America has always seemed to be more than a country or a nation. Peopled primarily by white migrants from Europe, it has also been an idea, i.e. that anyone regardless of his/her social origins can achieve success in the form of a better life through hard work, initiative and enterprise. This noble sentiment, however, excluded America’s indigenous population and the slaves who were brought from Africa from the early 17th century onwards. Hence, in a more modern sense the American Dream was ‘damaged goods’ from the very beginning. But nonetheless there was a palpable sense in which both America itself and many outside its borders believed that America was, indeed, a land in which they could pursue their dreams. A surrounding narrative built round the dream was that of the rugged individual who overcame daunting odds and built the nation - as arriving migrants moved westwards towards California then under Spanish rule – not forgetting the helping hand given to them by the Homestead Act of 1860 in which land was given for free to those white migrants prepared to move westward regardless of whether any indigenous people lived on the land or not.
These self-created narratives were fortified by the extraordinary propaganda machine that was Hollywood after World War I. Prior to Hollywood it was America itself that had created this narrative via the inscription on the Statue of Liberty on Ellis Island that said ‘Give me your tired, your poor,/ Your huddled masses yearning to be free’. Although even in 1860 the inscription was not completely true, the real souring that the title of this piece alludes to has occurred within a more recent time, say, in the immediate post-World War II years, and the inclusion of human rights in the United Nations Charter. History does not move in discrete steps; it moves through its own dynamics through the interaction of events and forces, sometimes at a leisurely pace and sometimes rapidly. There is no single cause-effect process that can explain what has happened in America; instead, multilayered processes consisting of many causes and many effects over a century and a half have brought it about. Hollywood propaganda alone cannot overcome the lived experiences of people. The seeds for the souring that we are witnessing today must have been sown many years ago in American history.
Most observers contend that the idea of the American dream grew out of the notion embodied in the ‘pursuit of happiness’ that the Declaration of Independence explicitly stated in 1776 would form the core of the Declaration in the form of liberty from British rule. In 1876, a hundred years after the founding of the United States of America, and a decade or so after the ending of the Civil War, possibly the bloodiest event in American history in which hundreds of thousands on both sides were killed or maimed, there were few, if any, celebrations to mark such an important milestone for the nation. The nation was still coming to terms not only with the carnage that occurred in the Civil War itself but with the fundamentally opposing views of the American polity that had inexorably led to the War itself. These were about the institution of slavery and whether slavery was compatible with the ideas of liberty that had become, at least rhetorically, an integral part of the American psyche with the formation of the United States of America in 1776 and its independence from British rule. The question was whether the rightly acclaimed ideal of freedom was not just an abstraction but available equally to slaves and to the dispossessed native Americans.
The myriad jobs lost in industry as a result are being replaced by low-skill and low-paying jobs in distribution in which employees live a precarious existence.
By 1976, the issue of slavery per se no longer exercised the country, except in the old Confederate states and organisations like the Ku Klux Klan, but civil rights for the country’s black citizens did. Thus, despite the apparent successes of the civil rights movement of the 1960s some hundred years after the Civil War, such as affirmative action, it nonetheless constituted unfinished business for the country and though not as egregious as Apartheid in South Africa it was a blot on the nation’s reputation. In addition, the Vietnamese war (1965-73) in which American armed might had suffered a humiliating defeat and the miasma of the Watergate scandal that had forced the elected President, Richard Nixon, to resign in ignominy had dealt severe blows to the nation’s self-esteem. These events only compounded a palpable sense of despondency, if not of failure, in the country in 1975 and 1976. The American nation was therefore hardly in a mood to celebrate. Indeed, the prevailing mood, far from being celebratory, was one of introspection and the future was looked upon with a sense of foreboding. America’s view of itself as the shining city on the hill and faith in the American dream had clearly suffered a massive setback despite the enormous wealth of the country.
