Book Review: Ours Was the Shining Future
The story of the American Dream
Listen around you, and you’ll hear we’re at a point in American history where everything uniquely sucks.
Across the country, we’re increasingly depressed and mad as we shout at randos through digital screen; gun violence is on the rise; we’re having a hard time dealing with climate change; we’re politically polarized; racism, xenophobia, and anti-Semitism dominate the headlines; our political, academic, and social institutions seem to be failing us; we are literally dying sooner than people in other Western countries are.
Inevitably, such a kaleidoscopic set of dysfunctions must have an equally kaleidoscopic set of causes. I wouldn’t blame you if you believed this mess of American dysfunction were like a game of Twister: you can contort yourself all you want, but at the end of the day, you only have so many limbs to get a small, limited number of wins on the board. It’d be delusional to think you could do more.
But what if you could? What if there was, in fact, a single thread you could pull that would loosen all the knots that choke society? One highly levered dysfunction, the mother of all dysfunctions, where if only we could fix this one problem, solving everything else would become easier?
In Ours Was the Shining Future, David Leonhardt suggests that there indeed is such a root of modern evils: the decline of the American Dream.
The American Dream is a charismatic belief that, like clockwork, tomorrow will be better than today, that no matter our race or gender or politics, even the poorest among us have the opportunity to make ourselves and our children better off.
I initially picked up Ours was the Shining Future because I consider myself the product of the American Dream. My parents are immigrants who came to this country in the 1980s. Their first jobs were serving fast food for a pittance a day, and they ate that fast food out of styrofoam boxes placed on top of stacked cardboard boxes, which served as their makeshift tables in their box-of-an-apartment they shared with another immigrant couple. It was a shitty life, but one they pursued because of their belief in opportunity this country offered. By all accounts, I am the product of that dream.
Throughout my professional career, I’ve been obsessed with the idea that we as a country aren’t what we used to be. While many thinkers on both sides of the political aisle take modern snapshots of America, Leonhardt’s addition to this body of work is how he traces the American Dream, starting from its origins in the Great Depression, and explains the forces that have made this dream so unique.
But first…
Is the American Dream actually in decline, and if so, to what extent? My biggest gripe with Leonhardt’s analysis is that he gives short shrift to answering this question before delving into the story of the American Dream. While I ultimately agree that the dream is in decline, it needs deeper exploration.
Leonhardt begins by looking at generational earning power. In the clearest manifestation of the American Dream, according to Raj Chetty, 92% of children born in 1940 grew up to have higher household incomes than their parents. Things then got progressively worse. 80% of boomers (born 1946-64) outearned their parents; just over 60% of Gen X (1965-80) earned more than their parents; and for Millennials (1981-96) it’s now a coin flip.
But don’t write off the American Dream just yet based on how Millennials are doing! New economic evidence and research actually suggests that the Millennials are doing just fine. The most prominent researcher here is Jean Twenge, who in her new book Generations examines the differences among generations over the past century. She rejects the idea that Millennials are suffering economically compared to former generations. Here are some data:
Wealth: Millennials’ average wealth has doubled over the past three years. Millennials also stand to inherit the vast accumulated wealth of their parents, ~$78 trillion.
Income: Millennial income has surpassed that of previous generations at the same age (see graph below). Income for the median Millennial household was about $9,000 higher than that of the median Gen X household, and about $10,000 more than the median Boomer household.
Racial disparities: In 2021, Millennial Black and Latino Americans were also making more money than Black and Latino Boomers, and Gen Xers at the same age.
The bottom line here is that economic prospects will change as a generation ages, and especially as it reaches its peak earning years. So I’m not sure that you can look at the most recent generation and conclude that the American Dream is in decline.
But maybe another way to argue for the decline is to just ask people what they think!
In October 2023, the Wall Street Journal asked people whether they believe “the American Dream — that if you work hard you'll get ahead — still holds true.” Just 36% said the Dream is still alive. Meanwhile, 18% said the Dream had never held true and 45% said it once held true, but not anymore. Similarly, an NBC News poll conducted in November found that a record-low 19% of voters said they feel confident life for their children's generation will be better than for their own generation, while 75% were not confident their children will be better off. And in 2022, Gallup asked people whether today’s youth will have a better life than their parents. Optimism has fallen by nearly half since the late 1990s and is now at an all time low.
