Colonial America: How Swede it was

By Chrystia Freeland
May 3, 2012

America used to be Sweden: According to new research, the America of the Founding Fathers was ‘‘more egalitarian than anywhere else in the measurable world.’’

That’s an important finding, and one that will surprise most Americans today. Both inequality and American exceptionalism are high on the national political agenda. One idea that brings those issues together is the belief that Americans have an exceptional cultural tolerance for income inequality. Unlike Europeans, the thinking goes, most Americans are confident that they are ‘‘soon to be rich.’’ As a result, the conventional wisdom has it, Americans in the middle look up to their 1 percent and are loath to tax them.

But historical research by the economists Peter H. Lindert and Jeffrey G. Williamson shows that when it comes to inequality, this American exceptionalism is an inversion of the conditions that prevailed at the time of American Revolution. In that era, which is so often invoked in today’s political and social battles, America was the world’s most egalitarian society – and proud to be so.

‘‘There has been an absolute reversal,’’ Lindert told me. ‘‘Compared to any other country from which we have data, America in that era was more equal. Today, the Americans are the outliers in the other direction.’’

Nowadays, we think of the postwar era as a halcyon time for the U.S. middle class. But it turns out that, in relative terms, colonial America, too, was a great country for the 99 percent, particularly when compared with the folks back in the old country.

‘‘Americans who were free were very well-off, and better off than their counterparts in the mother country,’’ Lindert said. ‘‘Every kind of person by occupation was better off than their counterpart by occupation. The carpenters, the shopkeepers and so forth all had a slightly better income than in the mother country.’’

Slavery is America’s original sin and was the great global injustice of that age. But on a purely economic basis, even when slaves are included in the calculation of inequality, America comes out as the most egalitarian.

‘‘If one includes slaves in the overall income distribution, the American colonies in 1774 were still the most equal in their distribution of income among households, though by a finer margin,’’ Lindert said.

Members of only one group fared better in Europe than their peers in the colonies – the people at the very top.

‘‘The Duke of Bedford had no counterpart in America,’’ Lindert said. ‘‘Even the richest Charleston slave owner could not match the wealth of the landed aristocracy.’’ Indeed, England’s 1 percent were so rich that the country’s average national income was nearly as high as that of the colonies, despite the markedly greater prosperity of what today we might call the American middle class.

Today, the opposite is true, Lindert said: ‘‘The rest of the world can’t come close to the 1 percent in America.’’

This portrait of colonial America as the world’s great egalitarian exception would probably come as a surprise to most Yanks today. But though Lindert and Williamson provide us with new data, the portrait they paint fits with contemporary accounts.

In a letter he wrote from Monticello in 1814, Thomas Jefferson applauded America’s economic equality. ‘‘We have no paupers,’’ he wrote to Thomas Cooper, an Anglo-American polymath and frequent Jefferson correspondent. ‘‘The great mass of our population is of laborers; our rich, who can live without labor, either manual or professional, being few, and of moderate wealth. Most of the laboring class possess property, cultivate their own lands, have families, and from the demand for their labor are enabled to exact from the rich and the competent such prices as enable them to be fed abundantly, clothed above mere decency, to labor moderately and raise their families.’’

By contrast, Jefferson believed, as the Lindert and Williamson research confirms, that members of America’s 1 percent were worse off than their European counterparts:

‘‘The wealthy, on the other hand, and those at their ease, know nothing of what the Europeans call luxury. They have only somewhat more of the comforts and decencies of life than those who furnish them.’’

Interestingly, particularly in view of today’s inequality wars, Jefferson didn’t pull his punches about which social order was preferable. ‘‘Can any condition of society be more desirable than this?’’ he opined about egalitarian America, and then did a little calculation showing that the overall happiness of Americans far outweighed that of the English, for whom ‘‘happiness is the lot of the aristocracy only.’’

It wasn’t just the Americans who perceived their society to be more economically equal than the Old World. Foreign visitors noticed, too. After his famous journey to America in the 19th century, Alexis de Tocqueville returned home to France to report that ‘‘nothing struck me more forcibly than the general equality of conditions among people.’’

