I Grew Up in a Communist System. Here’s What Americans Don’t Understand About Freedom

Only in a free-market system can we truly achieve individual liberty and human flourishing. 

 

Friday, March 09, 2018 by Carmen Alexe

Original link:   https://fee.org/articles/i-grew-up-in-a-communist-system-here-s-what-americans-don-t-understand-about-freedom/?fbclid=IwAR0AFbuSNlc-2KvaTBKZc5bvAtidvRpRmPeze9jBVw5lOzPFNreTaXq8o-4

 

 

Individual freedom can only exist in the context of free-market capitalism. Personal freedom thrives in capitalism, declines in government-regulated economies, and vanishes in communism. Aside from better economic and legislative policies, what America needs is a more intense appreciation for individual freedom and capitalism.

I was born and raised in communist Romania during the Cold War, a country in which the government owned all the resources and means of production. The state controlled almost every aspect of our lives: our education, our job placement, the time of day we could have hot water, and what we were allowed to say.

Like the rest of the Eastern European countries, Romania was often referred to as a communist country. In school, we were taught it was a socialist country. Its name prior to the 1989 Revolution to overthrow the Ceausescu regime was the Socialist Republic of Romania.

From an economic standpoint, a petty fraction of property was still privately owned. In a communist system, all property is owned by the state. So if it wasn't a true communist economy, its heavy central planning and the application of a totalitarian control over the Romanian citizenry made this nation rightfully gain its title of a communist country.

Socialism Creates Shortages

Despite the fact that Romania was a country rich in resources, there were shortages everywhere. Food, electricity, water, and just about every one of life's necessities were in short supply. The apartment building in which we lived provided hot water for showers two hours in the morning and two hours at night. We had to be quick and on time so we didn't miss the opportunity.

I get it, maybe we didn't need to be fashionable. But we needed to eat.

Fruity lip gloss, French perfume, and jeans were but a few of the popular items available only on the black market and with the right connections. God bless our black-market entrepreneurs! They made our lives better. They gave us the opportunity to buy things we very much desired, things we couldn't get from the government-owned retail stores which were either half-empty or full of products that were ugly and of poor quality.

The grocery stores were not any better. I get it, maybe we didn't need to be fashionable. But we needed to eat. So, the old Romanian adage "Conscience goes through the stomach" made a lot of sense.

During the late 1970s, life in Romania started to deteriorate even more. Meat was hardly a consumer staple for the average Romanian. Instead, our parents learned to become good at preparing the liver, the brain, the tongue, and other giblets that most people in the West would not even consider trying.

For a family of four like us, our rationed quota was 1 kilogram of flour and 1 kilogram of sugar per month.
 

When milk, butter, eggs, and yogurt were temporarily available, my mom—like so many others of our neighbors—would wake up at 2:00 a.m. to go stand in line so she'd have the chance to get us these goodies. The store would open at 6:00 a.m., so if she wasn't early enough in line she'd miss the opportunity.
In 1982, the state sent their disciples to people's homes to do the census. Along with that, food rationing was implemented. For a family of four like us, our rationed quota was 1 kilogram of flour and 1 kilogram of sugar per month. That is, if they were available and if we were lucky enough to be in the right place at the right time when they were being distributed.

The one television channel our government provided for us often focused on programs related to crime and poverty in the western world. After all, people were poor and suffering because of capitalism, so we were told, so we needed socialism and communism to solve the inequalities of humanity.

Capitalism Advances Private Property

Considering the shortages created by the government-controlled economy of my birth country, I came to understand and appreciate capitalism, the one system that had the most dramatic effect in elevating human civilization.

Private property and private property rights are at the core of capitalism.

The layman definition of capitalism is the economic system in which people and businesses engage in manufacturing, trading, and exchanging products and services without government interference. A free-market capitalist system works in a more efficient manner when not tampered with by government or central bank intervention in the credit markets, monetary policy, and interest rate fixing.

Private property and private property rights are at the core of capitalism. When in school, we learned that private property makes people greedy and is considered detrimental to society. Private property was associated with capitalism, the system that our textbooks claimed failed.

Allocation of Resources

Romania was rich in natural resources, yet the difference between our standard of living and those from the West was quite dramatic. It was indicative of a flawed economic system that most countries in Eastern Europe adhered to during the Soviet Era. But one may ask why was there so much poverty when natural resources are so abundant?

The free market, however, directs the allocation of resources via the amazing process of supply and demand.
 

Economics is the study of the allocation of scarce resources which have alternative uses. Efficiency is thus of primary concern when the goal is economic progress.
In a centrally-planned environment, the various government individuals who are assigned the task of planning the economy could not possibly know how to properly allocate the scarce resources of an entire nation, no matter how smart or educated they are. Shortages are one of the consequences of improper allocation of the scarce resources.

The free market, however, through the multiple spontaneous interactions of businesses and consumers, directs the allocation of resources via the amazing process of supply and demand. It is precisely due to the profit and loss events that economic efficiency is stimulated.

Free Markets Attract Capital

Due to its profit incentives, capitalism encourages innovation. Innovation leads to progress and an increase in the standard of living. But progress and the climate which offers humans a high standard of living cannot be created without the capital to transform and turn resources into the final products that give us the—relatively—cheap energy and food, smartphones, fitness gyms, and overall the life we currently afford. Capital moves in the direction of less regulation, less government intervention, and less taxation. In short, capital moves to where there's more economic freedom.

Capital is chased away due to the high risk associated with governments who engage in high levels of controlling their economies.

In contrast, communism, socialism, fascism, or just about any government-controlled system lacks the profit incentive. The people, who are the human resources, have no desire to engage in a business where the reward is not attainable (unless it's done in the black markets). They accept the state and its bureaucratic cronies to dictate their faith.

Capital is chased away due to the high risk associated with governments who engage in high levels of controlling their economies and, often, corruption. The overall standard of living is dramatically lower than in most capitalist places, and the poverty is higher. Consequently, the collectivist country falls into an economic and social trap from which it is hard to escape. Only capitalism can save a nation from the failure of its central economic planning.

Capitalism Helps Us Be Better Individuals

Similar to the old Soviet lifestyle, let's remember what the typical Venezuelan family of our times worries about on a daily basis. Food to put on the table and the safety of their children. They wake up in the morning wondering how many meals they can afford that day, where to get them from, and how to pay for them.

Capitalism makes it possible for us to challenge ourselves, to have goals, and to put forth the sweat in order to achieve them.
 

We, the lucky ones to live in a relatively free-market system, don't have these kinds of worries. We go to work, get leisure time to be on Facebook, watch TV, be with our families, read books, and enjoy a hobby or two. In short, we have the personal freedom to engage in and enjoy a variety of life events because of capitalism.
But there's another important motive to desire to live in a capitalist society. We are free to create and come up with all kinds of business ideas, no matter how crazy some might be. Because we don't have to worry about tomorrow, we have—or make—the time to read, explore, and innovate.

