The cacophony that pervades American discourse today, where volume and pitch offend every meter of reasonableness, provides clear evidence that the struggle for American identity is once again underway. Every eighty years or so America resets its image; reboots its brand. It is never an easy or comfortable process and this time is no different. Before I get into the current issues, however, allow me to provide some historical perspective.
Upon reaching the shores of Massachusetts Bay in the summer of 1630 on the ship Arbella, John Winthrop, echoing Jesus in the Gospel of Matthew, framed the requirements and expectations of his voyage-worn future colonists in a sermon that resonated throughout American history. His Model of Christian Charity articulated a sense of independence, duty, and blessings to those who honored their covenant with God. Winthrop claimed,
the Lord hath given us leave to draw our own Articles’ and that ‘he ratified this Covenant and sealed our Commission [and] will expect a strikt performance of the Articles’ that if neglected in any way would cause ‘the Lord [to] surely breake out in wrath against us’ but if we set the example of His Word, ‘hee shall make us a prayse and glory… for we must Consider that wee shall be as a City upon a Hill, the eies of all people are uppon us …
Winthrop envisioned “Massachusetts as the ideal place to build a Puritan utopia untainted by the corruptions of the Church of England and distant from a suspect English monarch.” It was up to the colonists to live up to the standard of the “chosen people” living in the “chosen land”—a “City upon a Hill.” He defined the Puritan ethos of the new American colonies: independence from the hierarchy of the Church of England; a constant struggle with sin, salvation, and battles against evil; and a high commitment to work and its just rewards with “attention fixed on God.” In so doing, he also set theological covenant as a standard of social order. Winthrop believed he could “transfer the principles of nationhood found in ancient Israel to [his] Massachusetts Bay Company with no need for explanation.”
Over the last two hundred thirty-eight years, this sense of American exceptionalism has proven to be the most durable of all aspects of American identity. Every president, regardless of political affiliation or disposition, has embraced the idea of America’s special role in the world. Most American citizens, albeit with different interpretations and varying degrees of fervor, similarly believe in the ‘specialness’ of America. We should remind ourselves, however, that by world historical standards a two hundred thirty-eight year-old country is just a pup, at most a testy teen. And like an adolescent, our identity—what it means to be an American—will evolve, subject to new interpretations of old values and perhaps even new values, to craft a new image to be projected across the world. Notwithstanding the somewhat clumsy brilliance and beauty of America’s early years, we must be mindful that the great powers that preceded America faced the reality of maturation and decline. There is no reason to believe we won’t face the same arc of maturation. We might aim to age gracefully, retaining our sense of exceptionalism—preferably as an exemplar rather than missionary— but a graceful course is far from certain.
This process of American re-identification is natural and recurring. It actually follows a discernible pattern that includes a four-phase cycle comprised of periods of objectivism, then radicalism, idealism, and finally crisis, each full cycle spanning approximately eighty years. The first cycle began after the Revolutionary War and founding of our country, then again after the Civil War, and then again following the Great Depression and our entrance into World War II. At the end of each period of crisis a new American identity is negotiated that more or less endures for the next eighty years. Following the founding of our country, America embraced an identity as “the new world.” After the Civil War, America identity evolved to “the land of opportunity.” Since the mid-1940s, when America last re-identified itself as an emerging “world power,” our collective identity has been focused on attaining superpower status. Today, twenty-five years after the collapse of the Soviet Union and our own (mis)adventures as a political superpower and overseer of the world’s financial markets, we are faced with a diminished, if not severely compromised, sense of American exceptionalism. In effect, we are standing in the middle of another period of crisis and renegotiation of identity, which is always contentious as evidenced by those at the extremes making more noise than the vast majority who sit between them. Liberty, capitalism, democracy, civil and human rights, all of which we believed, as President Lincoln did, would collude to form a more perfect union—the “last best hope of earth”—needs yet another makeover. 
Our union today is hardly cohesive and the invocation of hope seems an empty refrain. “Superpower” no longer rings true when the institutions we have developed to serve our interests and project power appear to be collapsing under the weight of hubris and avarice. Since the end of the Cold War, rather than following the example of President George H.W. Bush by behaving with a sense of restraint and humility, America’s leaders—political, business, religious, and academic—have puffed out their chests and spewed their decrees with the bravado and rectitude of a freshly saved sinner. These behaviors are markers of a period of high idealism that precede every crisis. And, as if our own guile was insufficient, now comes a tome of criticism aimed at a fundamental tenant of American exceptionalism—capitalism—by the economist Thomas Piketty. Not since 1959, when Soviet Premier Nikita Khrushchev flustered then Vice President Richard Nixon in what became known as the “Kitchen Debates” have Americans had to bear such criticism about capitalism. However, unlike Krushchev, Piketty’s study is well researched, well written, and delivered with a clear expression of limits and, moreover, humility.
Piketty’s basic argument is that a society’s adherence to the principles of capitalism—as the most efficient system of allocating capital and distributing wealth—results, in the long run, in a highly skewed distribution of wealth in favor of the very few that, among other effects, compromises other liberal democratic values, including democracy itself. In short, capitalism threatens democracy. This is based on his finding that the rate of return on capital is consistently higher than the rate of return on labor, by about three percentage points. Over decades, this condition (absent significant policy interventions or war) moves more and more wealth into the hands of fewer and fewer people. Furthermore, he shows, that the impact this has had on the concentration of wealth in the hands of the 1% is no more alarming than in the United States.