But I’m not so sure how much this matters! One thing this past year has taught me is that consumer sentiment about the objective macro state of the economy right now is just flat-out wrong. Earlier this month, Dictionary.com added the word “vibecession,” which it defines as a “period of widespread pessimism about the economy regardless of the actual economic situation.”
The Financial Times recently published an analysis on consumer economic sentiment, finding that we’re basically in a vibecession right now. Indeed, Americans are consistently wrong in the negative direction on many measures of macroeconomic performance. Contrary to what most Americans believe, inflation is not going up. America is at full employment. Wages are outpacing prices, and in fact is increasing fastest for the lowest-paid workers. But in spite of all this, consumers feel so bad about the economy that they report feeling worse today than they did in April 2009, when we were in the doldrums of the Great Recession. This just seems patently ridiculous on its face.
The reason for such mismatch between sentiment and reality is head-scratching, but new research suggests that the recent economic pessimism is due to falling real wages. If this is the case, then with real wages now back on the rise, my guess is that it’s only a matter of time before consumer sentiment rises to fit reality. So if you poll people a year from now, maybe people will be saying different things about the state of the American Dream.
Anyway, I think the decline of the American Dream has maybe been a bit overstated.
However, Leonhardt points to other data suggesting a decline in the American Dream. For much of the last half century, American incomes and wealth have stagnated. Wealth inequality has grown, which means that the working class, the precise class of people the American Dream is supposed to inspire, is increasingly have a hard time moving up. Finally, life expectancy is down. If the American Dream is supposed to promise a better life for the future, wouldn’t we expect future generations to live longer?
At the end of the day, we’re not growing the pie in a way that makes everyone better off. According to Leonhardt, this stagnation is producing a level of unrest that gives way to things like political polarization, racism, xenophobia, ultra-nationalism, and an everyone-fend-for-themselves mentality that precludes us from solving complex problems like climate change, too. And if this is true—if the American Dream is in decline and is upstream of our other societal ills—then Leonhardt’s book is worth taking seriously.
The three main actors in the American Dream are the working class, businesses, and the government, and the dream is alive when all three work together in harmony. Specifically, according to Leonhardt, the American Dream requires (1) the working class to wield power, to mobilize itself bottoms-up while it also enjoys support from the top-down. The Dream also requires (2) culture—the water that people in power swim in, the lens through which power views the world—to prioritize the working class. And finally, it requires (3) government to believe in the future and invest in things like basic research, where the private sector won’t touch.
Power
According to Leonhardt, the key ingredient to the American Dream is a working class that organizes broad grassroots movements (historically, via strong unions) to assert its economic interests, along with a strong political party (historically, the Democrats) that exerts its power to support these interests.
Leonhardt’s reasoning is intuitive: individually, a worker can’t protect himself against an employer due to power asymmetries. While a company can manage the loss of one employee, the opposite is typically not true. The best way to reduce this power imbalance is for employees to band together: a business that can afford to lose one worker may not be able to lose hundreds.
Importantly, for unions to have power, employees need to unionize en masse; otherwise, employers can simply fire the unionized employees and hire non-unionized employees. The mass mobilization of labor is exactly what happened in the 1930s, as charismatic, bold union leaders convinced millions of American workers to sign union cards and go on thousands of strikes.
But you also need to couple widespread unionization with political support. In the late 1800s and early 1900s, when employees tried to unionize without political support, they didn’t fare so well. To begin with, employers often just ignored unions, since the law didn’t recognize them either. Sometimes, the line was blurry between employers and the police. For example, police often collaborated with employers to investigate union activity. Some states allowed employers to pay the salaries of the police to quell labor disputes, and Pennsylvania even allowed certain employers to arm their own private police with the power to arrest. And when labor disputes became violent, government typically intervened on behalf of employers, deploying troops to kill workers.
