Saturday, November 2, 2013

The (Reconditioned) American Dream

Economy

In an review article (“Average Is Over—But the American Dream Lives On”), by Andrew Lewis, in The American Interest of Tyler Cowen’s Average Is Over,  it says that although income inequality is a current reality, and is likely to remain so for some time, it does not suggest the end of the American Dream.

Lewis writes:
Everyone has their own notions of what constitutes the American Dream, but when writer and historian James Truslow Adams coined the phrase in the 1930s, he wrote that in America “life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.” Cowen’s vision of our future actually reinforces this idea.
This claim might seem strange at first glance for a book that delves into the perpetually gloomy subject of economic inequality. But the takeaways from Cowen’s work are, at least marginally, more optimistic than most people would expect. While Cowen foresees an America with more polarizing income inequality, the country won’t be entirely in the grip of the forces we have grown used to. In the past, income inequality was largely driven by differences in social status. In the future, Cowen argues, society will become more meritocratic: ability will be to an even greater extent the primary driver of labor market success. For those Americans who currently lack access to elite education or other resources or privileges of status, the book offers many reasons to be optimistic about the future.
Cowen’s arguments hinge on the belief that income inequality will persist. In this hypothesis he is far from alone, and backed up by current trends. In the past decade income inequality has worsened by almost every measure.
True enough, given that the evidence shows the modern economy, once called the knowledge economy, has left many millions behind—with a trend continuing in this direction. So, why is Cowen, an economics professor at George Mason University in Fairfax, Virginia, so optimistic in the face of such a trend? The simple answer is that he believes that we are on the cusp of a meritocracy, where ability, and in particular technological ability, will count more than anything else, and that such an ability will be the chief deciding factor of who will find good jobs that pay well.

Sounds great and highly optimistic if you have such technical skills, but what if you don’t? Both Cowen and Lewis do not respond sufficiently to such a fundamental question in a way that understands the full implications of what is being put forward; they too easily dismiss potential societal problems and present societal inequalities as of little consequence. Many millions will be stuck, if they are so fortunate, in the dead-end and soul-destroying, low-paying jobs of the service economy. These will include educated individuals in non-technological fields, including those holding advanced degrees in literature, philosophy and history.

Would the millions of Americans affected by such economic policies and structural economic changes agree with such a rejigging or, rather, a reconditioning of the American Dream? If they would give consent, it would likely either be uninformed or against their interests.

Cowen’s interests are clear enough. Thus, it’s not hard to understand why Cowen, with the support of the reviewer, makes a strong case for what he calls “opportunity equality”—yet, is this not just another vacuous phrase—full of hopeful promise—that change for the better is taking place? That a technological revolution will make America more just and fair. Yet, such promises of a better future for the best and brightest have have been made before and the results are evident for all to see.

Little to nothing will change for the majority of individuals, including the highly educated (in the wrong fields); and the fortunate individuals who hold the plum jobs today will be the same individuals who will hold the plum jobs tomorrow. Such willful ignorance of the historical connection between wealth and politics explains what ails much of current economic thinking. Nothing new here, time to move on.

*******************
You can read the rest of the article at [The American Interest].

No comments:

Post a Comment

All comments ought to reflect the post in question. All comments are moderated; and inappropriate comments, including those that attack persons, those that use profanity and those that are hateful, will not be tolerated. So, keep it on target, clean and thoughtful. This is not a forum for personal vendettas or to create a toxic environment. The chief idea is to engage, to discuss and to critique issues. Doing so within acceptable norms will make the process more rewarding and healthy for everyone. Accordingly, anonymous comments will not be posted.