Week 8

Unequal Distribution of Wealth

The US is the wealthiest country in the world, but it has one of the highest disparities of wealth. Over the past 30 years, the unequal distribution of wealth has greatly increased and the gap has widened. Fixing perceived economic injustice has become an important political topic and focus. In a modern democratic republic, concentration of wealth can be a threat to democracy.

The market system that governs the economy of the United States has led to phenomenal growth, world leadership, and unprecedented prosperity over the course of its history. But it is not without its weaknesses and challenges. In an economic environment that has so many variables, economic rewards are delivered unequally. Over time, this creates wildly varying levels of income and wealth. The United States is the wealthiest country in the world, but it also has one of the highest disparities of wealth.

There are many influential factors of the poverty rate (breakdown of the family, economic exploitation, legacy of slavery and racism, and so on). The poverty rate fluctuates between 10–15% of the population in the bracket below the basic standard of living. Over the course of American history, there has been a gap between rich and poor but there has also been a significant movement of people out of poverty. Over the past 30 years, the unequal distribution of wealth has greatly increased and the gap has widened significantly. The most recent available figures (2013) from the Congressional Budget Office report the following on aggregate family wealth (assets minus debts):

Families at or below the 25th percentile were $13,000 in debt.

In a modern democratic republic, concentration of wealth can be a threat to democracy, freedom, opportunity, and virtue. There are many warnings in The Book of Mormon and from modern prophets that warn of the trouble caused by inequality and stark class divisions. As the American economy has evolved and American attitudes about political equality have developed to be more inclusive, many have come to question the justice of this economic inequity. Fixing perceived economic injustice has become an important political topic and focus.

Creating economic justice in our society is difficult, and there is complexity in defining what economic justice is and what it would look like.

There are essentially two sides to this. One argues for greater equality in opportunity—free public education for everyone, government protections against discrimination within the market, regulations to protect against different forms of corruption, and so on. The idea is that when opportunities are quantized, more people have access to fully participate in the market system. Success or economic reward is not guaranteed, but everyone can try.

The other common way to address economic inequality is through equality of conditions—an active government role in managing the economy and ameliorating (make better) the effect of unequal wealth distribution through progressive taxation and the redistribution of tax dollars to support an economic safety net. This would provide food, shelter, job training and job insurance programs to support economically disadvantaged people. This would help, but not guarantee, a stabilized market system and a minimization of the pain economic disruptions cause.

These programs are often called “entitlement programs” (such as Social Security, Medicare, Medicaid, food stamps, and veterans’ compensation). The vast majority of funds earmarked as entitlements in the federal budget help support veterans, the disabled, the elderly, and children. Some argue that these programs can be seen as an investment of sorts that helps to create economic contributors.The problem, however, remains.

Though neither of these solutions are inherently bad, their attempts to solve the problems of the market system can lead to a society developing a “spirit of entitlement” that can inhibit provident living and self-reliance. Below are two addresses from recent BYU-Idaho leaders that offer counsel and advice about avoiding a spirit of entitlement, regardless of our economic situation.

Elder David A. Bednar, “Repeat Over Again … the Same Things as Before”, January 26, 2016

I began my service on this campus in the summer of 1997, at what was then the largest private two-year college in the United States—Ricks College. In September of that year President James E. Faust, second counselor in the First Presidency, visited the school to dedicate the new John Taylor Building. Elder Henry B. Eyring of the Quorum of the Twelve Apostles and the Commissioner of Church Education was President Faust’s companion for that special occasion.

Elder Eyring arrived in Rexburg one day early to review several matters with me and to ensure that everything was in order for President Faust. When I picked up Elder Eyring at the airport, I learned that he had just returned from a two-week assignment in South America. He obviously was tired from his travels, and I was anxious to get him to our home so he could rest.

As we drove to Rexburg, I asked Elder Eyring if he was interested in quickly walking through the completed Taylor Building. He answered that he was interested, and we spent approximately 15 minutes inspecting the classrooms and other facilities.

Our last stop was the Taylor Chapel, and Elder Eyring stood near the pulpit on the stand and surveyed the seating area for quite a long time. After a few minutes, I asked him: “Elder Eyring, what are you thinking about?” He answered with this profound and penetrating observation: “I am thinking about how much we do for so few and how little we do for so many.” He then continued, “The tithing of the people I just visited in South America and from good people all over the world paid for this facility. And most of the people who have made this beautiful facility possible will never see or step foot in a building like this. That is what I am thinking about.”

That experience and the lesson I learned from Elder Eyring influenced me greatly during the time I served at BYU–Idaho. The Church of Jesus Christ of Latter-day Saints has invested millions of tithing dollars over the last 15 years to upgrade the BYU–Idaho campus and programs. Such expenditures have been made to enhance your learning, developmental, and employment experiences. Please do not take these sacred resources, your choice opportunities, and this beautiful campus for granted.

Please do not think that you are somehow more deserving or worthy. Please be grateful for the singular chance you have to learn and work here and for the responsibility that rests upon you as one who has been the recipient of great blessings.

In October of 2006, I returned to BYU-Idaho as a member of the Quorum of the Twelve to speak in a devotional and to preside at the groundbreaking ceremony for this BYU-Idaho Center and the Manwaring Center addition. I repeat again the warning and promise I expressed on that occasion.

