Money: Who Has How Much and Why by Andrew Hacker. Published by Scribner, 1997. 254 pages. $25.00.

Reviewed by Gene Mirabelli

“There’s three kinds of liars,” Mark Twain said. “There’s liars, damned liars, and then there’s statistics.” We all like to quote a few statistical facts in order to crush an opponent’s argument or to establish the rightness of our own line of thinking, especially when we’re in the middle of a political dispute. But most of us don’t enjoy reading statistical abstracts and only a few of us can tease out the meaning from a welter of apparently contradictory numbers. Happily, Andrew Hacker is a prince in this domain. Hacker’s book, Money: Who Has How Much and Why, is a compact and lucid account of the ways our society apportions its riches.

The first part of the book is an account of how much money different groups make and how much they have; the second part aims to explain why different groups end up with either the big pieces or the crumbs. Of course, you can read some of this information every day in newspapers and magazines, but that information is almost always tainted, because it was put there to explain something, to rationalize a political or economic point. Hacker’s book is especially welcome because it provides information simply to inform readers, not to persuade them to an agenda. The author has done a remarkable job of writing a straightforward and engaging book which does what he wants it to do: “enhance our understanding of ourselves, of the forces that propel us, and the shape we are giving to the nation of which we are a part.”

America is not only the richest nation of its kind; it’s also the one with the greatest inequality in the distribution of those riches. But before we go any further we should understand what we mean when we say we’re the richest nation. In 1970 we were at the top of the list for Gross Domestic Product per capita. Alas, by 1994 we had fallen behind Switzerland, Japan, Denmark and Norway. However, not to worry, our economists came up with a new yardstick, “purchasing power.” By this measure a typical citizen in this country can buy more with his wages than a citizen with a similar wage in other industrialized countries, because those countries have higher prices. Of course, those other countries have taxes on goods which raise prices, but they also provide social services which we don’t have.

President Kennedy assured us that “a rising tide lifts all boats,” and that an expanding economy benefits everybody. Unfortunately for most of us, the economic tide in the United States lifts the richest yachts faster and higher than the rowboats. From 1975 to 1995 the upper fifth of the nation’s households saw its average income increase by 35.4 percent. The second fifth went up 13 percent, the middle fifth went up 6.7 percent, the fourth went up 4.4 percent, and the bottom household had an income that went up 1.5 percent in that same twenty years. The top fifth did twenty times better than the bottom fifth. And here the author makes an even more interesting observation on those numbers: if you look at their share of the aggregate wealth of the country, not only the bottom fifth lost ground, all three above it lost ground too. So much for the rising tide.

Hacker notes that the position occupied by African-Americans in our economy resembles that of a caste rather than a class. The median income of Blacks went from a crummy $23,806 in 1975, to a crummy $25,970 in 1995. That’s a measly raise of $108 per year for twenty years. And while it’s true that most white families have been falling behind, Black families have been falling behind faster. After making allowances for many other variables, Hacker’s figures lead to the inescapable conclusion that bigotry is at work and that African-Americans do not have the same opportunities as even the most recent immigrants. As for immigrants, in the struggle for riches, Indians come in first, Latinos do poorly and, contrary to Hollywood stereotypes, people of Greek and Italian ancestry have greater household incomes than Americans from England, Denmark or Sweden.

Economics isn’t called the dismal science for nothing. From 1950 to 1960 the earnings of men, ages 35 to 44, rose 37.8 percent, but since the 1970s their income has been dropping. From 1990 to 1995, the earnings of that group went down by 9.5 percent. By his last chapter, Hacker has prepared us for the unhappy fact that “most young Americans will not live as well as their parents did.” Nope, this isn’t Norway where university education is cheap, health care is free, and housewives accumulate points toward government pensions for their labor at keeping the home. No, this is the richest nation on the planet.

On the last page of this beautifully clear and informed book the author says that his work “should not be read as a plea for income redistribution. The reason is straightforward: if people are disinclined to share what they have, they will not be persuaded by a reproachful tone.” Money is never angry or polemical; it’s informed and calm. The author is calm even when informing us that the United States now has a greater percentage of its citizens in prison or on the streets, and more neglected children, than any of the nations with which it can be appropriately compared. The question left unanswered by this excellent book is whether or not we want to continue to be this kind of nation.