Almost half of the world’s wealth is now owned by just one percent of the population.
Working for the Few, Oxfam

WhatsApp’s fifty-five employees are now enormously rich … The combination of digital technologies with huge network effects is pushing the ratio of employees to customers to new lows (WhatsApp’s 55 employees are all its 450 million customers need). And the rest of us? We’re winners in the sense that we have an even more efficient way to connect with each other. But we’re not getting more jobs.
Robert Reich

After decades of rising economic inequality, the issue has finally become part of the US mainstream media agenda ever since the Occupy movement took to the streets and coined their clever slogan, “we are the one percent.”

Of course, every capitalist society needs some inequality to serve as an incentive to acquire new skills and take entrepreneurial risks that could lead to an innovative new company. The question is: What’s the right amount of inequality?

This question has been coming up at least once a week among my friends, and I am no longer able to participate without citing Doris Kearns Goodwin’s 900+ page history of the Progressive Era, The Bully Pulpit: Theodore Roosevelt, William Howard Taft, and the Golden Age of Journalism.

“There are but a handful of times in the history of our country,” writes Goodwin in the book’s introduction, “when there occurs a transformation so remarkable that a molt seems to take place, and an altered country begins to emerge.” A disciplined historian, that is as close as Goodwin gets to explicitly suggesting a parallel between the Progressive Era’s dismantling of the excesses of the Gilded Age and our own struggle to address today’s startling inequality in which 85 individuals possess as much wealth as one half of the world’s population.

Riis coal

“The Bully Pulpit” is built around two relationships,” writes Bill Keller in his NYT review, “one between Roosevelt and Taft, lifelong friends and reformist comrades, until the partnership ruptured; the other between power and the press.” The stories of both relationships — one personal, the other structural — are fascinating.

From the end of the Civil War (1865) to the beginning of the 20th century, the US experienced unprecedented economic expansion due mostly to the technological advances of the Second Industrial Revolution. Real wages in the US grew 60% from 1860 to 1890. This impressive economic growth parallels the boom of the 1940s to 1970s that is compellingly described by Benjamin Wallace-Wells in his New York Magazine essay, The Blip. However, the economic growth of the Second Industrial Revolution was also accompanied by an increase in economic inequality, political corruption and harrowing workplace conditions.

While real wages rose for everyone, they rose most significantly for the wealthiest industrial “robber barons” of the day: John D. Rockefeller, Jay Gould, Andrew Carnegie, J. P. Morgan, and Cornelius Vanderbilt. These “first movers” were able to create monopolies in each of their respective industries (oil, railroads, steel, finance, steamships) by either buying out or suppressing the competition.

There were three perspectives on how to address rising inequality and industrial monopolies: socialism, progressive reforms, and philanthropy. The progressives and socialists sought many of the same ends with differing means: an 8-hour work day, federal income tax, direct election of senators, and a government crackdown on the abusive practices of the industrial monopolies. Perhaps the socialists of the 1890s were the Occupy Movement of their day, as some have suggested, and Obama represents the moderate, party-driven strategy taken by Roosevelt and Taft.

Others, like Andrew Carnegie, insisted that the inequality of the Gilded Age “is not to be deplored, but welcomed as highly beneficial.” For Carnegie, this new class of industrial billionaires could dedicate their accumulated wealth to philanthropy and, in doing so, address societal problems that are too large for individuals and too complex for government. This is the same argument made by Matthew Bishop and Michael Green in Philanthrocapitalism. Writing in the New Yorker, Russ Juskalian is less convinced.

Muckraking cartoon

During their political formation, both Roosevelt and Taft — from upper-class, well educated households — held the minority view of their Republican Party that government has a role to play in the redistribution of wealth and the regulation of monopolies. We must remember that after the US Civil War, in addition to increased industrialization and migration to cities, the tone of the country was largely defined by the Homestead Acts, which encouraged the settlement of the West, and established the American Dream — the assumption that any hardworking American could make a future for himself.

Somewhere between the noisy labor activists and the wealthy industrialists of the East Coast, most Americans were distrustful of both groups — and they were especially distrustful of government. The Reconstruction Era following the Civil War was defined by its laissez-faire attitude toward government. It assumed that the less the government was involved, the better off society would be.

In order to change the public’s attitude toward government, Roosevelt successfully managed relations with the press to take advantage of the “bully pulpit,” a term he coined to describe the president’s privileged position to change public opinion. Roosevelt was an extreme extrovert, tireless, always engaged in meeting after meeting, and ceaselessly advocating his point of view. He frequently invited journalists both to solicit their opinions, but also to spread his own progressive gospel.

Taft, by contrast, was an extreme introvert who dreaded public speaking, always sought consensus and was hesitant to use the press to advocate his reform agenda. In temperament Roosevelt was similar to Bill Clinton — always seen, always charismatic — and Taft was like Obama — thoughtful, eloquent, cautious. We’re left with no doubt that Taft’s introversion was a burden to his presidency. The same is probably true of Obama.

Roosevelt, like JFK, was a great storyteller. He was able to shape a compelling narrative about where the country had come from since the Civil War and where it was heading. In contrast, a common criticism of Obama today is that, while he’s an excellent writer and orator, he hasn’t been able to craft a vision of where we are headed as a nation and how we will address rising inequality and structural unemployment.

The parallels between the Gilded Age of the 19th century and the New Gilded Age of today are obvious. What is more subtle is the role of the press — then and now. The Bully Pulpit makes a convincing case that the muckraking investigative journalists of the 1890s — especially those at McClure’s Magazine — were requisite in raising the public’s conscious about the poor conditions suffered by the working class, the abuses of the industrial monopolies, and the political corruption exemplified by Tammany Hall in New York. McClure’s 20,000+ word articles were both investigative and explanatory in nature — uncovering abuses, yet also explaining their political relevance to their readers.

There is perhaps another modern parallel between the Muckrakers of the Progressive Era and some of the entrepreneurial journalists of today like Ezra Klein , Glenn Greenwald, Laura Poitras and Bill Keller. In addition to uncovering malfeasance, these journalists focus on explaining the social importance of the issues, and, ultimately, make a case for political reform.

I am optimistic that today’s new breed of philanthropy-backed, entrepreneurial journalists are the muckrakers of today’s new Gilded Age that will uncover the wrongs and advocate for necessary reforms. I’m less optimistic that a progressive reformer like Teddy Roosevelt could be elected in today’s money-driven electoral system. Granted, Roosevelt was never elected in the first place. If William McKinley hadn’t been assassinated by the anarchist Leon Czolgosz, it’s unlikely that Teddy Roosevelt (McKinley’s vice president) would have become president.

It took aggressive, enlightened leadership to stand up to the corporate interests that defined the party politics of the Gilded Age. Obama, so far, has proven to be enlightened, but not aggressive. It’s difficult to imagine a contemporary national leader who could craft a sufficiently compelling narrative to rally the entire country behind a movement to address campaign finance reform, corporate lobbying, and economic inequality.