How greed corrupted the American dream

Beware resentful multimillionaires, for they will destroy the American dream.

That, in a nutshell, was the warning issued by an article that appeared in the New York Post in 1900, cautioning readers that “discontented multimillionaires” form the “greatest risk” to “every republic”. The problem, it stated, was that multimillionaires “are very rarely, if ever, content with a position of equality”. But if the rich were to be treated differently from other Americans, “it would be the end of the American dream”.¹

The article, reprinted in regional papers around the country, argued that multimillionaires insist on special privileges, their own rules, demanding to be treated as an elite class. All previous republics had been “overthrown by rich men”, it added, and America seemed to have plenty who were ready to wreak havoc on democracy without consequence, “deriding the constitution, unrebuked by the executive or by public opinion”.²

As it happens, this forgotten editorial in the newspaper established by Alexander Hamilton appears to be one of the earliest uses of the phrase “the American dream” in a context we would recognise. But instead of assuming that multimillionaires are the realisation of the American dream, it says their lack of belief in the equality upon which republics are founded will destroy it.

Most people today almost certainly believe the opposite: that a multimillionaire proves the success of the American dream. But, in 1900, the Post’s editorial writer presumed that everyone would agree that the dream was of equality, and that wealth would destroy it. And local newspapers around the country reprinted the item – from Wilmington, North Carolina, to Galena, Kansas, to Santa Cruz, California – suggesting they found currency in it.

Before 1900, though, there is no discernible trace in cultural conversations of this specific phrase being used to describe a collective, generalised national ideal of any kind – let alone an economic one. It does not appear in any of the foundational documents in American history; it’s nowhere in the complete writings of Thomas Jefferson, Alexander Hamilton or James Madison.

It’s not in Hector St. John Crèvecoeur or Alexis de Tocqueville, those two great French observers of early American life. It’s not found in the works of any of America’s major 19th-century novelists: Washington Irving, James Fenimore Cooper, Nathaniel Hawthorne, Herman Melville or Mark Twain. It’s not in the supposedly more sentimental novels of Harriet Beecher Stowe, Louisa May Alcott, or even Horatio Alger, whose ‘rags to riches’ stories are so often held to exemplify it. Nor does it crop up visibly in political discourse, or newspapers, or anywhere noticeable in the public record.

Certainly the individual pursuit of prosperity, the self-made man, the success story, were all familiar American ideals, as the immense popularity in the second half of the 19th century of Horatio Alger’s books about impoverished boys rising to middle-class prosperity does attest. But the ‘Alger ethic’, as it’s been called, of rags-to-riches meritocratic bootstrapping was not associated with anything called ‘the American dream’ until much later. ³

Instead, the early iterations of the phrase described the political dreams of the framers – of liberty, justice and equality. The problem for the United States has always been how to reconcile the three. Liberty is in tension against both justice and equality: one person’s freedom to pursue property or power soon infringes upon principles of social justice and democratic equality.

When the term first crept into political discourse, it did so from the Left, to represent the social dream of justice and equality against individual dreams of aspiration and personal success;  today it is used all but exclusively to denote an individual’s pursuit of property.

Back then, it echoed “the American Creed” – that original belief system that broadly fused liberal democracy, individual opportunity, equality, liberty and justice. The difficulty wasn’t merely how to reconcile those principles with each other, it was also how to balance a doctrine of explicitly stated values against the behaviours of individual Americans who implicitly betrayed those ideals on a daily basis.

In 1845, a New York Post editorial was widely circulated that objected to the fact that this new political movement called nativism had arisen that was contrary to Americanism and the American creed. “The great principle of true Americanism, if we may use the word, is, that merit makes the man,” it observed. Because people should never be judged by “purely accidental” distinctions, but only by personal characteristics, any form of nativism was “contemptible” bigotry, based on “low and ungenerous prejudices – prejudices of birth, which we as a people, profess to discard”.

“What is the effort to confine the political functions incident to citizenship to native-born Americans, but the attempt to found an aristocracy of birth, even a political aristocracy, making the accident of birth the condition of political rights. Is this Americanism?  Shame on the degenerate American who pretends it! He is false to his American creed, and has no American heart.⁴

As a concept, Americanism would not get appreciably better at remembering its creed, or having a heart, but many individual Americans, believing in an inclusive polity established (at least in theory) by the framers, would continue to make principled appeals for tolerance, justice and equality. At stake was the character of modern America, whether it would be shaped by tribal loyalties or constitutional principles.

