In 1994, a cover story in the Economist proclaimed that "income inequalities in America and Britain are greater than at an time in the past 50 years." The magazine suggested that concerns about the issue "played a big role in Bill Clinton’s victory in 1992, and are likely to loom large in Britain’s general election." The Economist’s perspective on the issue resonated in many forums in Washington, one of which featured U.S. Treasury Secretary Robert Rubin, Democrat Bill Bradley, and Republican Jack Kemp. The Washington Post summarized the proceedings at this 1995 conference with these words: "The growing gap between rich and poor has become the central issue in American politics, and the party that figures out what to do about it -- or that makes the right noises about it -- will dominate American politics."

Anyone interested in getting capitalism right needs to be aware of the current debate about economic inequality in the United States and elsewhere, about what is happening and why. The capitalist system, despite its great successes, remains suspect in many quarters. From academe to Hollywood, detractors emphasize vast accumulations of wealth, rewards that are not adequately shared. A number of prominent political commentators have speculated that a widening gap between rich and poor could become a more important issue in American politics in the future, in campaign rhetoric and in policy prescriptions. They believe that increasing inequality could lead to a revitalized labor movement and greater support for protectionist policies, increased government spending on benefit and entitlement programs, and to higher taxes on corporations and the wealthy. Some already see hints of a new politics that is more sensitive to inequality in the wake of President Clinton’s defeat on "fast-track," the authority to negotiate trade deals. Politicians such as Democratic minority leader in the House of Representatives, Richard Gephardt, and 1992 Republican presidential candidate Pat Buchanan -- both potential presidential candidates in 2000 -- return again and again in their speeches to the deficiencies in the capitalist system in which the rich get richer, and the poor, poorer.

This essay looks at what Americans are saying about the gap between rich and poor. Where data are available, comparisons are made to attitudes in other nations. Pollsters in the United States rarely ask about economic inequality directly because they know that the technical term doesn’t mean much to most Americans. But the surveyors have explored attitudes on issues that relate to economic inequality for 60 years. How Americans think about the wealthy and the poor, about opportunity, and about the role the government should play in reducing differences between rich and poor provides some important clues about how the issue could play politically.

The survey data show that Americans are ambivalent about wealth. Strong majorities in Roper Starch Worldwide data say that millionaires use their wealth mostly to protect their own positions in society and that millionaires’ investments create jobs and help provide prosperity. Majorities tell Gallup that there is too much emphasis on wealth and that the country benefits from having a class of rich people. Nearly seven in ten in a recent Louis Harris and Associates survey say that Wall Street is absolutely essential because it provides the money business must have for investments and that most people on Wall Street would break the law if they believed they could get away with it.

Other surveys show that people neither resent nor admire the rich. In an NBC News/Wall Street Journal poll taken in February 1998, 80 percent said the statement "I resent the rich" did not describe their feelings at all. Another question in the survey revealed that just 28 percent said they admired the rich. A 1997 Newsweek poll on the newly rich found 73 percent saying that they don’t think much about these people at all.

The stability of attitudes in the United States is shown by responses to two questions asked fifty years apart. In a 1942 Roper Organization survey for Fortune magazine, just 21 percent said the country would be better off if we had no rich people. When Roper repeated that question 50 years later, in 1992, the number saying we would be better off without millionaires was identical. The proportion saying we would be worse off dropped from 67 percent to 44 percent over the span, and the number saying they didn’t have an opinion rose from 12 to 34 percent.

Americans tell the pollsters their own income needs and desires are modest, and not surprisingly, they think many people including CEOs, entertainers, sports stars, television news anchors, and Congressmen and Senators are overpaid. But their views about the gap between these salaries and their own doesn’t make them resent these individuals. The lack of resentment toward the wealthy is worth exploring for it goes a long way toward explaining why economic inequality has not had significant political repercussions in the United States.

The United States is a vast middle class country where class divisions have been historically weak. When CBS News asked Americans if they considered themselves part of the middle class, 80 percent said they did. When British Gallup asks whether Britain is divided into haves and have nots, about three quarters in Britain say their society is divided that way. In the United States, when the identical question is asked, around a quarter say U.S. society is divided that way. Hostility toward wealth has little place to grow in a culture dominated by the middle class.

Another reason for the lack of resentment is that most Americans are reasonably satisfied with what they have. An NBC News/Wall Street Journal survey taken in 1996 showed that 79 percent of those surveyed said that they and their families had most or pretty much of the material possessions they needed. In the survey, 66 percent of those with incomes under $20,000 a year said they have most or pretty much of what they needed, too. Survey after survey conducted in the United States shows that most Americans recognize improvements in their material well-being and in the nation’s standard of living from their parents’ time.

