Transcript Has the American Dream Been Stolen?

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
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Who Stole The American
Dream? The Series
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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 lowerpaying, less stable service jobs
 U.S. tax and trade policy favors this
trend, in effort to assist US corporations
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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
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What has happened?
Shift from industrial to global
information economy, booming markets
 Decline in US manufacturing jobs
 Few jobs available for unskilled/lowskilled workers that support a family
 Shortage of skilled workers
 Labor union membership in decline
 Two-income households the norm
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An Old Debate: The Evolution
of Capitalism
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Adam Smith
Thomas Malthus
David Ricardo
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Karl Marx
John Maynard
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
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Thomas Malthus
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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
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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
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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
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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
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Arthur Laffer
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1974: Argued that
excessive tax rates
can actually
decrease revenue
Rationale for Reagan
tax cut
Robert Reich
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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.
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