The American Dream was popularized by historian James Truslow Adams in his book The Epic of America (1931), during the Great Depression, when American corporate profits fell from 2.8 billion in 1929 to −2.6 billion in 1930. Even this decline created significant social and economic strain for working people. Corporations cut costs and restructured their operations to survive, but unemployment reached 25% by 1933, leaving millions in poverty.
It was in this period that Adams described the American Dream as a vision of social and economic mobility — of material prosperity and spiritual progress achieved through hard work and equal opportunity — as a way to restore social stability. The Dream's deeper roots, however, lie in the ideals of the American Revolution (1776): "life, liberty, and the pursuit of happiness," later reflected in the Constitution and echoed in the civil rights movements of the 1960s.
Some scholars argue that these ideals were gradually reshaped by market forces. Edward Bernays, a nephew of Sigmund Freud, described this shift in his book Propaganda (1928): "The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country."
Critics of modern consumer capitalism contend that this process redirected the pursuit of happiness toward the pursuit of consumption, in which material goods became markers of personal fulfillment. Whether one accepts that critique or not, the economic data itself tells a revealing story. U.S. corporate profits after taxes have grown almost without interruption since the late 1940s. Corporate profits were below 20 billion in 1947, reached1 trillion in the mid-2000s, and, according to the U.S. Bureau of Economic Analysis, had risen to roughly $4.7 trillion by 2026. Notably, American corporations remained profitable through every major crisis of the past seventy-five years, including the 2008 financial crisis and the 2020 pandemic, even if margins temporarily narrowed.
By contrast, wages, income, and labor's share of national income have not kept pace and remain near their postwar lows. Hourly earnings have barely kept up with inflation, while labor's share of national income has fallen to historic lows. Poverty, housing insecurity, and homelessness remain persistent problems, affecting millions of Americans, including a growing number of children. These challenges are interconnected rather than isolated.
The gap between corporate performance and household well-being raises a legitimate question: does the American economy currently serve the aspirations on which the nation was founded? When profits rise steadily while wages stagnate and economic insecurity grows, the promise of shared prosperity deserves honest reexamination.
The American Dream was not designed as a guarantee of outcomes, but as a promise of opportunity. Restoring that promise requires not abandoning the market system, but ensuring that its gains are more broadly shared. Rekindling the original vision — one rooted in dignity, mobility, and genuine opportunity for all Americans — remains the task before the nation.
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*Academic based in UK
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