America's Distribution of Wealth (1955)

[Music] for when our founding fathers established this Republic they created a political and economic system unique among nations a system which has led the United States to the very Pinnacle in wealth and in world leadership this series of programs is being presented to help all of us understand better our advantages under our American way of life for today's topic let's join now a group of young people at the National Education Program Workshop in Cersei Arkansas at the classroom lecturn is Dr Clifton El gayus Jr noted young historian in order to have a proper appreciation of the American economic system we must know how the national income is divided in America in other words we must examine the distribution of the great wealth produced through the operation of American capitalism is the distribution widespread or is the wealth of America concentrated in the hands of a few as the Socialists and Communists say this is the central question for our discussion today the answer constitutes a tribute to our system for the wealth produced within American capitalism is widely distributed throughout our population as we shall see basically an economic system must fulfill two social needs of the population which it serves first an adequate production of goods and second an equitable distribution of those goods of course there are other measurements of value for an economic system and in our previous classroom sessions we have seen how well our own system measures up how it provides a high degree of economic freedom and great incentives for our Personal Achievement thus bringing about National progress we know that American capitalism is morally right because its Chief elements private ownership the profit motive and the competitive market are wholesome and good they are compatible with God's laws and the teachings of the Bible and lastly we know that with her unique economic system the United States produces 42% of the wealth of the world although we have only 7% of the world's population and 6% of the land area to sum it up our system is morally right it provides economic freedom and great incentives for development and his production of goods is unmatched in all human history this brings us to the central question the question of distribution are these economic benefits under American capitalism being extended to American wage or salary earners or would this big segment of the population be better off under Socialism or communism a dramatic answer to this question came from an English socialist who visited America after Great Britain had experienced a socialist system for 5 years tell me who could possibly afford to buy food in a place such as this well this is just an ordinary Food Market most everybody in America shops and stores like this from time to time you don't have to be a capitalist it's not a luxury look at this for instance competition and big volume keep prices down I say begging on Pardon sir are you a capitalist what did you say what I mean is what is your work I'm a railroad engineer utterly impossible another dramatic answer to the question of America's distribution of wealth was given by a Russian communist who visited America who owns all these automobiles the employees in the plant that cannot be the sons of toil they are chained to their capitalist machines they are exploited they have nothing absolutely nothing under capitalism the Communist was amazed of course in communist countries the workers do not have cars a few of the lucky ones have bicycles and the bicycle is a trademark of English and European workers comparatively few own cars in America as we all know there are more automobiles than families and this is only a hint of our productivity who'll risk could guess as to the total amount of the national income during this amazing productive era in America let's say for the last 25 years yes I would say it would be hundreds of billions actually it's up in the trillions for the 25e period just ended it was3 trillion 780 billion you get rers cramp with a figure like that you may be wondering who got all this money to see how this wealth was distributed let's look at this graph this represents the total national income to the the employees of America the wage earners and salaried people went the biggest amount 65% the self-employed professional people and small business operators got the next share 9 and 1 12% the farmers and dairy men who supplied food markets and our processing plants with the raw food stuffs receive 6 and 1 12% stockholders the people who could save a little money and invested in business and industry receive 4% and you will remember that this amount was widely diffused since there are 18 million stockholders in America today their Investments of their savings have built new factories provided new machines and other equipment to make new jobs in Industry the corporations themselves receive 7 and one 12% before payment of taxes after taxes they retained only three and a fraction perc of the national income the people who had property for rent receive 4% and lastly the bond holders Who provided the cash for new schools new Paving home loans and so forth receive 3 and 1 12% now let's examine the distribution of wealth in another way let's examine the income by families in the most recent year for which we have statistics there were approximately 50 million families in the United States they received ceed an income of approximately $272 billion before taxes how was this income distributed among these families Professor gayus aren't the majority of our families in the lower income brackets below $3,000 a year not at all John nearly 21 million families or 40% received an income of $3 to $6,000 15 million more families received an income of of $6,000 or more these two groups contain 70% of the population that leaves only these with an income of $3,000 or less not to be overlooked a good-sized group 7% receive incomes of $10,000 or more but only 3% were in the 15,000 and above bracket and from this bracket came the bigger portion of venture capital or investment money to build manufacturing plants and to start businesses thus creating new jobs and new products in the lower brackets go these figures 12 and 8/10 per received incomes from $2 to $3,000 10 and 8/10 per received from $1 to $2,000 while 5 and 710 per receive less than $1,000 we must remember however that in these lower brackets are many Farm families whose cash incomes do not strictly reflect their standard of living Mary what can be learned from this graft it seems that our national wealth is very widely distributed much more than I realized yes 85% of all income goes to 93% of the families while the other 7% of our families receive the remaining 15% thus it can be seen that the great bulk of income goes to the the majority of families in the middle inome range that a relatively small percentage of families receive less than $3,000 a year and a very small minority of families receive $115,000 or more per year in fact if all the income left to those in the $115,000 or above bracket after taxes are paid were to be distributed evenly among the 160 million people in America each of us would receive only 55 cents a day and if the net income of all those who earned $225,000 or above were to be distributed evenly each of us would receive only 15 cents a day above our present income so we wouldn't gain much by liquidating the upper income brackets about whom the Socialist and Communists Rave so loudly it is to the benefit of all Americans that incentives for achievement remain constant in the upper income level as in all other brackets so that all Americans may enjoy the benefits from the total brain power and Enterprise in our Dynamic Nation there is one additional yard stick of our economic well-being in all walks of American life now that we have examined the distribution of national income let's take a brief look at the ownership of property the Farms of America are owned by 25 million people the houses of America worth 23 billion are owned by 113 million people our 50 million automobiles are owned by nearly 40 million families the factories and Machinery that produce the material things of Life have 18 million stockholders in one way or another more than 100 million of our people own the wealth of America and the remainder most of them children and yous will at some time in their lives own substantial wealth the true facts about American capitalism's distribution of wealth and its great wealth production overshadow anything the communist and socialist have to show the truth about the distribution of wealth under American capitalism makes KL Marx the world's worst profit Marx the Socialist founder of Communism prophesied that under capitalism wealth would be concentrated in the hands of fewer and fewer while the great majority of people would suffer increasing poverty the fact is that American capitalism has set a new standard for human welfare and if we keep its basic principles strong and vigorous in the years ahead the opportunity of every American for a still Better Living standard will certainly be enhanced and perhaps even the Disciples of socialism and communism will come out of their shadowy pipe dreams and join us in our March of human progress at our next session we will discuss the spirit of Enterprise until then class [Music] dismissed the American Adventure series is a production of the National Education Program Cersei Arkansas Dr George S Benson director Dr Clinton alanus Jr was our instructor this is a continuing series based on the unique political and economic system which has made America great watch for the next presentation of the American Adventure