In 1899, the Brooklyn Daily  Eagle published an item criticising a Vermont landowner’s decision to build an estate of 4,000 acres with 60 rooms, which would make it the largest individual property in America. “Until a few years ago, the thought of such an estate as that would have seemed a wild and utterly un-American dream to any Vermonter,” protested the reporter. Vermont had always been “a state of almost ideally democratic equality, where everybody worked and nobody went hungry”.⁵

If the concentration of wealth was an “un-American dream”, then preserving the American dream would mean resisting individual success at the expense of others. This vision looks a lot more like social democracy than free-market capitalism – and it’s a vision that continues through the earliest uses of the phrase. When the “American dream” was used in a context that referred to economic prosperity, the expression usually suggested that the accumulation of wealth was “un-American”, that the American dream was opposed to economic inequality and laissez-faire capitalism.

A Kansas editorial, in 1908, asked why a baseball pitcher earned 20 times more than a settlement worker, why the president of an insurance company made so much more than a headmaster:

“Why does the world offer fortunes to the man who shows us how to make money and starvation wages to the man who shows us how to make beautiful lives? Why do we accord highest place to money mongers and lowest place to teachers of ideals?”

False standards were leading people astray; but “thank goodness, a change is coming over the spirit of American dreams”. The country was beginning to concern itself with more than “the material things”. Having “solved the problems of the production of wealth”, “now we must stop!” The country had bigger problems than making money, contended that editorial from the American heartland. It was time to enable “the equitable distribution of wealth”.⁶

Enough Americans had been dreaming of material wealth for an editorial to praise a change in their spirit; there is no question that American energies have always been focused on acquisition, but the idea of the ‘American dream’ was summoned as a corrective, not as an incentive. Individual Americans’ dreams would need to improve to live up to national ideals of equality and justice, or inequity would destroy the American dream of democracy.

National conversations were highly attuned to the rampant inequality created by industrial robber barons and monopoly capitalism at the time. In 1900 a widely reviewed book called The City for the People argued:

A hundred years ago wealth was quite evenly distributed here. Now one-half the people own practically nothing; one-eighth of the people own seven-eighths of the wealth; one per cent of the people own fifty per cent of the wealth and one-half of one per cent own twenty per cent of the wealth, or 4,000 times their fair share in the principles of partnership and brotherhood. A hundred years ago there were no millionaires in the country. Now there are more than 4,000 millionaires and multi-millionaires, one of them worth over two hundred millions, and the billionaire is only a question of a few years more.⁷

Monopolies were fundamentally opposed to social good, it said. “Diffusion is the ideal of civilisation, diffusion of wealth and power, intelligence, culture, and conscience.” But instead of a democratising diffusion, America had created “private monopoly of wealth, private monopoly of government, private monopoly of education”.

The Labor World in Duluth, Minnesota, protested “the spectacle of one per cent of our families owning more wealth than all of the remaining 99 per cent!”.⁸ The symbol of the ‘one per cent’ that so dominates discussions of economic inequality today comes, like the American dream it accompanies, from a century ago. The difference is that a hundred years ago many citizens of the United States considered billionaires un-American.

So it was here, a century ago, that the story of the ‘American dream’ begins – during the so-called Progressive Era (roughly 1890-1920), protesting inequality. The phrase gradually began to coalesce, used in an increasingly consistent way by people around the country to remind Americans of a shared ideal about equality of opportunity – which may sound like our American dream of individual success. But they believed that the American dream of equal opportunity could only be protected by curbing unbridled capitalism, and protecting collective equality.

When the American dream was invoked, it was a sign of moral disquiet, not triumphalism, reflecting the fear that America was losing its way. The phrase was a warning siren, reminding Americans to look at the ground upon which they stood – not towards nebulous dreams of individual future advancement, but back towards the nation’s shared founding values.

That American attitudes were changing in response to the growth of monopoly capitalism was clear to all; wealth was no longer an easy virtue to pursue. It had become a test for American society. As the American dream began to develop into a popular way to articulate a collective national ideal, the phrase was used to talk about stopping the rich and powerful from destroying democratic equality, and with it economic opportunity for all.

Today, that dream is usually discussed as a nostalgic return to some golden past of national prosperity and harmony, in which happy small capitalists ran an agrarian, softly mercantile society and professionals earned the same as farmers, and everyone was content. But if you examine the actual history of the phrase, you find a society always grappling with inequality, uneasily recognising that individual success would not redeem collective failure.

The fact is, that in the first 20 years of the existence of the phrase, ‘the American dream’ was generally employed to describe a political ideal, not an economic one; and when it was used to describe an economic aspiration, it was with the pejorative meaning of ‘dream’ as illusion, not ideal.

Never, in its earliest years was the ‘American dream’ cited to celebrate the freedom of free markets. It was a way to debate ideas about protecting individuals from corrupt forces of power and self-interest.

The American dream was about how to stop bad multimillionaires, not how to become one.

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Sarah Churchwell is professor of American literature at the School of Advanced Study, University of London. Her new book Behold, America: A History of America First and the American Dream is published by Bloomsbury.

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