“In the authority of the holy Apostleship, I now raise a voice of warning and make a solemn promise. If the day ever were to come that intellectual arrogance, a lack of appreciation, and a spirit of demanding entitlement take root on this campus—among the students, faculty, employees or the administration, or within the community—then in that day the Spirit of Ricks will be well on the way to being extinguished—and the heavenly influence and blessings that have prospered this institution and the people associated with it will be withdrawn. Conversely, as long as intellectual modesty, humility, gratitude, obedience, and frugality continue to characterize those who learn and serve at BYU-Idaho, then this university will shine forth ever brighter as a beacon of righteousness and of inspired educational innovation” (David A. Bednar, The Spirit and Purposes of Gathering, Oct. 2006, 10–11).

I repeated that identical warning and promise at the dedicatory service of this building in December of 2010. Today I emphasize, affirm, and renew that warning and promise for a third time. You understandably may be asking yourself the question, why repeat this message a third time?

I am not the same man who warned and promised in 2006 and 2010. I am the same man, but I am different. I have traveled the earth for more than a decade and visited countless homes of faithful Church members—the rich and the poor, the meek and the humble, the educated and the uneducated. Those converted and consecrated Latter-day Saints have changed me.

I participate every year in the Council on the Disposition of the Tithes with the First Presidency, the other members of the Twelve, and the Presiding Bishopric. I witness firsthand the watch care exercised by the leaders of this Church over the widow’s mite that makes it possible for you to be a student or an employee at this university. Those experiences have changed me.

As sincere and earnest as I was in 2006 when I first delivered that warning and promise, I am many times more focused and intense about it today than I was then.

This campus is not the same campus it was in 1997 or 2006 or 2010. The campus is the same but different. I have watched for many years as the Lord has blessed and prospered the students, staff, and faculty of this remarkable university. The facilities are functional and beautiful. The students, staff, and faculty are faithful and diligent. So much has been accomplished in such a short period of time.

And precisely because you and the university are being blessed and prospered, the warning and promise are needed a third time. In particular, a warning is most needed when we do not think we need to be warned. Using the language of the Old Testament prophet Haggai, I invite you to carefully and prayerfully “consider your ways” (Haggai 1:5, 7). Is your pride allowing intellectual arrogance to creep into your mind and heart? Are you forgetting the Lord and failing to appreciate His bounteous blessings and promises? Are you turning inward, becoming self-centered, and gradually developing an attitude of personal privilege and entitlement?

These insidious spiritual flaws can develop in us so subtly that we may not recognize or respond to them. As you ponder these questions sincerely and with real intent, I promise the Holy Ghost will help you to see yourself as you “really are” (Jacob 4:13) and to identify both the things you presently are doing well and the course corrections you need to make in your life.

I believe consecrated people like you in this sacred and set apart place, with the help of the Lord and by the power of His Holy Spirit, can attenuate the pride cycle so prominently highlighted throughout the Book of Mormon. You can prosper and remain submissive. You can succeed and avoid arrogance. You can receive blessings with gratitude and not be seduced by a sense of self-serving entitlement. You can increase the intensity of the righteous light that shines forth from Brigham Young University-Idaho.

I love you, and I love BYU-Idaho. I invoke the Lord’s blessings upon you, both individually and collectively—even the spiritual capacities and gifts that will be necessary for you to overcome and avoid the pride that so often follows periods of great prosperity.

Elder Kim B. Clark, “Drenched in Gratitude: Protection Against the Spirit of Entitlement” September 14, 2010

When physical poisons enter the body, they disrupt the body’s systems and organs and can cause illness and even death. There are also spiritual poisons that disrupt our capacity to discern spiritual feelings and impressions. In their most advanced and virulent forms, spiritual poisons cause the afflicted to “die as to things pertaining unto righteousness” (Alma 12:16). There are many kinds of spiritual poisons. Today, I would like to talk about a spiritual poison that hardens the heart and deadens the soul. I speak today of the spirit of entitlement …

If you and I have the spirit of entitlement, it means we have an attitude and belief that the world owes us what we want. Like Laman and Lemuel, some who harbor the spirit of entitlement believe they have been shortchanged in life or aggrieved in some way and that they deserve more than they are getting. Often those who succumb to the spirit of entitlement feel superior to those around them, or believe certain rules should not apply to them, or that they should not be required to do what everyone else has to do. They believe they are entitled to special treatment and special privileges. They want something for nothing.

The spirit of entitlement has a history that goes back to the War in Heaven. Satan was full of pride and the spirit of entitlement when he rebelled and fought against the Father and the Son. He said to God, “I will redeem all mankind, that one soul shall not be lost, and surely I will do it; wherefore give me thine honor.” Jesus, in contrast, said simply, “Father, thy will be done, and the glory be thine forever.”

It is the law of heaven that “when we obtain any blessing from God, it is by obedience to that law upon which it is predicated.” But the blessing comes in God’s “own time, and in his own way.” Not only was Satan’s proposal contrary to God’s law and plan, but he demanded the blessing of God’s honor. Where Jesus was humble and submissive to the Father’s will, Satan was proud and entitled. Satan embraced the demanding spirit of entitlement in the pre-mortal realm and was “cast down.” Now he seeks to infect us with its deadly poison.

That infection often begins with small and simple feelings we might each encounter under certain circumstances; for example, a brother who was absent for several classes in the semester but claimed he should be treated differently because he was the head of a campus organization; or a sister who felt she had a right to an A in a class just because she had turned in all the assignments; or a brother who believed he had a right to park next to every classroom building.

The spirit of entitlement is a poison that works on the spiritual heart. Our heart contains our deepest desires and commitments and our character and our will. It is to and in our heart that the Lord communicates spiritual truth and divine guidance. When the spirit of entitlement gets into our hearts, we become overly concerned with measures of material success and preoccupied with indicators of rank and privilege. Greed creeps in, and we develop an attitude that we deserve to have our worldly wants and the desires of the natural man satisfied.