Today, a further fifty years later, the nation again looks at itself joylessly with a lack of pride. Faith in the American dream of endless progress barely registers in the public imagination. Yes, the country continues to do well according to measures such as per capita GDP, its ability to develop new technology, the size of its armed forces, its nuclear arsenal and its IT corporations, but simultaneously in other measures, for example, growing inequality, its poor international standing, bizarre claims on foreign territories, constant war-mongering, the rising cost of health care and housing, the country hardly sets a good example. Compared to the 1960s, it seems to be regressing on the social front and the extant social contract appears to be fraying in front of our very eyes. Moreover, industry, once America’s core strength is no more than a hollow shell. ‘Progress’ has been reduced now, in the hands of the billionaire-owned media, to compiling lists of billionaires who regularly proffer ‘solutions’, without being asked but with an almost juvenile sense of entitlement, for the world’s many problems via their charitable trusts. These are often no more than masks for their sophisticated tax-avoiding genius. In this context, today’s Make America Great Again (MAGA) is part of a wider mood of dissatisfaction with the way things are rather than a serious programme of action to set things right.
So much for America itself. But America has to contend with the rest of the world that has not stood still, especially since the 1990s. In the 19th and early 20th centuries, even though America had become the dominant economic power, the prevailing sentiment was one of insularity, notwithstanding the Monroe Doctrine by which outsiders were told to keep out of the Western Hemisphere. But, as America became an economic Titan, roughly from the 1920s onwards, its involvement in the affairs of other countries became unavoidable. It participated in both World War I and World War II and, although significantly over-stated, did make a major contribution in bringing the wars to a conclusion.
Victory in World War II formalised the involvement of the country with the outside world via Bretton Woods and the self-created image of the ‘shining city on the hill’ became more tangible. Moreover, the USSR a partner in World War II, a military but not an economic rival during the Cold War of 1945-91, was seen off. Within the country the growing band of academics and others impatient with the country’s seeming diffidence and respect for the institutional props that the country had itself created saw that the global economy pivoted round America and America could afford to relax and let other nations enjoy some of the benefits of the American-led global order. Some regions, mainly East and South-East Asia, i.e. China, Taiwan, South Korea, Malaysia, Thailand and Indonesia eagerly grasped the opportunities that came their way and took to making things that America needed with extraordinary panache. At first, America looked upon these regions/countries as upstarts but within a few years they were selling more and buying less from America. This was not and has not been to America’s liking. Opinion, even today, on this is divided. America likes the goods that Asia makes so efficiently but does not like to be in thrall to it. Moreover, the myriad jobs lost in industry as a result are being replaced by low-skill and low-paying jobs in distribution in which employees live a precarious existence. This does not sit well with the notion of the American dream.
Compared to the 1990s America no longer bestrides the globe like an economic colossus but has to contend in particular with the rapid rise of China as an entirely new geostrategic, economic and technological rival. China is developing its military, especially naval and missile capabilities, at breakneck pace and with an expanding space programme comparable to that of America to boot. In scientific research and the development of new technologies it is on par with America. More alarmingly, perhaps for America, China has got a choke-hold on the supply chain for rare earths – critical inputs for the global high-tech manufacturing sectors. China’s economy is now bigger than that of America on a purchasing power basis and perhaps not that much smaller at market rates of exchange especially when the inflated contributions of services such as finance, law and health to the US economy can be shorn of the froth of the vast earnings that characterise the top echelons of their management pyramids. The Cold War with the USSR may have ended in American victory and created the delusions of a unipolar world dominated by the US but such delusions have melted away. And, it is worth mentioning that China was, only two or three decades ago, a dirt-poor country looked upon either paternalistically, or with a mixture of pity and scorn, by America and the rest of the world. No one could have imagined that by 2025 it would be challenging America in global affairs. The story of the American dream has thus acquired a twist in its plot and is being rewritten.
History does not move in discrete steps, it moves through its own dynamics through the intersection of events and forces, sometimes at a leisurely pace and sometimes rapidly.
