Wealth and Power in America, by Gabriel Kolko

[p041] Wealth and Power in America. By Gabriel Kolko. Thames and Hudson, 178 pp., 35s. Backed by a wealth of carefully collected statistical data, this very useful study of income distribution and social class in the United States does much to explode the myth of the Affluent Society. The book divides itself into three sections: a study of the main trends in the distribution of income and wealth in the last 50 years or so; an analysis of the concentration of power in the giant corporations of the economy; finally an examination of the causes and extent of poverty. Looking first at the distribution of income, Kolko concludes that the basic pattern of inequality has per- sisted over many years: while the share of the national income going to the top 10 per cent of the population has remained virtually static for 50 years, the poorest 20 per cent of the population has experienced a sharp decline in the same period. Whereas in 1900 the poorer half of the people received 27 per cent of national personal income, this had fallen to

[p042] 120 23 per cent by 1959 (p. 15). So much for the ‘income revolution’ so _ be- loved of orthodox economists in America. When allowance is made for tax avoidance and _ expense accounts, Kolko’s case that there has been no trend whatsoever towards economic democracy is only further strengthened. Turning to the concentration of business power in the United States, it is obvious that all talk of a ‘Managerial Revolution’ is so much nonsense. Examining the giant cor- porations, Kolko shows that in 1955 200 companies, owning nearly one- fifth of the total assets of the economy, were controlled by about 2,500 men, and probably even fewer (p. 57). The influence of these 200 giants is even greater when it is shown that they exercise control over innumerable smaller, apparently ‘in- dependent’ companies. Most of the top directors of these companies were in no sense ‘passive’ in relation to their running and profitability: the reason is simple— most of them were active members of management. In addition, ‘the managerial class is the largest single group in the stockholding population and a greater proportion of this class owns stock than any other’ (p. 67). When are Crosland, Jay and company going to drop their fantastic con- ception of the divorce between ownership and control? The pairs are still happily married. British readers will perhaps be most surprised by the sections of this study dealing with the nature and causes of poverty in America. Using the concept of a ‘maintenance stan- dard of living’ (devised by the Bureau of Labour Statistics)—this is a mini- mum health and decency standard well below what we usually think of as a ‘normal’ American standard of living—official figures show that ‘since 1947 one-half of the nation’s families and unattached individuals have had an income too small to provide them with a maintenance standard of living’ (p. 101). In a similar period, one-third of families have had an income too small to provide even an ‘emergency’ standard of living—this is one calculated at 70 per cent of the maintenance standard. The causes of the existence of such a vast area of poverty are not hard LABOUR REVIEW—Autumn 1962 to discover: periodic unemployment which in the main hits unskilled and semi-skilled workers, the existence of a large amount of poverty among the under - privileged Negro workers concentrated in unskilled and service occupations and finally the increasing number of families headed by women, a result of the high divorce rate and break-up of marriages. These facts are very useful as an exposé of the dominant theories of equality and economic justice so popular in America. But real analysis must lead to a concrete plan of action. This the author ignores: the only hope for a truly democratic society freed from want and poverty lies in finding ways and means of overthrowing American capitalism. Kolko refuses to face up to this and to the logic of his own analysis. His role is simply to analyze and reveal ‘facts’, not to draw up a programme of action based on the analysis. This is the decisive weakness of an otherwise admirable study and one well worth reading for anybody with illusions about American capitalism. PJ. Family fortunes