When this happens, we are on our way to becoming like the people the Lord described in the first section of the Doctrine and Covenants: “They seek not the Lord to establish his righteousness, but every man walketh in his own way, and after the image of his own god.”

Brothers and sisters, this is what the spirit of entitlement is and what it does. It separates us from God and makes us forget the Savior and our dependence on His mercy and grace. It is a deadly spiritual poison. But we can be like Naaman after he washed himself in the Jordan seven times. If we will turn to God, humble ourselves, and repent, the Lord Jesus Christ will take away the poison and heal and change our hearts.

Like physical pain and swelling, there are warning signs of the spirit of entitlement. And so, we need to search our hearts to see if we find any sign of the spirit of entitlement there. Here are some questions that may help in the search: Are you overly critical of others? Do you look down on others? Is the word “deserve” used frequently in your vocabulary—as in “I deserve” or “I don’t deserve” this or that? Do you care too much about indicators of status and rank? If you are not recognized, or accorded a privilege, or blessed immediately after doing something good—do you hear a voice inside saying, “What about me?” or “That is not

fair”? Do you ever seek special treatment for yourself? Does it happen often?

The answers to these questions could be early warning signs that the spirit of entitlement is at work. If you or I ever feel these things or hear these things in our minds, we should not be like the little boy with the pitchfork wound in his foot. We should not foolishly wait for the poison to work. We should act in faith in Christ and repent—turn away from the spirit of entitlement and turn to the healing, redeeming power of the Lord.

Brothers and sisters, gratitude is the great antidote, the great protection against the spirit of entitlement. What we need is deep gratitude for the Lord Jesus Christ. We need to be drenched in gratitude for Him so that we “confess … his hand in all things” and “live in thanksgiving daily for the many mercies and blessings which he doth bestow upon [us] (Alma 34:38).”

I would like to close by suggesting three things we can do to engender a spirit of gratitude in our lives: pray with real intent, partake of the sacrament with our hearts and minds focused on the Savior, and worship in the temple with thanksgiving. These are gifts from the Savior. He has created them for us and taught us how to use them. They are opportunities to help us always remember Him and express our love and gratitude for Him. If we pursue these three sacred opportunities with full purpose of heart, we will have the spirit of gratitude in our lives and we will be protected from the spirit of entitlement. We will feel like and be like the people at the temple at Bountiful when the Savior appeared to them.

Economic Virtue: Worth Ethic, Self Reliance, Provident Living, and Charity

A strong work ethic, self-reliance, provident living, and charitable giving are also important for the proper operation of the market system. They offer an opposition force to the spirit of entitlement. Economic virtue has been a key topic for church leaders. The following excerpts are meant to help you consider the principle of economic virtue in your own lives. Notice the common principles: avoiding a spirit of entitlement, hard work and industry, self-reliance and provident living, avoiding debt, greed, selfishness, and of giving of our substance to those in need.

Elder D. Todd Christofferson, “Reflections on a Consecrated Life,” October 2010

A consecrated life is a life of labor. Beginning early in His life, Jesus was about His Father’s business (see Luke 2:48–49). God Himself is glorified by His work of bringing to pass the immortality and eternal life of His children (see Moses 1:39). We naturally desire to participate with Him in His work, and in so doing, we ought to recognize that all honest work is the work of God. In the words of Thomas Carlyle: “All true Work is sacred; in all true Work, were it but true hand-labor, there is something of divineness. Labor, wide as the Earth, has its summit in Heaven.”

God has designed this mortal existence to require nearly constant exertion. I recall the Prophet Joseph Smith’s simple statement: “By continuous labor [we] were enabled to get a comfortable maintenance” (Joseph Smith—History 1:55) By work we sustain and enrich life. It enables us to survive the disappointments and tragedies of the mortal experience. Hard-earned achievement brings a sense of self-worth.

Work builds and refines character, creates beauty, and is the instrument of our service to one another and to God. A consecrated life is filled with work, sometimes repetitive, sometimes menial, sometimes unappreciated but always work that improves, orders, sustains, lifts, ministers, aspires.

Having spoken in praise of labor, I must also add a kind word for leisure. Just as honest toil gives rest its sweetness, wholesome recreation is the friend and steadying companion of work. Music, literature, art, dance, drama, athletics—all can provide entertainment to enrich one’s life and further consecrate it. At the same time, it hardly needs to be said that much of what passes for entertainment today is coarse, degrading, violent, mind-numbing, and time wasting. Ironically, it sometimes takes hard work to find wholesome leisure. When entertainment turns from virtue to vice, it becomes a destroyer of the consecrated life. “Wherefore, take heed … that ye do not judge that which is evil to be of God” (Moroni 7:14).

Elder Joe J. Christensen, “Greed, Selfishness, and Overindulgence,” May 1999

… When it comes to overcoming being greedy, selfish, and overly indulgent, we all need a lot more help. In his candid manner, President Brigham Young said: “The worst fear … I have about this people is that they will get rich in this country, forget God and His people, wax fat, and kick themselves out of the Church … My greater fear … is that they cannot stand wealth.”

Our prosperity brings some real challenges because many are getting rich, more of us are waxing fat, and as a result of greed, selfishness, and overindulgence, we could lose the Spirit and literally kick ourselves out of the Church … Money in and of itself is not an evil, but as Paul taught Timothy, it is the love of money that is the root of all evil.

