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The American Dream vs. the Gospel of Wealth

Is America meant to be a land of opportunity or inequality? Civic virtue or consumerism? Gus Speth explores three deep contradictions in the American identity, asking: What’s next for the American dream?

Save the American Dream Sign, photo by Lisa Norwood

Photo by Lisa Norwood

Throughout our history, there have been alternative, competing visions of the "good life" in America. The story of how these competing visions played out in our history is prologue to an important question: What is the American Dream and what is its future?

The Pursuit of Happiness: Public Good or Personal Pleasure?

The issue came up in the early Republic, offspring of the ambiguity in Jefferson's declaration that we have an unalienable right to "the pursuit of happiness." Darrin McMahon in his admirable book, Happiness: A History, will be our guide here. McMahon locates the origins of the "right to happiness" in the Enlightenment. "'Does not everyone have a right to happiness?' asked the entry on that subject in the French encyclopedia edited by Denis Diderot. Judged by the standards of the preceding millennium and a half, the question was extraordinary: a right to happiness? And yet it was posed rhetorically, in full confidence of the nodding assent of enlightened minds." It was in 1776, the year of the Declaration of Independence, that Jeremy Bentham would write his famous principle of utility: "It is the greatest happiness of the greatest number that is the measure of right and wrong."

Thus, when Thomas Jefferson drafted the Declaration in June of that memorable year, the words "the pursuit of happiness" came naturally to him, and the language sailed through the debates of June and July without dissent. McMahon believes this lack of controversy stemmed in part from the fact that the "pursuit of happiness" phrase brought together ambiguously two very different notions: the idea from John Locke and Jeremy Bentham that happiness was the pursuit of personal pleasure and the older Stoic idea that happiness derived from active devotion to the public good and from civic virtue, which have little to do with personal pleasure.

The story of the pursuit of happiness in America is a story of its close alliance with capitalism and consumerism.

"The ‘pursuit of happiness,'" McMahon writes, "was launched in different, and potentially conflicting, directions from the start, with private pleasure and public welfare coexisting in the same phrase. For Jefferson, so quintessentially in this respect a man of the Enlightenment, the coexistence was not a problem." But Jefferson's formula almost immediately lost its double meaning in practice, McMahon notes, and the right of citizens to pursue their personal interests and joy won out. This victory was confirmed by waves of immigrants to America's shores, for whom America was truly the land of opportunity. "To pursue happiness in such a land was quite rightly to pursue prosperity, to pursue pleasure, to pursue wealth."

Allegory of Happiness by Agnolo BronzinoA History of Happiness
by Darrin McMahon

It is in this jettisoning of the civic virtue concept of happiness in favor of the self-gratification side that McMahon finds the link between the pursuit of happiness and the rise of American capitalism in the nineteenth and twentieth centuries. Happiness, he writes, "continued to entice with attractive force, providing a justification for work and sacrifice, a basis for meaning and hope that only loomed larger on the horizon of Western democracies." "If economic growth was now a secular religion," McMahon observes, "the pursuit of happiness remained its central creed, with greater opportunities than ever before to pursue pleasure in comfort and things." Max Weber saw this transformation first hand. "Material goods," he observed in The Protestant Ethic and the Spirit of Capitalism, "have gained an increasing and finally an inexorable power over the lives of men as at no previous period in history."

The story of the pursuit of happiness in America is thus a story of its close alliance with capitalism and consumerism. But in recent years, many researchers have begun to see this relationship as one of misplaced allegiance. Has the pursuit of happiness through growth in material abundance and possessions actually brought Americans happiness? That is a question more for science than for philosophy, and the good news is that social scientists have in fact recently turned abundantly to the subject. A new field, positive psychology, the study of happiness and subjective well-being, has been invented, and there is now even a professional Journal of Happiness Studies.

Imagine, if you will, two very different alternatives for affluent societies. In one, economic growth, prosperity and affluence bring steadily increasing human happiness, well-being and satisfaction. In a second, prosperity and happiness are not correlated, and, indeed, prosperity, beyond a certain point, is associated with the growth of important social pathologies. Which scenario provides a closer fit to reality?

