Economic inequality, philanthropy, and the New (and old) Gilded Age

The Difficult Art of GivingToday we have a guest post from Francesca Sawaya, author of The Difficult Art of Giving: Patronage, Philanthropy, and the American Literary Market. Called "A fresh, original, and important revisionist literary history,” (Kenneth W. Warren, University of Chicago) The Difficult Art of Giving rethinks standard economic histories of the literary marketplace. In today’s piece, Sawaya looks at the contemporary creative marketplace and sees just how little has changed.

One of the pleasures in writing about late nineteenth- and early twentieth-century American culture is how often the controversies alive then remain alive today in new form. Indeed, commentators in the last decade of economic boom and bust have increasingly taken to referring to this era as a “New Gilded Age.” For Paul Krugman, this term is useful for comparing the rates of economic inequality in the U.S. at the turn of the twentieth century and now [1]. According to Krugman’s fellow economists, Emmanuel Saez and Thomas Piketty, 5% of the national income in the U.S. goes to the upper one-one-hundredth of a percent of the income distribution—statistics unmatched since the old Gilded Age [2].

Along with this return to extreme economic inequality has also been a sudden surge in philanthropy by the wealthy, culminating in 2010 in “The Giving Pledge.” Warren Buffett and Bill and Melinda Gates invited “the world's wealthiest individuals and families to dedicate the majority of their wealth to philanthropy” [3]. 81 billionaires and their families have signed this pledge. As numerous commentators have noted, this surge in billionaire philanthropy of our New Gilded Age is also reminiscent of a surge in millionaire philanthropy in the old Gilded Age. Buffett and Gates themselves have cited Andrew Carnegie and John D. Rockefeller as inspirations. Whatever the good intentions of this new billionaire philanthropy, an obvious question cannot help but emerge: What might be the relation between rising economic inequality in the U.S. and mega-philanthropy in the old and New Gilded Ages?

Such a question is one that the most thoughtful of the billionaire philanthropists themselves raise and seek to address. Buffett, for example, said simply when he gave $31 billion to the already $30 billion Gates Foundation, “A market system has not worked in terms of poor people” [4]. In his Giving Pledge letter, he states that his financial success is partially the result of being “white and male” and partially a result of being in a “market system” that “rewards someone who saves the lives of others on the battlefield with a medal . . . but rewards those who can detect the mispricing of securities with sums reaching into the billions.” In addition, he editorializes frequently against the contemporary “extraordinary tax breaks” of the “mega-rich” and their “coddl[ing] by a billionaire-friendly Congress” [5]. Buffett’s commitment to philanthropy emerges out of a sense that a putatively free market system actually not only favors certain races and classes but enforces that favoritism in its laws and tax codes. Nonetheless, Buffett never says this directly. Even as he criticizes inequality, he insists that while “a market system . . . sometimes produces distorted results,” “overall it serves our country well.”

The mega-philanthropists of the past implicitly asked the same question and came to the same conclusions. Andrew Carnegie in his famous manifesto for millionaire philanthropy, “The Gospel of Wealth” (1889) saw the inequalities of a putatively free market system as necessary evils, but worried that without “the proper administration of wealth” the dramatic social inequality of his time would lead America down the road to “Socialism” or “Communism” [6]. John D. Rockefeller likewise worried about the threat to capitalism, arguing that philanthropy was a substitution for the “many crude plans” for providing “the widest possible distribution of the blessings of life,” a distribution he nonetheless insisted that “[w]e all desire” [7]. In short, millionaire and billionaire philanthropy in its old and new versions sees itself as addressing the social inequalities that inhere in a putatively free market system, even as they seek to evade the logical consequences of doing so.

The question that my book The Difficult Art of Giving: Patronage, Philanthropy, and the American Literary Market seeks to address is why this evasion? Despite the good intentions of many philanthropists, what are the reasons that this evasion continues to be such a central part of the story of American inequality and so central to philanthropy? More particularly, as a literary historian, I show the different ways that important authors understood and depicted this evasion. Using some of the most famous novels of the late nineteenth and early twentieth century as examples (Henry James’s The Golden Bowl; William Dean Howells’s A Hazard of New Fortunes; Mark Twain’s A Connecticut Yankee in King Arthur’s Court; Charles Chesnutt’s The Colonel’s Dream; and Theodore Dreiser’s The Titan), I show the ways this evasion is carefully scrutinized by American intellectuals. Implicitly a question all these authors ask—one we are still asking—is how could the relation between inequality and philanthropy be changed?

References

[1] Paul Krugman, “Why We’re in a New Gilded Age,” New York Review of Books, 8 May 2014; “Gilded Once More,” New York Times, 7 April 2007.

[2] Louis Uchitelle with Amanda Cox, “Age of Riches:The Richest of the Rich, Proud of a New Gilded Age,” New York Times, 7 July 2007.

[3] “The Giving Pledge,” http://givingpledge.org/

[4] Buffett is quoted in Landon Thomas, Jr., “A Bequest Between Friends,” New York Times, 27 June 2006.

[5] Warren Buffett, “Stop Coddling the Super-Rich,” New York Times, 14 August 2011.

[6] Andrew Carnegie, “The Gospel of Wealth,” reprinted in The “Gospel of Wealth” and Other Essays and Writings, ed. David Nasaw (New York: Penguin 2006), 4.

[7] John D. Rockefeller, Random Reminiscences of Men and Events (1909; New York: Sleepy Hollow Press, 1984), 154.

+   +   +

Francesca Sawaya is Associate Professor of English and Director of Graduate Studies at the University of Oklahoma and author of Modern Women, Modern Work: Domesticity, Professionalism, and American Writing, 1890-1950, also available from University of Pennsylvania Press. The Difficult Art of Giving: Patronage, Philanthropy, and the American Literary Market is available now.

Forthcoming Events