May 28, 2024 Reading Time: 7 minutes
The Statue of Liberty has welcomed millions of immigrants to better lives in America.

Who killed the American Dream? David Leonhardt, a senior writer at The New York Times, picks up his magnifying glass and investigates in Ours Was the Shining Future: The Story of the American Dream. Note the past tense in the title. 

In order to find the culprit, we must first learn about the deceased. What was the American Dream? As Leonhardt notes, while the range of definitions is vast, at its root, the American dream is about progress. In particular, he zeroes in on a “core part” of the dream, that children will lead better lives than their parents did. Leonhardt makes the definition sharper by beginning with the Origin Story. Pause for a second and ask yourself, “In what decade was the American dream born? What are the defining features of its life?” 

Chances are your answer to those questions are not the ones in this book. Leonhardt argues the American Dream was born in the 1930s. Before then, America was dominated by “rough-and-tumble capitalism.” But, in the midst of the Great Depression, the American dream arrived and roared into life. Leonhardt’s story of its rise begins, in all places, in a Minneapolis coal yard. The key that unlocked the American dream is labor unions. 

The role of labor unions in Leonhardt’s tale goes far beyond workers negotiating for higher pay. The labor union movement in the Great Depression created the template for the American Dream. Businessmen absorbed the spirit of the labor unions, becoming “Trustees of the Common Welfare” by banding together to work with the unions to create the postwar economic boom. The government joined the movement with large-scale investment to advance computer technology and build highways. Even the end of racial discrimination traces its roots to the 1930s labor union movement; A. Philip Randolph was a union organizer and a civil rights leader, “with the second role flowing from the first.” 

Alas. Like John Keats, this beautiful American dream died far too young. The “rough-and-tumble capitalism” which existed before the Great Depression came back to life. Tuberculosis killed Keats, but the American dream was murdered. Whodunnit? The obvious villain is Republicans, who claim to be promoters of prosperity. “But,” Leonhardt argues, “the record suggests otherwise: Living standards rose much less during the Gilded Age and Roaring Twenties than after World War II.” Then, when conservatives came back into power, the dream died. 

If this was all there was to the book, it would just enter into a long list of partisan history stories. Leonhardt, however, thinks Republicans are only part of the murderous cabal. While the American dream was in its ascendancy, the Democratic left splintered, creating two factions which helped kill the American dream. On the one side, there was “an insular, blue-collar old left dominated by union leaders,” and on the other side was the “idealistic, privileged New Left molded by intellectuals.” Despite the fact that these two groups have done much damage to the American dream, Leonhardt announces he has “tried to tell the story of each with empathy,” a courtesy he does not extend to Republicans. But, by the time he’s done, both of these Democratic groups have hands stained red with the blood of the American dream. 

His scorn for what he calls the Brahmin left is particularly striking. Relatively wealthy, college-educated elites have entirely separated themselves from the working class. 

Poor, working-class, and middle-class voters…recognize that the Brahmin left has stopped engaging with them on many issues….Today, many well-off progressives have decided that their views are the only acceptable ones on a long list of subjects, including guns, immigration, COVID, abortion, affirmative action, and gender issues. Opposing views are not merely different; they are some combination of ignorant and bigoted. 

Remember, that was written by a socially liberal reporter from The New York Times

The other faction on the left comes out only marginally better in Leonhardt’s narrative. Labor unions, Leonhardt’s heroes in building the American dream, eventually became large, sclerotic, inward-looking, and dominated by leaders amassing large fortunes. Leonhardt’s own experience with labor unions is illustrative. When he was a reporter, he was frustrated with his union representative’s lack of interest in helping him with real, practical problems. When he became management, he was frustrated by the union’s resistance to change in an industry undergoing a digital revolution. An underlying message of Leonhardt’s book is Make American Labor Unions Great Again. 

The Trumpian undertones of Leonhardt’s message are impossible to miss. A reinvigorated labor movement rejecting the current union bosses, working with the corporate leaders who prefer to build factories in America can join with a government willing to make the deals necessary to craft an industrial policy which will invigorate domestic manufacturing. Then add in more patriotism and tolerance of the social views held by Americans who were not educated at elite universities. Set aside Leonhardt’s formulaic denunciation of Trump himself, and it is clear he is arguing for Trumpian Economics without Trump, a resurrection of the Roosevelt coalition built in the Great Depression, a Democratic populist movement building a Common Good capitalism. 

