This was written by a user of the Forum Hard Light Productions. I copies his post here since I've found it well though out and enlightening:
MP-Ryan wrote...
So the rich are like Keyser Soze, the greatest trick they've ever played is convincing the masses that class structure doesn't exist?
Nothing so conspiracy-like. Unlike countries like Britain, the United States has never had a true class system in the sense of inherited social hierarchy. Instead, the myth of the American Dream propagated long beyond the days when it was actually possible. During the early settlement of the 13 colonies, it was indeed possible and not entirely uncommon for someone to come from abroad and greatly increase their standard of living. However, this was a result of two things: (1) a large, unclaimed land mass, and (2) decentralized governing structures. With the signing of the Declaration of Independence and the subsequent creation of the United States, government began the long process of increasing centralization and expansion of territorial interest. This pushed new immigrants further and further into the interior of the continent, and many of them did not have the financial resources to push inland. The American Dream is only possible through freely available property space and promotion of agriculture.
What is commonly known as the American Dream today - rags to riches stories of people who work hard and get ahead - is a complete myth. Hard work alone does not escalate social status (though it can elevate income level) and eventually even the hardest worker may hit a social ceiling, at which point further income growth becomes exponentially more difficult. This is because part of increasing wealth is having it in the first place in order to make the social contacts with banks, industry, etc. There are exceptions; every now and then you run across someone who has totally changed their social status level, but this is an anomaly rather than the rule.
However, because of the mythos concerning rags-to-riches stories in the United States, it is convenient to maintain the idea of the American Dream despite the fact that it is a rare anomaly because it gives the lower classes hope and reduces discontent. This is actually the reason why the only Western country to endure a Marxist-based revolution was Russia, and also why it failed so spectacularly (aside: Karl Marx was an absolutely brilliant guy who would have hated everything that Communism has become). In Russia, the elite structure did not have a mythos to contain popular unrest at social disparity, and it result in a revolution (that made things worse). Marx actually predicted the countries likely to switch to a communist system were Britain and Germany, and the entire premise of communism was based on the assumption that the country would be industrialized. Instead, however, Britain and Germany evolved the "middle class," a class structure which was entirely unheard of prior to the late 1850s.
The middle class in the United States is actually the result of that American Dream mythos we were talking about. Poor people do not live with the hope of entering the upper classes (the 2% of the population that controls 80% of the wealth in a Western nation), but rather they aspire to the middle class. Middle-class folks, on the other hand, aspire to a sub-divide frequently referred to as the Upper-middle class (typically this encompasses the income bracket of $300,000 to $5000000 gross family income). The class system in the United States is entrenched based on finances, rather than influence, but there is also a social component that is derived from it and creates an invisible ceiling on upward mobility.
The more the rich consolidate their wealth, the more legal influence is directed toward the maintenance of it. This also serves to produce limits on upward mobility and increase income disparity in all social classes except the upper class, as any legal tools that benefit the maintenance of wealth tend to be to the detriment of wealth accumulation (through no intent, it just tends to work out that way). So it's not a case of the rich sitting down together and scheming how to keep the masses poor, but rather an attempt to keep themselves rich. However, the American Dream myth continues to be propagated to reduce social upheaval. This last year is truly the closest we've come to revealing the truth wealth disparity in Western nations as the finances of the upper classes were exposed when financial institutions collapsed. You will, however, note how quickly the outrage over corporate bonuses has diminished and been swept out of the spotlight, and how no real revision to these practices has occurred.
Like I said, the strongest predictor of your income level is the income level of your parents. Class mobility is exceedingly rare, despite the fact that the American Dream myth is pervasive.
Incidentally, I should mention that, politically-speaking, my beliefs are virtually neutral on a left-right political scale, but skewed heavily towards libertarian principles. I'm a student of sociology, so I'm quite familiar with the writings of Mill, Marx, Durkheim, Foucault, Adam Smith, and others. Don't make the mistake of thinking that I'm some "Liberal" (as the term has become demeaning in the United States) hack that ideologically believes in nothing but socialism. Individual responsibility in society should be paramount, but the reality is that individuals are responsible for very little when it comes to their social status. Anecdotes of bankruptcy actually support that, as we are all conditioned to aspire outside our actual means.
The problem with self-proclaimed "conservatives" today is that the majority don't actually understand what conservativism versus liberalism is. Politically, I vote Conservative; ideologically, I associate with liberalism - as did virtually all of the founding fathers of the United States. People get all wrapped up in political ideology and then tack emotions to the idea of the Unites States as the great capitalist republic, but the truth is that the founding fathers weren't even capitalists in the modern sense of the word; Washington, Franklin, and Jefferson were fellows of the great liberal thinkers, and actually incorporated their ideals into the US Constitution. The zealous ideals of modern conservatism are actually what a lot of them stood squarely against.