There are some of the wealthy who deal with their prosperity very well using their resources to bless others and build the kingdom. For many, however, wealth presents major difficulties. As we deal with the materialism that threatens us, here are four suggestions for each of us to consider:

First, we should not confuse wants with needs …

If we are not careful, it is easy for our wants to become needs. Remember the line “There, there, little luxury, don’t you cry. You’ll be a necessity by and by.” Second, we should avoid spoiling children by giving them too much.

In our day, many children grow up with distorted values because we as parents overindulge them. Whether you are well-to-do or, like most of us, of more modest means, we as parents often attempt to provide children with almost everything they want thus taking away from them the blessing of anticipating, of longing for something they do not have. One of the most important things we can teach our children is to deny themselves. Instant gratification generally makes for weak people. How many truly great individuals do you know who never had to struggle? … In the words of Fred Gosman, “Children who always get what they want will want as long as they live.” All too many enter marriage who have never learned to cook, sew, or develop other important life skills. Ignorance of these needed skills, along with the lack of understanding of the management of money, sow the seeds for many failures in our children’s marriages. I fear that in many cases we are rearing children who are slaves to expensive fads and fashions. Remember the scripture, “For where your treasure is, there will your heart be also.” How do we determine where our treasure is? To do so, we need to evaluate the amount of time, money, and thought we devote to something. Might it not be well to evaluate how much focus we place on shopping and spending? …

Third, as we have heard so often, live modestly and avoid debt as if it were a plague.

… How much house do we really need to accommodate our family comfortably?

We should not endanger ourselves either spiritually or economically by acquiring homes which are ostentatious, feed our vanity, and go far beyond our needs.

If we are to be self-reliant and in a position to share, obviously we must acquire some resources. If we live within our means and avoid debt, resources can be accumulated. There are those with average incomes who, over a lifetime, do amass some means, and there are those who receive large salaries who do not. What is the difference? It is simply spending less than they receive, saving along the way, and taking advantage of the power of compound interest. Financial consultants indicate that “most people have it all wrong about wealth … Wealth is not the same as income. If you make a good income each year and spend it all, you are not getting wealthier. You are just living high. Wealth is what you accumulate, not what you spend.”

Finally, be generous in giving and sharing with others.

The more our hearts and minds are turned to assisting others less fortunate than we, the more we will avoid the spiritually cankering effects that result from greed, selfishness, and overindulgence. Our resources are a stewardship, not our possessions. I am confident that we will literally be called upon to make an accounting before God concerning how we have used them to bless lives and build the kingdom.

Elder Jeffrey R. Holland, “Are We Not All Beggars?” October 2014

… From the beginning of His ministry, Jesus loved the impoverished and the disadvantaged in an extraordinary way. He was born into the home of two of them and grew up among many more of them. We don’t know all the details of His temporal life, but He once said, “Foxes have holes, and … birds … have nests; but the Son of man hath not where to lay his head.” Apparently the Creator of heaven and earth “and all things that in them are” was, at least in His adult life, homeless.

Down through history, poverty has been one of humankind’s greatest and most widespread challenges. Its obvious toll is usually physical, but the spiritual and emotional damage it can bring may be even more debilitating. In any case, the great Redeemer has issued no more persistent call than for us to join Him in lifting this burden from the people. As Jehovah, He said He would judge the house of Israel harshly because “the spoil of the [needy] is in your houses.” “What mean ye,” He

cried, “that ye beat my people to pieces, and grind the faces of the poor?”… In our day, the restored Church of Jesus Christ had not yet seen its first anniversary when the Lord commanded the members to “look to the poor and … needy, and administer to their relief that they shall not suffer.” Note the imperative tone of that passage—“they shall not suffer.” That is language God uses when He means business.

Given the monumental challenge of addressing inequity in the world, what can one man or woman do? The Master Himself offered an answer. When, prior to His betrayal and Crucifixion, Mary anointed Jesus’s head with an expensive burial ointment, Judas Iscariot protested this extravagance and “murmured against her.” Jesus said: “Why trouble ye her? she hath wrought a good work …“She hath done what she could.”

“She hath done what she could”! What a succinct formula! … So how might we “do what we can”? For one thing, we can, as King Benjamin taught, cease withholding our means because we see the poor as having brought their misery upon themselves. Perhaps some have created their own difficulties, but don’t the rest of us do exactly the same thing? Isn’t that why this compassionate ruler asks, “Are we not all beggars?” Don’t we all cry out for help and hope and answers to prayers? Don’t we all beg for forgiveness for mistakes we have made and troubles we have caused? Don’t we all implore that grace will compensate for our weaknesses, that mercy will triumph over justice at least in our case? Little wonder that King Benjamin says we obtain a remission of our sins by pleading to God, who compassionately responds, but we retain a remission of our sins by compassionately responding to the poor who plead to us.

In addition to taking merciful action in their behalf, we should also pray for those in need. A group of Zoramites, considered by their fellow congregants to be “filthiness” and “dross”—those are scriptural words—were turned out of their houses of prayer “because of the coarseness of their [wearing] apparel.” They were, Mormon says, “poor as to things of the world; and also … poor in heart”—two conditions that almost always go together. Missionary companions Alma and Amulek counter that reprehensible rejection of the shabbily dressed by telling them that whatever privileges others may deny them, they can always pray—in their fields and in their houses, in their families and in their hearts. But then, to this very group who had themselves been turned away, Amulek says, “After [you] have [prayed], if [you] turn away the needy, and the naked, and visit not the sick and afflicted, and impart of your substance, if [you] have [it], to those who stand in need—I say unto you, … your prayer is vain, and availeth you nothing, and [you] are as hypocrites who do deny the faith.”What a stunning reminder that rich or poor, we are to “do what we can” when others are in need.

