Has the American Dream

Been Stolen?

Athens to New York

Spring, 1999
Prof. Kim Pearson
 Outline
■ Who Stole The American Dream?
The Series and the Controversy
■ What has happened?
■ The Evolution of Capitalism
■ Current Issues
Who Stole The American
Dream? The Series
■ 1996 series
■ Followed 1990
series --
“America: What
Went Wrong”
■ Both became
books
Who Stole the American
Dream? Major Claims
■ American middle class is shrinking while
ranks of rich and poor are growing
■ Major cause is export of high-paying
manufacturing jobs, increase of lower-
paying, less stable service jobs
■ U.S. tax and trade policy favors this trend, in
effort to assist US corporations
 The Controversy
■ Critics contend that Bartlett and Steele’s
reporting was biased; ignored the good
■ Also contend that Bartlett and Steele’s reporting
failed to take into account the realities of the
global economy
■ Supporters argue that government and society
should be more concerned about the losers in the
current economic transformation
 What has happened?
■ Shift from industrial to global information
economy, booming markets
■ Decline in US manufacturing jobs
■ Few jobs available for unskilled/low-skilled
workers that support a family
■ Shortage of skilled workers
■ Labor union membership in decline
■ Two-income households the norm
 An Old Debate: The
Evolution of Capitalism
■ Adam Smith ■ Karl Marx
■ Thomas Malthus ■ John Maynard
■ David Ricardo Keynes
■ Arthur Laffer
■ Robert Reich
 Adam Smith
■ 1776: Wealth of Nations; first description of
capitalism
■ Pre-industrial revolution
■ Core concepts: free market, supply and
demand, free trade
■ Believed “invisible hand” would ensure fairness
■ Ignored caste differences and other artificial
barriers
 Thomas Malthus
■ 1766-1834, a cleric
■ Published Essay on
the Principle of
Population, 1798
■ Argued: Population
rises faster than
food supply; must
cut birth rate
■ Critics cite history of
growth
David Ricardo
■ 1772-1823, tycoon
■ Went in to business at
14, retired rich at 42
■ Iron Law of Wages:
Analyzed effects of
markets on wages;
argued against
government role
 Karl Marx
■ Work influenced by
Dickensian world of
the 1850s
■ A theory of history
that was translated
into an ideology
■ Declared, to his dying
day, “I’m not a
Marxist.”
Karl Marx
■ Progress comes from
expanding the
ownership of the means
of production
■ When workers control
the means of production,
classes will disappear
■ Capitalism can reinvent
itself
 John Maynard Keynes
■ Studied “boom-bust” cycle of business
■ Businesses fail when demand is inconsistent.
■ Government can “prime the pump” when
business is slow by cutting taxes and
spending more
■ This was rationale behind “New Deal” policies
during the Depression
 Arthur Laffer
■ 1974: Argued that
excessive tax
rates can actually
decrease revenue
■ Rationale for
Reagan tax cut
 Robert Reich
■ Former Labor
Secretary under
Clinton
■ Critic of “Corporate
Welfare”
■ Argues for
investments in
worker education,
retraining
Conclusions: It’s a Small
World After All
■ Free market capitalism no longer exists
■ All industries are global, not national
■ While Mathus’ nightmare never materialized,
sustainability is a real issue for the whole planet
■ Increasing dependence on technology makes the issues
of education and equity more critical than ever.