<p>If you watch enough American TV, you inevitably see something like this:  A comedian who originally came from another country (let's say India, although it could be almost any country) is being interviewed about his big success in America.  He is beaming with pride.  &quot;Only in America could a guy like me with nothing but a quick wit and a few jokes rise to the top and achieve fame and fortune!  It's the American dream!  Land of opportunity!!  Only in America!!!&quot;</p>
<p>At first glance, it seems reasonable, if only because we've heard it so many times.  But when you think about it further, it starts to fall apart:<br />
I assume that India has broadcast TV and movies.<br />
I assume that at least some of it is entertainment.  (It can't all be parliamentary proceedings and speeches from government ministers.)<br />
I assume that some of the entertainment is comedy.<br />
I assume that there is a need for comedians and comedy writers.<br />
I assume that the comedians and comedy writers are paid.<br />
Therefore, comedian must be a viable career path for <em>someone</em> in India.  And they might even make it big.... in India.  So, why isn't someone talking about the Indian Dream?</p>
<p>What exactly is the unique structural or economic factor which enables the American Dream?  Is it even a real thing?  Here is my research so far:</p>
<p><strong>Social mobility</strong> — We think of America as the place where &quot;rags to riches&quot; is possible.  But the Economist magazine has reported on numerous occasions that America is actually less socially mobile than the EU, the UK, and other places.  It's not just a hunch or a gut feeling.  Social mobility can be quantified by measuring the likelihood that someone in the bottom income quintile will reach the top income quintile in their lifetime.  And America is not #1 by this measure.</p>
<p><strong>Red tape</strong> — Many countries have bureaucratic impediments to creating and growing a business.  However, in all but a few exceptional cases, these impediments can be overcome with effort, persistence, and patience.  Business in America is often smoother than in many other countries, but it is not frictionless, either.  The most recent World Bank <em>Ease of Doing Business</em> ranking puts the United States not as #1 but as #6, after New Zealand, Singapore, Hong Kong, Denmark, and South Korea.  Yet we don't talk about the New Zealand Dream or the Singapore Dream or the Danish Dream.</p>
<p><strong>Large market</strong> — If you write a hit song in Icelandic or Estonian, your sales are probably capped at the 0.4 million Icelanders or the 1.3 million Estonians who might purchase the song.  However, if you write a hit song in American English, you have an enormous potential market of 330 million Americans, and it could just as well spread to Canada, the UK, Australia, etc.  Similarly for software, consumer products, books, etc.  A big market certainly helps to create big success.  However, America is not the only large market in the world.  China, Russia, Japan, the EU, Brazil, Indonesia, the Spanish-speaking world, the Arab-speaking world are all large markets.  Admittedly, your product would have to cross quite a few national borders to reach the entire Spanish-speaking world, but it has been done.  Yet no one talks about the Spanish-Speaking-World Dream.</p>
<p><strong>Entrepreneurial culture</strong> — Several conservative countries have attempted to foster an entrepreneurial culture, only to find that they could not tolerate the frequent failures which accompany it.  In many societies, failed efforts are shameful, embarrassing, or dishonorable.  Americans, on the other hand, admire the hustle and regard certain kinds of failures as a badge of honor.  Street cred.  Lessons learned.  Older and wiser.  That tolerance for failed efforts certainly encourages entrepreneurship and facilitates enterprise, no doubt.  But it doesn't mean that Americans are the only ones with an enterprising spirit.  Lebanese, Greeks, Gujaratis, Israelis, Cantonese, and Turkish people have a long history of enterprise, just to name a few.</p>
<p><strong>Deep capital markets</strong> — It takes money to build a business, and America has a rich financial ecosystem:  Angel investors, early-stage venture capital, late-stage venture capital, IPOs, public listings, corporate buyouts, small business loans, large corporate bond issuance, etc.  But America is not the only country with money.  The EU has deep capital markets.  Japan has deep capital markets.</p>
<p><strong>Vast resource wealth</strong> — America is a large country loaded with natural resources.  If those natural resources are exploited, someone will inevitably get rich.  However, the mere presence of natural resources in a given country does not guarantee that everyone in that country will have the opportunity to gain from them.  For example, the Congo (DRC) is another large country loaded with natural resources, but it is a very different place from America.  No one would say there is a Congolese Dream.</p>
<p><strong>Established institutions</strong> — Many economists who study the comparative wealth of nations reach the conclusion that fair and reliable institutions are critical to the building of wealth.  In particular, strong property ownership rights, clear deeds and titles (see Hernando de Soto), fair and impartial courts, and enforceable contracts with a large body of prior case law.  However, plenty of Western European countries also have such established institutions.  It is not a unique factor for the United States.</p>
<p><strong>Legacy of technological and industrial development</strong> — Historically, America has been at the forefront of technological and industrial development.  Inevitably in such a flourishing environment, a few individuals will win big and accrue vast fortunes — Edison, Ford, Rockefeller, Bill Gates, Steve Jobs, etc.  An observer could fall under the <a href="https://en.wikipedia.org/wiki/Texas_sharpshooter_fallacy" rel="nofollow noreferrer">Texas sharpshooter fallacy</a> and say, &quot;These people were all smart, talented, and hard-working, so therefore they must have achieved their success due to their smarts, talent, and hard work.  Furthermore, anyone else who is equally smart, talented, and hard-working will also achieve their level of success.  That's the American Dream.  QED.&quot;</p>
<p><strong>Hindsight and anecdotes</strong> — I notice that many of the people who talk about the American Dream have already attained success.  Isn't that anecdotal evidence?  Maybe a more scientific approach would be to identify a sample of 1000 smart, talented, and hard-working 20-year-olds <em>before</em> they begin their careers, and then follow them over the next few decades.  When they reach 60 years old, we can measure their level of success and ask them for their perspective on the American Dream.</p>
<p><strong>A big country with lots going on</strong> — America is a big country with lots going on, so it gives the impression of lots of opportunities on which to hang a dream.  There is a space program, so a young child can dream of becoming an astronaut.  There is a thriving art market, so a young child can dream of becoming an artist.  There is a movie industry, so a young child can dream of becoming an actor.  There is R&amp;D, so a young child can dream of becoming a scientist, engineer, or inventor.  And so on.  It gives the <em>impression</em> of endless opportunity for all.  But is it statistically born out?  In high school, we thought that the existence of the <a href="https://en.wikipedia.org/wiki/Search_for_extraterrestrial_intelligence" rel="nofollow noreferrer">SETI program</a> implied that any one of us could become an astrophysicist or an exobiologist.  We were mistaken.</p>
<p><strong>A confluence of factors</strong> – Maybe there is no one unique factor which creates the American Dream and sets America apart.  Maybe it is a confluence of all the factors above.  And maybe the American Dream is not a binary thing, with one country possessing it and the other 192 countries lacking it.  Maybe there is a continuum.  There are surely other countries which offer almost as much opportunity as America.  After all, the silver medalist is also a fast runner.  He was just slightly overtaken by the gold medalist, due to some confluence of factors.</p>
<BR>
<p><strong>What am I not understanding about the American Dream?</strong></p>