Capitalism makes it possible for us to challenge ourselves, to have goals, and to put forth the sweat to achieve them. It gives us the freedom to try new things and explore new opportunities. It gives us the chance to create more opportunities. It helps us build strong character because when we try, we also fail, and without failure, how do we know we've made mistakes? Without failure, how do we know we must make changes?

Individual Freedom Can Only Exist in the Context of Free Markets

Before immigrating to the U.S., I had to go through a rigorous process. One of the events was the immigration interview with the American counselor who, among many other questions, asked why I escaped Romania and why I wanted to come to America. My short answer was freedom. Then he posed the interesting question: "If America was to go through a period of economic devastation with shortages similar to Romania, would you still feel the same way?" I didn't think too much about it, and I said, "Yes, of course, as long as I have freedom."

Capitalism is the path to the individual rights and liberty that build the solid foundation of a free society.

In retrospect, that was a dumb answer on my part. After several decades, I came to believe that the human condition of individual freedom can only exist in the context of free markets. Shortages are created by the intrusion of the state into the complex activity of the markets, whether it's price controls or poor allocation of resources.

When shortages are powerful and long enough to dramatically affect lives, people resort to revolt. Large revolts call for serious governmental actions including, but not limited to, eroding or completely eliminating individual rights (the right to free speech and to bear arms), the institution of a police state, and the enacting of a powerful state propaganda system. Capitalism is the path to the individual rights and liberty that build the solid foundation of a free society.

Is America a True Capitalist Economy?

The short answer is no. Most of the world refers to the American system as being a capitalist one. Based on my short definition of capitalism, it is obvious that it is not quite a pure one, and I wish to clarify that the U.S. is not a truly free-market capitalist system.

We still maintain stronger capitalist traits than most, however a few other nations who lead the way in economic freedom have surpassed us.

The economic policy of the 19th Century with limited regulations and minimal taxation attracted the needed capital to our country. The Industrial Revolution made spectacular advancements in human conditions due to the capital concentrated in the region. America lost its number one place due to legislating higher regulations, taxation, and protectionist policies.

But we are still enjoying some of the fruits today. Compared to many countries in the world, we still maintain stronger capitalist traits than most, however Hong Kong, Singapore, Switzerland, New Zealand, and a few other nations who lead the way in economic freedom have surpassed us.

What America Needs

It starts in our own backyard, in our home, in our small group, in our community.
 

Aside from better economic and legislative policies, what America needs is a more intense appreciation of individual freedom and capitalism. Such a crazy idea is not acquired through public schools or becoming a public servant. Young people don't need more years of schooling with more worthless college degrees and student loans in default. America needs more entrepreneurs and businessmen. It needs more people with drive and ambition, more self-starters, more innovators, more people who are willing to take chances.
It starts in our own backyard, in our home, in our small group, in our community. It starts with loving, involved, and dedicated parents who'd instill the values of personal responsibility and delayed gratification in their children. It continues with an education that entails both theory and hands-on practice in environments conducive to learning how to think independently and how to acquire life- and work-skills. It evolves into a purpose-driven life rich in learning and experiences. And this may be just the beginning of attaining the intellectual maturity to perceive the value that free markets and individual freedom afford most of us.

Carmen Alexe

Carmen Alexe escaped Communist Romania during the Cold War. Her motive was individual freedom. She has close to 30 years in the lending industry, currently working as a Commercial Real Estate Consultant. She's been a real estate investor since 2001. She's also a passionate Salsa dancer. She's a free spirit doing research on and practicing how to live free in an unfree world. She shares her zeal for free markets, individual freedom, and personal responsibility by writing on her blog.

Wealth inequality in the United States

From Wikipedia, the free encyclopedia

CBO Chart, U.S. Holdings of Family Wealth 1989 to 2013. The top 10% of families held 76% of the wealth in 2013, while the bottom 50% of families held 1%. Inequality worsened from 1989 to 2013.

 

Wealth inequality in the United States (also known as the wealth gap) is the unequal distribution of assets among residents of the United States. Wealth includes the values of homes, automobiles, personal valuables, businesses, savings, and investments. The net worth of U.S. households and non-profit organizations was $94.7 trillion in the first quarter of 2017, a record level both in nominal terms and purchasing power parity. If divided equally among 124 million U.S. households, this would be $760,000 per family; however, the bottom 50% of families, representing 62 million American households, average $11,000 net worth. From an international perspective, the difference in US median and mean wealth per adult is over 600%.

Just prior to President Obama's 2014 State of the Union Address, media reported that the top wealthiest 1% possess 40% of the nation's wealth; the bottom 80% own 7%; similarly, but later, the media reported, the "richest 1 percent in the United States now own more additional income than the bottom 90 percent". The gap between the top 10% and the middle class is over 1,000%; that increases another 1,000% for the top 1%. The average employee "needs to work more than a month to earn what the CEO earns in one hour." Although different from income inequality, the two are related. In Inequality for All—a 2013 documentary with Robert Reich in which he argued that income inequality is the defining issue for the United States—Reich states that 95% of economic gains went to the top 1% net worth (HNWI) since 2009 when the recovery allegedly started. More recently, in 2017, an Oxfam study found that eight rich people, six of them Americans, own as much combined wealth as half the human race.

A 2011 study found that US citizens across the political spectrum dramatically underestimate the current US wealth inequality and would prefer a far more egalitarian distribution of wealth.

Wealth is usually not used for daily expenditures or factored into household budgets, but combined with income it comprises the family's total opportunity to secure a desired stature and standard of living, or pass their class status along to one's children. Moreover, wealth provides for both short- and long-term financial security, bestows social prestige, and contributes to political power, and can be used to produce more wealth. Hence, wealth possesses a psychological element that awards people the feeling of agency, or the ability to act. The accumulation of wealth grants more options and eliminates restrictions about how one can live life. Dennis Gilbert asserts that the standard of living of the working and middle classes is dependent upon income and wages, while the rich tend to rely on wealth, distinguishing them from the vast majority of Americans. A September 2014 study by Harvard Business School declared that the growing disparity between the very wealthy and the lower and middle classes is no longer sustainable.

Statistics

In 2007, the top 20% wealthiest possessed 80% of all financial assets. In 2007 the richest 1% of the American population owned 35% of the country's total wealth, and the next 19% owned 51%. Thus, the top 20% of Americans owned 86% of the country's wealth and the bottom 80% of the population owned 14%. In 2011, financial inequality was greater than inequality in total wealth, with the top 1% of the population owning 43%, the next 19% of Americans owning 50%, and the bottom 80% owning 7%. However, after the Great Recession which started in 2007, the share of total wealth owned by the top 1% of the population grew from 35% to 37%, and that owned by the top 20% of Americans grew from 86% to 88%. The Great Recession also caused a drop of 36% in median household wealth, but a drop of only 11% for the top 1%, further widening the gap between the top 1% and the bottom 99%.