How has all this happened? A short digression into America’s early history will go some way in describing and explaining how we have reached this point in history. Early European explorers after discovering the Americas, north and south, unleashed wave after wave of European migration to what was deemed to be virgin territory waiting to be exploited. The Inquisition in Europe had created an atmosphere of religious intolerance so that many thought it worthwhile to take the perilous journey across the Atlantic to save themselves from poverty and persecution in their native lands. But, in the new world of the Americas there was already an indigenous population – to be known by the pejorative and factually incorrect title ‘red Indians’. The arrival of large numbers of white settlers from Europe would inevitably create conflict and so it proved to be the case. From the early 17th century to the beginning of the 20th the indigenous people of north America were ethnically cleansed. Treaties were made and broken and populations expelled or decimated. Such barbarity was not reserved for America’s human population. A photograph from 1892 shows a small hill of bison skulls with a white man sitting on top. Perhaps 60 million bison were butchered with the throwaway justification: ‘Every buffalo dead is an Indian gone’. Estimates vary but over this period the indigenous population of north America was reduced from around 5 million to a few thousand.
Killing on such an extraordinary scale over its history scale has dulled American attitudes to the extent that the slaughter of civilians in Vietnam, Laos, Cambodia, Afghanistan, Iraq etc. has been accepted with barely a shrug of the shoulders. Furthermore, Americans are not particularly averse to killing each other; some 20,000 plus are murdered every year with the police itself killing more than 1000 of them. Owning guns is not only a badge of honour but an essential rite of passage in order to be considered a full-fledged American.
America was at the beginning and until the 20th century primarily an agricultural country. Fertile lands and huge river systems made the country ripe for an agricultural revolution based on massive land holdings that made large-scale farming viable, something that was not possible in Europe. Wheat, cotton and tobacco began to be cultivated from the mid-West to the south. What was missing was cheap manpower. Slavery on an industrial scale from West Africa provided the needed manpower and the profits from the slave trade were shared with the European powers, Spanish, Portuguese, French, Dutch and British. This cooperation between white Christian Europe in the development of North and South America was the seed that germinated in the 21st century to create the idea of the ‘West’ as a civilisational entity - with the tacit proviso that the West was destined to rule the world forever, if not by containment, then by war.
Here, it should be pointed out that the institution of slavery was not invented in the 17th century by Europe. The Greeks, Romans, Arabs and Chinese practised the buying and selling of men and women. Repugnant as it undoubtedly was, it could, however, be described as an extension of domestic vassalage, a near-universal phenomenon in the pre-modern world. Feudal serfs in Europe were in a similar position of bondage to slaves and their legal status was not that of Europe’s ‘freemen’ who were either artisans or owners of property. In Africa, too, given the poor soil and climate, although settled agriculture never acquired the structure, or economic importance, of feudalism in Europe or Asia, men and women were sadly bought and sold nevertheless.
In America, however, the entire economy functioned on the basis of slavery and played a major role in making cotton, tobacco and sugar cultivation not only viable but massively profitable. And, what it almost certainly brought in its wake, was the normalisation of the existence of ‘superior’ and ‘inferior’ ethnic groups. In the Americas, these inferior groups happened to be black people from Africa; in other countries they were usually of the same ethnicity. Slavery legally ended in 1865 but the evil of racism replaced it. In the process of normalising racism senior and highly respected figures on the American side of the War of Independence played a central role. They not only owned slaves but saw nothing wrong in fathering children through them. Thomas Jefferson, the author of the Declaration of Independence and a revered figure in American history, being one of the most prominent.
But racism only sanctified exploitation of the black population; it is American capitalism, old and new, that has created a permanent underclass of the poor with almost no prospect of participating in the American dream. In understanding this feature of the American economy, we have to understand how the ‘robber baron’ stage of the 1920s and the neoliberalism creed of the 1970s created a new political and social order and the American dream, such as it was, has been one of its many victims. Neoliberalism arose as the Vietnam war and two oil shocks caused inflation to jump and economic growth to slow – stagflation as it was called. Economics is as much an effort to understand the working of the economy – with all its wide-ranging ramifications for society – as it is a device for the propagation of ideology, including strongly-held prejudices. The Economics faculty of Chicago University jumped at the opportunity to argue falsely that inflation had been caused by an over-large state that had over-extended itself into areas such as welfare. Hence, what was needed, as the University of Chicago saw it, was a sharply reduced role for the state and lower taxes. Its ideas resonated strongly with the preferences of the rich.
