Income Inequality and Public Relations

Gilbert Stuart Williamstown Portrait of George Washington.jpgMartin Wolf’s column in the Financial Times on “A Republican Tax Plan Built for Plutocrats” raised an interesting issue for me as a former Southerner.  Wolf wrote:

The pre-civil war South was extremely unequal, not just in the population as a whole, which included the slaves, but even among free whites. A standard measure of inequality jumped by 70 per cent among whites between 1774 and 1860. As the academics Peter Lindert and Jeffrey Williamson note, “Any historian looking for the rise of a poor white underclass in the Old South will find it in this evidence.” The 1860 census also shows that the median wealth of the richest 1 per cent of Southerners was more than three times that of the richest 1 per cent of Northerners. Yet the South was also far less dynamic….

The South was a plutocracy. In the civil war, whose stated aim was defence of slavery, close to 300,000 Confederate soldiers died. A majority of these men had no slaves. Yet their racial and cultural fears justified the sacrifice. Ultimately, this mobilisation brought death or defeat upon them all. Nothing better reveals the political potency of tribalism.

Why wasn’t the antebellum South more upset by income inequality.  My great-grandfather, who fought in the Civil War as a colonel in the 21st Alabama regiment, moved to Mobile, Alabama, from Iowa just a few years before the war started.  He worked for a Mobile silversmith, James Conning, and had no slaves.  During the war, he was often so short of money that he asked to Mr. Conning to help out  his wife while he was away fighting.  (See From That Terrible Field by John Folmar.)  There were, no doubt, some in the South who resented the wealthy plantation owners, but as Gone with the Wind brings out, most Southerners looked at the aristocracy favorably, while the aristocracy exercised a sort of benevolent dictatorship that cared for the lower classes, even if they didn’t do much to improve their situation.  

The lesson for me then is that income inequality is less of a problem if there is a friendly relationship between the classes.  The aristocracy had a sense of “noblesse oblige.”  In the South, this relationship had been built up over generations, and was made easier to bear because income and class inequality was widespread and accepted in in Europe at that time.  The US was much more democratic than Europe, which lessened the perception of differences in America.  We had rebelled against the British royalty and their decrees: “No taxation without representation.”  We declared that “All men are created equal.”  There was a softening at both ends, with the aristocracy showing sympathy for the lower classes, and the lower classes feeling empowered by their power in the democracy.  

Alexis de Tocqueville was apparently not as impressed with the South as he was of the Northern United States.  He thought that slavery and the agrarian economy made the South less responsive to the democratic trends sweeping the North.  But this view ignores the fact that many of the leaders of Revolution and creation of the new country were Southerners, particularly from Virginia , the bastion of the plantation aristocracy, or plutocracy as Martin Wolf calls it.  Most of the early Presidents came from Virginia, starting with Washington, as did many other political leaders.  The fact that Southern secession was widely supported in the Southern states is evidence of the support by the lower classes of the slave-holding aristocracy.  

Today, one problem of the aristocracy of the 0.1 percent is that they are not widely liked by the lower classes particularly by the white middle class.  Many of the upper one percent are recent arrivals in the US — Jews, Indians, Asians — who have made no effort to ingratiate themselves with the broader population.  If anything, they have isolated themselves in Manhattan or Silicon Valley.  Mark Zuckerberg went on some sort of a tour of the US, which turned out to be mainly a joke.  Buzzfeed reports that the trip increased Zuckerberg’s Q Score, a popularity rating, from 14 percent to 16 percent, about the same as Ashton Kutcher, Rachael Ray, Charles Barkley, Warren Buffett and Mark Cuban.  Elon Musk’s Q Score is 24%.  Tom Hanks has a Q Score of 46%.  Billionaires are not particularly well liked.  

The billionaires’ contempt for everybody else explains the resentment against them, and thus the rising concern about inequality.  The public perception is that these people don’t deserve the wealth and privilege they hold, that they gained it dishonestly, even if they came up with some brilliant new invention.  I would guess that Steve Jobs is viewed much more favorably that Bill Gates, because Jobs was concerned about the beauty and functionality of the products he built, while Bill Gates pretty much only cared about the money.  He is trying to make amends by giving money away now, but he has lots of evil to atone for.  Today’s billionaires might take a lesson in public relations from the plantation owners of the old South.  

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