Sorry Professor, The American Dream Is Not Dead

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A version of this article previously appeared in Forbes.

I recently came across a disturbing article entitled, "The American Dream Is An Illusion," written by a college Economics Professor. The Professor argues that, "... recent evidence suggests that, in reality, social mobility rates are extremely low. Seven to ten generations are required before the descendants of high and low status families achieve average status."

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If You Made It, You're An Outlier

The Professor's argument impacted me viscerally, as I have a number of students from various nationalities in my UC Santa Barbara entrepreneurial classes. In fact, UCSB has the highest percentage of Hispanic students of all the UC schools.

I believe that a teacher is not only obligated to merely educate. They should also inspire the young people held in their trust. Can you imagine being a recent immigrant in this Professor's class and being told that you have almost no chance of bettering your social status?!

When interviewed, the Professor's response to any and all counter arguments seems to be, "I am just reporting the facts revealed by history." This slavish devotion to "the data" caused me to review the assumptions upon which he is basing his social mobility theory.

One of the major tenets of his argument appears to hinge on the number of doctors with French surnames in the New England and Louisiana. By his reckoning, the percentage of such doctors is below the national average, causing him to conclude that historically, French immigrants have enjoyed little social mobility.

It seems shocking that he wouldn't take into account people who changed their surnames from one that his highly ethnic to one that is Anglicized. Could it be that such people assimilated more quickly and thus enjoyed a faster ascent up the socioeconomic ladder?

It also doesn't make sense that he is ignoring approximately half of the original immigrants, namely, the females who married and changed their surnames. It also seems suspect that he is looking at one of the poorest areas of the country (middle of Louisiana) and comparing it to the entire country. Could it be that this area of the country has fewer doctors as compared with more densely populated regions of the country?

He does note that, "The vast pool of immigrants that arrived in the United States prior to 1914 -- a group that included Christian Arabs, Greeks, Hungarians, Italians, Japanese, Jews from the Russian Empire, and Scandinavians -- assimilated rapidly and contributed to an economic boom. " For some reason, he chose to not apply his "how many doctors" analysis to these populations of immigrants.

Economist agree that, while individuals might occasionally act irrationally, large groups of people, making decisions over an extended period of time, will gravitate toward rational behavior. Yet, according to the Professor, the millions of modern-day immigrants to America are all exhibiting unreasonable, foolish actions when they cross the border in hopes of improving their social status.

The Professor also notes that the social status of descendants of nobility in Sweden are, "among higher social status groups: doctors, attorneys, the wealthy, members of the Swedish Royal Academies" and that in the UK, if you have an ancestor who went to Oxford or Cambridge, you are four times as likely to attend one of those institutions. However, he provides no insights into the number of immigrants who enter these higher areas of "social status." Are we to believe that immigrants have little chance to improve their lot in life, just because people with wealthy ancestors continue to do well? It is also unclear how an analysis of European social groups is relevant to analyzing the health of the American Dream.

Speaking of which, he fails to even define the American Dream. Since when was becoming a doctor the American Dream? I realize it is an easy statistic to measure, but it is a pretty thin slice of data from which to boldly proclaim that, "the American Dream is an Illusion."

I submit that the American Dream entails the freedom to live your life on your own terms; select a career of your choosing, live where you want to live, while aggressively pursuing your version of happiness. My definition of the American Dream includes home ownership, a well paying job and a business environment in which entrepreneurs can create their own ventures and control their own destiny. I don't consider getting into Oxford or becoming a doctor to be reasonable measures of attainment of (or lack thereof) the American Dream.

A 2012 report published by the Partnership For A New American Economy highlights the wide-open social mobility afforded recent immigrants. The group found that, "... immigrants or their children founded more than 40 percent of America’s Fortune 500 companies, and... that immigrants now own more than 18 percent of all incorporated businesses in the United States." The report goes on to note that these, "immigrant-owned businesses now employ one out of every ten U.S. workers at privately owned-companies and add more than $775 billion dollars of revenue to the U.S. gross domestic product."

Three additional key findings from their report include:

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I appreciate and respect everyone's opinion, including this particular Professor. However, if a person in a position of authority chooses to take a swipe at an entire generation's ability to succeed, they should do so based upon irrefutable data. The American Dream might appear to be an illusion from the heights of an ivory tower, but it fortunately remains alive and well to those entrepreneurs who risk everything to come to America and begin a new life.

Follow my startup-oriented Twitter feed here: @johngreathouse. I promise I will never tweet about that killer burrito I just ate.

Image: AP's coverage of Made In America

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara's Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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