-Americans: "Americans, while occasionally willing to be serfs, have always been obstinate about being peasantry"(Fitzgerald, I don't remember the page number, but it is in Chapter 5), basically we will work for the rich, but being working-class is obsurd to think about.
-American Dream: ?
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Essentially, F. Scott Fitzgerald satirizes Americans--especially those on the East Coast--of his time who have become a sordid bunch, focusing on the acquisition of wealth as a measure of social status and success. Knowledgeable of the original ideal of the American Dream as having left an impoverished Ireland or a civil war-torn Italy or other economically deprived conditions in Europe in order to own land and become financially independent and provide a better life for one's children, Fitzgerald perceived the dream of the Jazz Age as a perversion of the original.
Americans tend to think they are always working toward the next thing. When they work for someone else, they never consider themselves less than the person, because they feel like they will be there too someday. It's the American dream.
The idea in the quotation seems, to me, to relate to the idea that perception or pretense plays an out-sized role in the American mind. Serfdom and peasantry are not all that different, really, yet one is perceived to be an important and offensive title/description...
Materialism is closely aligned with this kind of emphasis on outward appearances.
Overall, I think that Fitzgerald is saying that the American Dream is an absurdity. He is saying that Americans only care about material things and have lost their sense of moral purpose. He thinks that we are sort of chasing some sort of material utopia that we think will make us happy even though it really won't.
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