What is the American Dream?

Here’s a simple question:  what is the American Dream?

This shouldn’t be hard.  The idea of an American Dream has been around since the inception of the United States.  It’s likely the most commonly held secular belief we all share, or aspire to, across the world.

Let’s first define what the dream is.   For simplicity let’s use Ben Franklin’s definition from the 1700’s, one of the earliest known articulations, and one I find very useful.  Ben maintained that:

  • hard work and
  • honest dealings with others will
  • provide economic and spiritual prosperity (following the dream’s path will provide a spiritual reward).

What makes this dream special was that it was a formula for success that was impossible throughout the rest of the world.  For example, in Europe in the 1700’s, this simple formula didn’t yield anything close to prosperity.

There are lots of reasons for this, but one of the most important is something Ben Franklin left out of the formula:  ownership of a home.

Ben left this out because nearly everyone owned their own family home, or aspired to some day.  In Europe and the rest of the world, by and large, families didn’t own the homes they lived in.  They leased them from a feudal landlord.

Why is this important?  Ownership of a family home changed everything.  Mostly, it provided the economic mechanism by which prosperity is possible.

It kept expenses at a minimum, by enabling people to grow enough food to eat and wood to heat their homes.  It also provided people with the ability to make an income by selling the product of their labors.  Finally, ownership of a family home served as a stable storehouse of financial wealth because it was a productive asset with measurable attributes.

In this role, the productive family home is the essential enabler of the American Dream.  Without it, it’s impossible to save enough, make enough, or be financially secure enough to achieve the dream.

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Discussion — 6 Responses

  • Federico Mena Quintero October 23, 2013 on 1:40 am

    Congratulations on this new blog, John; I’m sure it will be very interesting!

    My wife came to this same conclusion recently, over assorted conversations – that not owning a home is a big hurdle for low-income people. Instead of being able to dedicate a substantial part of their income towards a productive purpose (or even to improving their general quality of life), it all goes to paying for rent or maintaining/replacing low-quality/cheap things.

    • John Robb Federico Mena Quintero October 24, 2013 on 12:14 pm

      Thanks Federico. That’s exactly the problem. We tend to buy/rent the largest/most comfortable places we can afford rather than the places that offer the ability to generate income while we live there.

  • Bill Seitz October 23, 2013 on 10:42 pm

    I’m not sure a 30yr mortgage gives ones freedom or lower expenses.

    • John Robb Bill Seitz October 24, 2013 on 12:20 pm

      It depends on what it buys you Bill. JR

      • SinnerG John Robb October 24, 2013 on 12:28 pm

        It buys me “ownership” of my home even though I incur debt and obligations to make it so. Ownership is part of the spiritual part.