According to PolitiFact and others, in 2011 the 400 wealthiest Americans have more wealth than half of all Americans combined. Inherited wealth may help explain why many Americans who have become rich may have had a substantial head start. In September 2012, according to the Institute for Policy Studies, over 60 percent of the Forbes richest 400 Americans grew up in substantial privilege.

In 2013 wealth inequality in the U.S. was greater than in most developed countries other than Switzerland and Denmark. In the United States, the use of offshore holdings is exceptionally small compared to Europe, where much of the wealth of the top percentiles is kept in offshore holdings. While the statistical problem is European wide, in Southern Europe statistics become even more unreliable. Fewer than a thousand people in Italy have declared incomes of more than 1 million euros. Former Prime Minister of Italy described tax evasion as a "national pastime". According to a 2014 Credit Suisse study, the ratio of wealth to household income is the highest it has been since the Great Depression.

However, according to the federal reserve, "For most households, pensions and Social Security are the most important sources of income during retirement, and the promised benefit stream constitutes a sizable fraction of household wealth" and "including pensions and Social Security in net worth makes the distribution more even". A September 2017 study by the Federal Reserve reported that the top 1% owned 38.5% of the country's wealth in 2016.

According to a June 2017 report by the Boston Consulting Group, around 70% of the nation's wealth will be in the hands of millionaires and billionaires by 2021.

Early 20th century

Pioneering work by Simon Kuznets using income tax records and his own well-researched estimates of national income showed a reduction of about 10% in the portion of national income going to the top 10%, a reduction from about 45–50% in 1913 to about 30–35% in 1948. This period spans both The Great Depression and World War II, events with significant economic consequences. This is called the Great Compression.

Wealth and income

Artist's depiction of U.S. wealth inequality in 2013.

 

There is an important distinction between income and wealth. Income refers to a flow of money over time in the form of a rate (per hour, per week, or per year); wealth is a collection of assets owned minus liabilities. In essence, income is specifically what people receive through work, retirement, or social welfare whereas wealth is what people own. While the two are seemingly related, income inequality alone is insufficient for understanding economic inequality for two reasons:

1. It does not accurately reflect an individual's economic position
2. Income does not portray the severity of financial inequality in the United States.

The United States Census Bureau formally defines income as received on a regular basis (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, social security, union dues, medicare deductions, etc. By this official measure, the wealthiest families may have low income, but the value of their assets earns enough money to support their lifestyle. Dividends from trusts or gains in the stock market do not fall under the definition of income but are the primary money flows for the wealthy. Retired people also have little income but usually have a higher net worth because of money saved over time.

Additionally, income does not capture the extent of wealth inequality. Wealth is derived over time from the collection of income earnings and growth of assets. The income of one year cannot encompass the accumulation over a lifetime. Income statistics view too narrow a time span for it to be an adequate indicator of financial inequality. For example, the Gini coefficient for wealth inequality increased from 0.80 in 1983 to 0.84 in 1989. In the same year, 1989, the Gini coefficient for income was only 0.52. The Gini coefficient is an economic tool on a scale from 0 to 1 that measures the level of inequality. 1 signifies perfect inequality and 0 represents perfect equality. From this data, it is evident that in 1989 there was a discrepancy about the level of economic disparity with the extent of wealth inequality significantly higher than income inequality. Recent research shows that many households, in particular those headed by young parents (younger than 35), minorities, and individuals with low educational attainment, display very little accumulation. Many have no financial assets and their total net worth is also low.

According to the Congressional Budget Office, between 1979 and 2007 incomes of the top 1% of Americans grew by an average of 275%. ... (Note: The IRS insists that comparisons of adjusted gross income pre-1987 and post-1987 are complicated by large changes in the definition of AGI led to households in the top income quintile reporting a lot more of their income in their individual income tax form's AGI, rather than reporting their business income in separate corporate tax returns, or not reporting certain non-taxable income in their AGI at all, such as municipal bond income. Anyone who wants to discuss incomes in the U.S. fairly must include a chart of all available data split by quintile up to the mid-1980s. That should be followed by a chart from 1990 to 2011. The five-year gap would avoid the major AGI definition changes. The big picture of this subject is not just a segment of all available data starting in 1979, especially after the IRS warned about the large AGI definition changes in the late 1980s). In addition, IRS studies consistently show a majority of households in the top income quintile have moved to a lower quintile within one decade. There are even more changes to households in the top 1%. Without including those data here, a reader is likely to assume households in the Top 1% are almost the same from year to year.) In 2009, people in the top 1% of taxpayers made $343,927 or more. According to US economist Joseph Stiglitz the richest 1% of Americans gained 93% of the additional income created in 2010. A study by Emmanuel Saez and Piketty showed that the top 10 percent of earners took more than half of the country's total income in 2012, the highest level recorded since the government began collecting the relevant data a century ago. People in the top one percent were three times more likely to work more than 50 hours a week, were more likely to be self-employed, and earned a fifth of their income as capital income. The top one percent was composed of many professions and had an annual turnover rate of more than 25%. The five most common professions were managers, physicians, administrators, lawyers, and teachers.

 

In the book Modern Labor Economics: Theory and Public Policy, it is noted that in the United States all income that employees received from their employers in 2012 was 8.6 trillion dollars while the amount of money received from all other sources of personal income in that year came to 5.3 trillion dollars. This makes the relationship of employee to employer and vocational employment in general of paramount importance in the United States.

Gender Pay Inequality

Women in every demographic shown to be paid less than their male counterparts.

Wealth inequality and child poverty

In 2013 UNICEF data on the well-being of children in 35 developed nations ranked the United States at 34 out of 35 (Romania is the worst). This may reflect growing income inequality.

U.S. stock market ownership distribution

U.S. family pre-tax income and net worth distribution for 2013 and 2016, from the Federal Reserve Survey of Consumer Finances.

 

In March 2017, NPR summarized the distribution of U.S. stock market ownership (direct and indirect through mutual funds) in the U.S., which is highly concentrated among the wealthiest families:

• 52% of U.S. adults owned stock in 2016. Ownership peaked at 65% in 2007 and fell significantly due to the Great Recession.
• As of 2013, the top 1% of households owned 38% of stock market wealth.
• As of 2013, the top 10% own 81% of stock wealth, the next 10% (80th to 90th percentile) own 11% and the bottom 80% own 8%.