Labor finally began to receive political support during the New Deal, as FDR granted procedural and substantive protections to unions. On procedure, the National Labor Relations Act codified workers’ right to collective bargaining and almost immediately resulted in a decline of labor-related violence. The federal government also created a bureaucratic process for management and workers to resolve disputes through peaceful negotiations. Finally, when the United States began ramping up wartime production, the government often insisted that defense contractors accept collective bargaining. As a result, > 30% of workers were union members by mid-1940s, up from 10% in mid-1930s.
In addition to procedural protections, the FDR administration passed a number of laws that substantively improved the living standards for the working class. Some of these measures included a 40-hour work week, a minimum wage, a ban on child labor, unemployment insurance, welfare benefits, and Social Security.
The unionization of America, combined with this new political support, produced great results for the working class. The typical union member earned 10-20% more on average than his non-union counterpart. Contrary to union detractors, who worry about unionization distorting employment, studies have shown that when unions have grown, unemployment hasn’t tended to rise. Areas with a higher share of unionization also haven’t suffered from lower economic growth or more joblessness than regions with fewer unions.
According to Leonhardt, the American Dream began its decline when the working class lost its political power to the “Brahmin Left,” the outspoken, liberal, college-educated minority elites who paternalistically shifted the Democratic Party to the left on social issues (e.g., religion, guns, immigration, abortion, gender, and the use of language) while neglecting the economic ones (e.g., higher wages, better working conditions). It turns out that the majority of lower-middle class working Americans don’t care about the social issues nearly as much as the economic ones.
The primary example of this is immigration. In 1965, Congress was debating a new federal bill to change the immigration system from a country-based quota system (i.e., specific numbers of immigrants from specific countries) to a global quota system (i.e., specific number of total immigrants, without regard to country of origin).
But Congress needed to be careful. At the time, a Gallup poll showed that only 7% of people favored more immigration; 40% supported keeping immigration at its current level; and 32% favored a reduction.
Indeed, labor activists across the board opposed immigration. A. Phillip Randolph, the leading advocate for the Black working class, said that “excessive immigration is against the masses of all races and nationalities in the country.” Additional immigration would expand inequality on both ends. For the working class, in certain industries where immigrants cluster like retail, construction, and child care, more immigrants would compete for jobs and depress wages. In turn, these lower wages would hold down the prices of frequently used services such as restaurant meals and landscaping, mainly benefiting the rich.
So, given popular antagonism against increased immigration, politicians agreed to cap the global immigration quota to 265,000, which was roughly the same as the combined national quotas in place at the time. However, the quota turned out to be full of loopholes. In the year the bill went into effect, 297,000 immigrants legally entered the US. Two years later, the number reached 362,000. In 2001, it exceeded 1,000,000, and we haven’t really looked back since.
Even as some liberal politicians later sought to limit immigration in the name of protecting the national interest, those voices would be shut down by the Brahmins in power, who adopted a binary position of “more immigration good, less immigration racist.” Leonhardt is extremely careful to note the central role of immigration in our country and wholeheartedly acknowledges that many of our former immigration restrictions were rooted in racism. However, he urges us to be more nuanced today. Being pro-immigrant is different from being pro-immigration, and any immigration policy must carefully consider the question of who and how many immigrants to admit into America. The Brahmin Left has seemingly answered with everyone and infinite, failing to consider the impact on the American people themselves.
Culture
If power is about whether the weak has sufficient political power and representation to assert their interests against the strong, culture is about the strong—primarily, businesses—and their default posture towards the weak.
Prior to World War II, American corporate culture was what Leonhardt calls “rough-and-tumble capitalism,” a purely laissez-faire economic system in which companies’ North Star was cost control. Businesses maximized corporate profits by quashing unions, suppressing wages, lobbying for minimal taxes, and beating back regulations. It was basically business versus everyone else.
Culture is typically hard to change, but watershed events can shake things up, leading people to believe that the predominant culture has stopped working. This is precisely what happened to America with twin onslaught of the Great Depression and then World War II. This onslaught would foment a new culture, a more collaborative form of capitalism Leonhardt calls “democratic capitalism,” which created a greater role for the government and workers.
