Peter Lindert and Jeffrey Williamson are among the most prominent economic historians of their generation, and have been collaborating with each other for more than four decades. One important strand of their work has been concerned with the conceptualisation and measurement of living standards, most notably, perhaps, in relation to the longstanding debate over the standard of living during Britain's industrial revolution (see e.g. Lindert and Williamson, Reference Lindert and Williamson1983). However, an even more consistent theme has been the study of inequality, most obviously within the United States but also elsewhere (see e.g. Lindert and Williamson, Reference Lindert and Williamson1976; Reference Lindert and Williamson1985; Reference Lindert, Williamson, Bordo, Taylor and Williamson2003).
Their current work builds on these foundations to offer a new synoptic history of trends in American growth and inequality since the early-eighteenth century and incorporates a great deal of new data which have only become fully accessible in recent years. It makes particular use of new (or relatively new) information on the distribution of income and wealth, and pay scales, in colonial America by Alice Hanson Jones, Jackson Turner Main and Gloria Lund Main. It also supplements these data with information obtained from the Integrated Public Use Microdata Series (IPUMS) which has been assembled by Steven Ruggles and his colleagues at the University of Minnesota's Population Center.
One of the main challenges faced by the vast majority of economic historians is the need to draw inferences from often fragmentary data, and this means that the findings which are drawn from such studies always have a somewhat contingent nature. However, it is surely worth meeting this challenge if we wish to understand the present in its own historical context.
The book seeks to challenge a number of conventional assumptions about the history of economic growth in the United States and the distribution of its spoils. The authors argue that many economic historians continue to encourage the view that average incomes in the United States continued to lag behind UK incomes until the start of the twentieth century (cf. Maddison, Reference Maddison2006: 264). In opposition to this view, they argue that the comparative history of incomes in America/the United States and the UK went through a series of different stages. American living standards exceeded British standards during the colonial period; fell behind during the War of Independence; rose again during the first half of the nineteenth century; fell during the Civil War; and then rose once more.
Lindert and Williamson also chart the history of income inequality over this period. They argue that colonial America was a relatively egalitarian society, but that inequality grew substantially during the first half of the nineteenth century. The overall level of inequality remained broadly unchanged during the second half of the nineteenth century although its precise contours changed dramatically in the aftermath of the Civil War. This period was followed by an unprecedented period of growing equality (‘the greatest levelling of all time’) between the 1910s and 1970s, at the end of which inequality once again increased.
The finding that Americans enjoyed a higher average income and – by implication – a higher standard of living than their British counterparts on the eve of the American Revolution may seem less surprising to historians who are familiar with other welfare indicators. During the last 30–40 years, historians on both sides of the Atlantic have used information about the heights of a variety of different groups to shed new light on their health and wellbeing, and one of the first fruits of this endeavour was the discovery that native-born white Americans had achieved near-modern height standards during the second half of the eighteenth century (see e.g. Fogel, Reference Fogel, Engerman and Gallman1986). Anthropometric historians have also argued that the average heights of native-born white Americans declined on the eve of the American Civil War, a finding which has given rise to a long-running debate on the causes of the ‘antebellum puzzle’ (e.g. Komlos, Reference Komlos1996). The authors make very little reference to this literature, although it is arguable that their findings with regard to income inequality should play a larger part in it.
Lindert and Williamson's findings offer a more nuanced account of the causes of economic inequality than Thomas Piketty's recent survey and may even be seen, in some respects, as a direct challenge to it. Piketty (Reference Piketty2014: 25) attributed what he saw as a long-term tendency in favour of greater inequality to one ‘fundamental’ factor, namely the tendency for the average annual rate of return on capital to grow more rapidly than the economy as a whole. In contrast, Lindert and Williamson emphasise the importance of specific historical episodes, and specific policy choices, in shaping the ebb and flow of inequality. They pay particular attention to the importance of such factors as changes in economic, social and fiscal policy; fluctuations in the population age structure and the labour supply; the importance of education; technological development; international trade; and financial regulation, and they also emphasise that there is nothing in the historical record to support the view that efforts to reduce inequality must necessarily hamper growth.
Although the study of inequality may seem a rather bleak subject, this is, on the whole, an optimistic study. The authors argue that the solutions to growing inequality are clearly visible – ‘like hundred dollar bills lying on the sidewalk’ (p. 262). Their book was published a little over six months before the result of the 2016 Presidential election, and it remains to be seen how many of its recommendations will be adopted by the newly-elected incumbent of the White House.