The Federal Reserve reported the median value of stock ownership by income group for 2016:

• Bottom 20% own $5,800.
• 20th-40th percentile own $10,000.
• 40th to 60th percentile own $15,500.
• 60th to 80th percentile own $31,700.
• 80th to 89th percentile own $82,000.
• Top 10% own $365,000.

NPR reported that when politicians reference the stock market as a measure of economic success, that success is not relevant to nearly half of Americans. Further, more than one-third of Americans who work full-time have no access to pensions or retirement accounts such as 401(k)s that derive their value from financial assets like stocks and bonds. The NYT reported that the percentage of workers covered by generous defined-benefit pension plans has declined from 62% in 1983 to 17% by 2016. While some economists consider an increase in the stock market to have a "wealth effect" that increases economic growth, economists like Former Dallas Federal Reserve Bank President Richard Fisher believe those effects are limited.

Causes of wealth inequality

The income growth of the typical American family closely matched that of economic productivity until some time in the 1970s. While it began to stagnate, productivity has continued to climb. According to the 2014 Global Wage Report by the International Labour Organization, the widening disparity between wages and productivity is evidence that there has been a significant shift of GDP share going from labor to capital, and this trend is playing a significant role in growing inequality.

 

Selected economic variables related to wealth and income equality, comparing 1979, 2007, and 2015.

 

The image contains several charts related to U.S. wealth inequality. While U.S. net worth roughly doubled from 2000 to 2016, the gains went primarily to the wealthy.

 

U.S. median family net worth peaked in 2007, declined due to the Great Recession until 2013, and only partially recovered by 2016.

 

Essentially, the wealthy possess greater financial opportunities that allow their money to make more money. Earnings from the stock market or mutual funds are reinvested to produce a larger return. Over time, the sum that is invested becomes progressively more substantial. Those who are not wealthy, however, do not have the resources to enhance their opportunities and improve their economic position. Rather, "after debt payments, poor families are constrained to spend the remaining income on items that will not produce wealth and will depreciate over time." Scholar David B. Grusky notes that "62 percent of households headed by single parents are without savings or other financial assets." Net indebtedness generally prevents the poor from having any opportunity to accumulate wealth and thereby better their conditions.

Economic inequality is a result of difference in income. Factors that contribute to this gap in wages are things such as level of education, labor market demand and supply, gender differences, growth in technology, and personal abilities. The quality and level of education that a person has often corresponds to their skill level, which is justified by their income. Wages are also determined by the "market price of a skill" at that current time. Although gender inequality is a separate social issue, it plays a role in economic inequality. According to the U.S. Census Report, in America the median full-time salary for women is 77 percent of that for men. Also contributing to the wealth inequality in the U.S., both unskilled and skilled workers are being replaced by machinery. The Seven Pillars Institute for Global Finance and Ethics argues that because of this "technological advance", the income gap between workers and owners has widened.

Income inequality contributes to wealth inequality. For example, economist Emmanuel Saez wrote in June 2016 that the top 1% of families captured 52% of the total real income (GDP) growth per family from 2009-2015. From 2009 to 2012, the top 1% captured 91% of the income gains.

Notably, for both the wealthy and not-wealthy, the process of accumulation or debt is cyclical. The rich use their money to earn larger returns and the poor have no savings with which to produce returns or eliminate debt. Unlike income, both facets are generational. Wealthy families pass down their assets allowing future generations to develop even more wealth. The poor, on the other hand, are less able to leave inheritances to their children leaving the latter with little or no wealth on which to build...This is another reason why wealth inequality is so important, its accumulation has direct implications for economic inequality among the children of today's families.

Corresponding to financial resources, the wealthy strategically organize their money so that it will produce profit. Affluent people are more likely to allocate their money to financial assets such as stocks, bonds, and other investments which hold the possibility of capital appreciation. Those who are not wealthy are more likely to have their money in savings accounts and home ownership. This difference comprises the largest reason for the continuation of wealth inequality in America: the rich are accumulating more assets while the middle and working classes are just getting by. As of 2007, the richest 1% held about 38% of all privately held wealth in the United States. while the bottom 90% held 73.2% of all debt. According to The New York Times, the richest 1 percent in the United States now own more wealth than the bottom 90 percent.

However, other studies argue that higher average savings rate will contribute to the reduction of the share of wealth owned by the rich. The reason is that the rich in wealth are not necessarily the individuals with the highest income. Therefore, the relative wealth share of poorer quintiles of the population would increase if the savings rate of income is very large, although the absolute difference from the wealthiest will increase.

As the price of commodities increases because of inflation, a larger percentage of lower-class people's money is spent on things they need to survive and go to work, such as food and gasoline. Most of the working poor are paid fixed hourly wages that do not keep up with rises in prices, so every year an increasing percentage of their income is consumed until they have to go into debt just to survive. At this point, their little wealth is owed to lenders and banking institutions.

The nature of tax policies in America has been suggested by economists and politicians such as Emmanuel Saez, Thomas Piketty, and Barack Obama to perpetuate economic inequality in America by steering large sums of wealth into the hands of the wealthiest Americans. The mechanism for this is that when the wealthy avoid paying taxes, wealth concentrates to their coffers and the poor go into debt.

The economist Joseph Stiglitz argues that "Strong unions have helped to reduce inequality, whereas weaker unions have made it easier for CEOs, sometimes working with market forces that they have helped shape, to increase it." The long fall in unionization in the U.S. since WWII has seen a corresponding rise in the inequality of wealth and income.

Racial disparities

The wealth gap between white and black families nearly tripled from $85,000 in 1984 to $236,500 in 2009.

There are many causes, including years of home ownership, household income, unemployment, and education, but inheritance might be the most important. Inheritance can directly link the disadvantaged economic position and prospects of today's blacks to the disadvantaged positions of their parents' and grandparents' generations. According to a report done by Robert B. Avery and Michael S. Rendall, "one in three white households will receive a substantial inheritance during their lifetime compared to only one in ten black households." This relative lack of inheritance that has been observed among African Americans can be attributed in large part to factors such as unpaid labor (slavery), violent destruction of personal property in incidents such as Red Summer of 1919, unequal opportunity in education and employment (racial discrimination), and more recent policies such as redlining and planned shrinkage. Other ethnic minorities, particularly those with darker complexions, have at times faced many of these same adversities to various degrees.