A few pioneering business leaders were among the first to accept this cultural change, and they formed a group to promulgate it across the entire business community. This group, the Committee on Economic Development (CED), was made up of the who’s who in business, from the chairman of Coca-Cola to the lead partner at Goldman Sachs.
The CED leaders, along with outside academic economists and Federal Reserve officials, traveled across the country, steering businesses toward a consumer-oriented economy through the means of democratic capitalism. The alternative was a a slide back into rough-and-tumble capitalism. To the CED, this was a very real possibility, as they feared that the abrupt halting of wartime production would trigger a post-war recession, leading business to turn inward once again and cut costs for self-preservation. Hoping to avoid this, the CED argued instead that American companies could blow the lid off post-war pent-up consumer demand by hiring more, paying more, increasing production, and investing in productivity.
And this is precisely what happened, as businesses invented a bunch of new consumer products like Silly Putty, the Slinky, the microwave oven, new car models, the blender, Tide, Benadryl, and more. Along the way, businesses actually cared about their workers. Large companies collaborated with unions in forming agreements that tied wage increases to productivity, leading to a rise in real wages (i.e., so long as a company found more efficient ways to produce its goods, profits and wages and profits could both climb without prices having to rise much). And according to Leonhardt, the “purest sign” of the shift to democratic capitalism was in how business executives compensated themselves. While the typical CEO received real raises from the 40s to the 70s, these raises were modest. Meanwhile, stock prices, GDP, and median family income all rose more quickly, compressing inequality.
However, this culture of democratic capitalism began to change in the 1960s, again due to tectonic shifts that made people believe things weren’t working. Crime was on the rise, Americans became jaded with the Vietnam War, and Watergate sowed mistrust in government. The straw that ultimately broke the American people’s backs was the oil shock of 1973, which caused oil prices to jump 3x. A recession began within weeks and continued for 16 months. The US fell into a wage-price spiral, where wage and price increases fed into one another and got out of control. To add insult to injury, taxes weren’t adjusted for inflation, so the spiral pushed families into higher tax brackets. Families saw their purchasing power evaporate.
As these conditions persisted, more Americans became open to the idea that the country needed to try a different approach to running the economy. This is when the Chicago School of economics of entered the spotlight.
According to the Chicago School, everything is the government’s fault. Government imposes regulations, artificially raising the price of goods and reducing their production. Government protects labor unions, harming non-union workers and ultimately impeding labor mobility. Government taxes distort the level of entrepreneurship and risk-taking among private businesses. Government blocks mergers when in reality, mergers creat economies of scale that enable companies to cut prices. In short: government bad, free market good.
When Reagan entered the White House in 1980, he adopted the Chicago School and went on a deregulatory full court press. Taxes were the first to go. Reagan decreased the top marginal tax rate from 70% to 50% in 1981 and then to 28% in 1986. Mergers soared, increasing 13x during Reagan’s presidency. Reagan began the deregulation of Wall Street and also reduced the budgets of regulatory agencies like the EPA, DOE, and OSHA. And Reagan made sure that his changes would outlast his presidency by cramming the judicial branch (remember, federal judges have no term limits) with other Chicago School ideologues. He appointed 383 federal judges (most in history), 83 of which to federal appellate courts (also most in history) and 4 of which to SCOTUS.
The Chicago School infiltrated culture so successfully that it even poisoned the Democratic Party. This new Democratic Party, embodied perfectly in poster president Bill Clinton, championed neoliberalism, which still pushed for social liberalism but now advocated for fiscal conservatism. The neoliberals agreed with the Reaganites that the New Deal had put too much faith in government planning and not enough in the power of the market to allocate resources efficiently. As a result, neoliberal politicians shrank union power, deregulated the economy and especially the finance industry, and permitted globalization at the expense of American workers.
