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Recreating the American Dream: Wealth Creation for the 21st Century

  • 23 January 2017

On the first day of the first full working week for President Trump (Monday, 23 January), the Higher Education Policy Institute is publishing a lecture by Martha Kanter, who was President Obama’s Under Secretary of Education throughout his first term in office. Dr Kanter delivered the HEPI Annual Lecture on 8 December 2016, but it has not been published in any form before and is now appearing in an updated version.

Nick Hillman, Director of the Higher Education Policy Institute, said:

We were honoured to host Dr Kanter, whose lecture is a tour de force. She shows the power of the American dream but also the obstacles in the way of delivering it. From her perspective, the election of Donald Trump looks more fearful than Brexit but she also paints a positive picture of the power of education to change hearts, minds and economies.

‘Most importantly, she explains how to deliver her goal through co-payment in which business, philanthropists and government work together to help people realise their true potential. She lays down some important challenges to higher education institutions too, urging them to be ever more transparent on what they do in return for the investment they receive.

Extracts from the speech follow.

Speech extracts 

Brexit and Trump

‘After the US presidential election, it seems there are some things far more alarming than Brexit. … I am confident that our collective genius will get us through these uncertain times, as it has since the birth of our nations. I am confident that the building of bridges will ultimately dominate the building of walls. … The true measure of a society’s prosperity is not the buildings it constructs, the technological accomplishments it achieves or the number of awards its elite members earn. It is how well it provides opportunity, equity, and advancement for all.’

‘We need to move beyond shock, disbelief, and disappointment, close sharpening divides and create a vision of a shared future which we can all make happen. We must join forces to argue that providing more higher education should not be viewed as an expense but as an investment …’

Rising costs

‘In the US as in the UK, there are real fears about rising college costs. Increasing cost-of-living expenses and less support for government aid programmes threaten to make the benefits of higher education increasingly unaffordable, putting higher education out of reach for many poor and middle-class families. Over the last three decades, average tuition costs at US public four-year colleges increased by more than 250 per cent compared to family income growth of 16 per cent. … The lack of higher educational opportunity increased the disaffection of the hardworking middle class whose voices and votes were prominent in the Brexit and US election results.’

Wealth creation

‘We should apply a wealth-creation framework to higher education in the 21st century, which informs how we look at achieving success in life beyond how much money one earns.’

‘The wealth that accrues from tertiary education advances our social and civic, as well as our economic, capacities. More highly-educated people earn more, invest more and save more, and they are healthier, happier and generally more productive throughout their lives. Furthermore, they are employed at higher rates and rely less on government-funded services. They are also less likely to enter the escalating high-cost criminal justice system. These are just a few of the reasons why higher education should be considered an investment, not an expense.’


‘Unfortunately, not all schools, community colleges or universities accrue these outcomes at the rates of our top US and UK institutions. We must therefore make a robust case for improving the transparency of what students learn and accomplish during college and after they graduate as a way to make a strong argument for investing in evidence-based educational incentives and interventions that increase the outcomes of our nations’ students. Our best institutions should assume more responsibility for doing this and, concomitantly, our nations should make larger investments in research across the board.’

‘It is more important than ever to shine a spotlight on the ethnic, gender, income, race and class composition of students moving through the education pipeline. Who gets in and who benefits from higher education must become far more transparent for the purpose of supporting talent, extending outreach, improving classroom teaching and more closely aligning our education systems, from the worst elementary schools to the ivory towers.’

Free College Movement

‘In the case of the free college movement in the US, education, business, philanthropy and government are partnering in new combinations to fund the gap in tuition and fees for eligible, deserving students based on varying combinations of merit and need, some more inclusive and others more restrictive. To date, more than 150 US cities and towns in 37 states as well as four entire states are making the College Promise available to their residents. The majority provide this benefit for high-school graduates to attend a two or four-year public college or university. The rest provide the benefit to adults who have not had a higher education. A few offer the benefit to private as well as public universities.’

The future

‘The US and the UK will need millions more college graduates to lead our nations forward who, today, are held back because of escalating college costs, the prevalence of loans, the barriers of poverty, the historic consequences of our inequitably-driven education systems and the failing abilities of our leaders to work together towards common goals, above their individual ideologies and interests.’

‘When the US and UK glance over our shoulders, we see other nations outpacing us in their commitment to invest in higher education as a critical means to ensuring their future competitiveness in an increasingly globalised world. Today, under 50 per cent of US and UK adults between the ages of 25 and 34 have earned a college degree, though the UK is slightly ahead of the US. These numbers portend tragic consequences when our countries are significantly outpaced by Korea, Japan, and Canada, respectively.’

