The American Dream is an organizing principle — it is a simple story that we use to give a compact answer to the more complicated reality: the interplay between self, society, money, leisure, and work.
The American Dream is an arena. It is a space; a framework. In essence it says that an individual ought to be able to direct him/herself insofar as their self-direction does not harm the ability for others to self-direct. Or in other words: do your stuff, but don’t hinder other people doing theirs. Therefore we are able to test our products in the market. We can organize ourselves with like-minded individuals to solve complex problems. We can learn by doing and failing (and importantly, that failure is not permanent failure.) We can employ our resources to our own ends and create systems that have purpose. In short: the American Dream is an arena of freedom and permission; it is the healthy soil that allows us to flourish. When the arena is calibrated in a way that helps maximize freedom and permission we say that the system is healthy.
Now, the big idea is inspiring: “an arena where I can strive, try, fail, try again, and reap the rewards of my success!” Who wouldn’t get inspired by this? I think that this system works so well because it is in accordance to our nature: it resonates with our human heart and taps into what truly motivates us. But when you look under the hood of this system, it isn’t all that sexy — it’s actually kind of boring. Things like bankruptcy laws mean that we don’t have to live in a Charles Dickens-esque poor-house if our business fails. A just legal system that means we don’t have to rely on bribes or kickbacks to make businesses happen (for a fascinating look at how this destroys the flourishing of a society check this out). Even though we complain about taxes, we still live in a society that believes that you should keep the majority of what you earn. These are not givens everywhere in the world or at all times throughout history. But even though the particulars aren’t all that sexy, the implications are massive. You live in this time in history in a civilization that believes that the free man is the greatest force of good in the world. The American Dream is an inheritance; you live in an arena that was carved out for you from earlier generations. The Dream is in fact their dream for you—a place of freedom and permission. An arena for human flourishing.
However, all ideas are subject to erosion or drift over time; this is especially true for big, central ideas such as the American Dream. One way that it has drifted is in saying that the American Dream is the acquisition of stuff. The argument goes that the American Dream is an affordable house, available land, or easy access to the hallmarks of a middle class life. These hallmarks are actually the byproduct, not the prime product of a healthy arena. Individual wealth (houses, cars, land, investment etc) is a symptom of a healthy system. So when you look at charts of savings rates, home ownership, equity ownership and see that they are up, one conclusion you can draw is “this is a healthy system of wealth creation.” Yet you would be wrong to say “if we add more houses and cars and stocks we’d be even more healthy!” An abundance of byproduct does not mean the American Dream is working. A good analogy to think about this is grades in school. Grades are a byproduct. Good grades indicate that a student has achieved some level of mastery of a given subject over a given period of time. But we would be fools to say that we have smarter students if we tinker with the system to create higher grades. In reality by artificially amplifying byproduct we run the risk of killing the whole system (give every kid an A, and you have a system that says absolutely nothing about the student.). When it comes to home ownership, this is one of the lessons we learned in the Great Recession. We can’t just have more home ownership and then claim that we are healthier (it is fascinating to watch this video clip with the Great Recession ringing in our ears). If we as a society want to ensure that the American Dream is available to all, we need to focus on protecting this arena of freedom and permission.
This is what we are trying to do at Able. The whole thrust of our business is to make this arena available to everyone who wants to take part in it. There are a whole host of players needed in order for the American Dream to function. We have touched upon the legal and legislative ones above. But a healthy system needs everyone taking part and playing a part. Our small part is twofold. The first is that we are a financier: we are lending money to help businesses flourish. The second is that we are bringing investors a new platform so that they can invest in businesses they love and relationships they have. To continue our agriculture metaphor: we are doing all we can to make the soil the healthiest that it can be for small businesses, so that all parties who want to work and grow in this arena can. Since 2008 the small business loan process has begun to show symptoms of illness. At Able we are doing everything we can to promote health in this system. Because in the end the American Dream is our dream as well. We don’t take on old ways of lending just to be innovative; we don’t lend money just so that we can make money. We do it because we are part of the system too. It’s health is our health. We do this because we believe that this is what it means to be good citizens.