The practical result of this new culture was the deterioration of the American Dream. While Reagan admittedly ended the weak economic growth of the 1970s, he ultimately started a new era of unbalanced growth and widening inequality. Due to inane degrees of globalization, we saw a decline in the share of American economic output going to workers’ wages. Corporate profits, by contrast, have grown more rapidly than the economy, going from 5.5% of national income in the postwar decades to over 7% in the Reagan era.
Investment
Okay, so power is about the working class having political power, and culture is about business’ default posture towards the working class. Investment, finally, is about the government and its optimism for the future, its willingness sacrifice in the short-run to benefit the long-run. This is intuitive: the American Dream is about making future generations better off, and investment today creates the conditions for prosperity tomorrow.
While Leonhardt analyzes a number of areas government should invest in, the most compelling is technology and basic research. The pinnacle of government investment here was during World War II and the Cold War. In this period, the government pioneered the semiconductor industry by funding the initial research in transistors and then catalyzed the market by being its first customer. The Defense Advanced Research Projects Agency created a physically remote network of computers that gave rise to the Internet. In biology, too, government-funded research led to the development of penicillin, cortisone, chemotherapy, and cardiac treatments.
While private sector investment in technology is also important, the private sector tends to do less of it than a healthy economy needs. Investments are expensive, and their commercial applications aren’t immediately clear. More importantly, only a fraction of the returns typically flow to the originally investors and inventors. Value capture is even harder because intellectual property isn’t always airtight enough to protect the fruits of investment.
It isn’t until a basic technology is mature enough that the private sector can/should unleash its creativity to build commercial products on top. One clear example of this is the iPhone, which was built off the back of government-funded technologies—CPUs, dynamic random access memory, LCD screens, lithium-ion batteries, the Internet, HTTP and HTML, cell networks, GPS, and touch-screens.
It’s tempting to think that venture capital can replace government investment, but this would be wrong. In venture capital, investors are constrained by the need to generate returns within a fixed period of time (~7 years). VCs haven’t had the biggest of appetites for funding capital-intense, early-stage R&D budgets for technology that will take a few years to even produce, let alone commercialize economically. The SPAC wave of 2020-21 was an exception because it provided a release valve for these types of companies to go public and generate liquidity earlier than they otherwise would have. But barring that, investors have traditionally preferred to invest only when they can understand all the levers of a business—for instance, how does each additional dollar poured into sales and marketing translate into additional revenue for the company? The point is to model the future of a business with as much certainty as possible.
But the point of things like basic research is that it’s almost impossible to model what the applications of that research will be. Leonhardt argues a the role of government is to take the long view, spending money on basic research that may not turn a short-term profit but has the potential to yield a big return for society.
A healthy cycle of investment into technology should therefore look like the following. First, the government should pay for basic scientific research that the private sector isn’t conducting. Then the government should create an early market for new products by buying them. As technologies mature and come down the cost curve, the government’s role should recede and give way to the private sector, which can more efficiently allocate capital to commercialize these sophisticated technologies.
Unfortunately, though, since the 1970s, government spending on R&D has drastically declined. While America has still witnessed a narrow cone of progress in communications and information technology, innovation has otherwise stalled.
Separately, there’s another reason why government investment is important for the American Dream, beyond the fact that investment is future-oriented: Leonhardt suggests that investment improves economic equality.
Consider investment into infrastructure and housing. In the 1940s and 50s, the government invested heavily to build the air traffic and interstate highway systems. But today, the government can’t build anymore. The Northeast Corridor has failed to build high-speed rail like the Japanese Shinkansen. Public transit in many American cities are deteriorating and too expensive to repair. Our planes and trains are actually slower than they were 50 years ago. Housing costs are ballooning in blue states, leading to a homelessness crisis in cities like San Francisco and New York City. The result of all this is a disproportionate burden on the backs of the working class and minorities while the very wealthy can still easily make things work.
According to Leonhardt, part of the broad decline in investment is due to—you guessed it— the working class’ loss of power to the Brahmin Left and neoliberalism. For instance, it’s no surprise to Leonhardt that blue cities have witnessed a decline in minority populations due to high housing costs. After all, the Brahmins have catered more towards college-educated elites than the working class. Furthermore, the neoliberal uprising has made government wary of “picking winners” in innovation, preferring instead to leave investment to the hands of the private sector.