The security that wealth can provide is undeniably attractive to Americans, but at the same time, wealth ranks far down the list in terms of things people say are important in their lives. Most people don’t think the rich are happier than they are, and many people say they would not be willing to make significant sacrifices or adjustments in their current lifestyle to become wealthy. The surveys also show that most Americans believe that individual initiative and drive go a long way toward explaining what they and others in the society have. These attitudes mitigate against resentment, too.

Most important, the United States still sees itself as an opportunity society. Much has been written about the death of the American dream, but the survey data show that reports of its death have been greatly exaggerated. In the United States, there has been no significant erosion in the belief that if you work hard, you can get ahead. In 1952, Americans were asked how they felt about this statement posed by University of Michigan interviewers: "Some people say there’s not much opportunity in America today -- that the average man doesn’t have much chance to really get ahead. Others say there’s plenty of opportunity, and anyone who works hard can go as far as he wants." Eighty-seven percent said there was still plenty of opportunity in the United States, and just 8 percent said there wasn’t much opportunity in America for the average man. In 1997, 79 percent said the statement "People who work hard are likely to succeed" was true; 18 percent said it was false.

Most people say that they have had greater opportunities than their parents have had, and in most (but not all) surveys they say they are optimistic about their own children’s prospects for getting ahead. One question from the Gallup Organization is particularly striking. In 1947, 64 percent of fathers surveyed believe that their sons’ opportunities to succeed would be better than their own, and 13 percent said they would be worse. In 1997, when the question was repeated, 62 percent of fathers said their sons’ opportunities would be better than their own, and 21 percent thought they would be worse. When Gallup asked mothers about daughters in 1947, 61 percent expected them to have better opportunities than they had had, and 20 percent disagreed. But by 1997, when many doors had been opened for women, the percentage of mothers expecting their daughters to have greater opportunity was 85 percent. Americans tolerate substantial inequality because they believe that opportunity is present for them and for their children.

In terms of opportunity, American attitudes are different from attitudes in many other places. A survey conducted in 1991 by the International Social Justice Project found that far more people in the United States than in other countries felt that people had equal opportunities to get ahead.

In (name of country) people have equal opportunities to get ahead
(percent agree)

United States 66%
United Kingdom 42
West Germany 55
East Germany 25
Japan 41

Americans’ unique perspective about their social mobility can be seen in a question from the World Values Survey (1991-1993), that asked people to respond to this statement:

In the long run, hard work usually brings a better life

(Percent agree)
United States 59%
United Kingdom 38
France 37
West Germany 43
Japan 33

Another question from the World Values Survey reinforces the picture of the United States as an opportunity society:

The way things are in (name of country), people like me and my family have a good chance of improving our standard of living

(Percent agree)
United States 55%
United Kingdom 29
West Germany 34
East Germany 39

The United States has never had a strong pro-state tradition. Americans have placed more emphasis than Europeans on individuals’ responsibility to take care of themselves, and contemporary surveys reinforce this belief. A question asked in February 1997 by the Council for Excellence in Government found that 16 percent said that the statement "the government is responsible for the well-being of all its citizens" was closer to their view. Two-thirds said the statement "people are responsible for their own well being and they have an obligation to take care of themselves" was closer. The World Values Survey asked people in a number of countries whether individuals should take more responsibility for providing for themselves, or whether the state should take more responsibility to ensure than everyone is provided for. More people in the United States than in other nations came down on the side of the individual’s responsibility to take care of himself.

Individuals should take more responsibility for providing for themselves

(Percent supporting the statement, points 1-3 on a 10-point scale)
United States 59%
United Kingdom 30
France 45
West Germany 48
Japan 11

When people in the United States were asked by the International Social Survey Program (1992) whether government should provide everyone with a basic income, 35 percent in the United States agreed that it should. Responses in Europe were quite different.

Government should provide everyone with a guaranteed basic income

(Percent agree)
United States 35%
United Kingdom 68
West Germany 58
East Germany 88

Taken together, these findings explain why there is little is little support in the United States for measures to limit individual incomes. Similarly worded questions asked since 1935 show not a single instance in which even 40 percent in the United States have supported placing a limit on how much people can earn.

