The end of the American Dream?

In an op-ed for Handelsblatt, Dennis J. Snower says that the US needs a swift change of course to overcome its current challenges.

The violent death of George Floyd in the US has led to worldwide protests. But the people’s anger runs deeper than merely seeing the horrible images. It is a manifestation of an American society that has long been divided, writes Dennis J. Snower, Professor of Macroeconomics and Sustainability at the Hertie School and President of the Global Solutions Initiative.

“The gap between rich and poor is becoming bigger and bigger […] and reality has caught up with the American Dream: Those born poor have a lesser chance of becoming rich in the US than in many European countries,” he writes.

“But it is not only economic inequality that has grown: According to a recent study by Katharina Lima de Miranda and myself, both components of the ‘American Dream’ – the ability to forge your own destiny through your own efforts, and the social solidarity that there is a social backing for such performance-related advancement – no longer have a firm foundation to stand on.” 

There has been a collapse in social solidarity over the past decade, Snower adds, which has led America into a vicious circle: the deficit of solidarity and empowerment fuels the growing populism – and the growing populism in turn fuels the division of society and exacerbates the problems, which have become even more evident in times of COVID-19. President Trump only adds fuel to the fire with his rhetoric and the inability of his administration to tackle the current challenges.

“America must see the shocking images of recent weeks as an opportunity for a fundamental change of course,” Snower explains. “What is needed now is a new kind redistribution – not redistribution in the traditional sense, but a far-reaching redistribution of economic incentives. The ‘American Dream’ can only be brought back to life if the country succeeds in opening up drastically improved education and training opportunities for the disadvantaged poor – those whose income is consistently 30 percent below the average income.”

Read the full article here (in German).

More about Dennis Snower

  • Dennis Snower , Senior Professor of Macroeconomics and Sustainability