But what was obvious just before the Revolution has been largely forgotten today. ‘‘It was known by them at the time,’’ Lindert said. ‘‘Now we as a society may have lost sight of that, because we didn’t have the numbers to remind us.’’

Thanks to Lindert and Williamson, we now do. Their historical work makes a particularly important contribution to the current debate because, as chance would have it, those who argue that inequality is as American as apple pie tend also to hold the views of the Founders in particularly high regard.

‘‘I see it as a puzzle,’’ Lindert said. ‘‘Those of us who insist that inequality is fine would also invoke a Founding Fathers’ society for which it was not true.’’

Equality, not just of opportunity but also of outcome, turns out to be one of the features that really did make the United States exceptional in the age when the country was born. That startling fact is worth bearing in mind as Americans struggle to figure out how to remain exceptional in an altogether more complicated era.

29 comments

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A twisted and egregious misrepresentation of historical facts in the service of Liberalism.

The DataRat

Posted by DataRat | Report as abusive

Two very different interpretations of freedom were impregnated into the colonial American womb. One was represented by the Puritans of Massachusetts in 1620. The other by the Virgina settlements a few years earlier. Both interpretations have been with us from the start, and have competed endlessly for the soul of the country.

In Virginia, large land grants were given to English aristocrats as a way to provide the younger generations of noble sons who had no land or cash with a means to provide for themselves. The only catch was this: those lands were occupied by fearsome “savages” and malaria. It was very dirty, very dangerous work to extract any value from these lands. So these nobles solved their problem by forming companies. They convinced investors to put up the cash to fund settlements, which would provide raw goods to be traded at a profit. The settlers were mostly young poor men seeking their own shot at adventure and fortune. As the Commonwealth of Virginia expanded and grew, more adventurers came flooding in. The freedom they sought was the economic freedom to own your own land and set thereby set your own rules. If you were poor, you at least aspired to wealth, so the prerogatives of the noble against unfair intrusion by the king (federal govt.) were defended by all.

In the Commonwealth of Massachusetts, a different philosophy began with the first settlement. The Pilgrims were religious fanatics who valued spiritual well being far more than wealth. They had fled England and Holland not to get rich, but to establish a new, spiritually pure community. They heavily regulated communal behavior. The success of the community was everyone’s responsibility, and in turn a much higher percentage of the community was given a say in government decision making, or suffrage, than any other society in history. (See the Town Hall tradition.)

Although the actual religious Puritans were soon swamped in numbers, their core ideology made an indelible stamp on the character of the society.

Both poles of colonial America–Virginia and Massachusetts–developed many common ideas about freedom. Otherwise, there never would have been a Revolution. However, these differences were present in the heart of the disputes which grew into the Civil War, and have always been with us.

Whether or not Americans have a patriotic duty toward one another’s well being or a duty to exercise the right to become free like a modern day aristocrat is the essential question.

Posted by BajaArizona | Report as abusive

Most Americans seem to have no idea of the gigantic scope the poor play in economic inequality. The Jeffersonian quote says it all, “Most of the laboring class possess property, cultivate their own lands, have families, and from the demand for their labor are enabled to exact from the rich and the competent such prices as enable them to be fed abundantly, clothed above mere decency, to labor moderately and raise their families.” The key word here is “labor.” People LABORED to have a good life. Nowadays the folks we call “poor” have been living on entitlements for generations. They have no desire to labor because they don’t have to. The concept of labor = reward is lost on them. While everyone attacks the rich who are easy targets, no one wants to address the larger problem of the poor whose sponging while having no intention to contribute anything is woefully unsustainable and a far greater drain. A massive effort needs to be done to differentiate the poor from the needy for they are not one in the same. The needy should get all the benefits an advanced society can offer them, the poor on the other hand need to be reaquainted with the concept of labor.

Posted by GLK | Report as abusive

And they managed all that without income taxes, welfare payments, government housing and other redistribution tools. Amazing, no?

Posted by amateurediteur | Report as abusive

Secondary school statistics: if every free person is (for the sake of example) 10% better off than his or her peers in Europe; and slaves in both America and Europe earn nothing, and the proportion of slaves in the population is the same in both, then the variance of income is going to be 10% greater in America too. Inequality will perforce be greater in the region which has the enhanced income.