The article "America's Financial Divide" added context to racial wealth inequality stating "…nearly 96.1 percent of the 1.2 million households in the top one percent by income were white, a total of about 1,150,000 households. In addition, these families were found to have a median net asset worth of $8.3 million. In stark contrast, in the same piece, black households were shown as a mere 1.4 percent of the top one percent by income, that's only 16,800 homes. In addition, their median net asset worth was just $1.2 million. Using this data as an indicator only several thousand of the over 14 million African American households have more than $1.2 million in net assets… Relying on data from Credit Suisse and Brandeis University's Institute on Assets and Social Policy, the Harvard Business Review in the article "How America's Wealthiest Black Families Invest Money" recently took the analysis above a step further. In the piece the author stated "If you're white and have a net worth of about $356,000, that's good enough to put you in the 72nd percentile of white families. If you're black, it's good enough to catapult you into the 95th percentile." This means 28 percent of the total 83 million white homes, or over 23 million white households, have more than $356,000 in net assets. While only 700,000 of the 14 million black homes have more than $356,000 in total net worth." According to Inequality.org, the median black family is actually only worth $1,700 when you deduct these durables. In contrast, the median white family holds $116,800 of wealth using the same accounting methods. Some historical context: In South Africa, during the atrocities of apartheid, the median black family held about 7 percent of typical white South African family net worth. Today, using Wolff’s analysis, the median African American family holds a mere 1.5 percent of median white American family wealth.

A recent piece on Eurweb/Electronic Urban Report "Black Wealth Hardly Exists, Even When You Include NBA, NFL and Rap Stars" stated this about the difference between black middle class families and white middle class families. "Going even further into the data, a recent study by the Institute for Policy Studies (IPS) and the Corporation For Economic Development (CFED) found that it would take 228 years for the average black family to amass the same level of wealth the average white family holds today in 2016. All while white families create even more wealth over those same two hundred years. In fact, this is a gap that will never close if America stays on its current economic path. According to the Institute on Assets and Social Policy, for each dollar of increase in average income an African American household saw from 1984 to 2009 just $0.69 in additional wealth was generated, compared with the same dollar in increased income creating an additional $5.19 in wealth for a similarly situated white household."

Author Lilian Singh wrote on why the perceptions about black life created by media are misleading in the American Prospect piece "Black Wealth On TV: Realities Don’t Match Perceptions". "Black programming features TV shows that collectively create false perceptions of wealth for African-American families. The images displayed are in stark contrast to the economic conditions the average black family is battling each day."

In an article on Huffington Post by Antonio Moore "The Decadent Veil: Black America's Wealth Illusion" the question of inequity is taken another critical step forward and the piece digs into how celebrity is masking this massive inequality. Excerpt: "The decadent veil looks at black Americans through a lens of group theory and seeks to explain an illusion that has taken form over a 30-year span of financial deregulation and new found access to unsecured credit. This veil is trimmed with million-dollar sports contracts, Roc Nation tour deals and designer labels made for heads of state. As black celebrity invited us into their homes through shows like MTV cribs, we forgot the condition of overall African American financial affairs. Despite a large section of the 14 million black households drowning in poverty and debt the stories of a few are told as if they represent those of millions, not thousands. It is this new veil of economics that has allowed for a broad swath of America to become not just desensitized to black poverty, but also hypnotized by black celebrity… The decadent veil not only warps the black community's vision outward to a larger economic world, but it also distorts outside community's view of Black America's actual financial reality."

According to an article by the Pew research Center, the median wealth of non-Hispanic black households fell nearly 38% from 2010 to 2013. During that time, the median wealth of those households fell from $16,600 to $13,700. The median wealth of Hispanic families fell 14.3 % as well, from $16,000 to $14,000. Despite the median net worth of all households in the United States decreasing with time, as of 2013, white households had a median net worth of $141,900 while black house households had a median net worth of just $11,000. Hispanic households had a median net worth of just $13,700 over that time as well.

Effect on democracy

A 2014 study by researchers at Princeton and Northwestern concludes that government policies reflect the desires of the wealthy, and that the vast majority of American citizens have "minuscule, near-zero, statistically non-significant impact upon public policy … when a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose." When Fed chair Janet Yellen was questioned by Bernie Sanders about the study at a congressional hearing in May 2014, she responded "There’s no question that we’ve had a trend toward growing inequality" and that this trend "can shape [and] determine the ability of different groups to participate equally in a democracy and have grave effects on social stability over time."

In Capital in the Twenty-First Century, French economist Thomas Piketty argues that "extremely high levels" of wealth inequality are "incompatible with the meritocratic values and principles of social justice fundamental to modern democratic societies" and that "the risk of a drift towards oligarchy is real and gives little reason for optimism about where the United States is headed."

According to Jedediah Purdy, a researcher at the Duke School of Law, the inequality of wealth in the United States has constantly opened the eyes of the many problems and shortcomings of its financial system over at least the last fifty years of the debate. For years, people believed that distributive justice would produce a sustainable level of wealth inequality. It was also thought that a certain state would be able to effectively diminish the amount of inequality that would occur. Something that was for the most part not expected is the fact that the inequality levels created by the growing markets would lessen the power of that state and prevent the majority of the political community from actually being able to deliver on its plans of distributive justice, however it has just lately come to attention of the mass majority.

Proposals to reduce wealth inequality

Taxation of wealth

Senator Elizabeth Warren proposed an annual tax on wealth in January 2019, specifically a 2% tax for wealth over $50 million and another 1% surcharge on wealth over $1 billion. Wealth is defined as including all asset classes, including financial assets and real estate. Economists Emmanuel Saez and Gabriel Zucman estimated that about 75,000 households (less than 0.1%) would pay the tax. The tax would raise around $2.75 trillion over 10 years, roughly 1% GDP on average per year. This would raise the total tax burden for those subject to the wealth tax from 3.2% of their wealth under current law to about 4.3% on average, versus the 7.2% for the bottom 99% families. For scale, the federal budget deficit in 2018 was 3.9% GDP and is expected to rise towards 5% GDP over the next decade. The plan received both praise and criticism. Two billionaires, Michael Bloomberg and Howard Schultz, criticized the proposal as "unconstitutional" and "ridiculous," respectively. Warren was not surprised by this reaction, stating: "Another billionaire who thinks that billionaires shouldn't pay more in taxes." Economist Paul Krugman wrote in January 2019 that polls indicate the idea of taxing the rich more is very popular.

Limit or tax stock buybacks

Senators Charles Schumer and Bernie Sanders advocated limiting stock buybacks in January 2019. They explained that from 2008-2017, 466 of the S&P 500 companies spent $4 trillion on stock buybacks, about 50% of profits, with another 40% going to dividends. During 2018 alone, a record $1 trillion was spent on buybacks. Stock buybacks shift wealth upwards, because the top 1% own about 40% of shares and the top 10% own about 85%. Further, corporations directing profits to shareholders are not reinvesting the money in the firm or paying workers more. They wrote: "If corporations continue to purchase their own stock at this rate, income disparities will continue to grow, productivity will suffer, the long-term strength of companies will diminish — and the American worker will fall further behind." Their proposed legislation would prohibit buybacks unless the corporation has taken other steps first, such as paying workers more, providing more benefits such as healthcare and pensions, and investing in the community. To prevent corporations from shifting from buybacks to dividends, they proposed limiting dividends, perhaps by taking action through the tax code.