What is the nature of the American dream, both the original crafted in the Great Depression and the one to which America should turn in the future? Leonhardt begins his argument by pointing to the work of Raj Chetty. If you look at Americans born in 1940, 92 percent of them had higher incomes than their parents, which is evidence of the American dream being realized. The evidence that the American dream died? Only 50 percent of children born in 1980 had higher incomes than their parents. Now, at first glance, it should not be surprising that if your parents lived through the Great Depression, you ended up with a higher income than they had. So, perhaps this was not the best piece of evidence for his argument. Instead, he could have pointed to the decline in labor productivity starting in the 1970s. 

Before we think about labor productivity, though, consider Leonhardt’s argument on its own merits. There is actually a rather clean way to test whether that American dream is still alive by looking at immigration. Part of the traditional story of the American dream was that immigrants could land on these shores and their children would become part of the grand American experiment and have higher living standards than the immigrant parents. Is the same thing true today? Unquestionably. As Leonhardt notes, “most children of the recent immigrant wave have grown up to earn at least a middle-class income. There is no permanent underclass of American immigrants.” So, doesn’t that mean the American dream is alive and well? 

Leonhardt thinks not. What was the effect of immigration on American workers? Here, to his credit, he doesn’t take the easy way out. “The precise answer to how much immigration has affected native-born workers will never be known. The subject is too complicated, too dependent on estimates and assumptions.” Nevertheless, despite the inability to point to direct economic impacts on Americans’ income, Leonhardt argues that recent immigration has done much damage to the American dream. It’s not economic damage, it’s cultural damage. Pointing to Jonathan Haidt’s academic work and Barbara Jordan’s political work, Leonhardt argues for the importance of communalism for working-class Americans. High levels of immigration are good for the Brahmin left, but very disruptive to the working-class Americans’ view of themselves as part of a community that values them. The current immigration system, Leonhardt argues, has “become one more way that the economy and political system have drifted from the interests and values of many working people.” 

In other words, the death of the American dream is not really an economic issue. It is a cultural issue. In this discussion, two issues have been conflated. First, there is the well-documented and endlessly debated fall in productivity growth in the last half-century. Second, there is the equally evident shift in the cultural landscape. 

Looking again at Leonhardt’s fixation on the importance of labor unions reveals the problem of not keeping these two secular trends separate. He wants to credit labor unions with the economic growth rates after World War II, and thus he believes the way to reestablish the American dream is with a new labor movement. But, the positive effects of labor unions in the stories Leonhardt tells are not really economic. They are cultural. Starting with his story about the coal yard in Minneapolis in the 1930s, what labor unions are providing to the workers is not just higher pay, but a sense of community. The same is true of all the other parts of Leonhardt’s story of the American dream. Business leaders, government employees, and the early civil rights leaders were all forming communities. That, underneath it all, is Leonhardt’s American dream. It’s not the economy, it’s the sense of belonging. 

Who killed the American dream isn’t actually the right question. The first question is whether the American dream is dead yet. Leonhardt’s book functions as a Rorschach test. If you start the book with the belief that the American dream is dead, you are certain to find much in the book to love. Because the book is sprawling and the villains are legion, it makes no difference if you are conservative or liberal. Robert Bork and Cesar Chavez are both part of the problem.  

But, if you start the book believing that the American dream is alive and well, that there is still reason to find great hope in the future, then the book falls flat. Again because the book is sprawling and not tightly argued, there are ample places in these chapters where the heartbeat of the American dream can still be detected. 

Did the American dream die? James Truslow Adams raised the idea of the American dream in his 1931 book The Epic of America, which ends with the phrase “Mine is the shining future.” Adams set out to describe: 

that American dream of a better, richer, and happier life for all our citizens of every rank which is the greatest contribution we have as yet made to the thought and welfare of the world. That dream or hope has been present from the start. Ever since we became an independent nation, each generation has seen an uprising of the ordinary Americans to save that dream from the forces which appeared to be overwhelming and dispelling it. Possibly the greatest of these struggles lies just ahead of us at this present time — not a struggle of revolutionists against established order, but of the ordinary man to hold fast to those rights to “life, liberty, and the pursuit of happiness” which were vouchsafed to us in the past in vision and on parchment. 

There is much ruin in a nation, decadence is rampant, but the deeper question, the question that really can’t be answered with data or with Leonhardt’s book, is whether Adams’ description is still true. 

As for me, I still believe. 

James E. Hartley

James Hartley is Professor of Economics at Mount Holyoke College. A California native, he earned his B.A., M.A, and Ph.D. in Economics from the University of California at Davis. His publications include The Representative Agent in Macroeconomics, Real Business Cycles: A Reader (co-edited with Kevin Hoover and Kevin Salyer), and Mary Lyon: Documents and Writings.

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