Have you heard this narrative? The middle class has been hollowed out because of an overreliance on free markets. Americans can't compete with low-cost labor and imports, so all the good jobs in America have disappeared, especially those in manufacturing. It's a dismal argument that many politicians, even some on the right, have spent the past few years spinning. They say that the American dream is dying and that only wealthy Americans have been successful for the past few decades. Supposedly, free trade, immigration, and unabated technology have resulted in an economy that no longer works for Americans. The problem with this bleak story is that it is completely wrong.
They're misreading both the current level of prosperity in America and how it was created. Americans have been growing richer since the end of the 19th century and now enjoy levels of abundance and opportunity unimaginable 150 years ago. More recently, American incomes have not stagnated, lower-income Americans have done much better, and the middle class has grown robustly. The American economy is not perfect, but moving further away from free markets and implementing industrial policy, as these politicians want to do, will make Americans worse off. More government intervention and restrictions on economic freedoms will kill the American Dream, not save it. In Crushing Capitalism, Norbert J. Michel makes the case for maintaining perspective on how well Americans have done during the past few decades and nurturing the institutions that have enabled Americans to succeed.
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