People in the United States are also wary of government-orchestrated redistribution. The polls show that Americans would like to see wealth more evenly distributed. Around six in ten in Gallup surveys conducted since the mid 1980s think money and wealth should be more evenly distributed. But when asked specifically what government should do, Americans express reservations about redistributionist policies. In 1996, the National Opinion Research Center (NORC) began a question about redistribution this way "Some people think that the government in Washington ought to reduce the income differences between the rich and the poor, perhaps by raising the taxes of wealthy families or by giving income assistance to the poor. Others think that the government should not concern itself with reducing this income difference between the rich and the poor." People were then asked to place themselves on a 7-point scale with a score of 1 meaning that government ought to reduce income differences, and a score of 7 meaning that government should not concern itself with the issue. Twenty-eight percent placed themselves at points 1 and 2 on the scale indicating strong agreement that government should involve itself in the area, and 20 percent put themselves at points 6 and 7 indicating that government should not concern itself with these matters. Fifty percent placed themselves in the middle. Just 32 percent of those making less than $20,000 a year placed themselves at points 1 and 2 indicating a strong preference for governmental activity to reduce income differences. Another question, also asked by NORC in 1996, found just 32 percent agreeing that it is the responsibility of government to reduce income differences between the rich and the poor, and 42 percent disagreeing. A quarter neither agreed nor disagreed. Thirty-eight percent of those making less than $20,000 a year said this was a government responsibility, but almost as many, 31 percent disagreed.

A May 1997 BBC exit poll found that 57 percent of British voters agreed that government should redistribute income from the better off to the less well off. A survey taken in the United States in June 1997, by Penn Schoen and Berland Associates for the moderate Democratic group, the Democratic Leadership Council, found just a third saying that "government should work to redistribute income to close the gap between the rich and the poor."

The International Social Survey Program provides a comparative perspective on attitudes toward redistribution by asking people to agree or disagree with this statement:

It is the responsibility of government to reduce the differences in income between people with high incomes and those with low incomes

(Percent agree)
United States 38
United Kingdom 66
West Germany 66
East Germany 89

Working against more government involvement to reduce the income gap is a substantial skepticism in the United States about government’s ability to do good. Americans, like others, want a lot from government. But today they see the government as more of a problem causer than problem solver. In a January 1998 CBS News/New York Times poll, 88 percent said the government can have a positive impact on people’s lives, and only 9 percent disagreed. In another question asked in the same survey, however, just 31 percent said government was having a positive impact on most people’s lives today. Forty-one percent said it was having a negative impact, and 22 percent thought it wasn’t having much impact on most people’s lives. In 1959, when Gallup first asked which was the biggest threat to the United States in the future, 15 percent said big business, 41 percent big labor, and 14 percent big government. In 1995, when Gallup last asked the question, 24 percent said big business, just 9 percent said big labor, and 64 percent selected big government. In 1958, when University of Michigan interviewers asked how much of the time you could trust the government in Washington to do what was right, 73 percent said they felt they could trust the government most of the time or just about always. When Gallup repeated the identical question in February 1998, just 39 percent gave that response.

Growing social equality in the United States has also tended to dampen the political impact of economic inequality. Most Americans say that they are doing better than their parents. More U.S. households have three televisions than have none; more households also have three cars than have none. Irving Kristol points out that these days "only experts can deduce a person’s economic status from his clothing; ... and CEOs run into their secretaries in even the poshest restaurants." This social leveling mitigates the impact of economic inequality.

Concern about economic inequality could grow. The free enterprise system work best when it encourages accumulation and restraint. The latter quality is noticeably absent in many areas of American life today. Staggering CEO salaries accompanied by opulent lifestyles could make Americans more sensitive to differences in wealth, particularly during economic downturns. Today, most Americans are satisfied and feel they are doing pretty well economically, but they are not as confident about how their fellow workers are doing. If Americans come to believe that the odds are being rigged against working America by corporate America, the political repercussions of this issue will grow. As one Democratic pollster put it, "the issue is not CEOs making more money, it is CEOs making more money while layoffs and downsizing are occurring. It is not about having wealth, it is about having wealth at the expense of people who are working hard and trying to do better by their families." Globalization has made many people uneasy, and politicians such as Richard Gephardt and Pat Buchanan use the rhetoric of class-warfare to underscore anxiety about economic change. Concerns about fairness are never very far from the surface in American politics. For decades Americans have told the pollsters that the rich don’t pay their fair share of taxes. This issue doesn’t usually resonate strongly because most Americans feel they are doing well and are able to get ahead. Should that change, should Americans feel that opportunity is waning, the political impact of the economic inequality will grow. One important aspect of getting capitalism right means creating a climate in which people feel opportunity is present for them and their children.

This is adapted from Attitudes toward Economic Inequality (Everett Carll Ladd and Karlyn Bowman), American Enterprise Institute Press, Washington, D.C., 1998. Draft, not for quotation or citation without author’s permission.