The Myth that Things Are Getting Better

Rich Man, Poor Man

by Herman P. Miller
Crowell, 305 pp., $3.95 (paper)

Income Redistribution and the Welfare State

by Adrian L. Webb, by Jack E.B. Sieve
G. Bell & Sons (London), £1.90

Two myths about the distribution of income comforted liberals during the 1950s. They believed that incomes were becoming steadily more equal, and that government spending programs uniformly accelerated that trend. Frederick Lewis Allen spoke for a self-satisfied New Deal generation when he said that “we had brought about a virtually automatic redistribution of income from the well-to-do to the less well-to-do” through the mechanism of the welfare state.

As the Fifties ended the first myth began to give way to evidence. Income distribution, it appeared, had barely changed since the war. The changes that did occur were at the expense of the poorest as well as the richest parts of the population, yielding a slight bulge around the middle classes. In 1947, the poorest 20 percent of the nation’s families shared only 5.1 percent of the nation’s income; by 1960, they had to make do with 4.9 percent.

As liberals began to acknowledge the persistence of inequality in the private economy, they redoubled their faith in spending by “the public sector.” John Kenneth Galbraith’s 1958 book, The Affluent Society, summed up the postwar liberal strategy. Galbraith argued that inequality could not be attacked directly through a stiffer income tax. Most Americans, he observed were too prosperous to care very much about soaking the rich. Thus equality had faded as a political issue. It could be approached only indirectly, through a general expansion of public spending. The poor, Galbraith argued, “would be among the first beneficiaries of [government spending on] education, health, housing and other services….” Admittedly, an enlarged public sector would support itself in major part through regressive taxation, for example by hiking sales taxes. But that was no objection:

It will be argued that some people are still very poor. The sales tax, unlike the income tax, weighs heavily on the small consumption of such individuals. But if the income tax is unavailable or in service to other ends, the only alternative is to sacrifice social balance [between public and private spending]…. The modern liberal rallies to protect the poor from the taxes which, in the next generation, would help eliminate poverty.

Galbraith’s ideology made virtuous what liberal politicians had already found necessary: a program which did not rely principally on the defunct Roosevelt coalition based on labor and the ethnic minorities. The defeat of national health insurance and the emasculation of public housing had by 1952 ended hope for a second New Deal. Liberals could succeed only with new measures and new partners. Within a few years the transition was accomplished. Labor and the academic liberals joined with downtown business interests in sponsoring urban renewal; with auto manufacturers and highway contractors in supporting vast road projects; with suburban legislators in promoting state-supported higher education.

But the result was …

This article is available to online subscribers only.
Please choose from one of the options below to access this article:

Print Premium Subscription — $94.95

Purchase a print premium subscription (20 issues per year) and also receive online access to all all content on nybooks.com.

Online Subscription — $69.00

Purchase an Online Edition subscription and receive full access to all articles published by the Review since 1963.

One-Week Access — $4.99

Purchase a trial Online Edition subscription and receive unlimited access for one week to all the content on nybooks.com.

If you already have one of these subscriptions, please be sure you are logged in to your nybooks.com account. If you subscribe to the print edition, you may also need to link your web site account to your print subscription. Click here to link your account services.