Saturday, December 03, 2005

The American Dream

The American Dream may be summed up in two words: Social Mobility. The promise of the American Dream is the promise of the Horatio Alger stories, that anyone can make it with enough work and determination. Your fate is in your own hands, and the system is fair and will reward you based upon your own merits. Whether this is generally true or not, there has usually been a sufficient number of cases where this has actually happened to supply anecdotal evidence.

Faith in the American Dream is what keeps both the American economy and American society chugging along. Acording to this doctrine, even the poorest worker is but an aristrocrat in exile, waiting for his big break, his ticket to easy street. If they cannot achieve vast wealth, they can at least attain a decent standard of living and look forward to a comfortable retirement. Social status at birth is no obstacle, or indeed, any guarantee. In the American Dream, America is not ruled by an aristocracy, but a meritocracy.

America has resisted the large labour movements which exist in England, primarily because it represents itself as a society of equals. There can be no class consciousness if there are no classes. The perception of stratification, reenforced in England by the existence of an old aristocracy marked by birth rather than effort, leads those at the bottom of the economic scale to identify themselves as permanent members of that class, and to band together with others of their class to further the interests of their class as a whole. This, too, is an imperfect solution. Class identification reenforces stratification. The solidarity of the workers tends to hold them down even as it locks others at lower economic levels out. The result was the closed shop system, which drew a hard line of division between labour and management, and blocked entry into the shop. Furthermore, the hard antagonism between labour and management impaired productivity, limiting the funds which could be used to pay workers and expand operations, resulting in fewer and lower paid jobs. Unpleasant as Margaret Thatcher was, she at least broke much of this up and provided a better chance for those locked out at the bottom to gain access and climb the ladder.

There have been times when the American Dream has faltered and almost failed: during the early part of the 20th century and during the depression. Both times the spectre of communism loomed large. Karl Marx made one prediction that still holds true: when the workers were not able to afford the products of their own labour, the markets, and the businesses that served them, would collapse, taking the whole system down with them. The first time it was salvaged through the efforts of rich philanthropists, who, convinced of the need for a healthy and contented workforce, poured much of their wealth back into civic improvements, education, and public health. It is ironic that many of these same philanthropists were responsible for much of the damage that they were now seeking to repair, and it is still open to question whether their later efforts for the public good were sufficient to redress the harm they had caused amassing their fortunes. More telling were the early efforts of Henry Ford, who insisted on paying his workers what were essentially dot com wages for the time, creating a working middle class which would eventially form the backbone of American wealth and power. He also promised never to fire anyone who would make an honest effort to work, regardless of ability. Ford himself, though, was a mixed bag; during the depression he employed gangs of enforcers to put down strikers by force, resulting in the death of a number of the very employees to whom he had made these promises.

The second time the American Dream teetered at the brink, it was salvaged by Franklin Delano Roosevelt, who instituted large public works projects in the New Deal to sop up the unemployment caused by the crash. Much of the anti-communists ferver of the 50's was a reaction to the flirtations with Communism brought on by the depression. By the 50's, however, much of the motivation for this interest in communism had already dried up. Few people could see any reason to jump a horse that now seemed to have regained its feet, and McCarthyism was simply an exercise in demagoguery, and attempt to seize power by attacking a scapegoat constructed out of an internal enemy that was already too weak to defend itself. The anti-communists, however, had little faith in the judgement of the people, and shared a bizarre conviction with the communists themselves in the power, even the inevitability, of communism's ability to seduce and subvert the will of the people.

The power of the American economy lies not only in it productive capacity, but also in its ability to consume, the strength of its markets, and this is made possible by disposable income in the hands of the vast majority of its people. If there is no one to buy, production becomes pointless. This, at least, was understood by Ford when he paid his workers unprecedented wages, creating a market for his own goods. It is a lesson which needs to be relearned. Low prices based upon low wages leads a race to the bottom, and possibly to a situation where prices which cannot be lowered any further are still too high to be afforded by the majority of the population. This is the America of Wal-Mart.

Wal-Mart is a classic pyramid scheme, which can only work so long as it grows. Sam Walton was not a villain--he really did intend to share his success with his employees. But he created a trap. Wal-Mart's earlier employees, who were given shares of the company, prospered by holding pieces of an ever growing pie. But the pie has stopped growing, and the result is stagnation, with the vast majority of employees at the bottom stuck on the lowest rung of a ladder whose upper rungs are already too crowded. This stagnation prevents social mobility, setting the stage for the formation of class consciousness, and the death of the American Dream. At this point, Marxism becomes relevant again.

But Marxist solutions are little more than crutches at best, and unmitigated catastrophes at worst. They may be better than nothing, but that does not make them the best solution available. They gain traction only when no other solution is offered. The real solution must come from all levels of society. The working poor are active participants in their own ruin. The key is education. We must all understand that there are consequences to even the simplest of actions, that the price tag on something does not tell us the full cost of what we are buying. Every dollar we spend is a vote. If we spend our money on goods produced or sold on the basis of subsistence wages, we are voting for an economic system which will drag us to the subsistence level. In a globalized market, the poverty of the third world worker is as close as the goods they produce. If their wages are so low that they can never expect to climb out of the hole of poverty and at least buy what they produce, trade deficits become inevitable, and the very gentry who benefit from this arrangement in first world countries will soon find themselves beholden to foreign masters. The workers in third world countries need not make the same as workers in the first world, but they must at least make enough to become consumers themselves, producing a market sufficient to eventually equalize trade between the countries. Any other arrangement puts first world countries on borrowed time.

In the past, at least some of those who held positions of power had sufficient vision to see the wreckage ahead before they reached it, and were able to turn to avoid it. They understood that money will flow from rich to poor, the way air moves from a high pressure area to a low pressure area. This can happen through charity, through a well ordered economic system, or through theft. If charity is scarce, and the economic system is so skewed that vast disparities become entrenched, then the only means of protecting property becomes a police state. And a police state quickly becomes so expensive that a welfare state, by comparison, looks like a dime store bargain. In a police state, the thugs hire out to the highest bidder--but then, the rich are still paying the criminals. And when the thugs figure this out, they find themselves in a position where they can name their price. And there is a danger that the day will come when the enlisted men will turn their guns on their officers, as they did in Russia in 1917. If the police are amongst the working poor, and come to believe themselves trapped in that status, it is only a matter of time before they switch allegiances.

In America that switch is likely to be gradual, a slow erosion of the social contract. The result will not be revolutionary fervour, but a slow rot, powered by the assumption that everyone works in their self interest anyway, so why shouldn't I? If even the illusion of meritocracy collapses, then hard work and idealism will seem naive and be held in contempt. It is faith--real faith, not superstition--that binds a society together, faith even that supports the very value of money. Faith and the ruthless pursuit of wealth have always been bitter enemies; the antagonism between them rings out again and again in every scripture and fable. Evangelicals who rail against the materialism of science have completely missed the point. The real enemy is the materialism of greed, and American Christians seem to have made an alliance with Mammon. They have too many rich patrons to please. This will cost them dearly. It may cost them everything.