Why Personality, Intelligence and Hard Work Won’t Guarantee Achieving the “American Dream”

The American dream is founded on the belief that anyone, regardless of social or economic status, can become successful, given intelligence, a good personality, hard work and perseverance. This belief has permeated American culture since its founding, and persists until today, despite evidence that it is more a myth than a reality. Of course, there are famous outstanding examples of individuals who have done so, but they are not the norm.

The themes of self-reliance and personal responsibility as a means to amassing unlimited success has been an appealing story for more than a century. The self-made man myth, also described as “The American Dream” has been linked at various times to Benjamin Franklin, Ralph Waldo Emerson and the Horatio Alger stories. Not only is there little truth in the belief, but this oversimplified story has created an indelible view that there is neither responsibility nor the need to take care of one another, including those most vulnerable among us. It’s every person for himself or herself. And many self-help books and gurus have supplemented the fictional stories by emphasizing the values of independence and taking personal responsibility.

Movies, TV shows and popular media, and many politicians are reinforcing these myths by arguing and promoting the notion that anyone can be wealthy or make it to the top by virtue of their hard work and positive attitude and that’s how successful people did it in the past. We regularly read or hear about success stories like Bill Gates, Jeff Besos, Michael Dell, Richard Branson, Mark Cuban and a host of others.

In her book, , Facing up to the American Dream, Jennifer Hochschild identified four tenets of the American Dream that are more myths than reality:

  • Everyone regardless of origin or status can attain the American Dream.
  • The American Dream is a hopefulness for success.
  • The American Dream is possible through actions that are under the individual’s direct control.
  • Because of the associations of success and virtue, the American Dream comes true.

The U.S. is viewed by most of its citizens as a “land of opportunity.” According to this belief, anyone who comes to America have the opportunity to “pull themselves up by their bootstraps,” and succeed as long as they work hard and persevere. Those who are most worthy of America’s bounty are the meritorious. This social ideal promulgates the belief that, “those who are the most talented, the hardest working and the most virtuous get and should get the most rewards,” argue S. McNamee and R. Miller, in their book, The Meritocracy Myth.

Hard work is seen as a powerful factor in meritocracy and a necessary element for acquiring the American Dream. National surveys have found that hard work consistently scores among the top three factors necessary for success, and ranks with education and knowing the right people as its closet competitors. According to one survey,about 77% Americans believe that hard work is often or very often the reason why people are rich in America. More than a third of all Americans — and more than half of all Republicans — believe that the rich are rich because they worked harder than everyone else. When pressed for proof, they usually point to surveys showing that the rich spend more hours working and fewer hours in “leisure activities” than everyone else. A 46% plurality believes that most rich people “are wealthy mainly because they know the right people or were born into wealthy families.” But nearly as many have a more favorable view of the rich: 43% say wealthy people became rich “mainly because of their own hard work, ambition or education,” largely unchanged from a Pew survey in 2008.

How Income Inequality Prevents Access to the American Dream

When the Pew Economic Mobility Project conducted a survey , 39 % of respondents said they believed it was “common” for people born into poverty to become rich, and 71 % said that personal attributes like hard work and drive, not the circumstances of a person’s birth, are the key determinants of success. Yet Pew’s own research has demonstrated that it is exceedingly rare for Americans to go from rags to riches, and that more modest movement from the bottom of the economic ladder isn’t common either. In fact, economic mobility is greater in Canada, Denmark, and France than it is in the United States.

Full-time minimum wage workers cannot afford a two-bedroom rental anywhere in the U.S. and cannot afford a one-bedroom rental in 95% of U.S. counties, according to the National Low Income Housing Coalition’s annual “Out of Reach” report.

In fact, the average minimum wage worker in the U.S. would need to work almost 97 hours per week to afford a fair market rate two-bedroom and 79 hours per week to afford a one-bedroom, NLIHC calculates. That’s well over two full-time jobs just to be able to afford a two-bedroom rental.

The BBC reported startling economic equality figures in a recent documentary: the top 200 wealthiest people in the world control more wealth than the bottom 4 billion. But what is more striking to many is a close look at the economic inequality in the homeland of the “American Dream.” The United States is the most economically stratified society in the western world. As The Wall Street Journal reported, a recent study found that the top .01% or 14,000 American families hold 22.2% of wealth, and the bottom 90%, or over 133 million families, just 4% of the nation’s wealth.

The U.S. Census Bureau and the World Wealth Report 2010 both report increases for the top 5% of households even during the current recession. Based on Internal Revenue Service figures, the richest 1% have tripled their cut of America’s income pie in one generation. In 1980 the richest 1% of America took 1 of every 15 income dollars. Now they take 3 of every 15 income dollars.