American Dream

From Wikipedia, the free encyclopedia

For many immigrants, the Statue of Liberty was their first view of the United States. It signified new opportunities in life and thus the statue is an iconic symbol of the American Dream.

 

The American Dream is a national ethos of the United States, the set of ideals (democracy, rights, liberty, opportunity and equality) in which freedom includes the opportunity for prosperity and success, as well as an upward social mobility for the family and children, achieved through hard work in a society with few barriers. In the definition of the American Dream by James Truslow Adams in 1931, "life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement" regardless of social class or circumstances of birth.

The American Dream is rooted in the Declaration of Independence, which proclaims that "all men are created equal" with the right to "life, liberty and the pursuit of happiness." Also, the U.S. Constitution promotes similar freedom, in the Preamble: to "secure the Blessings of Liberty to ourselves and our Posterity". 

History

The meaning of the "American Dream" has changed over the course of history, and includes both personal components (such as home ownership and upward mobility) and a global vision. Historically the Dream originated in the mystique regarding frontier life. As the Governor of Virginia noted in 1774, the Americans "for ever imagine the Lands further off are still better than those upon which they are already settled". He added that, "if they attained Paradise, they would move on if they heard of a better place farther west".

19th century

In the 19th century, many well-educated Germans fled the failed 1848 revolution. They welcomed the political freedoms in the New World, and the lack of a hierarchical or aristocratic society that determined the ceiling for individual aspirations. One of them explained:

The German emigrant comes into a country free from the despotism, privileged orders and monopolies, intolerable taxes, and constraints in matters of belief and conscience. Everyone can travel and settle wherever he pleases. No passport is demanded, no police mingles in his affairs or hinders his movements ... Fidelity and merit are the only sources of honor here. The rich stand on the same footing as the poor; the scholar is not a mug above the most humble mechanics; no German ought to be ashamed to pursue any occupation ... [In America] wealth and possession of real estate confer not the least political right on its owner above what the poorest citizen has. Nor are there nobility, privileged orders, or standing armies to weaken the physical and moral power of the people, nor are there swarms of public functionaries to devour in idleness credit for. Above all, there are no princes and corrupt courts representing the so-called divine 'right of birth.' In such a country the talents, energy and perseverance of a person ... have far greater opportunity to display than in monarchies.

The discovery of gold in California in 1849 brought in a hundred thousand men looking for their fortune overnight—and a few did find it. Thus was born the California Dream of instant success. Historian H. W. Brands noted that in the years after the Gold Rush, the California Dream spread across the nation:

The old American Dream ... was the dream of the Puritans, of Benjamin Franklin's "Poor Richard"... of men and women content to accumulate their modest fortunes a little at a time, year by year by year. The new dream was the dream of instant wealth, won in a twinkling by audacity and good luck. [This] golden dream ... became a prominent part of the American psyche only after Sutter's Mill."

Historian Frederick Jackson Turner in 1893 advanced the Frontier Thesis, under which American democracy and the American Dream were formed by the American frontier. He stressed the process—the moving frontier line—and the impact it had on pioneers going through the process. He also stressed results; especially that American democracy was the primary result, along with egalitarianism, a lack of interest in high culture, and violence. "American democracy was born of no theorist's dream; it was not carried in the Susan Constant to Virginia, nor in the Mayflower to Plymouth. It came out of the American forest, and it gained new strength each time it touched a new frontier," said Turner. In the thesis, the American frontier established liberty by releasing Americans from European mindsets and eroding old, dysfunctional customs. The frontier had no need for standing armies, established churches, aristocrats or nobles, nor for landed gentry who controlled most of the land and charged heavy rents. Frontier land was free for the taking. Turner first announced his thesis in a paper entitled "The Significance of the Frontier in American History", delivered to the American Historical Association in 1893 in Chicago. He won wide acclaim among historians and intellectuals. Turner elaborated on the theme in his advanced history lectures and in a series of essays published over the next 25 years, published along with his initial paper as The Frontier in American History. Turner's emphasis on the importance of the frontier in shaping American character influenced the interpretation found in thousands of scholarly histories. By the time Turner died in 1932, 60% of the leading history departments in the U.S. were teaching courses in frontier history along Turnerian lines.

Americanization of California (1932) by Dean Cornwell

20th century

Freelance writer James Truslow Adams popularized the phrase "American Dream" in his 1931 book Epic of America:

But there has been also the American dream, that dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to his ability or achievement. It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not a dream of motor cars and high wages merely, but a dream of 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... The American dream, that has lured tens of millions of all nations to our shores in the past century has not been a dream of merely material plenty, though that has doubtlessly counted heavily. It has been much more than that. It has been a dream of being able to grow to fullest development as man and woman, unhampered by the barriers which had slowly been erected in the older civilizations, unrepressed by social orders which had developed for the benefit of classes rather than for the simple human being of any and every class.

Martin Luther King Jr., in his "Letter from a Birmingham Jail" (1963) rooted the civil rights movement in the African-American quest for the American Dream:

We will win our freedom because the sacred heritage of our nation and the eternal will of God are embodied in our echoing demands ... when these disinherited children of God sat down at lunch counters they were in reality standing up for what is best in the American dream and for the most sacred values in our Judeo-Christian heritage, thereby bringing our nation back to those great wells of democracy which were dug deep by the Founding Fathers in their formulation of the Constitution and the Declaration of Independence.

Literature

The concept of the American Dream has been used in popular discourse, and scholars have traced its use in American literature ranging from the Autobiography of Benjamin Franklin, to Mark Twain's The Adventures of Huckleberry Finn (1884), Willa Cather's My Ántonia, F. Scott Fitzgerald's The Great Gatsby (1925), Theodore Dreiser's An American Tragedy (1925) and Toni Morrison's Song of Solomon (1977). Other writers who used the American Dream theme include Hunter S. Thompson, Edward Albee, John Steinbeck, Langston Hughes, and Giannina Braschi. The American Dream is also discussed in Arthur Miller's Death of a Salesman as the play's protagonist, Willy, is on a quest for the American Dream. 

As Huang shows, the American Dream is a recurring theme in the fiction of Asian Americans.

American ideals

Many American authors added American ideals to their work as a theme or other reoccurring idea, to get their point across. There are many ideals that appear in American literature such as, but not limited to, all people are equal, The United States of America is the Land of Opportunity, independence is valued, The American Dream is attainable, and everyone can succeed with hard work and determination. John Winthrop also wrote about this term called, American exceptionalism. This ideology refers to the idea that Americans are the chosen ones, and that they are the light.