That’s if the proportion of slaves in the population is equal on both places. In practice it seems likely that the proportion of slaves in the US population will have been greater than the proportion in Europe, so that will amplify the difference in variance, not attenuate it (unless slaves were so numerous that they actually started to dominate the calculation of average income – not something to be proud of). Further, there was a whole underclass of low-income indigenes in the US which had no direct counterpart in Europe at all.

The two contentions in this “research’ – that the range of a largely bimodal distribution was greater in the US, and that the variance of that distribution was less – are flatly incompatible, unless the US economy was actually dominated by slaves.

Posted by Ian_Kemmish | Report as abusive

The Founding Fathers gave every American “The Right to Pursue Happiness” but they did not guarantee it. I highly doubt many Americans in the 1800s would have looked to Government for freebies and handouts as today, if they couldn’t find a job, they created one. The America of “Ask not what your country can do for you – ask what you can do for your country” is almost gone.

Posted by rgordieb | Report as abusive

Great article.

And don’t forget about religion, too. Back then, it was easier for those living to remember the great tragedies of religious violence between religious organizations in other countries.

For example the Spanish Inquisition, over many decades, saw the legal murder of Jews who refused to become Christian.

And the religious violence in England where citizens could be required to take an oath affirming their loyalty to the Anglican Christian faith. Great numbers were jailed and murdered who refused to take the oath. The lines often occurred even inside families, brother against brother.

All across Europe, horrible executions and civil violence occurred all too often between Europeans who considered themselves Catholics/Papists and those who considered themselves to be Protestants. And even among the Protestants, there was killing and violoence between different sects of Protestants.

The refugees on the Mayflower didn’t come to America to get away from ATHEISTS; they came to America to get away from other CHRISTIAN sects who were persecuting them, jailing them and executing them.

All these facts, more freshly in the minds of the authors of the American constitution, caused them to explicitly ban religion in government.

A peaceful society makes an egalitarian condition more possible.

Posted by AdamSmith | Report as abusive

Focusing on the equality of the economic outcome for a society is to miss the principle of our founding – individualism. I agree that our society was more economically equal than others and I also agree that this outcome is the best case scenario. Where I adamantly object to your conclusion is on the focus. The focus on equality should be on the opportunity, and the more equal economic outcome is the result. The Founding Fathers’ society did not focus on the result and work backwards. The foundation provides the structure for the desired outcome. Our society doesn’t have equal opportunity now and that is the reason for the advancing economic inequality. The laws are not made in accordance with our principle “by the people, for the people”, but instead by and for the politically-connected and economically-elite. The justice system does not uniformly apply a set of preexisting rules to everyone EQUALLY. I agree with you that Americans must struggle to figure out how to remain exceptional in an altogether more complicated era. http://www.StreetJusticeSociety.com

Posted by ShellyBernal | Report as abusive

GLK, you should consider the effects of the Industrial Revolution in your comparisons of the American poor of 200 years ago and today. Then the poor had their own farms. Today they rent. Then the poor could by their own labors produce most of the essentials. Today the poor are utterly reliant on outside sources of employment, regulations, laws, transportation, society, etc.

You have obviously never found yourself alone and penniless in an American city. Try it sometime. See how well you do.

Posted by BajaArizona | Report as abusive

Yes, this is true, but it is true because America had no banks, not because, it had more welfare, or bankruptcy, courts, or affirmative action, or unions, etc, etc. John Adams wrote Jefferson: “I have never had but one opinion concerning banking, from the institution of the first, in Philadelphia, by Mr. Robert Morris and Mr. Gouverneur Morris, and that opinion has uniformly been that the banks have done more injury to the religion, morality, tranquility, prosperity, and even the wealth of the nation, than they can have done or ever will do good. They are like party spirit, the delusion of the many for the interest of the few. I have always thought that Sir Isaac Newton and Mr. Locke, a hundred years ago, at least, had scientifically and demonstratively settled all questions of this kind.” And this from a man who also believed in a natural aristocracy. Jefferson agreed with both.

Posted by REMant | Report as abusive

amateurediteur: Life expectancy in 1776 was 35. We were not a world power. Our country today is just a little bit bigger and a little bit more complicated. I suggest you quit pretending it’s 1776, join reality, and understand that today both our country and the world are very different places than they were in 1776.

