The American Dream is a national ethos of the U.S. Perhaps every third Hollywood movie describes the life story of a person born to poor conditions who makes it. The Americans themselves believe that this social mobility is one of the virtues in which the Americans beat other nations. The only problem is that the data suggest otherwise:
The myth of the American Dream (CNN Money)Someone evaluated the "probability that you will be stuck in the same class as your parents", i.e. the social immobility of a sort. Denmark only has 0.15 so it's a country where the "dream" is true. Canada, Japan, France, Pakistan are between 0.3 and 0.5 but better than the U.S., the U.K. is slightly worse than the U.S., and Peru is much worse at 0.67.
What's wrong here?
One of the reasons of the persistent belief in the social mobility of the U.S. economy is that it probably used to be true in America, perhaps as recently as a century ago. After all, Europeans (and others) would mostly come to America as poor people near a financial crisis. One may say that all the rich dynasties were and are descendants of such poor immigrants.
However, things have changed, it seems. The idea about the exceptional American social mobility may be a true feature of the American movies – but not so much the American life.
The basic theme of the movies sounds touching. However, I still think that one should ask whether a high social mobility is something that a nation really wants. I am not so sure about it.
My doubts were energized when I heard Barack Obama's talk claiming that the income inequality threatens the American Dream. What the current U.S. president calls the American Dream could perhaps more accurately be called Karl Marx's dream or Vladimir Lenin's dream. When Obama articulates these ideas this clearly, he makes you sure that you want to avoid this American Nightmare.
A deeper problem is that if you think about Obama's left-wing caricature of the American Dream rationally, you will ultimately agree that Obama is actually right. Any sufficiently quantitatively well-defined realization of the American Dream ultimately does boil down to the amount of redistribution etc.
The reason is that the GDP growth per generation is just something of order 50% in the long run – both in countries where the American Dream rules and those in which it doesn't. And this relative growth is arguably not changing certain things "qualitatively". And even if it were changing them, the income boundaries between the classes are arguably being increased, anyway.
My point is that if a country has a very high social mobility, people must move up but there must also be many people who move down!
In fact, the number of the down-movers must be pretty much comparable to the number of the up-movers if the social mobility is high. The existence of the negative entries – entries that not only exist but they are actually equally important as the positive ones – is something that is routinely being overlooked or censored.
I am convinced that this outright denial of the existence of negative numbers is really a necessary condition behind the propaganda that "a high social mobility is a clearly positive thing". As you may predict, I view social mobility as a pretty much "morally neutral" quantity and too high values of social mobility are clearly bad according to my world view.
One should separately discuss what are the natural causes of social mobility or social immobility; and one should separately discuss what are the policies that change the social mobility relatively to the natural values (they usually increase it) and whether these policies are good for the societies.
Concerning the former, there are very good reasons behind the inertia. People inherit DNA and some skills (or their shortage) from their parents. Sons and daughters are often taught many things by their parents (this type of transferred information is somewhere in between the DNA heritage and the financial heritage). Moreover, they sometimes inherit the assets, too. It's natural because offspring are still closer to you, emotionally and/or genetically, than a vast majority of the people in the world.
Centuries ago, it was normal in Europe for men to inherit the crafts from their dads. In certain corners, it was really an exception if someone violated this rule! And it did work. Of course that I think it is a silly oversimplified feudal stereotype if someone wants to artificially enforce such rules. On the other hand, I do think that there are very good reasons why such patterns might often be true "naturally". Such correlations follow from biology and the mechanisms inside the society and they often play a helpful role in the society.
Concerning the latter point, policies that deliberately change (increase) the social mobility, well, I think that they require a high degree of redistribution. The redistribution is meant to help the poor ones to become richer – even if they can't pay for the required investments etc. – and these funds are taken from the wealthier ones. An inheritance tax may attack the correlations between the parents and their heirs more directly.
One should also remember that some of the methodologies may produce high values of the "social mobility" for societies with generally lower degrees of social inequality. I don't want to go into details. While I have doubts about the positive character of policies that try to increase "social mobility", I am absolutely convinced that policies artificially trying to lower "social inequality" are pernicious.
To summarize, one may continue to react to various movies and works of fiction in the same way as he always did but he may still want to use a different, more rational attitude towards the social and political questions. When he does so, he may easily find out that some "ideals" that have been incorporated into the national ethos should better preserve their status of exceptions. Too high degrees of social mobility are probably impossible without a significant degree of the government's redistribution (i.e. state-sponsored organized theft) and they tend to produce an insufficiently structured and stable society.
Some inertia is really a good thing. At least to a certain extent, the respect towards this near-constancy – the respect towards the social immobility – is a subset of the conservative values, something that every decent human believes. The ability and freedom to keep and protect his or her or their (personal, corporate, or national) financial reserves against a drop by "too many classes" is a manifestation of the concentration of capital, a feature by which the modern societies differ from the old and poor ones, something that allows us to achieve things that our ancestors couldn't achieve.
A free enough society keeps the boundaries between the classes penetrable (and of course that the hermetic isolation would make our economies not just unjust but highly inefficient, too) but it won't try to artificially push many people through these boundaries. Spoiled brats without talent who inherit hundreds of millions may be annoying but one shouldn't forget they're not the rule. There are many skillful and bright sons and daughters who are often more capable of dealing with certain responsibilities than random comers from other classes. The number of such skillful sons and daughters is much higher than what you would predict if you were assuming no correlations between the parents' and offspring's skills.
So please, leave the artificial mass production of people in classes different from their parents' classes to the Hollywood filmmakers. Dreams belong to the film screens and beds; attempts to mindlessly import dreams into the real world usually end up with nightmares.