CC BY-SA 4.0
2023-09-05T06:13:12.777Z
Hi! Can you define what you mean exactly by the "American Dream"? That entrepreneurs/media celebrities can only be successful in the US (clearly false), or that they reach success (by some metric) with higher probability there, or that they get payed more, or what?
Giskard
CC BY-SA 4.0
2023-09-05T15:09:44.320Z
@Giskard — That might be part of the question, I'm afraid.  The American Dream has such a long legacy (in America, at least) that I would be very hesitant to provide my own definition, lest that becomes the focus of the discussion.
SlowMagic
CC BY-SA 4.0
2023-09-05T15:19:01.817Z
Possibly helpful:   [Wikipedia](https://en.wikipedia.org/wiki/American_Dream)
SlowMagic
CC BY-SA 4.0
2023-09-05T15:19:20.560Z
Possibly helpful:   The Oxford English Dictionary defines the American dream as “the ideal that every citizen of the United States should have an equal opportunity to achieve success and prosperity through hard work, determination, and initiative.”
SlowMagic
CC BY-SA 4.0
2023-09-05T17:54:50.877Z
Personally I find the question to be unclear in the SE sense. You quote the Economist study that shows that in the strictest interpretation the American Dream is not in fact reality, so I am not sure what more you are looking for. It is not possible to provide a more definitive answer, as the definition is somewhat vague and many different indicators can be argued to measure something similar. But I think there are other people on the site who will disagree with me and may provide long smart (?) philosophical answers.
Giskard
<macroeconomics><united-states>
Does the American Dream have any economic meaning?
SlowMagic
# Does the American Dream have any economic meaning?