Leonhardt’s more interesting reason for the decline is the ossification of interest groups. Successful societies essentially become victims to their own success. The interest groups that promote the initial rise of prosperous economies are the same ones that engage in regulatory capture, blocking the development of anything that doesn’t benefit their interests. It’s a form of pulling the ladder up from under you after you’ve climbed it: these interest groups, which have ended up with a larger slice of the economy’s pie, now hoard that slice and keep the overall pie from growing as much as it otherwise would have. For example, farmers lobby to keep food prices high. Large corporations push for tax breaks. Unions negotiate contracts that maximize wages even at the expense of a company’s long-term success. Neighborhood groups practice NIMBYism, opposing new construction, keeping housing prices high, and blocking the deployment of local infrastructure projects.
So, what does the government spend money on nowadays, if not investing for the future? Healthcare, retirement, and criminal justice. As a share of GDP, government spending on these three areas was ~5% in 1960, but it has ballooned today to ~17%. To Leonhardt, this is a tragedy. The high costs of healthcare don’t make people healthier, they line the pockets of an inefficient bureaucracy. Retiree health and welfare benefits often (and counterintuitively!) help the affluent and ignore the fact that childhood poverty is through the roof relative to elderly poverty. Our criminal justice system results in mass incarceration for nonviolent offenses, again disproportionately impacting minority communities.
Leonhardt also laments that this tragedy is a uniquely American one. Not only does this type of inefficient spending kill the American Dream, but our Western peers have found ways to care for and protect its aging populations without spending so much, using the money instead to invest in actually worthwhile things like education, childcare, and infrastructure.
Where do we go from here?
Leonhardt spends the last ~20 pages of his book brainstorming what we can do from here to revive the American Dream. He offers a few ideas.
Conservative populism. Leonhardt admits that the Trump wave of conservative populism ostensibly caters to the working class by rejecting the neoliberal consensus. Trump promised to cancel free-trade agreements, protect American industries, and reduce immigration. Some outspoken Republicans (Josh Hawley) are now crying for more antitrust enforcement against big tech, and there even appear to be rumblings for stronger unions (Marco Rubio and Mitt Romney). However, Leonhardt ultimately believes that the Republican Party isn’t the answer because it’s still too captured by big business. After all, notwithstanding Trump’s promises to uplift blue-collar America, his administration also acted in ways that weakened the American Dream (e.g., loosening corporate regulations, reducing taxes, and trying to take health insurance from lower-income families). Leonhardt thinks that the revival of the American Dream will still need to come from the Democratic Party.
But not the current version of the Democratic Party! Put simply, Leonhardt thinks that folks on the Left need to chill. Although many of their gripes are legitimate, they should draw fewer hard lines in social issues that alienate vast majority of the working class. According to Leonhardt, a better Democratic Party will require its members to be more inclusive of and respectful towards blue-collar workers.
A new story with a new storyteller. We need a new story that will animate a new zeitgeist. FDR was able to catalyze the New Deal under a story of freedom from oppressive American businesses. Reagan then told a different story, one about trusting in our individual creativity over government meddling. While Leonhardt doesn’t purport to know what specific message is necessary, he thinks that our new story will have something to do with freedom—just like FDR’s and Reagan’s—and that it may require a FDR or Reagan-like charismatic politician to popularize that story.
A national crisis? Remember: both the rise and fall of the American Dream coincided with national crises that created fundamental shifts in culture. The New Deal was born out of the Great Depression and World War II while Reaganomics was born out of the oil shocks in the 1970s. It’s possible we might need another forcing function—war, depression, or a natural disaster—to create a political reaction that redistributes revives the American Dream.
This would be depressing! And just as importantly, haven’t we been through enough trauma—9/11, the Great Recession, COVID, and now Russia/Ukraine and Israel/Palestine—to create a shift in culture already? Maybe that shift is embodied in the rise in conservative populism, but Leonhardt argues that the trauma of our era still doesn’t reach the level of trauma wrought by the Great Depression and World War II. In any case, Leonhardt doesn’t really think (or want??) something to drastically shake things up. He thinks we can rack up policy victories over time to slowly nurse the American Dream back to life.