Literary commentary

European governments, worried that their best young people would leave for America, distributed posters like this to frighten them (this 1869 Swedish anti-emigration poster contrasts Per Svensson's dream of the American idyll (left) and the reality of his life in the wilderness (right), where he is menaced by a mountain lion, a big snake and wild Indians who are scalping and disembowelling someone).

 

The American Dream has been credited with helping to build a cohesive American experience, but has also been blamed for inflated expectations. Some commentators have noted that despite deep-seated belief in the egalitarian American Dream, the modern American wealth structure still perpetuates racial and class inequalities between generations. One sociologist notes that advantage and disadvantage are not always connected to individual successes or failures, but often to prior position in a social group.

Since the 1920s, numerous authors, such as Sinclair Lewis in his 1922 novel Babbitt, and F. Scott Fitzgerald, in his 1925 classic, The Great Gatsby, satirized or ridiculed materialism in the chase for the American dream. For example, Jay Gatsby's death mirrors the American Dream's demise, reflecting the pessimism of modern-day Americans. The American Dream is a main theme in the book by John Steinbeck, Of Mice and Men. The two friends George and Lennie dream of their own piece of land with a ranch, so they can "live off the fatta the lan'" and just enjoy a better life. The book later shows that not everyone can achieve the American Dream, thus proving by contradiction it is not possible for all, although it is possible to achieve for a few. A lot of people follow the American Dream to achieve a greater chance of becoming rich. Some posit that the ease of achieving the American Dream changes with technological advances, availability of infrastructure and information, government regulations, state of the economy, and with the evolving cultural values of American demographics. 

In 1949, Arthur Miller wrote Death of a Salesman, in which the American Dream is a fruitless pursuit. Similarly, in 1971 Hunter S. Thompson depicted in Fear and Loathing in Las Vegas: A Savage Journey Into the Heart of the American Dream a dark psychedelic reflection of the concept—successfully illustrated only in wasted pop-culture excess.

The novel Requiem for a Dream by Hubert Selby Jr. is an exploration of the pursuit of American success as it turns delirious and lethal, told through the ensuing tailspin of its main characters. George Carlin famously wrote the joke "it's called the American dream because you have to be asleep to believe it". Carlin pointed to "the big wealthy business interests that control things and make all the important decisions" as having a greater influence than an individual's choice. Pulitzer Prize–winning journalist Chris Hedges echos this sentiment in his 2012 book Days of Destruction, Days of Revolt:

The vaunted American dream, the idea that life will get better, that progress is inevitable if we obey the rules and work hard, that material prosperity is assured, has been replaced by a hard and bitter truth. The American dream, we now know, is a lie. We will all be sacrificed. The virus of corporate abuse – the perverted belief that only corporate profit matters – has spread to outsource our jobs, cut the budgets of our schools, close our libraries, and plague our communities with foreclosures and unemployment.

The American Dream, and the sometimes dark response to it, has been a long-standing theme in American film. Many counterculture films of the 1960s and 1970s ridiculed the traditional quest for the American Dream. For example, Easy Rider (1969), directed by Dennis Hopper, shows the characters making a pilgrimage in search of "the true America" in terms of the hippie movement, drug use, and communal lifestyles.

Political leaders

Scholars have explored the American Dream theme in the careers of numerous political leaders, including Henry Kissinger, Hillary Clinton, Benjamin Franklin, and Abraham Lincoln. The theme has been used for many local leaders as well, such as José Antonio Navarro, the Tejano leader (1795–1871), who served in the legislatures of Coahuila y Texas, the Republic of Texas, and the State of Texas.

In 2006 U.S. Senator Barack Obama wrote a memoir, The Audacity of Hope: Thoughts on Reclaiming the American Dream. It was this interpretation of the American Dream for a young black man that helped establish his statewide and national reputations. The exact meaning of the Dream became for at least one commentator a partisan political issue in the 2008 and 2012 elections.

Political conflicts, to some degree, have been ameliorated by the shared values of all parties in the expectation that the American Dream will resolve many difficulties and conflicts.

Public opinion

A lot of Americans think the U.S. has more social mobility than other western industrialized countries. This (study using medians instead of averages that underestimate the range and show less stark distinctions between the top and bottom tiers) makes it abundantly clear that we have less. Your circumstances at birth—specifically, what your parents do for a living—are an even bigger factor in how far you get in life than we had previously realized. Generations of Americans considered the United States to be a land of opportunity. This research raises some sobering questions about that image.— Michael Hout, Professor of Sociology at New York University

The ethos today implies an opportunity for Americans to achieve prosperity through hard work. According to The Dream, this includes the opportunity for one's children to grow up and receive a good education and career without artificial barriers. It is the opportunity to make individual choices without the prior restrictions that limited people according to their class, caste, religion, race, or ethnicity. Immigrants to the United States sponsored ethnic newspapers in their own language; the editors typically promoted the American Dream. Lawrence Samuel argues:

For many in both the working class and the middle class, upward mobility has served as the heart and soul of the American Dream, the prospect of "betterment" and to "improve one's lot" for oneself and one's children much of what this country is all about. "Work hard, save a little, send the kids to college so they can do better than you did, and retire happily to a warmer climate" has been the script we have all been handed.

A key element of the American Dream is promoting opportunity for one's children, Johnson interviewing parents says, "This was one of the most salient features of the interview data: parents—regardless of background—relied heavily on the American Dream to understand the possibilities for children, especially their own children". Rank et al. argue, "The hopes and optimism that Americans possess pertain not only to their own lives, but to their children's lives as well. A fundamental aspect of the American Dream has always been the expectation that the next generation should do better than the previous generation."

Hanson and Zogby (2010) report on numerous public opinion polls that since the 1980s have explored the meaning of the concept for Americans, and their expectations for its future. In these polls, a majority of Americans consistently reported that for their family, the American Dream is more about spiritual happiness than material goods. Majorities state that working hard is the most important element for getting ahead. However, an increasing minority stated that hard work and determination does not guarantee success. Most Americans predict that achieving the Dream with fair means will become increasingly difficult for future generations. They are increasingly pessimistic about the opportunity for the working class to get ahead; on the other hand, they are increasingly optimistic about the opportunities available to poor people and to new immigrants. Furthermore, most support programs make special efforts to help minorities get ahead.

In a 2013 poll by YouGov, 41% of responders said it is impossible for most to achieve the American Dream, while 38% said it is still possible. Most Americans perceive a college education as the ticket to the American Dream. Some recent observers warn that soaring student loan debt crisis and shortages of good jobs may undermine this ticket. The point was illustrated in The Fallen American Dream, a documentary film that details the concept of the American Dream from its historical origins to its current perception. 

