The American Mindset

The American Dream is not merely a set of opportunities. It is also a way of thinking.

As we have discussed earlier, throughout most of human history, societies were organized around the assumption that power belonged to a select few. Rulers made decisions while ordinary people adapted to circumstances largely beyond their control.

The American experiment challenged that view. It rested upon the idea that ordinary individuals were capable of governing themselves and directing the course of their own lives. America was founded on a remarkable belief about ordinary people.

This belief shaped not just America’s political institutions but also the national character.

Take baseball, for example. In every local community in every small town across America, you will find a passion for little league baseball. It’s one of the many ways people engage and thrive in their communities.

With a dozen or more teams in a small town, there is a large and thriving ecosystem in play. You have coaches, assistant coaches, and parents volunteering with their minivans to bring supplies and raise money.

There are small businesses – plumbers, accountants, electricians, lawyers, store owners – sponsoring games with posters and banners and prizes to give away. There are home games and away games where children travel across towns to play and compete.

If you have ever stopped at a lemonade stand, or bought cookies in front of a supermarket, you see how children of all ages participate in organizing and raising money for their many causes.

Most of these are not organized by paid employees. These are grassroots community efforts to belong to a thriving community and contribute towards creating a better life for everyone. This ecosystem works in thousands of small towns without any external hand guiding it.

As an active volunteer in my community, I noticed how my son benefitted from having not just one, but many father figures. With every “Yes sir,” he learned respect and how to carry himself with humility, pride and dignity.

Three core traits have shaped the American mindset of optimism, rugged individualism, and agency.

Underlying all of this is a belief in agency.

A 2014 study¹⁴ by the Pew Research Center found that Americans were significantly more likely than people in many other advanced nations to believe that hard work is very important for getting ahead in life. At the same time, most Americans acknowledged that factors such as education, family background, and opportunity also play a role. The belief was not that effort is the only ingredient of success, but that effort still matters a lot.

That distinction is important.

A small business owner I met in Texas had just started her own beautician business after a difficult experience with a franchise. She had decided to channel her professional talents into a business and licensed a location from a national franchise. But because of various factors such as its location and overhead costs, her business never really took off. Rather than give up and go back to her safe career, she got out of the contract and started her own independent business.

That path is not for everyone, but it’s an example of how agency can shape the direction we take despite difficult circumstances.

As broadly outlined in psychology such as in the Locus of Control Theory¹⁸, or Human Action¹⁹, a society that believes that outcomes are determined by forces beyond individual control, such as in many central planning philosophies, eventually risks losing its agency. People become hesitant to start businesses, pursue difficult goals, recover from failure, or invest in uncertain opportunities.

On the other hand, a society that believes that effort matters, even imperfectly, encourages action.

This belief has long fueled American entrepreneurship, innovation, and mobility²³.  More individuals launch businesses because they believe their actions can influence their future.

This is why the American mindset serves as a bridge between the foundations and the pillars of the American Dream.

People who are unfamiliar with American culture often describe it as individualistic. They are partially correct.

What is frequently misunderstood is its nature. America’s rugged individualism, as it is popularly known, has historically and by tradition been paired with a strong culture of cohesive family units, voluntary community involvement, and giving.

The American tradition emphasizes personal responsibility, self-reliance, and initiative. We are expected to care for ourselves, support our families, and contribute to our communities at the same time.

According to Philanthropy Roundtable¹⁵, most of the charitable giving in America comes from ordinary individuals and families. We voluntarily donate about seven times as much per person than other countries, and almost twice the level of individual households.

In recent annual data, giving by individuals and families accounted for roughly 66% to 67% of all total giving, from all tiers of affluence.

This extraordinary tradition of voluntary giving reflects a distinctive feature of American society: a belief that communities are strengthened by citizens who freely choose to support one another while supported by self-government institutions, rather than vice versa.

At every school board or township meeting, you can see in action the long tradition of voluntary association. Churches, charities, neighborhood groups, youth sports leagues, and countless other institutions thrive because people choose to engage in them.

