The classic Horatio Alger myth -- the rags-to-riches tale of someone from a humble, working-class background who attains a modicum of wealth and stability in American society -- is virtually an evergreen political meme, waiting to be co-opted by whichever political party wants to be perceived as siding with the “little guy.” At this year’s Republican and Democratic conventions, both parties have floated their own versions of the Horatio Alger myth, each offering their own take on how America’s under-class can make it again. On one side, you have the Romney-Ryan-Rand Republicans, arguing that it's still possible to make in America, given the right tax breaks and laissez-faire approach by government. On the other side, you have the Democrats, who claim that all that hard work and rugged individualism will go for naught without the active support of big government.
So who's right? Will the real Horatio Alger please stand up?
On the first evening of the Democratic National Convention in Charlotte, Latino keynote speaker Julian Castro espoused a form of “you can make it in America” optimism for America's under-class, targeted to immigrants and the increasingly influential Hispanic-American voting bloc. As Castro explained, his version of the Horatio Alger myth is for government to give the common worker a helping hand. He argued that it's too difficult to go it alone, that government must take on the role of creating opportunity for the under-class, especially when it comes to education.
In the lead-up to the Democratic Convention, the New York Times suggested that the Bootstrap Optimists comprise one of the most important voting blocs in the Democratic Party. They are typically people of color or immigrants, making less than $30,000 per year and "financially stressed," yet who are optimistic about the ability to make it in America through hard work and a protective safety net provided by government. Castro gave a nod to this bloc in his speech, when he pointed out that people from his home state of Texas "actually still have bootstraps" - yet he did not once point out an example of an entrepreneur or small business owner who "bootstrapped" his or her own business.
In his speech, Julian Castro also suggested that the American Dream is about to be downsized permanently, bootstraps or no bootstraps. He referred to the American Dream as "not a sprint, not a marathon" but a "relay race," with each generation playing a role in slowly aggregating wealth and passing it down to the next generation.
But what about the real "Bootstrap Optimists" - the men and women of Silicon Valley and other innovation hubs across the nation - who parlay their hard work and modest capital into successful, thriving businesses? Who bootstrap their businesses by maxing out personal credit cards? Forget waiting for modest gains to be relayed to the next generation - this is wealth that can be achieved within the current generation. These should be the role model for today's generation of immigrants and low-income Americans.
So which version of the Horatio Alger myth will it be for America? The hard-working member of the under-class who gets ahead with the help of government programs and makes a "decent" living -- or the hard-working entrepreneur who thinks up an entirely new business model based on his or her personal struggles and uses the latest technology to make it a reality?
The answer to that question really depends on what kind of economy you want in America. Ahead of Julian Castro’s talk, The Atlantic ran a great piece on what Castro stands for – and more importantly – what his city of San Antonio stands for. There are no high-tech industries and no venture capital money sloshing around in the city, just government expenditures on healthcare and military. All of that leads to slow, plodding growth rather than fast-growth high-tech, and less emphasis on entrepreneurial start-ups. As a result, the most vibrant socio-economic class in America - the immigrants and people of color - are dissuaded from fast-growing, high-tech businesses.
Agreed, things are tough in America right now. But there's no need to define down the American Dream or put it on temporary hiatus. The Internet makes it possible for quick-thinking entrepreneurs with a modest amount of capital to turn the Horatio Alger myth into a reality. Entrepreneurs are raising millions of dollars through crowdfunding programs, risking everything they've ever saved to take advantage of new technologies, and leveraging the power of the Web to reach huge audiences cheaply and easily. And it's not just Mitt Romney look-alikes who get loans from their parents are having success -- just look at how many Silicon Valley start-ups were launched by immigrants new to the country but optimistic about the future.
This is way the Horatio Alger myth was drawn up at the turn of last century - as a celebratory tale of what is possible with enough hard work in America - not as a resignation that the American Dream may need to be deferred indefinitely. What was it that Langston Hughes once wrote about "A Dream Deferred"? If you buy into the notion that the economic future of America is built on its ability to innovate rapidly – then America needs to embrace the Horatio Alger myth as a way for the new generation of immigrants and people of color to create a vibrant, high-tech society filled with entrepreneurial risk-seekers - not as just a modest way to make a decent living.
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