John Bew: How the American dream ran out of gas

Tyler Cowen argues that Americans used their new-found wealth and prestige “to dig in”, protect themselves against risk, “and to build and cement a much safer and static culture”.

By John Bew

Consumers of Americana cannot fail to have noticed the angst that has exerted a vice-like grip on the collective psyche in the United States in recent years. It runs both vertically and horizontally through American society: from the intellectual and economic elites at the top, usually in the tech sector or in college towns on the east and west coasts, to the “left behind” working and middle classes in the flyover rural heartlands, the “tombstones” of US manufacturing in the rust belt and vast inner-city ghettos. The angst unites portions of the left and right – from Bernie Sanders to Donald Trump –
though proposals for how to remedy the nation’s problems remain starkly divisive.

One of the intellectual events of last year was the publication of J D Vance’s Hillbilly Elegy: a Memoir of a Family and Culture in Crisis, which told the story of the disintegration and despair of a white, working-class Kentucky family from the Appalachian Mountains. Tellingly, it surged back on to the New York Times bestseller list just after Trump’s inauguration as Americans struggled to explain the political explosion that had just gone off in their country. Vance regards Trump as the political equivalent of the prescription opiates – “hillbilly heroin” – that dull the pain but are a scourge of so many working-class communities. The president promises to revive industry but only 8 per cent of the US workforce is employed in the manufacturing sector. Meanwhile, many Americans view the rise of China with a great deal of fear and resentment, but also grudging admiration for the kind of dynamism and ambition that once characterised their own land.

As the “state of the nation” debate rumbles on, Tyler Cowen re-enters the fray with a Malcolm Gladwell-style diagnostic of how the American dream has run out of gas. Cowen, who holds a chair in economics at George Mason University in Virginia and is a regular columnist for Bloomberg View, is probably best known for his short book The Great Stagnation (2011). In it, he argued that the economic conditions that had driven the breakneck pace of US growth for the past two centuries were largely exhausted. Americans had gorged on “low-hanging fruit”, such as the cultivation of free and previously unfarmed land and the discovery of vast new resources. The building of infrastructure and the spread of technology followed, and the US reaped the benefits of educating its immigrant population.

The Complacent Class picks up the baton and suggests that a damaging socio-cultural phenomenon has arisen from these altered conditions. The pioneering spirit that inspired the American dream has dissipated. Americans used their new-found wealth and prestige “to dig in”, protect themselves against risk, “and to build and cement a much safer and static culture”. Consequently, the country’s growth has plateaued. A deflated Stars and Stripes balloon adorns the cover of the book. But its deeper message is that the trends towards stagnation cannot go on for ever, and that America is heading towards a crisis that will shake the country to its economic and social foundations. The election of Donald Trump is merely a dress rehearsal for the main event.

In Democracy in America, Alexis de Tocqueville suggested that the defining characteristic of the American people was a restlessness and risk-taking mentality. Yet he also wondered whether such a spirit could be sustained indefinitely. “People suppose that the new societies are going to change shape daily,” he wrote, “but my fear is that they will end up being too unalterably fixed with the same institutions, prejudices and mores, so that mankind will stop progressing and will dig itself in.”

Cowen regards Tocqueville’s warnings as prophetic. Americans have become complacent and cautious where they were once restless and radical. They are working harder than ever to avoid change. They move home and job less often than they did a generation ago. Interstate migration has fallen sharply since the 1980s, much as the economy has become more uniform. Contrary to the expectation that technology would speed up change, the ubiquity of the internet further encourages people into silos: they seek “matches” within their own socio-economic and ethnic groupings. Of couples who married between 2005 and 2012, more than one-third met online (nearly 70 per cent for same-sex couples).

Despite flickers of dissatisfaction with the status quo, as with support for anti-establishment politicians and the Ferguson riots, Americans are less inclined to protest and mobilise than they were a generation ago. Even the drugs of choice tell a story about the dousing of their spirit. Of all the substances to legalise, they chose the one – marijuana – that makes most users spacey, calm and sleepy. LSD and crack cocaine have lost out to heroin and prescription opioids, “which relieve pain and induce a dreamlike stupor”. All of this contributes to a suffocating passivity: a “Zeitgeist of community-enforced social stasis”.

Much of what Cowen writes will jar with the national self-image that abounds in the wealthier parts of the United States. Despite the “start-up” culture, the number of new businesses has been in decline since the 1990s. The successes of Uber and Facebook are exceptions to the rule; there are fewer “unicorn miracle growth firms” than a generation ago. Infrastructure is showing little improvement, with traffic getting worse every year and plane travel slower. The once cherished tradition of American car culture – a symbol of independence, mobility and patriotic endeavour – has been replaced by fetishisation of mobile phones. Where once Americans made a virtue of triumphing over their environment, now construction is hampered by a surge in the nimby spirit.

Another consequence of this lack of dynamism is that segregation by race, income and education is making a comeback. The worst offenders are often places where those with impeccable liberal credentials reside in greatest numbers: college towns and “hi-tech, knowledge-based metros”. Democrats “cluster themselves more tightly than do Republicans”. Income segregation is at its most extreme in the “Amtrak corridor” on the west coast that covers Bridgeport, Stamford, New York and Philadelphia. Much has been made of large-scale renewal projects in cities that receive “breathless write-ups in airline magazines”. Palo Alto, the home of the Silicon Valley upper crust, was once regarded as a ghetto. But such renewal has made comfortable urban living impossible for swaths of the country. The median rent in San Francisco just passed $5,000 a month for a two-bedroomed apartment. Elsewhere, living standards and wages have stagnated. Cowen follows previous obituary writers for the American dream – such as the conservative-libertarian Charles A Murray and the liberal Robert Putnam – in his view that “America seems to be evolving two sets of social norms: a high-stability set of norms for the higher earners and upper social-economic classes” and “less stable social and marriage norms for many of the less-educated lower earners”.

The causes of this stultification go right to the top. Government spending is on “autopilot”, bound up with the legacy of past promises and messy compromises. In 1962, about two-thirds of the federal budget had not been locked in and could be deployed at the discretion of the government of the day. Today, only about 20 per cent of it can be freely allocated, which is likely to drop to 10 per cent by 2022. In Cowen’s view, this pattern is so embedded that “it probably needs to play itself out before we can be cured of it”. Here he begins to show his own hand. In his view, the budget is bloated and unsustainable over the long term. Social security, Medicare and Medicaid already account for 49 per cent of this spending and that is likely to increase. The US government spends more per capita on health than the French. As Cowen notes, for all his revolutionary rhetoric, Trump promised to keep these programmes in place because they were so valued by his base. As the saga over reforming Obamacare plays out, it is worth noting that the former president’s much-maligned health-care scheme has surged in popularity since the government raised the prospect that it might be taken away.

The Complacent Class adopts the familiar, folksy style common to current writing about the dysfunctional condition of America, flitting from pop sociology to Leninite urgency about “What is to be done?”. It hints, tantalisingly, at a bigger thesis about historical development and cycles of generational change but then leaves us at the water’s edge with a rather underdeveloped prediction of a future crime wave and economic crisis, followed by a protracted rebirth. (Perhaps that is Cowen’s next book.) Twenty-first-century Tocqueville this is not. But The Complacent Class is speckled with arresting vignettes and deserves a place on the shelf in the burgeoning collection of literature on the tortured American soul.

John Bew will talk about “Citizen Clem”, his biography of Clement Attlee, at the Cambridge Literary Festival on 22 April. The Complacent Class: the Self-Defeating Quest for the American Dream, by Tyler Cowen, is published St Martin’s Press, 256pp, $28.99.