Column Barack Obamas American dream

Written by Michael Walton | Michael Walton | Updated: Aug 29 2008, 05:52am hrs
Barack Obama, now formally nominated by the Democratic party as its presidential candidate, embodies a powerful tension at the heart of American narratives. If he wins the Presidency, he will be hailed as an affirmation of the American dreamliving proof that anyone born in the United States, even a black person, can rise to the highest office of the land. But he has also characterised his journey as improbable, as a path to success that was against the odds. Which story is true

The numbers on opportunity and race suggest that Obama is indeed unusual. The myth of opportunity is powerful, is reflected in beliefs, and underpins the least inclusive system of social provisioning in the rich world. It is also misleading.

Being the land of opportunity is a foundational narrative of the United States. Effort and talent receive their just rewards. For the sake of greater opportunity, people tolerate greater inequality than in Europe or Japan. The rich deserve their wealth; the poor their fate. One side of the story is true: the United States is more unequal than Europe and Japan. The share of the bottom 20% of the population in total income is 6%, compared with 9% for Germany and Sweden. The share of the top 10% of Americans is 30%, compared with 22% for Germans and Swedes.

The narrative influences policies. Tax cuts that primarily benefit the rich are passed with relative ease. Extraordinary levels of CEO remuneration are not a source of controversy. There is much less support for spending to help the poor than in Europe. Total social spending is less than 15% of GDP in the United States compared with 26% in Europe. Some 44 million Americans are without health insurance. This would be unthinkable in Europe, where even Margaret Thatcher, a radical, right wing leader, did not attack the British National Health Service. Universal health insurance is now finally on the agenda if Obama is elected.

The myth of opportunity has powerful historical roots. Alexis De Tocqueville believed he had discovered a land of impressive mobility in the 1830s, writing in his Democracy in America that wealth circulates with astounding rapidity, and experience shows that it is rare to find two succeeding generations in the full employment of it. This was almost certainly overstated then, though in the 19th Century the United States probably had more mobility than Europe, and certainly more than Latin America or India.

What is the situation now One measure of opportunity is the extent to which a generations wealth is shaped by the wealth of their parents. It turns out that inter-generational mobility is not high in the United States. Recent estimates indicate that a family with an income half the national average would take five generations to substantially close the gap. Mobility is generally the same or higher in Europeindeed, much higher in Scandinavia, that also has dramatically greater social provisioning. And for the poor in America, upward mobility is unusually low by international standards, and especially so for blacks. Moreover, on a whole set of measures, including health status, education, and incarceration, blacks continue to fare substantially worse than whites.

The racial divide is also a source of the low levels of social provisioning in the United States. Harvard economists Alberto Alesina and Edward Glaeser explored the question of why the United States has a less extensive welfare state than Western Europethe lack of universal health insurance being one manifestation. They looked for economic differencesincluding the mobility argumentand found nothing. They rather conclude that a major factor is the lack of solidarity between middle groups and the poor, influenced by the fact that many of the poor are black. This is further reflected in beliefs: 60% of American respondents in the World Values Survey say the poor are lazy, compared with 26% of Europeans. Yet, there is no systematic difference in the pattern of hours of work of Americans and Europeans that could explain this contrast.

If Obama wins the Presidency it will not be because the United States is the land of opportunity. Indeed, to win, his biggest challenge will not be the design of compelling economic, social or defence policy. It will be to convince enough white, working and middle class males to vote for him, to counter the belief that he is not one of us. If he does win, it will nevertheless mark a major symbolic shift, a triumph over latent forms of racism and, for many, an inspiration of what is possible. The question would then be if such a shift could be used to genuinely tackle not only failures of inclusion, in health policy and elsewhere, but also the subtle, and not so subtle, structures of identity that underpin profound inequalities in opportunity and the supporting, incorrect beliefs.

Michael Walton is at the Harvard Kennedy School, Institute of Social & Economic Change, and the Centre for Policy Research