America's breaking dream

This does not matter only to Americans. In a world in which individuals' fates are increasingly linked, and effective governance depends on some consensus on norms of social and distributive justice, growing income differentials in one country - especially one that has long served as a beacon of economic opportunity - can shape behavior elsewhere. Without the belief that hard work begets opportunity, people are less likely to invest in education, undermining labor-market development; they may even be driven to protest.

More generally, declining economic mobility in the US could undermine confidence in the principles of a market economy and democratic governance that America has espoused for decades - principles that are fundamental to many countries' development strategies. As Nobel laureate Joseph Stiglitz has said: "(T)he extent to which the global economy and polity can be shaped in accord with our values and interests will depend, to a large extent, on how well our economic and political system is performing for most citizens." Given increasing evidence that the system is performing much better for wealthier citizens than for poorer ones, America's soft power seems bound to erode substantially.

Reducing inequality will require long-term, comprehensive solutions, such as fiscal-policy reforms that reward public investment in healthcare and education without adding disincentives to an already cumbersome tax code. But pursuing such measures requires significant political will, which the US seems to be lacking.

Indeed, given the political paralysis at the national level, initiating a constructive debate about an issue as divisive and consequential as inequality will depend largely on the American public. If more people recognize the constraints that inequality places on their future prospects, the more likely are they to press policymakers to confront it. This would not only benefit the US; it would also have a positive impact on global governance.

Americans have long prided themselves on their country's status as the land of opportunity, a destination that people have endured immeasurable adversity to reach. A public education campaign aimed at highlighting the challenges that inequality poses to the very foundation of this reputation is a low-risk first step toward reviving America's promise.

The author is Leo Pasvolsky senior fellow at the Brookings Institution and College Park professor at the University of Maryland's School of Public Policy.

Project Syndicate

(China Daily 09/13/2013 page9)