The Way It Was in 1955

by Paul Krugman

July 21, 2012, 11:27 am7 Comments

Job Creators of 1955

Brad DeLong points us to an amazing Fortune reprint: a portrait of American executives in 1955, back when inequality was much lower and tax rates at the top much higher than they are today. The business leaders of the time led straitened lives by historical standards — they were substantially poorer than the previous generation of executives:

The executive’s home today is likely to be unpretentious and relatively small–perhaps seven rooms and two and a half baths. (Servants are hard to come by and many a vice president’s wife gets along with part-time help. So many have done so for so long, in fact, that they no longer complain much about it.)

The large yacht has also foundered in the sea of progressive taxation. In 1930, Fred Fisher (Bodies), Walter Briggs, and Alfred P. Sloan cruised around in vessels 235 feet long; J. P. Morgan had just built his fourth Corsair (343 feet). Today, seventy-five feet is considered a lot of yacht. One of the biggest yachts launched in the past five years is the ninety-six-foot Rhonda III, built and owned by Ingalls Shipbuilding Corp., of Birmingham, Alabama. The Rhonda III cost half a million dollars to build, and the annual bill for keeping a crew aboard her, stocking her, and fueling her runs to around $130,000. As Chairman Robert I. Ingalls Jr. says, only corporations today can own even so comparatively modest a craft. The specifications of the boat that interests the great majority of seagoing executives today are “forty feet, four people, $40,000.” In this tidy vessel the businessman of 1955 is quite happily sea-borne.

According to modern conservative dogma, this kind of punishment of “job creators” should have brought economic progress to a screeching halt. Yet according to Fortune, executives continued to work hard — and the postwar generation was actually a period of economic progress that has never been matched.



Somehow, John Galt never made an appearance.