Structural changes to the political system. In order to combat the ossification of interest groups that have captured politics and kept this country in stagnation, Leonhardt thinks that we need to update the structure of government. Times are changing, but our political institutions are stuck in sclerosis. For example, it’s been 30+ years since we’ve amended the Constitution, and it’s been 60+ years since we admitted a new state.
Leonhardt suggests that the Constitution be updated to fix the unequal representation of the Senate, which gives disproportionate power to rural states that favor laissez-fair politicians. Leonhardt suggests that the power of the Supreme Court—which he thinks is now the dominant branch of government, to the detriment of the working class given the Court’s laissez-faire, anti-regulatory tendencies—be checked by Congress and the President. Leonhardt also suggests that we admit Puerto Rico and Washington DC as new states, not only because the people deserve political representation, but also because doing so would increase democratic capitalism, given their political views.
While I am okay with Leonhardt’s recommendations, I disagree with his reasoning. Things like expanding statehood and reforming the Senate are procedural problems—they affect the principle of democratic process and can equally disadvantage Democrats or Republicans. Contrast this with, for instance, the political question of how much the government should spend on welfare, which explicitly and differentially affects different groups.
Procedural problems require procedural reasoning, and political problems require political reasoning. Procedural reasoning is outcomes-independent while political reasoning is outcomes-oriented. Procedural reasoning is rooted in an articulation of broad principles while political reasoning is rooted in power applied with scalpel-like precision. Procedural reasoning looks like: “let’s take this course of action, even if it might produce results I don’t like, because the principle of XYZ [free speech, political representation, etc.] overrides the importance of those results.” Political reasoning looks like: “let’s take this course action because I want to create this specific outcome for this specific group of people, and we have power over our opponents to do so.”
It’s a mistake to apply political reasoning to procedural problems, but when Leonhardt says that we should admit Puerto Rico and Washington DC because doing so would help the liberal cause, he makes that exact mistake. He mistakenly applies political reasoning to what is fundamentally a procedural question, that of representation in a democracy. And what would happen if Puerto Rico and DC actually had primarily Republican populations—would Leonhardt backpedal and say they don’t deserve statehood even though they still lack representation? This type of reasoning just seems comical to me. The reason we don’t apply political reasoning to procedural problems is because that would bastardize our principles, rendering their application inconsistent depending on whoever’s in power. Maybe it’s the Democrats today, maybe it’s the Republicans tomorrow. Our country and Constitution are founded on a bedrock set of a principles that I hope we can apply consistently.
Or maybe I’m being too idealistic. The vast majority of problems are political and so maybe we’re used to political thinking. Both Democrats and Republicans have engaged in political reasoning for procedural problems. Even SCOTUS is susceptible to this. In theory, it’s supposed to apply legal reasoning to arrive at the outcome of a case, not work backwards from a desired outcome. In in practice, however, it often does the latter, making the institution a political weapon. Anyway, I’ll hop off my soapbox—I’ve previously written about similar things here, here, and here.
Conclusion & more commentary
Leonhardt’s final and most important recommendation reviving the American Dream is—surprise!—more power to labor. Leonhardt is adamant that “the missing ingredient [to the American Dream] has been a strong grassroots movement focused on achieving these economic changes [for the working class]… The lack of such a movement is the biggest shortcoming of the modern American left.”
I already mentioned that my biggest gripe with the book is Leonhardt’s all-too-quick examination of whether the American Dream is in decline. If I had to pick another one, it’d be that Leonhardt fixates so heavily on power as the panacea. Indeed, of the three legs of the stool of American Dream, Leonhardt makes clear that power carries most of the weight. Meanwhile, culture is downstream of power, and investment is downstream of both.
