The fading American dream

 I was initially skeptical of Rawls's difference principle. However, when I read Rawls’s paper this week, I was more convinced. Rawls’s state “background institutions must work to keep property and wealth evenly enough shared over time so as to preserve the fair value of the political liberties and fair equality of opportunity over generations”(37). Rawls continues by stating “they do this by laws regulating bequest and inheritance of property, and other devices of adjustment, that prevent excessive concentrations of private power” (37). 

The United States is known for the “American dream” where America is filled with opportunity and prosperity, and good social mobility for those with hard work. If you put enough time and effort into your work you can move up social classes. However, there has undoubtedly been an increasing divide between the lower and upper class. With that, more of the wealth, and thus power has fallen into the hands of few relative to the population. It seems Rawls is right in stating that due to property and wealth being in the hands of few, they have excessive concentration of private power. First off, has this concentration of wealth and inheritance hurt economic mobility? If so, can this concentration of wealth be prevented by regulating bequest and inheritance? 

 For the past year, I have been conducting a research project with my economic professor to understand the issues with class mobility and wealth concentration using the Forbes 400 list. The Forbes 400 lists the 400 wealthiest people in America. It is commonly used in academic papers to reflect issues with income inequality, and has shown through those papers compared with other economic measures, to be a good way to gauge this inequality. In this project, which uses data from 1983-2020, I focus on “dynasties” which are the grouping of families over time. So for example, the owners of M&Ms, the Mars family are grouped together and when one person dies the dynasty continues by passing the wealth on to the child. In this way, we can see the way wealth has been concentrated overtime through these “dynasties.” I found that as wealth distribution has been concentrated into the higher ranks, and with that mobility has been decreasing. 

This finding connects back to Rawls’s point above, that inheritance of property, in this case wealth, has contributed to concentration of wealth in the hands of few. Even though these children normally don’t make more money than their parents who initially made the money, they still retain a large sum of wealth. Thus, this concentration contributes to this excessive concentration of private power. Furthermore, it shows how the American Dream is slowly fading away as intergenerational mobility is continuing to decrease in America. It seems reasonable for their to be adjustments in our society to maintain this American dream, and in turn increase class mobility through regulating inheritance.


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