Now, lest I be accused of proposing quixotic global social programs or of endorsing panhandling as a growth industry, I reassure you that my reverence for principles of industry, thrift, self-reliance, and ambition is as strong as that of any man or woman alive. We are always expected to help ourselves before we seek help from others. Furthermore, I don’t know exactly how each of you should fulfill your obligation to those who do not or cannot always help themselves. But I know that God knows, and He will help you and guide you in compassionate acts of discipleship if you are conscientiously wanting and praying and looking for ways to keep a commandment He has given us again and again.

You will recognize that I speak here of difficult societal needs that go well beyond members of the Church. Fortunately the Lord’s way of assisting our own is

easier: all who are physically able are to observe the law of the fast. Isaiah wrote: “Is not this the fast that I have chosen? … Is it not to deal thy bread to the hungry, and that thou bring the poor that are cast out to thy house? when thou seest the naked, that thou cover him … ? [that thou] undo the heavy burdens, and … let the oppressed go free … ?”

I bear witness of the miracles, both spiritual and temporal, that come to those who live the law of the fast. I bear witness of the miracles that have come to me.

Truly, as Isaiah recorded, I have cried out in the fast more than once, and truly God has responded, “Here I am.” Cherish that sacred privilege at least monthly, and be as generous as circumstances permit in your fast offering and other humanitarian, educational, and missionary contributions. I promise that God will be generous to you, and those who find relief at your hand will call your name blessed forever. More than three-quarters of a million members of the Church were helped last year through fast offerings administered by devoted bishops and Relief Society presidents. That is a lot of grateful Latter-day Saints.

Brothers and sisters, such a sermon demands that I openly acknowledge the unearned, undeserved, unending blessings in my life, both temporal and spiritual. Like you, I have had to worry about finances on occasion, but I have never been poor, nor do I even know how the poor feel. Furthermore, I do not know all the reasons why the circumstances of birth, health, education, and economic opportunities vary so widely here in mortality, but when I see the want among so many, I do know that “there but for the grace of God go I.” I also know that although I may not be my brother’s keeper, I am my brother’s brother, and “because I have been given much, I too must give.”

In that regard, I pay a personal tribute to President Thomas Spencer Monson. I have been blessed by an association with this man for 47 years now, and the image of him I will cherish until I die is of him flying home from then–economically devastated East Germany in his house slippers because he had given away not only his second “suit and his extra shirts but the very shoes from off his feet. “How beautiful upon the mountains [and shuffling through an airline terminal] are the feet of him that bringeth good tidings, that publisheth peace.” More than any man I know, President Monson has “done all he could” for the widow and the fatherless, the poor and the oppressed.”

The Decline of Economic Virtue

In a system of free agency, not all choices made are good ones. An overly focus on self-interest is seen in the desire to accumulate wealth regardless of consequence, flaunt riches, exploit advantages, and maintain a position over others. Greed and selfishness leads to the exploitation of others or the system. This type of success is without economic virtue which, again, hurts others.

A purely capitalist economic system would be based on laissez faire principles, where the government would leave the market alone completely. Circumvention of the laws of supply and demand is possible. For example, when monopolies (a lack of competition) develop they tend to charge inflated prices and offer poor service/products. This can hurt the consumer greatly. Without competition, businesses have no incentive to improve or regulate quality. Producers can take advantage of consumers by knowingly selling poor products. Employers can take advantage of employees by paying wages below what would be considered fair.

To avoid this, the government is called to step in and increase regulation. This solves some of the unvirtuous activities an unvirtuous economy leans toward. A strong, functioning government is key to the successful operation of the market system. The enforcement of rule of law, property rights, and free exchange is necessary for a productive economic activity. The government does this through internal controls on industry—inspections, rules, licensing requirements— which help root out corruption and protect workers and consumers.

As the government has stepped in to try to protect citizens from this lack of economic virtue, society has lost a certain amount of economic freedom and also a certain level of economic responsibility and self-reliance. When freedom declines in the marketplace, businesses tend to find loopholes in the laws and anarchy rises.

Corruption and scandal are not an unavoidable feature of the market system. Pragmatically understood, the market system means economic freedom under the rule of law, which protects natural rights and channels self-interest for the benefit of all.

Corruption and malfeasance—theft, misrepresentation, manipulation, fraud—take those rights away, and do not leave the market “free.”

As our country loses its cultural values of hard work, thrift, and individual responsibility, it must rely more on the government to restrain its excesses, distribute its wealth, and support its people. If we can’t regulate ourselves, then the government will take on more regulatory functions. If we can’t be charitable voluntarily, the government will redistribute money by force and taxation. All of this means a decline in economic liberty. When moral virtues decline, free market institutions decline as well.

The following section on the Progressive Movement examines a key period in American history. It offers a case study of technological change, decline in economic virtue, revolutionary market growth, and responses to those challenges by the government and society.

The Progressive Era Responds to the Lack of Economic Virtue and Unequal Distribution of Wealth

As discussed in Lesson 7, industrialization significantly changed American society. The growth of transportation networks (like cross-continental railroads) and communication systems (like the telegraph and telephone) facilitated the change. Railroads in particular had a multiplier effect. Its need for land, labor, and materials stimulated other industries (like coal, wood, and steel).l. The companies that controlled these industries quickly amassed immense wealth, and were entrenched in their monopolies over all levels of production.

The country, tied together by these networks, became a nationwide market. Consequently, this led to a standardization of consumers, the creation of national newspapers and magazines, and a significant increase of bureaucracy and economic complexity. Western settlement followed the railroad. As the steel railroads grew horizontally across the landscape, the expansion of the railroads spurred the growth of American cities with skyscrapers and tenement living. These urban environments became centers for immigration. However, these environments also led to worker exploitation, political corruption, crime, and poverty.