The average American believes that the richest fifth own 59% of the wealth and that the bottom 40% own 9%. The reality is strikingly different. The top 20% of US households own more than 84% of the wealth, and the bottom 40% combine for a paltry 0.3%. The Walton family, for example, has more wealth than 42% of American families combined.

In a study published recently, Norton and Sorapop Kiatpongsan used a similar approach to assess perceptions of income inequality. They asked about 55,000 people from 40 countries to estimate how much corporate CEOs and unskilled workers earned. Then they asked people how much CEOs and workers should earn. The median American estimated that the CEO-to-worker pay-ratio was 30-to-1, and that ideally, it’d be 7-to-1. The reality? 354-to-1. Fifty years ago, it was 20-to-1.

In the same way, an editorial of the St. Louis Post Dispatch argues that in ‘in America, you can start poor, work hard and end up rich. But winding up rich is becoming more and more and more difficult unless you are born to wealthy parents.” Based upon a study by the Treasury Department, in which tax returns from the same groups were followed between 1996 and 2005, the editorial stated: “It was found that 45 % percent of the people in the poorest group managed to work their way out of it over the decade. Ten percent of them managed to make it to the middle class, and the incomes of 3.6 percent of them were among the highest 20 % of the country. Rags-to-riches still happen in America. But it’s notable that more than half the people who started out poor were still poor nine years later. Of those who started in the middle income, about a third stayed there. The rest were split pretty evenly between those who climbed higher and those who slipped down. By contrast, there was a startling difference among those who began well-off, a population that tends to stay that way. More than 85 % of those who started out in America’s richest quintile were still there a decade later. Economic status at the time of a person’s birth still makes a big difference.”

Despite current trends of social mobility, some sectors of society have shown a much more aristocratic nature. A self-perpetuating political elite, for instance, is beginning to control the higher spheres of financial and governmental power, both in the Democrat and Republican parties. As the grandson of a senator, George W. Bush is not only the son of a president, but is also a member of wealthy business elite. John Kerry, on the other hand, married a very wealthy women after receiving his education at a Boston posh private school, and subsequently Yale. There, and just like the Bushes, Kerry belonged to the ultra-select Skull and Bones society. Al Gore is a Harvard graduate whose father was a senator, while John McCain’s grandfather and father were the first pair of father/son Four-Star admirals in the United States Navy. Historically, Barack Obama is one of the first serious candidates without blue-blood pedigree, who is also a member of an ethnic minority.

British epidemiologists Richard Wilkinson and Kate Pickett, authors of The Spirit Level: Why Greater Equality Makes Societies Stronger, argue that almost every indicator of social health in wealthy societies is related to its level of economic equality. The authors, using data from the U.S. and other developed nations, contend that GDP and overall wealth are less significant that the gap between the rich and the poor, which is the worst in the U.S. among developed nations. “In more unequal societies, people are more out for themselves, their involvement in community life drops away,” Wilkinson says. If you live in a state or country where level of income is more equal, “you will be less likely to have mental illness and other social problems,” he argues.

A University of Leicester psychologist, Adrian White, has produced the first ever “world map of happiness,” based on over 100 studies of more than 80,000 people and by analyzing data from the CIA, UNESCO, The New Economics Foundation, the World Health Organization and European databases. The well being index that was produced was based on the prediction variables of health, wealth and education. According to this study, Denmark was ranked first, Switzerland second, Canada 10thand the U.S. 23rd.

In my article, “The American Myths of the Self-Made Man, the American Dream and Meritocracy, I argued the following:

  • “The self-made man myth is alive and well in Silicon Valley, built on the dream of the next killer app or technological device, where success stories of people like Steven Jobs and Mark Zuckerberg flood the mainstream media. It’s interesting to note that most ‘rags-to-riches’ success stories are defined in terms of doing well in business and making lots of money. Yet, rarely do we hear about the significant investments and contributions by family, friends, associates, protagonists, antagonists, advisors, teachers, authors, mentors, coaches, and the list could go on.”
  • “Each and every year Forbes magazine celebrates America’s billionaires as paragons of entrepreneurial success, asserting that the list ‘instills confidence that the American Dream is still very much alive.’ Of the America’s current 400 richest, Forbes explains, 70% ‘made their fortunes entirely from scratch.’ Most news media took that claim at face value and did little or no fact checking. However, researchers at a Boston-based group, United for a Fair Economy, investigated the actual backgrounds of the Forbes 400.They concluded that most of the super-rich were born with advantages, concluding Forbes was spinning a ‘misleading take of what it takes to become wealthy in America. Most of the Forbes 400 have benefited from a level of privilege unknown to the vast majority of Americans.’ The study concluded that more than 60% of those on the list all grew up in substantial privilege with inheritances up to $1 million.
  • “A Pew Foundation study, reported in theNew York Times, concluded, ‘The chance that children of the poor or middle class will climb up the income ladder, has not changed significantly over the last three decades.’ The Economist’s special report, ‘Inequality in America,’ concluded, ‘The fruits of productivity gains have been skewed towards the highest earners and towards companies whose profits have reached record levels as a share of GDP.’”

