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America’s super rich today actually hold more wealth than their counterparts back in 1918, the year Forbes first took a stab at identifying the nation’s grandest fortunes.
By Bob Lord
Congratulations, fellow Americans. We’ve made it back to 1918 levels of wealth concentration. Well, almost.
In 1918, Forbes published its first list of the wealthiest Americans. That first Forbes list identified only the top 30. Today’s top 400 is a longer list, so, for purposes of comparison, let’s focus on the first 90 names on the 2014 Forbes 400 list.
Why 90? In 1918, the nation’s population was just slightly less than one-third of today’s population. So, the 90 wealthiest Americans represent the same portion of the population today as the “Forbes 30” represented in 1918.
Because of the tripling of the population since 1918, an apples-to-apples comparison of the 1918 Forbes list to today’s list requires that we treat every three plutocrats on the 2014 Forbes list as the equivalent of one of 1918’s plutocrats.
So, for example, we would compare the combined wealth of today’s three richest Americans, Bill Gates, Warren Buffett, and Larry Ellison, to the wealth of the wealthiest American in 1918, John D. Rockefeller.
That comparison rates as not even close. The share of the nation’s total wealth that Rockefeller controlled in 1918 runs about double that share that Gates, Buffett, and Ellison control today.
Mr. Rockefeller aside, things have become more “gilded” today than they were in the Gilded Age. We may not have a Rockefeller, but we have more Fricks, more Carnegies, and more Morgans.[pullquote]The group today that includes the Kochs and the Waltons towers over us far more mightily than did its 1918 counterpart.[/pullquote]
Consider this: In 1918, the wealth of the 30 wealthiest Americans totaled $3.68 billion, about 1.47 percent of the nation’s estimated aggregate wealth of $250 billion. The wealth of the 90 wealthiest Americans today totals $1.4 trillion, about 1.75 percent of our current aggregate wealth of $80 trillion.
So, based on the topmost group overall, America actually appears to be a good bit more gilded than in 1918.
But perhaps even more revealing: a then-and-now comparison of the distribution of wealth within the Forbes list itself.
Put aside the outliers at the top of each list (Rockefeller then and Gates, Buffett, and Ellison today) and a clear pattern emerges. In 1918, a plutocrat at the top of the list owned about three times as much wealth as one in the middle of the top 30 and four times as much wealth as one barely making the top 30. Today, a plutocrat near the top of the Forbes list controls about four times as much wealth as one in the middle of the top 90 and almost seven times as much wealth as one near the bottom of the top 90.
In other words, the group today that includes the Koch brothers, the Waltons, and Sheldon Adelson towers over us far more mightily than did its 1918 counterpart, a gang that included Andrew Carnegie and J.P. Morgan.
The bottom line: We don’t yet have a modern day John D. Rockefeller. Otherwise, the new Gilded Age has officially arrived.
Bob Lord, an Institute for Policy Studies associate fellow, practices tax law in Arizona.