American Dream stairway


For many these day, unemployment is not so much a personal thing as a structural thing. Yes, it is handy and inviting to blame politician and economists, the root cause of much labour force dislocation transcends both Republican (legacy) and Democratic (current) policies. My mantra to people embarking on a career these days is “if you want an above average standard of living you have to ask yourself ‘what can I do better than (a) a computer, and (b) a highly motivated Asian’?” By the latter, I am referring to the literally billions of Chinese, Indians and others in southeast Asia whose education, skills, infrastructure and access to the global workforce has rocketed. Forget immigrants ‘taking jobs’. That is a mere distraction of the foreigners taking jobs on a scale much larger through global competition.

The Economist recently examined these issues of disruptive shifts in their article “The American Dream, RIP?”

  • “Could America survive the end of the American Dream? The idea is unthinkable, say political leaders of right and left. Yet it is predicted in ‘Average is Over’, a bracing new book by Tyler Cowen, an economist. Mr Cowen is no stranger to controversy. In 2011 he galvanised Washington with ‘The Great Stagnation’, in which he argued that America has used up the low-hanging fruit of free land, abundant labour and new technologies. His new book suggests that the disruptive effects of automation and ever-cheaper computer power have only just begun to be felt. It describes a future largely stripped of middling jobs and broad prosperity. An elite 10-15% of Americans will have the brains and self-discipline to master tomorrow’s technology and extract profit from it, he speculates. They will enjoy great wealth and stimulating lives. Others will endure stagnant or even falling wages, as employers measure their output with ‘oppressive precision”’.Some will thrive as service-providers to the rich. A few will claw their way into the elite (cheap online education will be a great leveller), bolstering the idea of a ‘hyper-meritocracy’ at work: this ‘will make it easier to ignore those left behind’. Young men will struggle in a labour market that rewards conscientiousness over muscle.

We are already seeing the who-moved-my-cheese scapegoating…

  • “Even if only a fraction of Mr Cowen’s vision comes to pass, he is too sanguine about the politics of polarisation. Inter-generational tensions fuelled 1960s unrest and would be back with a vengeance, this time in the form of economic competition for scarce resources. The Middle Ages were stable partly because peasants could not vote; an unhappy modern electorate, by contrast, would be prey to demagogues peddling simple solutions, from xenophobia to soak-the-rich taxes, or harsh, self-defeating crime policies.”

Unfortunately, for too many the “American Dream” is really about privilege. Getting yourself into a group (American residents) you will have special economic real being (relative to others like minorities and women as well as populations in the 2nd and 3rd world). Like so many artefacts of the modern digital age, the enclaves of privilege have broken down broadly (one could argue they have gotten more entrenched for the uber-affluent, but entry into the elite is even harder than American residency ever was).

  • “Many voters remember a time when hard work was reliably rewarded with economic security. This was not really true in the 1950s and 60s if you were black or female, but the question still remains: what if Mr Cowen is right?”

So where is the embrace of adversity in this stressful and debilitating challenge. The embrace is in appreciating and respecting the fundamental changes that have happened and responding appropriately with some serious changes and investments (in education, skilling and infrastructure primarily). Not embracing failure is to grasp at one of a couple ersatz solutions: (a) blame, and (b) lingering. Blame is about attacking groups – immigrants, rich, welfare rolls – perceived to have ‘stolen’ the jobs and money. Lingering is about shoring up terminally ill industries and jobs with artificial boosts (eg. bailouts, subsidies, tariff protections, loans). Embracing failure of the economy gone by is about embracing the new opportunities of new industries, new skills and new jobs.

The American Dream is dead. Long live the American Dream.