We need look no farther than Washington, D.C. to see that the effects Piketty warns us about are blooming with the ferocity of fertilized dandelions on the Washington Mall. Money has always held sway over politicians, but now more than ever moneyed interests funded by those who enjoy higher returns from capital have a vice-like grip on Congress. We no longer “get the government we deserve” through our votes, we get the government people like the Koch brothers have purchased. Across the street from Congress, the Supreme Court is doing its bit too. It has decided, as Mitt Romney claimed on the campaign stump in 2012, that corporations are citizens too. Citizens United v. the Federal Election Commission (2010) and other decisions like the more recent Burwell v. Hobby Lobby (2014) that support this notion of corporate personhood, and which I expect may someday will be viewed as just as ridiculous as the holding of “separate but equal” in Plessy v. Ferguson (1896), provide a growing body of evidence that suggests a slide from democracy to plutocracy—those with the gold rule.
Plutocracy is not all bad if all you want is a more functional government. Fewer people with influence means more things are likely to get done, but will they be things that benefit most Americans, or few? Moreover, plutocracy threatens more than the democracy it supplants, it threatens the very essence of individualism and independence, which are at the core of another tenant of American identity: liberty. When those with the gold rule, there are a whole list of other “INs” that are at risk: invention, ingenuity, inspiration, initiative and innovation; inclusiveness, integration and integrity; and perhaps most importantly, intelligence and intellect—our collective brainpower. Opportunity, like wealth, becomes concentrated too. As Piketty points out, in the history of 19th century France, the last time similar levels of wealth concentration occurred, inheritance rather than merit defined the path to wealth and opportunity. Is that where we want America to go? Will whom we marry matter more than an advanced degree? Will the next iteration of American identity be that of a wildly wealthy few and a mass of commoners for whom the American dream is restricted to something to read about in the diaries of their grandparents and great-grandparents? Will privilege trump merit? Will democracies continue to be replaced by authoritarian regimes across the world?
If egalitarianism in America (heralded by Tocqueville in Democracy in America) is another durable thread of American identity, it is at best frayed and in need of repair. However, such values like egalitarianism—broadly interpreted— may not have survived America’s coming of age as a superpower. Egalitarianism today may be limited to those strands that support civil and human rights, not economic opportunity. This issue is the anvil against which America’s next identity—especially as it pertains to its economic system—will be hewn. Indeed, pundit-economists like Paul Krugman and Joe Stiglitz believe economic rights are an issue of equality, rather than equity; of entitlement more than merit, while others who follow the teachings of Ludvig von Mises and Friedrich Hayek believe the Krugman/Stiglitz world is, to use Hayek’s phrase, the “road to serfdom.” Of course, seldom do the extremes of any range of argument—the polar endpoints—produce solutions with more benefit than (unintended) costs. Even Alan Greenspan, a staunch protégé of Ayn Rand’s, realized (perhaps too late) that her argument of the perfectly rational man as a virtuous economic actor was deeply flawed. So, the question is, in this contentious period of re-identification, can we retain the benefits of capitalism while avoiding its apparent endgame of a very wealthy few? Unfortunately, the answer is probably no.
Absent the destruction of capital that we saw in World War I and II, which, as Piketty illustrates, flipped diverging rates of return on capital and labor to converging rates, the only way to stem the concentration of wealth and affect redistribution is through various tax schemes, any and all of which are anathema to the Mises/Hayek school and its many wealthy supporters. Reading Piketty’s proposals of a global tax, or others who have put forward similar tax schemes is like reading a new version of Alice in Wonderland, prompting the query: did Piketty get into Lewis Carroll’s stash? However, things happen, like the collapse of the Soviet Union, that still amaze people like me, so who knows?
The American values we have historically held dear; that basket of values that includes ideas like liberty, individualism, capitalism, merit, democracy, civil and human rights needs a new handhold we can believe in—a new identity. Coming of age is an inelegant and klutzy process, but to-date America has handled it mostly well. We have created more prosperity than any predecessor power in the history of the world. When called to defeat evil like Hitler’s Third Reich, we put our blood and treasure on the line and, with great help from allies and, in particular, Stalin’s Russia, we won. We have, for the most part, lived up to Winthrop’s ideal of a “city upon a hill.” Adulthood is, however, knocking at America’s door.
- Will our leaders be wise and graceful, or continue in the vain and bilious manner portrayed by too many today?
- Will we be exemplars of self-restraint and moderation, or zealous missionaries of consumptive duplicity?
- Will we lock the gates to America, or continue to embrace those who come from foreign lands?
- Will we educate our children to know more than us, or fail to enable their dreams?
- Will we honor science and take reasonable measures to affect climate change, or will we continue to chant “Drill, baby, drill!”?
- Will we fight to engineer a system that protects and rewards merit balanced by empathy, or will we accept the pernicious effects of concentrated wealth and its natural progeny plutocracy?
- Will we be welcomed in the capitols of the world, or be regarded with contempt and trepidation?
- Will we honor our American heritage and come together to relight the city upon the hill, or continue to strut down a pathway to irrelevance?
In sum, will America be rebranded as ‘beneficent stewards’ of the future of the world, or will the nation of Washington, Jefferson, Franklin, Madison, and Hamilton become an isolated, self-centered, and decaying archetype of entropy? These are the choices we face as we step forward to rebrand America. Other great powers in the history of the world faced the same dilemma; some succeeded, some failed. There is no clear roadmap to follow and nothing will be determined in the next election, or Supreme Court decision, or annual statement of profit and loss. This is a result that will be determined by the decisions and actions of individual Americans every day. Like water carving a new gorge in a mountain of stone, it will be the collective will of the people, expressed in their nearly imperceptible movements that will set the course of the next eighty-year cycle. The loudest among us will not prevail; it will be the actions—not words—of the vast majority of us who decide how to behave as Americans each and every day.