The American Dream is dying
Democracy is in retreat around the globe, according to the latest annual report from Freedom House, a civil liberties watchdog.
The situation is especially concerning in the United States, where a decade of creeping authoritarianism has produced one of the world’s most rapid paces of democratic deterioration, according to the report. In terms of individual freedoms, we’re now “closer to countries such as Romania and Panama than Western European partners such as France and Germany,” as Ishaan Tharoor noted recently.
But there’s a major economic component to our recent decline, as well: the yawning divide between rich and poor, which researchers have found to be both a cause and a consequence of democratic backsliding here and elsewhere.
The United States scores particularly poorly on equal treatment under the law, for instance. In the workplace, a large compensation gap between White men and virtually everyone else “has remained relatively constant over the past several decades,” the report notes.
“Long-running and interrelated disparities in education and housing” are another major area of concern. Black homeownership rates continue to fall from their 2004 peak, according to the report, driven in part by mortgage discrimination against non-Whites. In the United States, homeownership is both the engine of middle-class wealth and a major determinant of quality public schooling.
As a result, there is a yawning wealth gap between White and Black American families.
The United States is also deficient in the realm of “equality of opportunity and freedom from economic exploitation,” the authors write. The American Dream — “the notion of a fair society in which hard work will bring economic and social advancement, regardless of the circumstances of one’s birth,” as they define it — is faltering in a society that now has one of the lowest rates of upward mobility in the wealthy world.
The share of Americans earning more money than their parents has plummeted, driven by decades of wage stagnation for all but the top earners. The federal minimum wage hasn’t been increased in over a decade. The coronavirus pandemic ushered in a massive wave of layoffs, and unsafe working conditions for millions of people who do the essential work of keeping the country running.
The Freedom House report underscores how inequality and authoritarianism reinforce each other. Researchers have found that when people are unable to improve their economic situation through hard work they may come to believe the system is “rigged” against them. Many become more likely to support authoritarian, populist leaders who promise to do things like “drain the swamp” and “make America great again.”
“The central message of populist movements has historically been that the common people are being exploited by a privileged elite, and that radical institutional change is required to avoid such exploitation,” as a United Nations report described last year.
But more often than not, authoritarian leaders wreak havoc upon their countries’ economies. Using data from 133 countries, for instance, a 2019 study found that economies are more likely to shrink under dictatorships than to expand. A separate study found that countries shifting from an autocratic to a democratic regime received a 20 percent gross domestic product boost in the years following the change.
Their distrust of experts among authoritarian leaders often leads to poor economic judgment, as when Turkish President Recep Tayyip Erdogan’s move to restrict interest rate hikes caused the value of the Turkish lira to collapse. They tend to enrich themselves and their inner circles at the expense of everyone else — President Donald Trump’s well-documented self-dealings while in office are a case in point. Embezzlement and corruption are considerably more common in dictatorial governments than they are in democracies.
In the end, countries enter a vicious cycle where a deteriorating economy leads to authoritarian rule, which causes economic conditions to decline even further. In a prior era, such an outcome would be inconceivable in the United States, the “shining city on a hill” that other nations looked to for inspiration and guidance.
But now, Freedom House is just one of many democracy watchdogs warning that authoritarianism is on the march here. If history is any guide, we will all be poorer for it. As the late Supreme Court Justice Louis Brandeis said, “We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”