(Asked by: username_0 on 2023-09-04)

If you watch enough American TV, you inevitably see something like this: A comedian who originally came from another country (let's say India, although it could be almost any country) is being interviewed about his big success in America. He is beaming with pride. "Only in America could a guy like me with nothing but a quick wit and a few jokes rise to the top and achieve fame and fortune! It's the American dream! Land of opportunity!! Only in America!!!"

At first glance, it seems reasonable, if only because we've heard it so many times. But when you think about it further, it starts to fall apart:  
I assume that India has broadcast TV and movies.  
I assume that at least some of it is entertainment. (It can't all be parliamentary proceedings and speeches from government ministers.)  
I assume that some of the entertainment is comedy.  
I assume that there is a need for comedians and comedy writers.  
I assume that the comedians and comedy writers are paid.  
Therefore, comedian must be a viable career path for *someone* in India. And they might even make it big.... in India. So, why isn't someone talking about the Indian Dream?

What exactly is the unique structural or economic factor which enables the American Dream? Is it even a real thing? Here is my research so far:

**Social mobility** — We think of America as the place where "rags to riches" is possible. But the Economist magazine has reported on numerous occasions that America is actually less socially mobile than the EU, the UK, and other places. It's not just a hunch or a gut feeling. Social mobility can be quantified by measuring the likelihood that someone in the bottom income quintile will reach the top income quintile in their lifetime. And America is not #1 by this measure.

**Red tape** — Many countries have bureaucratic impediments to creating and growing a business. However, in all but a few exceptional cases, these impediments can be overcome with effort, persistence, and patience. Business in America is often smoother than in many other countries, but it is not frictionless, either. The most recent World Bank *Ease of Doing Business* ranking puts the United States not as #1 but as #6, after New Zealand, Singapore, Hong Kong, Denmark, and South Korea. Yet we don't talk about the New Zealand Dream or the Singapore Dream or the Danish Dream.

**Large market** — If you write a hit song in Icelandic or Estonian, your sales are probably capped at the 0.4 million Icelanders or the 1.3 million Estonians who might purchase the song. However, if you write a hit song in American English, you have an enormous potential market of 330 million Americans, and it could just as well spread to Canada, the UK, Australia, etc. Similarly for software, consumer products, books, etc. A big market certainly helps to create big success. However, America is not the only large market in the world. China, Russia, Japan, the EU, Brazil, Indonesia, the Spanish-speaking world, the Arab-speaking world are all large markets. Admittedly, your product would have to cross quite a few national borders to reach the entire Spanish-speaking world, but it has been done. Yet no one talks about the Spanish-Speaking-World Dream.

**Entrepreneurial culture** — Several conservative countries have attempted to foster an entrepreneurial culture, only to find that they could not tolerate the frequent failures which accompany it. In many societies, failed efforts are shameful, embarrassing, or dishonorable. Americans, on the other hand, admire the hustle and regard certain kinds of failures as a badge of honor. Street cred. Lessons learned. Older and wiser. That tolerance for failed efforts certainly encourages entrepreneurship and facilitates enterprise, no doubt. But it doesn't mean that Americans are the only ones with an enterprising spirit. Lebanese, Greeks, Gujaratis, Israelis, Cantonese, and Turkish people have a long history of enterprise, just to name a few.

**Deep capital markets** — It takes money to build a business, and America has a rich financial ecosystem: Angel investors, early-stage venture capital, late-stage venture capital, IPOs, public listings, corporate buyouts, small business loans, large corporate bond issuance, etc. But America is not the only country with money. The EU has deep capital markets. Japan has deep capital markets.