Research published in 2013 shows that the US provides, alongside the United Kingdom and Spain, the least economic mobility of any of 13 rich, democratic countries in the Organisation for Economic Co-operation and Development. Prior research suggested that the United States shows roughly average levels of occupational upward mobility and shows lower rates of income mobility than comparable societies. Blanden et al. report, "the idea of the US as 'the land of opportunity' persists; and clearly seems misplaced." According to these studies, "by international standards, the United States has an unusually low level of intergenerational mobility: our parents' income is highly predictive of our incomes as adults. Intergenerational mobility in the United States is lower than in France, Germany, Sweden, Canada, Finland, Norway and Denmark. Research in 2006 found that among high-income countries for which comparable estimates are available, only the United Kingdom had a lower rate of mobility than the United States." Economist Isabel Sawhill concluded that "this challenges the notion of America as the land of opportunity". Several public figures and commentators, from David Frum to Richard G. Wilkinson, have noted that the American dream is better realized in Denmark, which is ranked as having the highest social mobility in the OECD. In 2015, economist Joseph Stiglitz stated, "Maybe we should be calling the American Dream the Scandinavian Dream."

In the United States, home ownership is sometimes used as a proxy for achieving the promised prosperity; ownership has been a status symbol separating the middle classes from the poor.

Sometimes the Dream is identified with success in sports or how working class immigrants seek to join the American way of life.

Four dreams of consumerism

Ownby (1999) identifies four American Dreams that the new consumer culture addressed. The first was the "Dream of Abundance" offering a cornucopia of material goods to all Americans, making them proud to be the richest society on earth. The second was the "Dream of a Democracy of Goods" whereby everyone had access to the same products regardless of race, gender, ethnicity, or class, thereby challenging the aristocratic norms of the rest of the world whereby only the rich or well-connected are granted access to luxury. The "Dream of Freedom of Choice" with its ever-expanding variety of good allowed people to fashion their own particular lifestyle. Finally, the "Dream of Novelty", in which ever-changing fashions, new models, and unexpected new products broadened the consumer experience in terms of purchasing skills and awareness of the market, and challenged the conservatism of traditional society and culture, and even politics. Ownby acknowledges that the dreams of the new consumer culture radiated out from the major cities, but notes that they quickly penetrated the most rural and most isolated areas, such as rural Mississippi. With the arrival of the model T after 1910, consumers in rural America were no longer locked into local general stores with their limited merchandise and high prices in comparison to shops in towns and cities. Ownby demonstrates that poor black Mississippians shared in the new consumer culture, both inside Mississippi, and it motivated the more ambitious to move to Memphis or Chicago.

Other parts of the world

The aspirations of the "American Dream" in the broad sense of upward mobility has been systematically spread to other nations since the 1890s as American missionaries and businessmen consciously sought to spread the Dream, says Rosenberg. Looking at American business, religious missionaries, philanthropies, Hollywood, labor unions and Washington agencies, she says they saw their mission not in catering to foreign elites but instead reaching the world's masses in democratic fashion. "They linked mass production, mass marketing, and technological improvement to an enlightened democratic spirit ... In the emerging litany of the American dream what historian Daniel Boorstin later termed a "democracy of things" would disprove both Malthus's predictions of scarcity and Marx's of class conflict." It was, she says "a vision of global social progress." Rosenberg calls the overseas version of the American Dream "liberal-developmentalism" and identified five critical components:

(1) belief that other nations could and should replicate America's own developmental experience; (2) faith in private free enterprise; (3) support for free or open access for trade and investment; (4) promotion of free flow of information and culture; and (5) growing acceptance of [U.S.] governmental activity to protect private enterprise and to stimulate and regulate American participation in international economic and cultural exchange.

Knights and McCabe argued American management gurus have taken the lead in exporting the ideas: "By the latter half of the twentieth century they were truly global and through them the American Dream continues to be transmitted, repackaged and sold by an infantry of consultants and academics backed up by an artillery of books and videos".

After World War II

In West Germany after World War II, says Pommerin, "the most intense motive was the longing for a better life, more or less identical with the American dream, which also became a German dream". Cassamagnaghi argues that to women in Italy after 1945, films and magazine stories about American life offered an "American dream." New York City especially represented a sort of utopia where every sort of dream and desire could become true. Italian women saw a model for their own emancipation from second class status in their patriarchal society.

Britain

The American dream regarding home ownership had little resonance before the 1980s. In the 1980s, British Prime Minister Margaret Thatcher worked to create a similar dream, by selling public-housing units to their tenants. Her Conservative Party called for more home ownership: "HOMES OF OUR OWN: To most people ownership means first and foremost a home of their own ... We should like in time to improve on existing legislation with a realistic grants scheme to assist first-time buyers of cheaper homes." Guest calls this Thatcher's approach to the American Dream. Knights and McCabe argue that, "a reflection and reinforcement of the American Dream has been the emphasis on individualism as extolled by Margaret Thatcher and epitomized by the 'enterprise' culture."

Russia

Since the fall of Communism in the Soviet Union in 1991, the American Dream has fascinated Russians. The first post-Communist leader Boris Yeltsin embraced the "American way" and teamed up with Harvard University free market economists Jeffrey Sachs and Robert Allison to give Russia economic shock therapy in the 1990s. The newly independent Russian media idealized America and endorsed shock therapy for the economy. In 2008 Russian President Dmitry Medvedev lamented the fact that 77% of Russia's 142 million people live "cooped up" in apartment buildings. In 2010 his administration announced a plan for widespread home ownership: "Call it the Russian dream", said Alexander Braverman, the Director of the Federal Fund for the Promotion of Housing Construction Development. Russian Prime Minister Vladimir Putin, worried about his nation's very low birth rate, said he hoped home ownership will inspire Russians "to have more babies".

China

The Chinese Dream describes a set of ideals in the People's Republic of China. It is used by journalists, government officials and activists to describe the aspiration of individual self-improvement in Chinese society. Although the phrase has been used previously by Western journalists and scholars, a translation of a New York Times article written by the American journalist Thomas Friedman, "China Needs Its Own Dream", has been credited with popularizing the concept in China. He attributes the term to Peggy Liu and the environmental NGO JUCCCE's China Dream project, which defines the Chinese Dream as sustainable development. In 2013 the President of the PRC Xi Jinping began promoting the phrase as a slogan, leading to its widespread use in the Chinese media.

The concept of Chinese Dream is very similar to the idea of "American Dream". It stresses entrepreneurship and glorifies a generation of self-made men and women in post-reform China, such as rural immigrants who moved to the urban centers and achieve magnificent improvement in terms of their living standards, and social life. Chinese Dream can be interpreted as the collective consciousness of Chinese people during the era of social transformation and economic progress. The idea was put forward by the new CPC General Secretary Xi Jinping on November 29, 2012. The government hoped to create a revitalized China, while promoting innovation and technology to restore the international prestige of China. In this light, Chinese Dream, like American exceptionalism, is a nationalistic concept as well.