What the social scientists in this new field are telling us is of fundamental importance. Two of the leaders in the field, Ed Diener and Martin Seligman, carried out a review of the now-voluminous literature on well-being in their 2004 article, "Beyond Money: Toward an Economy of Well-Being." In what follows, I will draw upon this article and other research.

The overall concept that is gaining acceptance among researchers is "subjective well-being," i.e., a person's own opinion of his or her well being. Subjects in surveys are frequently asked, on a scale of one to 10, how satisfied are you with your life? Most well-being surveys today ask individuals how happy or satisfied they are with their lives in general, how satisfied they are in particular contexts (e.g., work, marriage), or how much they trust others, and so on.

Hand Holding American Flag, photo by Rita M.

Photo by Rita M.

A good place to begin is with the studies that compare levels of happiness and life satisfaction among nations at different stages of economic development. They find that the citizens of wealthier countries do report higher levels of life satisfaction, although the correlation is rather poor and is even poorer when factors such as quality of government are statistically controlled. Moreover, this positive relationship between national well-being and national per capita income virtually disappears when one looks only at countries with GDP per capita over $10,000 per year. In short, once a country achieves a moderate level of income, further growth does not significantly improve perceived well-being.

Diener and Seligman report that peoples with the highest well-being are not those in the richest countries but those who live where political institutions are effective and human rights protected, where corruption is low, and mutual trust high.

Even more challenging to the idea that well-being increases with higher incomes is extensive time series data showing that throughout almost the entire post-World War II period, as incomes skyrocketed in the United States and other advanced economies, reported life satisfaction and happiness levels stagnated or even declined slightly.

Moldova, Photo by Stelios LazakisWhat the Healthiest & Happiest Societies Have in Common
(Hint: It's not more wealth, but how it's shared).

But that is not all. Diener and Seligman note that, "Even more disparity [between income and well-being] shows up when ill-being measures are considered. For instance, depression rates have increased 10-fold over the same 50-year period, and rates of anxiety are also rising ... [T]he average American child in the 1980s reported greater anxiety than the average child receiving psychiatric treatment in the 1950s. There is [also] a decreasing level of social connectedness in society, as evidenced by declining levels of trust in other people and in governmental institutions." Numerous studies also stress that nothing is more devastating to well-being than losing one's job and unemployment.

Instead of income, Diener and Seligman stress the importance of personal relationships to happiness: "The quality of people's social relationships is crucial to their well-being. People need supportive, positive relationships and social belonging to sustain well-being ... [T]he need to belong, to have close and long-term social relationships, is a fundamental human need ... People need social bonds in committed relationships, not simply interactions with strangers, to experience well-being."

In short, what the social scientists are telling us is that as of today, in Ed Diener's words, "materialism is toxic for happiness." Whether the pursuit of happiness through evermore possessions succeeded earlier in our history, it no longer does.

The American Dream vs. The Gospel of Wealth

Norton Garfinkle traces another dueling duality in the American tradition, one reflected in the title of his helpful book, The American Dream vs. the Gospel of Wealth. Although the phrase "the American Dream" entered the language thanks to James Truslow Adams and his 1931 book, The Epic of America, Garfinkle argues that the force of the concept, if not the phrase, derives from President Lincoln.  "More than any other president," Garfinkle believes, "Lincoln is the father of the American Dream that all Americans should have the opportunity through hard work to build a comfortable middle class life. For Lincoln, liberty meant above all the right of individuals to the fruits of their own labor, seen as a path to prosperity. ‘To [secure] to each laborer the whole product of his labor, or as nearly as possible,' he wrote, ‘is a most worthy object of any good government.'"

"It is not a dream of motor cars and high wages merely, but a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable."
    -James Truslow Adams

"The universal promise of opportunity," Garfinkle writes, "was for Lincoln the philosophical core of America: it was the essence of the American system. ‘Without the Constitution and the Union,' he wrote, ‘we could not have attained ... our great prosperity.' But the Constitution and the Union were not the ‘primary cause' of America, Lincoln believed. ‘There is something,' he continued, ‘back of these, entwining itself more closely about the human heart ... This is the just and generous and prosperous system which opens the way to all, gives hope to all, and consequent energy and progress and improvement of condition to all.' This was, for Lincoln, the American Dream, the raison d'être of America, and the unique contribution of America to world history."

