Shifting Paradigms: From American Dream to Social Contract

Highlights from a conversation about the American Dream and the potential for envisioning a new social contract for the 21st century.

by Edward Scanlon and Terri Friedline

The American Dream is under siege. Many people are finding their American Dream slipping out of reach while others have struggled to fully realize their “Dream.” Evidence of these struggles can be seen in a number of social indicators, such as stagnating wages and income, declining labor market participation, rising student debt levels, expanding racial wealth gap, and dropping mortality rates. As a result, the American Dream may be less salient today, or at the very least, its paths to attainment have become blurry.

Attendees gather for the April 12th event, More Than A Dream, at The University of Kansas Hall Center for the Humanities.

We — Edward Scanlon and Terri Friedline — recently set out to engage in a critical conversation on whether the American Dream is still salient today and whether a new social contract has potential for bringing the “Dream” into focus. In other words, can we shift paradigms from “American Dream” to “Social Contract” and if so, how? What is a social contract and what should a new one look like? The April 12th event, held at the University of Kansas’ Hall Center for the Humanities, brought together experts across disciplines including Yasuyuki Motoyama, Ewing Marion Kauffman Foundation, Jennifer Hamer, KU Departments of American Studies and African and African American Studies, and Don Haider-Markel, KU Department of Political Science. As a basis for conversation, these experts read our paper titled More Than A Dream: A New Social Contract for the 21st Century and came prepared to engage with the ideas contained within. Attendees were also engaged, writing down their thoughts and impressions on post-it notes and hanging them throughout the conference hall for all to see.

Attendees write down their thoughts and impressions regarding the American Dream and the Social Contract.

This event was generously supported by The University of Kansas Hall Center for the Humanities, Institute for Policy & Social Research, School of Social Welfare, and Center on Assets, Education, and Inclusion.

Here are highlights from that conversation.

The American Dream: contradictory conceptualization, increasingly unattainable, historical fiction. So, is the “Dream” still salient for making policy decisions within the context of today’s diverse US society?

The American Dream faces a number of challenges, ranging from its inability to guide political decision making and to resonate with important segments of today’s diverse US society. For example, there is little doubt that the concept of the American Dream faces challenges for promoting inclusive, 21st century policies. The “Dream” has been invoked by a range of people across the political spectrum to argue for or against social safety net policies, such as Supplemental Nutrition Assistance Program (SNAP), Temporary Aid to Needy Families (TANF), Social Security, and others. In other words, the “Dream” can be used to argue for or against almost any public policy. This lack of specificity calls into question whether the “Dream” can actually be leveraged for guiding 21st century policy decisions.

The American Dream is historical fiction that rests on an assumption of fairness and equality that has never existed in the US across time or across place.

Lack of specificity is not the “Dream’s” only challenge: a real question is whether it ever existed in the first place. In her remarks, Jennifer Hamer pointed out that “…People believe that there was a time passed when the ability to achieve [the American Dream] was actually a norm. Everyone was doing it…But the American Dream is historical fiction that rests on an assumption of fairness and equality that has never existed in the US across time or across place…so that hard work and determination and its link to prosperity for some citizens, mostly Whites and white males, has generally been possible at the expense and oppression of others based on race and ethnicity, gender, class, sexuality, religion, age, and ability.”

Importantly, these challenges are not confined to the past. Despite historical progress, Don Haider-Markel reminded us that we still have a long way to go: “It is very difficult to achieve equality if you can be discriminated against…In a moment where it seems like the US has changed so much because we have things like marriage equality, people often forget that at the same time a couple might be able to get married that couldn’t get married three years ago. But both of those people might be fired from their jobs if people find out that they are married, for example.” Thus, whether or not you believe the American Dream is salient today may depend a lot on whether you are included or excluded by existing policies and practices, particularly in terms of race, ethnicity, class, gender, sexual identity, or citizenship status.

The language of Social Contract may resonate better with a diverse US society and may also be more effective for guiding 21st century policy decisions.

The social contract is another philosophical concept that has been used to describe the American experience. In our paper, we write that, “…the last 35 years have seen an erosion of the “Dream” precisely because the laws and policies that bound citizens together…have been either partially or fully dismantled. Moreover, without a clear sense of the paths that we might take to achieve widespread prosperity, we are divided about how best to reanimate the “Dream.” This suggests the need for us to articulate a new vision of our social responsibilities to one another…A new social contract — a clearly delineated compact that establishes rights and responsibilities expected of US citizens — could help us to articulate the pathways and supports needed for greater levels of equality and well-being.”

A new social contract could help us to articulate the pathways and supports needed for greater levels of equality and well-being.

In our view, then, the social contract is an agreement between a society and its government in which the government is responsible for promoting positive freedoms and establishing inclusion.

Once characterized by strong social support from both government and private business, the social contract has been weakened by a series of mutually-reinforcing policy decisions and has given way to a “low-wage” contract.

The social contract that was put into place during 1930s New Deal legislation included government-provided programs such as Social Security and Medicare. Moreover, private business and corporations engaged in “welfare capitalism,” adopting employer provided and controlled programs such as health insurance, life insurance, pensions, and disability plans. This social contract was a foundation for a strong and expanding middle class.

