Resurrecting the American Dream

This article was published in the Springfield News Leader at the time of my visit to Springfield, Missouri in March 2009 where I gave a couple of lectures on the same theme.

It’s nearly 80 years since James Truslow Adams coined the phrase ‘The American Dream’.  Adams believed that dream should be within reach of all Americans. It was ‘the dream of a land in which life should be better and richer and fuller for everyone.’  That was certainly not the case when he wrote The Epic of America in 1931, neither is it the case today.

Millions of Americans had been thrown out of work after the Wall Street crash, but the true meaning of the American Dream – that all citizens had an equal right to life, liberty and the pursuit of happiness – had been long forgotten by 1929.  From the mid-19th century onwards, those equal rights were denied to growing numbers as the economy came to be dominated by a small super-rich elite.

The good intentions of the founding fathers were displaced by the belief that economic progress depended on an aggressively competitive society regardless of the cost to the losers.  The American dream became a nightmare of rugged individualism.  Anyone could become rich.  But nobody was guaranteed access to the economic opportunities necessary to earn a reasonable living.

Today, the United States has about 3 million millionaires, while around 36 million Americans live in poverty. For those in between, despite unprecedented economic growth in the last three decades, real incomes have fallen steadily.  The economy is delivering the goods for only a small minority of Americans.  But why does the American dream remain beyond the reach of so many?

When Herbert Hoover ran for President in 1928 he said, ‘We in America today are nearer to the final triumph over poverty than ever before in the history of any land.’  He was quite wrong, of course.   No society has ever eradicated poverty, and the reasons for this failure were explained by the American economist Henry George.

Few people today have heard of Henry George, yet at the time of his death, in 1897, he was one of the most famous people in America.  His book, Progress and Poverty, sold two million copies after its publication in 1879; it remains the best selling economics book of all time.  In it, George set out to establish why, in the midst of unprecedented wealth, poverty was becoming deeper and more entrenched.

He concluded that the unconditional ownership of land by a small minority – the usual arrangement in all societies then and now – makes poverty inevitable.  Land values generally increase with economic advance, which means that landowners automatically get richer.  George believed this unearned income was unjust, and the principal cause of the growing gap between rich and poor.  He argued that it should be collected as public revenue and that taxes on personal incomes and corporate profits should be abolished.

While George’s ideas had massive popular support, he had correctly identified the means by which the wealthy elite maintained their position of privilege and power.  He had to be stopped, and a campaign was launched to discredit his ideas.

No government has ever had the courage to tackle unearned income, whether from land values or other speculative investments.  And no government has succeeded in eradicating poverty. Barack Obama may have the oratory of a great statesman, but there is no evidence he understands what is needed to place the American dream within reach of everyone.  As it struggles to emerge from the most serious economic collapse since Hoover’s time, America has a chance to show the world how to create a just society, and to turn the American dream into one to which citizens worldwide may realistically aspire.