Many different groups looked at these monumental changes with fear. It was an unknown world, and assumptions that had governed life before were no longer valid. It is from this environment that the Progressive Reform Movement emerged. There were many concerns—immigration, changing ideas of American cities, unprecedented concentration of wealth and power (referred to as “Robber Barons”), alarm at working conditions, exploitation of child labor, food safety, and attempts to make the political system more responsive and democratic.

The Progressive Reform Movement was made up of many groups with different motivations and goals. Motivation for Progressive reform came from industrialization’s significant effect on American economic practice and virtue as well as the unequal distribution of wealth and opportunity. The Progressives fought for a more involved government that regulated the market and protected workers and consumers. One way they tried to promote this is through journalistic muckraking—exposing ugly truths so the people will realize change is needed and fight for it.

These attempts at “muckraking” could reach a larger audience of readers far and wide because of new technology. Upton Sinclair’s The Jungle, a 1906 exposé of the meatpacking industry and its exploited workers in Chicago, is a powerful example of muckraking. Sinclair’s goal was to portray the failures of capitalism so dramatically that readers would be willing to accept his suggestion that capitalism be scrapped in favor of socialism. Many reforms came as a result of Sinclair’s portrayal of the industry and his description of the trials of a particular immigrant family. But as Sinclair remarked later, “I aimed at the public’s heart and by accident hit its stomach.” As you read the following excerpt from The Jungle, imagine what its impact might be to a public unaware of both the worker’s lives and the unsanitary conditions the food they ate was produced in.

Excerpts from Upton Sinclair, The Jungle (1906):

Let a man so much as scrape his finger pushing a truck in the pickle rooms, and he might have a sore that would put him out of the world; all the joints in his fingers might be eaten by the acid, one by one. Of the butchers and floorsmen, the beef-boners and trimmers, and all those who used knives, you could scarcely find a person who had the use of his thumb; time and time again the base of it had been slashed, till it was a mere lump of flesh against which the man pressed the knife to hold it. The hands of these men would be criss-crossed with cuts, until you could no longer pretend to count them or to trace them. They would have no nails—they had worn them off pulling hides; their knuckles were swollen so that their fingers spread out like a fan. 

Factory workers packing sliced bacon in glass jars at the Armour and Company meatpacking house, Union Stock Yards, Chicago, Illinois. Stereograph, c1909.
There were men who worked in the cooking rooms, in the midst of steam and sickening odors, by artificial light; in these rooms the germs of tuberculosis might live for two years, but the supply was renewed every hour. There were the beef-luggers, who carried two-hundred-pound quarters into the refrigerator-cars; a fearful kind of work, that began at four o’clock in the morning, and that wore out the most powerful men in a few years.
There were those who worked in the chilling rooms, and whose special disease was rheumatism; the time limit that a man could work in the chilling rooms was said to be five years. There were the wool-pluckers, whose hands went to pieces even sooner than the hands of the pickle men; for the pelts of the sheep had to be painted with acid to loosen the wool, and then the pluckers had to pull out this wool with their bare hands, till the acid had eaten their fingers off. There were those who made the tins for the canned meat; and their hands, too, were a maze of cuts, and each cut represented a chance for blood poisoning. Some worked at the stamping machines, and it was very seldom that one could work long there at the pace that was set, and not give out and forget himself and have a part of his hand chopped off.
There were the “hoisters,” as they were called, whose task it was to press the lever which lifted the dead cattle off the floor. They ran along upon a rafter, peering down through the damp and the steam; and as old Durham’s architects had not built the killing room for the convenience of the hoisters, at every few feet they would have to stoop under a beam, say four feet above the one they ran on; which got them into the habit of stooping, so that in a few years they would be walking like chimpanzees …

With one member trimming beef in a cannery, and another working in a sausage factory, the family had first-hand knowledge of the great majority of Packingtown swindles. For it was the custom, as they found, whenever meat was so spoiled that it could not be used for anything else, either to can it or else to chop it up into sausage. With what had been told them by Jonas who had worked in the pickle rooms, they could now study the whole of the spoiled-meat industry on the inside, and read a new and grim meaning into that old Packingtown jest—that they use everything of the pig except the squeal … There was never the least attention paid to what was cut up for sausage; there would come all the way back from Europe old sausage that had been rejected, and that was moldy and white—it would be dosed with borax and glycerin, and dumped into the hoppers, and made over again for home consumption. There would be meat that had tumbled out on the floor, in the dirt and sawdust, where the workers had tramped and spit uncounted billions of consumption germs.

There would be meat stored in great piles in rooms; and the water from leaky roofs would drip over it, and thousands of rats would race about on it. It was too dark in these storage places to see well, but a man could run his hand over these piles of meat and sweep off handfuls of the dried dung of rats. These rats were nuisances, and the packers would put poisoned bread out for them; they would die, and then rats, bread, and meat would go into the hoppers together. This is no fairy story and no joke; the meat would be shoveled into carts, and the man who did the shoveling would not trouble to lift out a rat even when he saw one—there were things that went into the sausage in comparison with which a poisoned rat was a tidbit. There was no place for the men to wash their hands before they ate their dinner, and so they made a practice of washing them in the water that was to be ladled into the sausage. There were the butt-ends of smoked meat, and the scraps of corned beef, and all the odds and ends of the waste of the plants, that would be dumped into old barrels in the cellar and left there. Under the system of rigid economy which the packers enforced, there were some jobs that it only paid to do once in a long time, and among these was the cleaning out of the waste barrels.