Note for Editors: 

HEPI’s mission is to ensure that higher education policy-making is better informed by evidence and research. We are UK-wide, independent and non-partisan.


  1. Ed Burghard says:

    This story misrepresents the American Dream. To learn what it actually is, read the article beginning on page #182 of this publication –

  2. Martha Kanter says:

    Mr. Burghard challenges my lecture on the basis of the American Dream. Frankly, I am not surprised that a 33-year marketing executive of Proctor and Gamble would bring an alternative and narrow perspective to the fore. I respect his opinion but vehemently disagree and ask him to revise his statement to something like:

    “This story presents a view of the American Dream that is different from my own. Mine is focused on jobs and economic development. Dr. Kanter’s premise is that while Jobs and economic development are crucial to America’s economic prosperity, she has a larger view than my own in that she believes that social and civic mobility, equity, and inclusion are essential components to realizing a nation that delivers on the founding principles of American Society, “life, liberty and the pursuit of happiness.” She believes that the American Dream will be reached through its people who aspire to achieve, deserve and receive a great education, but that they will also continue to pursue education, contribute to their communities as productive residents, and build a nation for all, not just some.”

  3. Ed Burghard says:

    For the record, the company is Procter & Gamble. Unfortunately your restatement of my comment is inaccurate. Xavier University has conducted extensive research into what the American Dream actually is. As a result, they have a statistically valid definition that is actually far from narrow. The reference link I provided gives some insight into their research findings. Consequently, I am not referring to a personal opinion but rather the outcome of a well constructed piece of academic research. I encourage readers of your post to take a look at the Xavier University study, it’s methodology and conclusions. They will find it statistically robust and anything but narrow. Suggesting the American Dream is about pursuing a higher education is a misrepresentation of what it really is. While a higher education may enable some residents of the U.S. achieve their American Dream, it is by no means mandatory. There are many examples of residents who do not have a college or university degree and are achieving their American Dream. Thank you for the restatement, but I will stand by my original comment.

  4. Dr. Martha Kanter says:

    Because Mr. Burghard and I have differing views about the American Dream, I asked my colleague, Nicholas Barr of the London School of Economics, to opine on our dialogue. Here’s what he said:

    1) Any index is based on two elements: (a) a vector of characteristics and (b) a vector of weights. Even if (a) can be quantified objectively (often a big ask), the choice of weights is arbitrary. Thus no index is definitive – rankings will be influenced by the choice of weights. Thus when Ed Burghard talks about ‘ … a statistically valid definition …’ he may well be right – the definition is statistically valid given the choice of characteristics and of weights. That is not a criticism of indexes, but a caution against regarding any index as definitive.

    2) To understand an index fully it is important to know the reason for creating it – the research by Xavier University (which I had not come across before) could be motivated by (a) a genuine, open-minded attempt to measure progress or, more cyncally (b) to promote the importance of religion or (c) to make Ohio look good. I am perfectly prepared to accept that (a) is right – my point is that it is possible to construct an index to support a particular viewpoint. As a simple-minded example, an index of university quality that gave a relatively higher weight to sports facilities and relatively lower weight to research quality could make a small rural university look better than the London School of Economics (which, being a city-centre university, has very limited sports facilities).

    3) I don’t think you are claiming that access to higher education is the only element in the American Dream, but that it is an important one, and the one on which you focus your efforts. A good reason for doing so is that skill-biased technical change is driving up the demand for skills – see, for example, the first page of my blog piece on

    4) If Ed Burghard were to say that the American dream has elements in addition to higher education I don’t suppose you would disagree – where he goes wrong, in my view, is to say that his vision is right and yours mistaken.

  5. Ed Burghard says:

    Dr. Kanter – many people in the U.S. achieve their American Dream without having a higher education. Therefore is is not a mandatory element. And, many people with a higher education are struggling to achieve their American Dream. I would agree a higher education can be helpful to some people achieving their American Dream. I encourage you to look at the Xavier University research. It has nothing to do with religion or making Ohio “look good”. You can evaluate that assertion for yourself at this link – I have no problem with a call to invest resources to make higher education accessible. I do have a problem with any inference that a higher education is mandatory to achieve the American Dream or a valid definition of the American Dream. I also strongly disagree with the inference “my definition” is focused on jobs and economic development. I seek to educate e,etched officials and economic development on what the American Dream is. But, the research was designed and executed independent of my use of it.

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