Although Garfinkle does not bring it out, I believe James Truslow Adams' vision of the American Dream is at least as compelling as that of Lincoln. Adams used the phrase, "the American dream," to refer, not to getting rich or even especially to a secure, middle class lifestyle, though that was part of it, but primarily to something finer and more important: "It is not a dream of motor cars and high wages merely, but a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position." That American Dream is well worth carrying with us into the future.

The competing vision, the Gospel of Wealth, found its origins in the Gilded Age. In his 1889 book, The Gospel of Wealth, Andrew Carnegie espoused a widely held philosophy that drew on Social Darwinism and, though less crudely expressed, has many adherents today. To Carnegie, the depressed conditions of late 19th century American workers and the limited opportunities they faced were prices to be paid for the abundance economic progress made possible. Carnegie was brutally honest in his views: "The price which society pays for the law of competition, like the price it pays for cheap comforts and luxuries, is also great; but the advantages of this law are also greater still than its cost—for it is to this law that we owe our wonderful material development, which brings improved conditions in its train. But, whether the law be benign or not ... it is here, we cannot evade it; no substitutes for it have been found; and while the law may be sometimes hard for the individual, it is best for the race, because it insures the survival of the fittest in every department. We accept and welcome, therefore, as conditions to which we must accommodate ourselves, great inequality of environment; the concentration of business, industrial and commercial, in the hands of a few; and the law of competition between these, as being not only beneficial, but essential to the future progress of the race. Having accepted these, it follows that there must be great scope for the exercise of special ability in the merchant and in the manufacturer who has to conduct affairs upon a great scale. That this talent for organization and management is rare among men is proved by the fact that it invariably secures enormous rewards for its possessor."

"Whereas in Lincoln's America, the underlying principle of economic life was widely shared equality of opportunity, based on the ideals set forth in the Declaration of Independence, in Carnegie's America the watchword was inequality."

Garfinkle recounts the many ways Carnegie's Gospel stood Lincoln's vision on its head: "Whereas in Lincoln's America, the underlying principle of economic life was widely shared equality of opportunity, based on the ideals set forth in the Declaration of Independence, in Carnegie's America the watchword was inequality and the concentration of wealth and resource in the hands of the few. Whereas in Lincoln's America, government was to take an active role in clearing the path for ordinary people to get ahead, in Carnegie's America, the government was to step aside and let the laws of economics run their course. Whereas in Lincoln's America, the laborer had a right to the fruits of his labor, in Carnegie's America the fruits went disproportionately to the business owner and investor as the fittest. Whereas in Lincoln's America, the desire was to help all Americans fulfill the dream of the self-made man, in Carnegie's America, it was the rare exception, the man of unusual talent that was to be supported."

Since the Reagan Revolution, of course, the Gospel of Wealth has returned with a vengeance. Income and wealth have been reconcentrated in the hands of the few at levels not seen since 1928, American wages have flatlined for several decades, the once-proud American middle class is fading fast, and government action to improve the prospects of average Americans is widely disparaged. Indeed, government has pursued policies leading to the dramatic decline in both union membership and good American jobs. In a sample of its 20 peer OECD countries, the United States today has the lowest social mobility, the greatest income inequality, and the most poverty.

The Consumers' Republic or the City on the Hill?

A third historical duality in envisioning America is that between an American lifestyle that revolves around consumption and one that embraces plain and simple living. In her important book, The Consumers' Republic, Lizabeth Cohen traces the rise of mass consumption in America to policies adopted after World War II: "Americans after World War II saw their nation as the model for the world of a society committed to mass consumption and what were assumed to be its far-reaching benefits. Mass consumption did not only deliver wonderful things for purchase—the televisions, air conditioners, and computers that have transformed American life over the last half century. It also dictated the most central dimensions of postwar society, including the political economy (the way public policy and the mass consumption economy mutually reinforced each other), as well as the political culture (how political practice and American values, attitudes, and behaviors tied to mass consumption became intertwined)."

