Globalisation and the 'American dream'

Abstract

In his essay ‘The internationalization of capital and trends in income inequality in western societies’, N.A. Wilterdink contended that the decrease in socio-economic inequality in Western societies during the larger part of the twentieth century was connected with the strengthening of networks of interdependence at the national level. He hypothesized that the increase in inequality evident since about 1980 was connected to the strengthening of international interdependencies and a corresponding weakening of the ties of interdependence within nation-states. That appears to be true, but appears to be only part of the explanation; political and institutional differences are also important in explaining variations between countries. Or, to put it another way, the key internal power ratios within each country have to be taken into account; the narrowing of economic inequality went along with more even balances of power between upper and lower strata in many countries. Those balances appear to be tipping back in favour of the more privileged, and global interdependences are increasingly interwoven with countries’ internal power ratios. Research by both economists and sociologists continues; it is clear, though, that the degree of socio-economic inequality may have implications for social cohesion within nation states, and particularly for the viability of the American Dream.