The increasing concentration of in-country inequality is signalled in the latest book, Terra Incognita: 100 Maps to Survive the Next 100 Years. Between 1980 and 2020, billionaires in the US saw their wealth soar by 1,130%, increasing more than 200 faster than median wages. At the same time, the tax obligations of billionaires in the US declined by 78% between 1980 and 2018 (measured as a percentage of their wealth).

Since 1990, CEO compensation has increased by 300%. Larry Ellison, chief executive of Oracle Corp. received US$1.84-billion and Barry Diller, chief executive of Interactive/Expedia.com received US$1.14-billion, and the next six received at least US$500-million in total pay. The average pay of chief executives at major corporations in the United States was US$15.7million in 2018. Some hedge fund managers made $4 billion annually, enough to pay the salaries of every public school teacher in New York City.

“An estimated 34% to 45% of wealth in the U.S. is inherited, according to a 2005 study by the National Bureau of Economic Research, and intergenerational class mobility is notoriously difficult, depending on where you grew up and what your racial identity is. The “self-made” story isn’t just wrong — it’s dangerous and discourages action to challenge the seemingly inevitable status quo.” In 2020 alone, children will inherit around $764 billion and pay an average of just 2.1% on this income. By contrast for working people, the average tax rate is 15.8%, seven times more. These disparities are further skewed by race, and the racial wealth gap is even larger than it was in 1968, at the peak of the struggle for civil rights.

In their report, Building A Better America–One Wealth Quintile At A Time , Dan Ariely of Duke University and Michael I. Norton of Harvard Business School, showed that across ideological, economic and gender groups, Americans thought the richest 20% of American society controlled about 59% of the country’s wealth, while the real number is actually 84%. At the same time, the survey respondents believed that the top 20% should own only 32% of the wealth. In contrast, in Sweden, a country with significantly greater economic equality, 20% of the richest people there control only 36% of the wealth of the country. In the American survey, 92% of the respondents said they’d rather live in a country with Sweden’s wealth distribution. They concluded that a majority of Americans they surveyed “dramatically underestimated the current level of inequality,” and “respondents constructed ideal wealth distributions that were far more equitable even than their immensely low estimates of the actual distribution.” They contend that all demographic groups including conservatives like Republicans and the wealthy “desired more equal distribution of wealth than the status quo.”

Behind many self-proclaimed bootstrapped billionaires is not just their parents’ cash but also the soft assets, or what sociologists call “social capital,” that come along with being raised in and around wealth.

“There are no self-made millionaires and billionaires. You either get rich through inheritance or by being born into a stable, peaceful and prosperous society. Either way, wealth acquisition is determined by winning the birth lottery. For that reason alone, you owe something back to society if you’re lucky enough to win that lottery.” Those are the words of Warren Buffett who has said that had he been born with the same talent but in a rundown Third World nation, he would have never become a multi-billionaire. He’s right.

All of these truths point to the existence of a built-together reality as put by Brian Miller and Mike Lapham in their book The Self-Made Myth: And the Truth about How Government Helps Individuals and Businesses Succeed. According to the 2017 “World Ultra Wealth Report” by research company Wealth-X, self-made individuals, mainly men, have “largely driven” global “wealth creation” from 1997 through 2017. The report noted that while there are an increasing number of women who are designated as high net worth, most inherited their wealth and only a small percentage sourced their wealth as self-made.

A 2007 Treasury Department study of inequality allows us to examine mobility at the most elite level. On the horizontal axis is an individual’s position on the income spectrum in 1996. On the vertical level is where they were in 2005. To examine the myth of mobility, researchers focused on the chances of making it into the top 10, 5 or 1 percent. They that these chances are abysmal. Only 0.2% of those who began in the bottom quintile made it into the top 1%. In contrast, 82.7% of those who began in the top 1% remained in the top 10% a decade later.

Can Personality and Intelligence Result in Success and The American Dream?

We know that possessing certain personal traits can help people do better in life — by knuckling down, making the right connections or having the best ideas. A new study goes further and asks whether a person’s traits and their background interact, with personal qualities being more important for people of lower socio-economic status. If true, this would provide intellectual support for the “American Dream” — being smart or diligent might make some difference for the rich, but for the poor, it would make all the difference.