However, Cohen also documents that, whatever its blessings, American consumerism has had profound and unintended consequences on broader issues of social justice and democracy. She notes that "the Consumers' Republic did not unfold quite as policymakers intended ... the Consumers' Republic's dependence on unregulated private markets wove inequalities deep into the fabric of prosperity, thereby allowing, intentionally or not, the search for profits and the exigencies of the market to prevail over higher goals. Often the outcome dramatically diverged from the stated objective to use mass markets to create a more egalitarian and democratic American society ... [T]he deeply entrenched convictions prevailing in the Consumers' Republic that a dynamic, private, mass consumption marketplace could float all boats and that a growing economy made reslicing the economic pie unnecessary predisposed Americans against more redistributive actions ...

"Most ironic perhaps, the confidence that a prospering mass consumption economy could foster democracy would over time contribute to a decline in the most traditional, and one could argue most critical, form of political participation—voting—as more commercialized political salesmanship replaced rank-and-file mobilization through parties."

Van Jones portrait
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The creation of the Consumers' Republic represented the triumph of one vision of American life and purpose. But there has been a competing vision, what historian David Shi calls the tradition of "plain living and high thinking," a tradition that began with the Puritans and the Quakers. In his book, The Simple Life, Shi sees in American history a "perpetual tension ... between the ideal of enlightened self-restraint and the allure of unfettered prosperity. From colonial days, the mythic image of America as a spiritual commonwealth and a republic of virtue has survived alongside the more tantalizing view of the nation as an engine of economic opportunities, a festival of unfettered individualism, and a cornucopia of consumer delights."

 "The concept [of the simple life] arrived with the first settlers, and it has remained an enduring—and elusive—ideal ... Its primary attributes include a hostility toward luxury and a suspicion of riches, a reverence for nature and a preference for rural over urban ways of life and work, a desire for personal self-reliance through frugality and diligence, a nostalgia for the past, a commitment to conscientious rather than conspicuous consumption, a privileging of contemplation and creativity, an aesthetic preference for the plain and functional, and a sense of both religious and ecological responsibility for the just uses of the world's resources."

In the end, these three dueling dualities in the American tradition—competing over the meaning of happiness, the path to prosperity, the centrality of consumerism—tell much the same story: the vision of an America where the pursuit of happiness is sought in the growth of civic virtue and in devotion to the public good, where the American dream is steadily realized as the average American achieves his or her human potential and the benefits of economic activity are widely shared, and where the virtues of simple living, self-reliance and reverence for nature predominate, that vision has not prevailed and has instead been overpowered by the rise of commercialism, consumerism, and a particularly ruthless variety of winner-take-all capitalism.

New ways of living and working, sharing and caring are emerging across America. They beckon us with a new American Dream, one rebuilt from the best of the old, drawing on the best of who we were and are and can be.

These American traditions may not have prevailed to date, but they are not dead. They await us, and indeed they are today being awakened across this great land. New ways of living and working, sharing and caring are emerging across America. They beckon us with a new American Dream, one rebuilt from the best of the old, drawing on the best of who we were and are and can be.

There is an America beyond despair, and it is fueling these developments. Ask a parent, ask yourself, what America would you like for your grandchildren and their children, and the odds are good that in the reply, the outpouring of hope, a new America unfolds.


James Gustave Speth author picJames Gustave Speth is an environmental lawyer, advocate, and author, most recently of The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability. From 1999 to 2008, he was dean of the Yale School of Forestry and Environmental Studies. From 1993 to 1999, he served as administrator of the UN Development Programme and chair of the UN Development Group. Prior to his service at the UN, he was founder and president of the World Resources Institute; professor of law at Georgetown University; chairman of the U.S. Council on Environmental Quality; and senior attorney and cofounder, Natural Resources Defense Council.

He wrote this article for Grist.org, where it originally appeared.

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