Every spring they did it; and in the barrels would be dirt and rust and old nails and stale water—and cartload after cartload of it would be taken up and dumped into the hoppers with fresh meat, and sent out to the public's breakfast. Some of it they would make into “smoked” sausage—but as the smoking took time, and was therefore expensive, they would call upon their chemistry department, and preserve it with borax and color it with gelatin to make it brown. All of their sausage came out of the same bowl, but when they came to wrap it they would stamp some of it “special,” and for this they would charge two cents more a pound.

Anti-Child Labor poster, circa 1910.

As a result of public pressure created by the response to The Jungle, Congress passed two pieces of groundbreaking reform legislation to protect and regulate the food supply with health and safety standards; the Pure Food and Drug Act (1906), and the Meat Inspection Act (1906). Another focus of the Progressives was the working conditions created by the transition to industrial production. “8 hours for work, 8 hours for sleep, 8 hours for what we will” became a popular slogan that helped drive the move toward organized labor and the creation of unions. Reformers focused on the issues of child labor, workplace safety, sanitary conditions, and quality of life protection with maximum hour laws. Children were one of the most exploited classes of workers. Children had always been a key part of the home economy throughout history; however, with the transition to large-scale manufacturing, their role had changed. Children were utilized in coal mines because they could get into small spaces, and on industrial machines because of their small fingers. They were also seen as easier to manage, cheaper to pay, and less likely to organize together in unions or disrupt production with strikes. Shocking pictures of children working in atrocious conditions were often the focus of muckraking photographers. Ending child labor in factories was tied to the movement towards free, compulsory education for all children. Federal efforts to outlaw child labor did not succeed until 1938, as previous attempts were declared unconstitutional.

Child coal miners, West Virginia, circa 1900.

One of the most dramatic incidents that demonstrated the need for workplace safety regulation was the Triangle Shirtwaist Fire in New York City. This factory had been the focus of union activity and protest in the years leading up to the tragedy. The factory caught fire in early 1911, tragically trapping hundreds of workers, largely young immigrant women, on the top floors of the building. Blocked exits, locked doors to prevent stealing, and generally unsafe working conditions created a tragedy where 147 workers died trapped in the building and overcome by fire or after jumping to their death in desperation. Those who died were seen as victims of greed. The Literary Digest, which covered the trial that followed, in which the owners were acquitted of wrongdoing, stated “Nine months ago 147 persons, chiefly young women and girls, were killed by a fire in the factory of the Triangle Waist Company … There are no guilty. There are only the dead, and the authorities will forget the case as speedily as possible. Capital can commit no crime when it is in pursuit of profits. Of course, it is well known that those who were killed in the Triangle disaster are only part, and a small part, of those murdered in industry during the passing year.” The media attention to this incident became a rallying cry for those who pushed for workplace safety regulations on the state and federal level. “These doors must remain open during business hours” became a popular sign and clearly marked fire exits are some of the still visible remnants of these changes.

The lives of workers and their struggles in muckraking journals stood in dramatic contrast to the lifestyles of the industrialists of the era. Andrew Carnegie was one of the most famous beneficiaries of industrialization in America in the late 19th century—when the phrase “millionaire” was invented. Carnegie was regarded as the quintessential example of America’s “rags to riches” stereotype, starting out as a poor Scottish immigrant and ending up directing one of the largest steel companies in America. Men like Carnegie were very aware of their unprecedented and extreme wealth next to the impoverished cities and hardscrabble working conditions. Although Carnegie was a generous philanthropist, many saw him as a “robber baron” who unjustly cornered markets and unfairly treated his workers. Carnegie’s company was the focus of one of the most famous worker’s strikes and union organizing attempts of the era—the 1892 Homestead Strike in Pennsylvania amongst iron and steel workers. His company’s controversial decision to call in private security and the state militia to reign in the worker’s strike resulted in violence and deaths on both sides. The way he dealt with labor struggles helped define his legacy and tarnished his reputation.

In the following excerpt, Carnegie attempted to explain and justify his view of wealth and how it should operate in society. Carnegie focused his charity on libraries throughout the country, many of which are still in operation today.

Excerpts from Andrew Carnegie, “The Gospel of Wealth” (1889)

The problem of our age is the proper administration of wealth, so that the ties of brotherhood may still bind together the rich and poor in harmonious relationship. The conditions of human life have not only been changed, but revolutionized, within the past few hundred years…This change, however, is not to be deplored, but welcomed as highly beneficial. It is well, nay, essential for the progress of the race, that the houses of some should be homes for all that is highest and best in literature and the arts, and for all the refinements of civilization, rather than that none should be so. Much better this great irregularity than universal squalor.

… Not evil, but good, has come to the race from the accumulation of wealth by those who have the ability and energy that produce it. But even if we admit for a moment that it might be better for the race to discard its present foundation, Individualism—that it is a nobler ideal that man should labor, not for himself alone, but in and for a brotherhood of his fellows, and share with them all in common … This is not evolution, but revolution … We might as well urge the destruction of the highest existing type of man because he failed to reach our ideal as favor the destruction of Individualism, Private Property, the Law of Accumulation of Wealth, and the Law of Competition; for these are the highest results of human experience, the soil in which society so far has produced the best fruit. Unequally or unjustly, perhaps, as these laws sometimes operate, and imperfect as they appear to the Idealist, they are, nevertheless, like the highest type of man, the best and most valuable of all that humanity has yet accomplished.

