Horatio Alger and the American Dream

by Keith Cooper

From Broader View Weekly, June 24, 2010


In a recent edition of this column, my brother Gordon and I discussed the BP oil disaster. Judging from some of the response I received, I think that some readers believed I was soft on BP and did not fully acknowledge the company’s responsibility. While I do believe that assigning blame alone is counterproductive I think this tragedy is a prime example of the impact of corporate misconduct.

Some may have thought my assertions were similar to those of New York City Mayor Michael Bloomberg, who said recently “The guy that runs BP didn't exactly go down there and blow up the well… …And what's more, if you want them to fix it, and they're the only ones with the expertise, I think I might wait to assign blame until we get it fixed.”

The fact is that indications are that profit-driven decisions to cut corners resulted in the explosion and well leak. So it seems that “the guy that runs BP” technically did blow up the well.

I became frustrated hearing the words of BP CEO Tony Hayward who spent much of the last week denying any personal responsibility. It is infuriating that BP will largely escape penalty for 11 deaths and grave damage to the ecosystem and the U.S. economy. This is because corporations enjoy the privileges of personhood while escaping much of the accountability to which individuals are held. This protection of corporations to the detriment of the individual (and of the greater good) demonstrates the worsening imbalance between corporate America and Main Street America.

Most troubling to me is that many in the working class of the country are the staunchest defenders of BP and other corporations. As I listen to talk radio, I am not surprised to hear a fat cat like Rush Limbaugh excuse corporate wrong-doing and extol capitalism as the purest American value. I find it interesting that so many of his listeners call in and echo sentiments that are counter to their own interests.

When President Barack Obama first suggested capping executive salaries of companies receiving federal T.A.R.P. money, my brother Gordon (a hard-working owner of a small business whose success has not exactly lifted him to wealth) complained that the United States was headed down a slippery slope toward limiting all incomes. I heard like comments from many who were gainfully employed, yet were struggling to even meet monthly bills and provide daily needs.

One wonders why there is such a disconnect between the perception of corporate capitalism and the realities of common folk (not a term meant to insult or condescend). Once, I laid it to a Horatio Alger syndrome. Alger wrote many stories in the late 19th century that featured characters born into lowly station who achieve positions of wealth, success, and power. A conception was born of the fictions that if one pulled oneself up by one’s bootstraps and worked hard, success would ultimately follow. This was an effective premise because it inspired the American dream that success is always within reach and wealth is the right of every man. The spirit of this dream has been an engine of American industry and economy for years. To be fair, there have been “rags to riches” success stories, but these few exceptions prove the rule that the Horatio Alger theme is a myth.

More common (especially in recent years) are stories of hard-earned savings and retirement accounts swallowed by greed and corruption, or of family homes lost to mortgage foreclosures, or of workers tossed out of jobs after years of dedicated service. Still, people stand up and cry out about government regulation of businesses and defend corporate avarice. Why? Because the conservative movement, in all its forms, has convinced us of the undeniable self-correcting powers of the marketplace. The myth is that the law of supply and demand can be applied to all economic ills and the consumer will democratically right wrongs. The principle applied to the corporate model is that corporations will be compelled by consumers to do the right thing. This too is a myth.

Recently, radio host Glenn Beck criticized President Obama’s celebration of increased employment by asking why more manufacturing jobs weren’t created. I assume he was implying that if government just backed off, manufacturing jobs would return to the U.S. and sustainable job growth would be restored.

The sad fact is that manufacturing will never resurge to its past strength. The cost of doing business and of labor will always be far cheaper in China and Taiwan than it is domestically. And under the current structure, corporations are bound to shareholder interests and not to ethics. So supply-side economics has failed us. Corporate success does not trickle down to benefit the working class. The power of the marketplace has failed to regulate business practices.

There are things Obama and the government can do to encourage industry to grow employment, but Glenn Beck would not be fond of them. If tax cuts were eliminated and penalties assessed for corporations that outsource labor overseas, some jobs would return. Unfortunately, corporate lobbying and collusion have prevented the political will to regulate industry in this way.

During administration after administration and congressional session after congressional session, corporate influence has whittled away safeguards that would encourage businesses to behave responsibly. By allowing corporations to act unethically we have encouraged a disregard for ethical standards. By moving toward a laissez-faire attitude toward business we have bred an “anything goes” climate that promotes greed and corruption. By catering to the supply side of the equation we have done an injustice to the consumer and the individual. We have fostered a culture of business addicted to corporate welfare. Over decades we have planted the seeds for the destruction we are now reaping.

There is good news. Cracks in the corporate façade are being exposed. People are waking up. Real outrage was expressed when executives of companies receiving taxpayer bailouts took huge bonuses. When extravagant trips were planned and company jets were purchased the outcry continued. Workers who have lost their jobs no longer the notion (advocated by former presidents George W. Bush, Bill Clinton, George H. W. Bush and Ronald Reagan) that global outsourcing is a good thing.

The current corporate model is unsustainable. Without real reform, the American dream is dead. Hopefully, the desire for change will persist.