The core thesis of Alexis de Tocqueville’s classic 1835 text, Democracy in America, was that Americans have a unique tendency to constantly form “civil associations” to solve local problems without waiting for a king or government decree¹⁶.

The impulse to engage is not contradictory to the culture of personal responsibility and self-reliance. It flows from the same philosophy, and it has increasingly inspired community leaders in other countries to do the same.

People who value freedom often prefer communities built through voluntary cooperation rather than obligation.

They want the freedom to choose the causes they support, the organizations they join, and the ways they contribute.

The Almanac of American Philanthropy¹⁷ noted that “flurries of $20 and $100 bills” from ordinary people – rather than giant checks from wealthy moguls – are what make U.S. philanthropy distinct and powerful.

This helps explain why generosity and individualism coexist. We may resist being told how to help, but we are remarkably willing to help and fight for the freedom to choose.

We do not view ourselves as passive recipients of decisions. We expect to make choices, accept the consequences, solve problems, and improve our circumstances whenever possible.

Even when life proves difficult, there remains a deeply rooted belief that personal responsibility matters if you are capable of it.

This mindset helps explain why we often appear to champion being individualistic and charitable at the same time.

Unfamiliar with this complex dynamic, observers from outside mistake American individualism for selfishness. The reality is very different.

While we are often skeptical of centralized institutions, we have built one of the world’s strongest traditions of voluntary association and community service that no centralized institution, including governments, can match.

Adam Smith²⁹ in The Wealth of Nations famously observed that we do not depend on the benevolence of the butcher, the brewer, or the baker for our dinner, but on their regard for their own self-interest. The insight was not that people are selfish. It was that ordinary acts of self-interest, when combined with freedom and voluntary exchange, can produce benefits far beyond what centralized planning by any institution can.

This is one reason America has been able to lift millions of ordinary people into levels of prosperity that would have been unimaginable to earlier generations³⁰. People did not have to wait for a central authority to determine what should be produced, where they should work, or what opportunities they should pursue. They were free to make choices, take risks, and respond to the needs they saw around them.

Contrast that with centrally planned or socialism inspired systems which focus on redistributing the existing pie to eliminate wealth gaps, thereby ultimately destroying the sources of wealth creation themselves³¹.

These systems and philosophies fail to recognize that wealth gaps are a natural outcome of risk and reward, and they uplift everyone, not just the entrepreneur. The goal of government may be to provide a minimum safety net as agreed by all, but not to intervene and control.

For decades, surveys have consistently shown that Americans tend to be more optimistic about their future.

A global Pew survey¹⁴ found that Americans were likely to report feeling positive about their day-to-day lives and personal prospects at almost twice the rate of their counterparts abroad.

We tend to believe that tomorrow can be better than today. This optimism is not naïve. We understand that luck, timing, family circumstances, connections, health, and countless other factors influence success. Life is rarely a simple equation in which effort alone determines outcomes.

Yet we have traditionally believed that hard work remains one of the most important ingredients of success.

This belief is central to the American Dream.

The dream does not promise that hard work will always be rewarded because reality is more complicated than that.

What the dream promises is that individuals possess agency over their lives.

This belief encourages us to take risks, start businesses, change careers, pursue education, and recover from failure²⁵. It creates a culture that values initiative and rewards those willing to try. It stands in contrast to the limiting belief that our circumstances determine our destiny.

The American mindset is therefore also a cultural mindset of possibility. That culture has never guaranteed success, nor has it eliminated hardship. What it has done however, is encourage generations of Americans to believe that tomorrow can be better than today and that they possess some ability to help make it so.

The mindset is shaped by the three facets we discussed in this chapter. Optimism gives us the belief that tomorrow can be better than today. Rugged individualism keeps us responsible for our own lives, while empowering us to contribute and build our communities together as willing citizens. And agency is the belief that our actions can influence what happens next.

This mindset remains one of America’s greatest strengths.

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Next Chapter: Prosperity

Previous Chapter: The American Foundations

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