There remains, then, only one mode of using great fortunes; but in this we have the true antidote for the temporary unequal distribution of wealth, the reconciliation of the rich and the poor—a reign of harmony—another ideal, differing, indeed, from that of the Communist in requiring only the further evolution of existing conditions, not the total overthrow of our civilization. It is founded upon the present most intense individualism, and the race is projected to put it in practice by degree whenever it pleases. Under its sway we shall have an ideal state, in which the surplus wealth of the few will become, in the best sense the property of the many, because administered for the common good, and this wealth, passing through the hands of the few, can be made a much more potent force for the elevation of our race than if it had been distributed in small sums to the people themselves. Even the poorest can be made to see this, and to agree that great sums gathered by some of their fellow-citizens and spent for public purposes, from which the masses reap the principal benefit, are more valuable to them than if scattered among them through the course of many years in trifling amounts … Such, in my opinion, is the true Gospel concerning Wealth, obedience to which is destined someday to solve the problem of the Rich and the Poor, and to bring “Peace on earth, among men Good-Will.”

In response to the growth of business monopolies that controlled all levels and aspects of production and distribution, Progressives lobbied for reforms that attempted to force monopolies apart and allow competition. The Sherman Anti-Trust Act (1890) passed by Congress under its interstate commerce clause declared:

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is … illegal. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony.

Partly in response to the wealth of the men like Carnegie and the need for increased federal revenue, the 16th Amendment (1913) was passed—“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” Before the passage of this amendment, federal revenue was derived mainly from customs tariffs and excise taxes.

Progressives also focused on political corruption. Corruption was seen in monopolistic businesses, local politics by city machines and ward bosses, and the spoils system where elected officials reward their supporters with government jobs and contracts. The opportunities for self-enrichment in political service were most famously described by George Washington Plunkitt, a political boss from Tammany Hall in New York City. In 1905 he published a memoir in which he detailed his use of “graft” (various schemes that led public officials to benefit financially through corruption), a problem that plagued many large cities.

Excerpts from George Washington Plunkitt, Plunkitt of Tammany Hall (1905)

Everybody is talkin’ these days about Tammany men growin’ rich on graft, but nobody thinks of drawin‘ the distinction between honest graft and dishonest graft. There’s all the difference in the world between the two. Yes, many of our men have grown rich in politics. I have myself. I’ve made a big fortune out of the game …

There’s an honest graft, and I’m an example of how it works. I might sum up the whole thing by sayin’: “I seen my opportunities and I took ’em.”

Just let me explain by examples. My party’s in power in the city, and it’s goin’ to undertake a lot of public improvements. Well, I’m tipped off, say, that they’re going to lay out a new park at a certain place.

I see my opportunity and I take it. I go to that place and I buy up all the land I can in the neighborhood. Then the board of this or that makes its plan public, and there is a rush to get my land, which nobody cared particular for before.

Ain’t it perfectly honest to charge a good price and make a profit on my investment and foresight? Of course, it is. Well, that’s honest graft. Or supposin’ it’s a new bridge they’re goin’ to build. I get tipped off and I buy as much property as I can that has to be taken for approaches. I sell at my own price later on and drop some more money in the bank.

Wouldn’t you? It’s just like lookin’ ahead in Wall Street or in the coffee or cotton market. It’s honest graft, and I’m lookin’ for it every day in the year. I will tell you frankly that I’ve got a good lot of it, too …

Now, in conclusion, I want to say that I don’t own a dishonest dollar. If my worst enemy was given the job of writin’ my epitaph when I’m gone, he couldn’t do more than write: “George W. Plunkitt. He Seen His Opportunities, and He Took ‘Em.”

The Beginning of Modern American Ideological Differences

Progressives spearheaded several reforms to try to open up the political process. This opening would involve giving more power to the middle-class and taking power away from big business interests or entrenched political bosses. Several states passed reforms to allow individuals or groups to put initiatives on the ballot, pass referendums on the actions of state legislatures, and put in place ways for elected leaders to be recalled (IRR reforms). These reforms also helped to create a fairer primary system. On the national level, amendments to the Constitution were passed: the 17th Amendment (the direct election of senators instead of being chosen by state legislatures) and the 19th Amendment (voting rights for women).

All these themes had faith in reform and believed that wrongs could be made right. They had faith in the scientific process and believed that science and technology would allow them to identify, understand, and solve problems. They also had faith in the power of government as the ultimate tool of change and reform. These documents from the Progressive Era demonstrate the difficulties faced by this new industrial order, and began a debate over the proper role of government and the need for reforms and protections. There were other political challenges in this era—socialism, anarchism, communism, and radicalism—but Progressives on the whole tried to improve existing systems within capitalism and the Constitution; they did not argue for a full-scale revolution.

In many ways, this era marks the beginning of modern American liberalism and the increased emphasis on ideological differences in American politics. As a result of the changes wrought by the Progressive Era, modern liberals began to believe that the result of classical liberalism (a limited government that allows people to be as free as possible from undue restraints, encumbrances, and regulation of their activities) is a rather negative freedom. To them, classical liberalism with limited government allowed those with power in society the freedom to abuse a majority of the people economically and politically.

Modern liberals began to believe that the burdens of freedom (both the political freedom of limited government and the economic freedom from capitalism and free market economics) are too great for the people to bear without restraint and protection. They believed that a positive freedom can only be conferred by the intervention of a vigilant government that protected the people from economic abuse, exploitation, and discrimination within the bounds of the capitalist system. These progressive ideas about the role of modern liberalism would go on to set the stage for future reform periods in times of challenge like the New Deal in the 1930s and the Great Society in the 1960s.

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