The Chicago School argued that a smaller, low-tax state would usher in a new, more efficient, deployment of resources driven by market signals instead of decisions by bureaucrats. Indeed, all investment decisions, both private and public, needed to be based on market criteria to ensure that resources were being efficiently used. Non-market sentiments like empathy, trust, friendship, loyalty, essential in any society, were given short shrift. This came to be known subsequently as Reaganomics and has been the major factor in not only souring but, perhaps, permanently ending the American dream.
American capitalism did not have the European structure of a large state sector providing public goods and running utilities. Health was mainly in private hands, as was higher education. Schools and community colleges were a state activity and in the former, i.e. schools there was a strong union presence. Nevertheless, the objective of a smaller state has seen its expression in the compression of wages and salaries of teachers to the undoubted detriment of American children. According to research done by the University of California American children now have the cognitive ability and numeracy of 10 year-olds. Neoliberalism’s objective of a smaller state has found its primary expression on the tax side with all the effort made to reduce direct taxes and make the tax system more regressive. For example, under Reagan the top rate of tax was lowered from 70 to 28 per cent and after Clinton raised it to 39.6 per cent to 35 per cent under George Bush. Further cuts were made in Trump’s first term. Other taxes, like those on capital gains, are barely taxed. America today has the least progressive tax system of any developed country.
On the other side of the balance sheet, America remains one of the few countries without a proper public health system and virtually no public transport in its main cities. This has resulted in countless persons owning cars out of necessity rather than choice. While petrol remains relatively cheap other costs of running cars, such as insurance, pose a huge burden for car owners. Lower taxes have neither boosted overall investment nor ushered in greater efficiency in the economy. Rampant financialization has ended manufacturing while the economy groans under the weight of gargantuan public and private debts.
But a new development in American capitalism poses an even more perilous long-term risk. It is often said that America is not run by the government. Instead, American corporate power runs America. Rent-seeking in which no new value is added but countless institutions and individuals become participants in the revenue streams generated in the economy. Where America enjoys a degree of dominance is in computer technology where it has corporations that are valued in hundreds of billions of dollars. Whether they will generate commensurate profits to justify the current euphoria or are simply bubbles that will pop, as they did in the early 2000s with dot.com boom, remains to be seen. Questions about the public interest, public infrastructure, democratic consent, accountability and the sanctity, or even relevance, of individual choice do not have clear cut answers as of now in America, or, indeed, elsewhere. But, American capitalism’s wholehearted and unreserved commitment to maximising monetary profits as against some notion of public welfare, does not inspire confidence. The American dream is unlikely to provide much, or any, confidence in the difficult years ahead to the bulk of the American population.
Today, after a generation or so of neoliberal economics, society is divided down the middle, with fringe opinions increasingly making the weather in the country and there appears little or no overlap of ideas and attitudes in the middle. In creating this atmosphere, the country’s media have played a major role in shattering the idea of the ‘dream’, so assiduously promoted by Hollywood over the years. Simply put, the American dream was that America was a land of opportunity and you did not need a helping hand from your family or friends and that upward mobility was yours for the taking. No one ever mentioned that the dream might also have a dark side or that hardly any of the rewards available applied if you were black or descended from the indigenous population. Today in 2026 the possibility that the dream might one day turn into a nightmare as AI and cryptocurrencies virtually privatize the entire economy are discussed in passim, but their many dangers are concealed behind the need to sustain the belief in America’s technological pre-eminence. The rest of the world is treated either with disdain or feared, for instance, China.
Most Americans continue to believe that they are a unique nation, blessed by God. For the ordinary people of America, the dream is over leaving behind a largely value-free polity and society where all human relationships are transactional. The traditional leaders of society, the politicians, have created an ethos in which half-truths and fabrications masquerade as facts. America’s international standing has been gravely damaged by the carte blanche given to Israel but the government and much of society carries on blithely with little, or no, self-awareness.