Half a century ago, Gunnar Myrdal's An American Dilemma  was published. This paper attempts to assess the arguments and the policy solutions of this classic work on the economic condition of black America 50 years after its initial publication.
An American Dilemma: A Summary
The American dilemma, according to Myrdal, was a moral dilemma. There was a conflict between the values that Americans professed to hold dearly and the specific ways that black Americans were treated. America was committed to the ideals of justice and equality of opportunity, and Americans did not believe that blacks were less able than whites. The problem was that Americans did not live up to these moral ideals.
Much of An American Dilemma attempted to trace the discrimination that existed against black Americans. It documented the political and socioeconomic well-being of blacks and whites, argued against attributing these differences to different levels of intelligence, and marshalled considerable evidence to show that blacks were in fact treated differently in America than whites.
Next, Myrdal attempted to show the damage that resulted from racial segregation and discrimination. He argued that the entire society suffered by denying blacks a decent education, by not providing them with job training, and by discriminating against them in employment and housing. Myrdal also made the case that America's treatment of blacks was inconsistent with the needs of an advanced, technologically sophisticated economy. As a result, the U.S. economy performed poorly.
Finally, Myrdal discussed the policies that might remedy these problems. He stressed first the need for American institutions to assert the importance of the American ethos of fairness. Second, he advocated institutional changes that would reduce discrimination in education and employment and enhance the political power of blacks. Third, Myrdal focused on traditional Keynesian economic stimulus to create jobs for black Americans and an untraditional emigration policy that would encourage blacks to move out of the South and to regions where better paying jobs were available.
Myrdal's analysis and his policy prescriptions follow from his vision of the economic process. This vision--the theory of cumulative causation--is described in the next section.
Cumulative Causation and Myrdal's Argument
Cumulative causation involves a positive or negative feedback mechanism including two or more variables. Since changes in any variable will lead to changes in other variables, the entire system continues to move along in one direction.
This vision of the economic process is in sharp contrast to the simple, unidirectional causal schema, where A causes changes in B, but the possibility of B having further effects on A is excluded. With unidirectional causation, changes in A lead to changes in B and things end there; the system reaches a new steady state with higher (or lower) values for the variables A and B.
With cumulative causation, the variables A and B have impacts upon each other. Changes in A will affect B, which will further affect A, again impact B, etc. When A and B both increase, we have a virtuous cycle or positive feedback loop; and when A and B both decline, we have a vicious cycle or negative feedback loop. With mutual interaction, it is also possible to have a situation in which increases in A lead to declines in B and declines in B increase A (or vice versa). Here we have an oscillating system that can ultimately go in either direction.
An American Dilemma argues that cumulative causation can help explain the political and socioeconomic condition of black Americans. Prejudice against blacks leads to lower living standards for blacks. Seeing that blacks do indeed have lower living standards, white prejudices are reinforced. This leads to further declines in black living standards relative to whites. As Myrdal …