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Loss of economic exceptionalism

Claude Fischer, professor of sociology | September 20, 2013

One of the key dimensions of “American Exceptionalism” is the idea that America is the land of opportunity more than any other. We would like to believe that American children who are raised in the meanest conditions are likelier to move up in the world than are children elsewhere. Yet, as of today, the U.S. does not provide more upward mobility than other nations do; if anything, young Americans’ economic fortunes are more tied to those of their parents than is true in other western nations. So, where did this image of exceptional mobility come from?

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Two economists, Jason Long and Joseph Ferrie, published a study this summer in the American Economic Review that creatively brings together some 19th-century data to argue that there was a time when the U.S. was exceptionally open – or, at least, more open than Britain was. Two pairs of sociologists wrote critical comments on the study (here and here). Yet, even with the controversy, there is a lesson to be learned.

Moving up and down and around

One important distinction to keep in mind is that there are two aspects to intergenerational “social mobility”: One dimension is often called “structural mobility.” Youths can move up economically compared to their parents if the economy in general is creating better jobs – as the U.S. was in various periods, particularly after World War II. The children of the well-off typically have a head start in the race for these new jobs, but still lots of youths from the lower ranks do well. (Conversely, when the economy goes bad, as it has in this century, many young people will move down compared to their parents.)

The other dimension is often called “exchange mobility”: the extent to which youths’ economic fates are tied to their parents’ positions. The weaker the tie, the less likely that the child of affluence stays rich and that the child of poverty stays poor, the more exchange mobility a society has.

Long and Ferrie compare the occupations of a sample of American and British men in their 30s in 1880 to the jobs their fathers had about 20 years before. They conclude that Americans about 130 years ago had considerably more exchange mobility than the British did. One of the follow-up papers, by Michael Hout and Avery Guest, pinpoints the difference: In the 1880s, the British sons at both the top of the ladder and the bottom of the ladder were especially more likely than American sons to stay just where there dads had been.

Moreover, in the U.S., unlike the U.K., farming was still a major occupation and many American sons could enter farming as a route of advancement. At least in this comparison, the United States appears to have been the land where young men could rise or fall based on their own rather than their fathers’ accomplishments. (Moreover, “softer” data suggests that the U.S. advantage in such mobility was even greater a few generations earlier.)

Long and Ferrie also argue that rates of exchange mobility in the U.S. dropped between the turn of the twentieth century and the 1970s. Here their critics are especially dismissive, arguing that mobility actually increased, at least a bit, in those decades. Given the heavily technical nature of the debate, we’ll step aside at this point

But it is fair to conclude – at least, I do – that in the 21st century, the U.S. no longer has an exceptionally open and mobile economy. That may be so because the class system has gotten more rigid here or because it has gotten less rigid elsewhere in the West, or both. In any case, the lesson is that our ideology of being the exceptional land of opportunity is a hangover from a time when it was true – but is no more.

Cross-posted from Claude Fischer’s blog, Made in America: Notes on American life from American history.

Comments to “Loss of economic exceptionalism

  1. This makes me think of an interesting article entitled “Decoding Complexity: The Organizing Principles Behind Our Economy” by James Glattfelder. It’s telling to review their study on The Network of Global Corporate Control and the integration infrastructure of a (potentially) self-organizing system. Interesting also, in the bylines of their study, is the mention that the study is not meant to determine whether collusion exists among these many TNCs (trans-national corporations).

    I would posit, though, that collusion is what gives of LIBOR (among others) and the plausible deniability inherent in the financial meltdown of 2008. I tend to observe a lot of black propaganda where, instead, common sense issues should be initially resolved through their obvious relevance.

  2. This whole line of analysis is leaving out a large class of persons who were almost guaranteed to have life experiences far in advance of their parents. I mean immigrants.

  3. None of this should come as any surprise. In a nation where half of the political establishment arguably exists for the purpose of making war on the working class, and does everything it can manage to make their lives difficult, in the name of “incentivizing” them to go out and get a (nonexistent) job, that upward mobility has become stifled as a result should come as no surprise.

    In a nation in which “rugged individualism” has created a selfish, brutal, me-first, don’t-care culture, the response to the disadvantaged was always, “go west, young man, go west.” Well, we’ve arrived at the Pacific Ocean, and now we’re all in the same leaky boat and have to row together – but culturally, as a nation, we haven’t figured that out yet.

    That’s why this study does not surprise me in the least. And it’s why I voted with my feet ten years ago. I now live in Costa Rica – a land of genuine, not just promised, opportunity.

  4. Another element ought to be taken into account when discussing American success stories. Even in their diminished numbers, these days a son who works hard and studies and saves may be considered a success in terms of his accomplishments and value as an employee. However, this does not guarantee he will be financially ahead of his less accomplished brother. He may earn more, but is likely to owe more also.

    His income might be higher, but he just gets to look at it, as it flows past him into his creditors pockets. Is his job security any better? No guarantee. Is his leverage in bargaining any better? That’s hardly a given. Indeed, the difference between the brothers might be called a “pride differential,” since he gets only pride as a result of his extra work and investment. Pride and self respect are not valueless, but they don’t put bread on the table.

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