That’s one of the problems with the Republican Party. Rather than dealing with the world as it really is, they redesign the world in their heads into that which is most convenient for their ideology. You can’t successfully govern that way.

Posted by flashrooster | Report as abusive

@GLK In America today there are 115m full-time workers and 27m part-time workers. For a population of 310m, it means there are not enough jobs for even half the population! How are these poor ‘sponges’ SUPPOSED to find work to get off the dole? Should they count on a bank loan to start a business? Best of luck… or beg for a govt grant that your ilk would call wasteful? I agree that work needs to be something should aspire to, but there needs to be opportunity to help that along. That and affordable education – if people can’t get the education to get the jobs then they’re stuck in the gutter forever (barring some huge turn of chance).

Posted by CDN_Rebel | Report as abusive

DataRat–

“As Mankind becomes more liberal, they will be more apt to allow that all those who conduct themselves as worthy members of the community are equally entitled to the protections of civil government. I hope ever to see America among the foremost nations of justice and liberality.”

Guess who said that? One George Washington

Posted by monarchist2 | Report as abusive

“As Mankind becomes more liberal, they will be more apt to allow that all those who conduct themselves as worthy members of the community are equally entitled to the protections of civil government. I hope ever to see America among the foremost nations of justice and liberality.” –G. Washington

Posted by monarchist2 | Report as abusive

@GLK, do you know anyone PERSONALLY who is like this? The poor I know personally hate handouts and have refused them at times out of pride. They want to work but can’t find any jobs.

It sounds like you are just spouting the “welfare queen” nonsense that has no evidence to back it up. The unemployed and poor I know are all eager to get working.

Posted by Andao | Report as abusive

This historical analysis, like all others, is counter productive in an age of Globalization – in which the value of unit labour cost is the factor of growth and development (eg. mainland China and India).

Virginia and Mass are not the example which pit American ideological and social contradictions. It’s evolution of a continental society based on lassiez faire Capitalism!
Creative destruction! And whatnots – inspired by money lenders and deprived souls of capitalists on WS.

Posted by hariknaidu | Report as abusive

Its interesting that the knowledge about how equality affects life quality and the wellbeing of a society actually existed in US almost 200 years ago. I hope for the sake of the American people that American politicians will manage to shift the trend towards greater income differences. Or the rich people will one day wake up in a country quite like Brazil and wonder why they are robbed in their homes by people with machine guns. That said, of course we need different incomes and payoff for education, hard work, innovation etc. In Sweden we probably have to little of that.

Posted by happyswede | Report as abusive

the employment rate for Americans aged 18 to 24 is at its lowest in more than 60 years, 54 percent

and 25 percent can’t afford basic living expenses

so much for the “blame the poor” mentality of some of GLK

Baja AZ know what time it is:

“Whether or not Americans have a patriotic duty toward one another’s well being or a duty to exercise the right to become free like a modern day aristocrat is the essential question.”

Posted by atom_b | Report as abusive

Where is more money used most efficently?

- In the hands of a poor person, that have to weight his spending decisions very carefully.

- In the hands of a wealthy person, that can spend money where he likes.

Which strategy gives best marginal effect on the overall happiness in the country?

There must be a strong incentives for all who are able to contribute to socity. Social support must be tuned so most poor prefer contibution to doing nothing. Taxes must be tuned so the wealthy can not rest on their wealth for generations.

One would think that most would prefer an egalitarian socity. Suprisingly that does not seem to be the case.

Posted by AndreasJ | Report as abusive

This is because the U.S. had a historical labor scarcity that lasted until about 1970 or so. Our so-called exceptionalism was an accident of history and Americans are going to have a very hard time getting used to the new normal. Basically, labor scarcity is over as are the prospects for the middle class as a whole. It’s over, guys.