Let’s start with culture. While many business leaders in the 1930s voluntarily adopted democratic capitalism, some needed to be dragged kicking and screaming. Business leaders only begrudgingly accepted the New Deal when FDR continued racking win after win after win for labor. The same happened with the Supreme Court. The early 1900s Court was antagonistic towards labor, but it wasn’t until FDR continued winning elections and pushing New Deal policies that the Court began to uphold a vision of an active government in protecting labor. The broader point is that when labor can organize effectively, and when political power supports labor, they can subsequently mold culture.
Investment is downstream of both power and culture. In a sign of the times during the era of democratic capitalism, even conservative politicians adopted liberal investment policies. The clearest example is President Eisenhower. Although he was the first Republican president in 20 years, he didn’t try to eliminate the New Deal bureaucracy or reduce government involvement in the economy, as one might have expected. In fact, under Eisenhower, government investment as a percentage of GDP grew to the highest levels in American history.
Leonhardt ultimately writes that “power is the central reason our economy became more broadly prosperous and less unequal in the middle and twentieth century, and power is the central reason those trends have reversed over the past fifty years.” His book contains a couple of chapters explicitly focused on power, but even in the other chapters, he always somehow finds a way to circle back to labor and unions. Leonhardt’s borderline obsession with power makes me skeptical… Is he just a union booster?
Of course, I’m being a little tongue-in-cheek and unfair to Leonhardt here—the American Dream is primarily about social mobility of the working class, so why wouldn’t a book on the American Dream emphasize unions? I should also point out that Leonhardt is careful to qualify the role of unions in society. He anticipates the blowback from dirty capitalist pigs like me by admitting that of course unions sometimes just care about their own paychecks and reaching retirement over all else; of course unions can shoot themselves in the foot by resisting change in a fast-changing era; of course unions can be greedy, demanding wages that are too high for a company to pay sustainably; and of course the the labor unions of the 1900s can’t be recreated in today’s globalized economy.
So what would such a modern-day labor policy look like? Leonhardt only offers a few concrete answers. Leonhardt argues that the “key feature” of a modern labor policy would be an “overhaul of the protracted, burdensome process that workers must endure to win union recognition.” Leonhardt also says that we need to do a better job of cracking down on employers, who today face only small slaps on the wrist for violating existing labor laws. In any case, I’ll admit I’m ignorant on labor policy and am wary of unionization, preferring instead to emphasize investment. That said, I’m curious to learn more about unions and would be the first to purchase a Leonhardt follow-up to Ours Was the Shining Future focused exclusively on unions 😉
Anyway, there are a lot of interesting things in Ours Was the Shining Future that I didn’t cover. Things like the role of power in decreasing racial inequality during the civil rights movement; how the Democrats and Republicans adopted differing approaches to solving crime in the 1960s, leading to the election of Richard Nixon; how the Brahmin Left actually began to accrue power; and the importance of investing in education. Leonhardt also does an excellent job documenting the roles of important historical figures as they pertain to the American Dream—people like Paul Hoffman (president of Studebaker and leader of CED), Grace Hopper (computer scientist during WWII), Robert Kennedy (New York senator and nephew to JFK), A. Phillip Randolph (leading civil rights and Black labor activist), and Robert Bork (leader of antitrust reform for the Chicago School). This is all fascinating and extremely well-written, and I wish I could have done this book more justice—I encourage you to read the book for yourselves to learn more.
I’ll end on a note of optimism, which I hope is also appropriate as we get into 2024: there may be signs that the American Dream is already being resuscitated. As mentioned, real wages are on the rise. Income inequality is decreasing. The minimum wage is up by at least 50% in ~20 states since 2013. The approval rating for unions reached its highest level in a half century in 2022. We are investing again in domestic industry—from semis, to basic research, to clean energy— with the passage of landmark industrial policy in CHIPS Act, Bipartisan Infrastructure Law, and Inflation Reduction Act. A new wave of antitrust, spearheaded by Lina Khan and Tim Wu, is trying to make its way through the cultural milieu.
But this is all admittedly only small stirring of life—it’ll be up to us to make sure this stirring is the awakening of a long dynamic revival, not the stirring and sputtering of a Dream on its last breaths.