**Vast resource wealth** — America is a large country loaded with natural resources. If those natural resources are exploited, someone will inevitably get rich. However, the mere presence of natural resources in a given country does not guarantee that everyone in that country will have the opportunity to gain from them. For example, the Congo (DRC) is another large country loaded with natural resources, but it is a very different place from America. No one would say there is a Congolese Dream.

**Established institutions** — Many economists who study the comparative wealth of nations reach the conclusion that fair and reliable institutions are critical to the building of wealth. In particular, strong property ownership rights, clear deeds and titles (see Hernando de Soto), fair and impartial courts, and enforceable contracts with a large body of prior case law. However, plenty of Western European countries also have such established institutions. It is not a unique factor for the United States.

**Legacy of technological and industrial development** — Historically, America has been at the forefront of technological and industrial development. Inevitably in such a flourishing environment, a few individuals will win big and accrue vast fortunes — Edison, Ford, Rockefeller, Bill Gates, Steve Jobs, etc. An observer could fall under the [Texas sharpshooter fallacy](https://en.wikipedia.org/wiki/Texas_sharpshooter_fallacy) and say, "These people were all smart, talented, and hard-working, so therefore they must have achieved their success due to their smarts, talent, and hard work. Furthermore, anyone else who is equally smart, talented, and hard-working will also achieve their level of success. That's the American Dream. QED."

**Hindsight and anecdotes** — I notice that many of the people who talk about the American Dream have already attained success. Isn't that anecdotal evidence? Maybe a more scientific approach would be to identify a sample of 1000 smart, talented, and hard-working 20-year-olds *before* they begin their careers, and then follow them over the next few decades. When they reach 60 years old, we can measure their level of success and ask them for their perspective on the American Dream.

**A big country with lots going on** — America is a big country with lots going on, so it gives the impression of lots of opportunities on which to hang a dream. There is a space program, so a young child can dream of becoming an astronaut. There is a thriving art market, so a young child can dream of becoming an artist. There is a movie industry, so a young child can dream of becoming an actor. There is R&D, so a young child can dream of becoming a scientist, engineer, or inventor. And so on. It gives the *impression* of endless opportunity for all. But is it statistically born out? In high school, we thought that the existence of the [SETI program](https://en.wikipedia.org/wiki/Search_for_extraterrestrial_intelligence) implied that any one of us could become an astrophysicist or an exobiologist. We were mistaken.

**A confluence of factors** – Maybe there is no one unique factor which creates the American Dream and sets America apart. Maybe it is a confluence of all the factors above. And maybe the American Dream is not a binary thing, with one country possessing it and the other 192 countries lacking it. Maybe there is a continuum. There are surely other countries which offer almost as much opportunity as America. After all, the silver medalist is also a fast runner. He was just slightly overtaken by the gold medalist, due to some confluence of factors.

  

**What am I not understanding about the American Dream?**

**Tags:** macroeconomics, united-states

> **Comments:**
> **username_1**: Hi! Can you define what you mean exactly by the "American Dream"? That entrepreneurs/media celebrities can only be successful in the US (clearly false), or that they reach success (by some metric) with higher probability there, or that they get payed more, or what?  
> **username_0**: @username_1 — That might be part of the question, I'm afraid.  The American Dream has such a long legacy (in America, at least) that I would be very hesitant to provide my own definition, lest that becomes the focus of the discussion.  
> **username_0**: Possibly helpful:   [Wikipedia](https://en.wikipedia.org/wiki/American_Dream)  
> **username_0**: Possibly helpful:   The Oxford English Dictionary defines the American dream as “the ideal that every citizen of the United States should have an equal opportunity to achieve success and prosperity through hard work, determination, and initiative.”  
> **username_1**: Personally I find the question to be unclear in the SE sense. You quote the Economist study that shows that in the strictest interpretation the American Dream is not in fact reality, so I am not sure what more you are looking for. It is not possible to provide a more definitive answer, as the definition is somewhat vague and many different indicators can be argued to measure something similar. But I think there are other people on the site who will disagree with me and may provide long smart (?) philosophical answers.  

---

## 0 answers