Posted by blended_purple | Report as abusive

Since the Occupy Wall Street movement has taken discussion of wealth distribution out of Romney’s “quiet rooms” and out into the public domain where it belongs, it’s been rather entertaining to see the circuitous lengths people will go to in making their defense of wealth redistribution from the Middle Class to the rich. And I get the feeling that most people making this argument are doing so against their own best interests and do so in the name of Republican rightwing ideology adherence. When you have a relatively small group of people who own the rights to things which the public can’t live without, and that small group of people are continuously raising their rates while failing to increase workers’ pay, increasing their wealth while everyone else sees theirs diminishing, that is redistribution of wealth, or systemic profiteering for short. The argument is basically that they deserve all that they can get because they figured out how to get it. This includes figuring out that buying off our government is profitable and the defenders of this kind of redistribution of wealth believe in rewarding those who have bought off the US government. Am I wrong? I don’t think so. You may word it differently, but it comes out the same: regardless of how the rich make their money, they deserve to pay as little in taxes as possible and deserve all the benefits their money can buy, including the benefit of controlling legislative outcomes.

Having a more egalitarian society was important to most of our Founding Fathers. For one, they seem to have believed in a real sense of fairness. But neither did they have an uber-wealthy class of individuals using their wealth to control what their government did and didn’t do. I’m sure money had its influence, but not like it does today.

But it wasn’t just a sense of fairness on the part of our Founders. They also understood how having fairness in wealth distribution was important to the longterm stability of our Republic. They saw firsthand what happens when societies evolve in such a way where a few own most of the wealth: Disproportionate wealth and power is always abused and the majority suffer.

In fact, Thomas Jefferson warned the American people about the threat posed, specifically, by powerful corporations, and he shared those warnings at a time when no corporations were as powerful as what exists today:

“I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country.”
Thomas Jefferson

Well, there’s no challenging going on anymore. The corporations won. They control our government. Too many Americans failed, and are continuing to fail, to heed the warnings given us by our Founders, such as Jefferson’s warning above.

It’s time we quit pretending that there’s no wealth redistribution going on from the Middle Class to the rich, and legitimizing it by claiming that the rich have the right to engage in such redistribution just because they figured out how–and they should be celebrated? We need to base our policies and tax laws on what is best for the entire country and not what is best for the wealthy few just because they figured out a method of getting rich at the expense of the American Middle Class.

Posted by flashrooster | Report as abusive

@Chrystia Freeland
How do you sleep at night?

Posted by trevorh | Report as abusive

But what about slavery?

Posted by Bob9999 | Report as abusive

I have a bone to pick with Christia about something she said on Bill Maher’s show. Please don’t compare your awesome job with mine. Maybe you can’t wait to leave your kids when you go off to work to your cushy office and respected important job, but most of us don’t have a job like yours! Or a choice like Ann Romney! I can’t believe you all are so out of touch with reality that not one person on the panel said that. Or the fact that Ann Romney had the nerve to say how great “choice” is when her own husband is advocating taking other womens choice away from them. What is wrong with you people???

Posted by habistany | Report as abusive

@DataRat I am thinking you did not read the article. Slow down, read it first before you get all bunched up in the middle. And no, Ayn Rand is not one of our Founding Fathers. Neither is Milton Friedman.

@amateurediteur huh?

Posted by krimsonpage | Report as abusive

As I mentioned on the Aljazeera website where this appeared, colonial America also had no banks, and the mobility achieved, both upward and downward, was not the result of transfer payments or bankruptcy restructurings, which they had little of either. In later years, with poverty rising, Adams and Jefferson agreed that the banks had brought nothing but what we euphemistically call “moral hazard.”

Posted by REMant | Report as abusive

Good article. Wonder how much of this current state is old money and ideas having moved into the Americas in the last 3 generations.

They have corrupted our laws and politics – creating the exact environment the early Americas rejected. Perhaps the same cure is needed.

Posted by Butch_from_PA | Report as abusive

What has changed is complacency; laziness has crept in.

Americans of that era were happy to practice their own religion, to plow their own land, and to mind their own business. Today’s Americans are content to sit in front of the TV but upset when they can’t pay their xbox subscription, mobile phone bill, or pizza delivery fee. Frankly, most Americans who are poor (not middle class) are there for a reason: lack of work ethic, drug addiction, and/or criminality (this is of course influenced by the culture they are raised in)

It seems an inveitable human trait to eventually take things for granted, no matter what you have. The citizens in the era of the founding fathers did not take for granted what America was as it was novel and precious.

How we return to that mentality? Perhaps it is an impossibility…

Posted by jaham | Report as abusive