Rodica Ioana Damian and her colleagues analysed a gargantuan US survey initiated in 1960 and involving data on 81,000 students — their high school personality and cognitive ability scores, parents’ socio-economic status, and various life outcomes eleven years on. Where personality aided life outcomes, was it more useful to children from poorer families?

Their study was published in the Journal of Personality and Social Psychology.

At first blush, the data suggested it did. For example, highly agreeable (compared to highly disagreeable) students from very wealthy families stick with education for a further four months, on average, compared to an extra twelve months if they are from the poorest families. Similarly, all extraverts go on to more prestigious jobs, but the advantage to the poorest pushes them an average additional nine points up the job prestige scale (to make this concrete, nine points takes you from a mail handling role to a retail sales position).

But all these effects were found without taking into account an elephant in the room: intelligence. When this was controlled for, almost all of these personality compensation effects melt away — the exception is that conscientiousness is still more useful to those from poorer backgrounds when it comes to gaining a higher income. So it seems personality does influence life outcomes, but mostly it doesn’t especially benefit the poor once the influence of intelligence is taken into account. It’s also worth noting that the benefit of affluent socio-economic status dwarfs the benefit of being highly conscientious or extraverted, so a poor kid with “the right stuff” is unlikely to outperform rich kids with less impressive personal qualities.

What about that elephant? In this dataset, as with many past studies, intelligence has big benefits for life outcomes. And its impact differed due to socioeconomic class … but not in favour of the poor. A very poor child who is also very smart is likely to stay nearly 30 months longer in education than his or her low IQ peers. But for a rich child, they’ll stay 40 months longer. Wealthier families also see their intelligent kids entering more easily into prestigious jobs than their poor high-IQ peers.

This kind of finding is called, after the gospel author, a Matthew Effect: “the rich get richer”. One way to interpret this is that leveraging a child’s brightness in fields of higher education or societal prestige requires other assets out of reach of poor families, such as a college fund or knowing the right connections.

This isn’t new data — over 40 years old — so circumstances may have changed that remodel the interaction between personal qualities and background. But its comprehensive approach strongly suggests that in 20th Century America, people on the bottom rungs of society could only compensate for their lot on the basis of intelligence — and even there, their richer counterparts are often going to find that easier. Diligence, effort, and can-do may be prized components of the American ethos, but when they come up against class, they just can’t compensate.

How The Self-Help Industry Perpetuates the Myths

Also, so many self-help gurus help to perpetuate the myths discussed here by convincing their clients that anyone can make it to the top with hard work and a few positive affirmations. These naive and damaging practices–particularly for young people–just reinforce and sustain the myth of the self-made man and meritocracy, and avoid dealing with the real problem of income inequality.

Our self-help culture doesn’t allow us to admit we might not be able to overcome greater economic woes on our own. In fact, it often makes our individual situations worse when things don’t work out.

Thomas Scheff, a professor emeritus at the University of California, Santa Barbara, recently published a paper in the journal Cultural Sociology claiming that in highly individualistic cultures like the United States, where people are encouraged to “go it alone,” shame is the price they pay for not achieving success.

Viewed through this prism, you can think of the constant simmering anger in American culture as the road rage of self-help culture. Fearing the humiliation of failure, we aggressively lash out at others who prove the self-help nostrums a lie.

This could be the reason that many, including Republican members of Congress, blame the long-term jobless for their own plight, and cut off their unemployment checks. We say those who fell prey to predatory lending weren’t misled, but were greedy.

According to the tenets of self-help, the victims of American economic problems need not a helping hand, but a kick in the pants. True, self-help advice is not always fully useless Yet all too often, knowledge and individual action are not enough. Self-help causes us to take the political and economic problem of increasing income inequality and make it personal. That’s both morally wrong and financially ineffective.

Summary:

Among America’s most cherished core values is the belief that the United States is a “land of opportunity” and that it uniquely offers to citizens the potential for rising from “rags to riches” provided that citizens have the necessary ability and work hard. This is a myth. Income and wealth disparity in the United States (as measured by the Gini index of equality/inequality, and in other ways) is much higher in the United States than in any other Western democracies. So is hereditary socioeconomic immobility, that is, the probability that a son’s relative income will just mirror his father’s relative income, and that sons of poor fathers will not become wealthy.

So just being intelligent, having a good personality, working hard and being persistent is not the path to success, as it’s so frequently thought of and promoted.

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Ray Williams

Ray Williams

Author/Retired Executive Coach-Helping People Live Better Lives and Serve Others