A series of mutually-reinforcing policy decisions over recent decades have altered the social contract.

A series of mutually-reinforcing policy decisions over recent decades have altered the nature of this contract, resulting in reducing the unionized workforce, hindering wage growth, undermining the effectiveness of the social safety net, and concentrating political power into the hands of the wealthy.

Edward Scanlon presents on the historical contexts of the American Dream and the Social Contract.

The altering of the social contract can be seen in cities across the country. Hamer described East St. Louis as an example, discussing private business’ slow divestment in local workforce and infrastructure. “By the time we get to the late 1950s, we already have corporations and manufacturers leaving inner cities, central cities, and industrial suburbs…Why do they leave? Because corporate owners find support in the American Dream, which encourages prosperity, wealth, and individualism…The timing of these phase-outs and closings were critical, coinciding with the end of the War on Poverty and its genuine attempts to create a fair and equitable America…What was left was a jobless city with families without the accumulated wealth to move, persistent racial job discrimination in surrounding cities that even today inhibit their ability for employment, failing schools, and a crumbling infrastructure without the ability to raze abandoned downtown buildings, maintain empty lots, and replace stoplights.”

Of course, the altering of this social contract had real implications for families. “The power to purchase and accumulate material and social resources such as utilities, homes, vehicles, clothing, education, and food are tied to work and its wages and benefits…[Today], there exists no social contract between corporations and their workers and families that make their existence possible. Capital and its leaders are always in search of greater profits,” said Hamer.

Can we intentionally re-write the social contract for the 21st Century so that it identifies a specific set of policies geared toward inclusion and simultaneously brings the American Dream into focus? And what types of policies should that contract entail?

We write that, “To be clear, writing a new social contract is not without challenges. Indeed, creating a new social contract and deciding its policies raises a number of questions.” These challenges include such things as taking an incremental versus radical approach to change, identifying policies that can be acceptable to a wide range of constituencies, or adequately addressing racial and economic inequalities. Moreover, this social contract needs written in an era in which society is experiencing high levels of inequality, demographic “sorting” of the public, and social mistrust.

Speaking to the challenge of moving toward a new social contract, Haider-Markel stated that, “There’s going to be points of agreement and points of disagreement. And to figure out those points where agreement can be found, and fitting beneath whether it’s one social contract or different conceptualizations, I mean it’s…a challenge, certainly, but it’s nothing new in the United States that this is a challenge…For incremental changes, I think you can find points of agreement.”

Writing a new social contract is not without challenges; however, opportunities can be found within challenges.

Yasuyuki Motoyama reminded us that opportunities can also be found within challenges, stating “I think there are opportunities to reshape the social contract at the local level…So, possibly, some kind of crisis could be an opportunity, as well.” For Motoyama’s complete remarks, please visit here.

Perhaps there is more agreement between the interests — and related policies — of private business and public social welfare than we sometimes realize. Motoyama provided evidence for this when he discussed his national research with business owners. “I myself surveyed more than 10,000 business owners nationwide for multiple years and tested what factors are associated with higher perception of the business climate. Tax rates, such as personal income tax, corporate tax, and sales tax do not matter at all, with the exception of property taxes. And more importantly, government spending on social welfare is positively related to a better business climate, meaning that the more state government spends on social welfare, the better the perception of the business climate by business owners…At the moment, it’s the aggregate of food stamps, social security, Medicare, Temporary Assistance for Needy Families, and other public aid. But in any case, business owners do pay attention to social safety net factors…”

Jennifer Hamer (seated, second from left) talks with attendees about what is needed in a new social contract.

Through her historic accounting of East St. Louis in the 1950s, Hamer hinted that a new social contract should take aim at narrowing the racial wealth gap, stating: “Wealth accumulation and access to its resources are generational. Even though Whites also moved into East St. Louis and industries left East St. Louis, Whites, because of the privileges that they were afforded, were actually able to leave East St. Louis. They had accumulated wealth…While Whites had the ability to move and to follow industry into the suburbs, African Americans didn’t. They just didn’t have that accumulated wealth. They began with slavery and they weren’t that far away from it when we get to mid-century.”

The policies of a new social contract imply a strong role for government; however, an underlying, endemic problem is that public sentiment questions government’s ability to intervene effectively and efficiently. Can this be addressed by a new social contract?

Haider-Markel pointed out that our views of government are driven in part by binary thinking. “Part of it is…a reaction by some in society to see everything government does and everything that happens in society as a zero-sum game. That basically if somebody else is winning, that means I’m losing…There’s a notion not that they’re adding to what you’re doing, but that they’re taking away from what you’re doing…You’re trying to talk to a group of people that don’t see this as ‘everybody grows, everybody gets some.’ Its ‘If you’re getting something new, you’re taking from something.’ That zero-sum game, I think, is really important in highlighting the political feasibility of some of what might be proposed.”

Watch the full event here:

Also, please read Yasuyuki Motoyama’s complete remarks, which are available in the blog post Narrowing of the American Dream.

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