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If wealth causes wealth, why don't dynastic fortunes even keep up with inflation? The Kennedys are poorer than they were fifty years ago, the Rockefellers are p

If wealth causes wealth, why don't dynastic fortunes even keep up with inflation? The Kennedys are poorer than they were fifty years ago, the Rockefellers are poorer than they were 70 years ago, the Du Ponts have long since peaked, the Mellons are pretty marginal, etc., etc., etc. "Although education can cause wealth in some cases (and only in the "developed" world at that) in most cases wealth is passed down generation to generation." Empirically false. The US real GDP has more than doubled in the last thirty years, so half of our total wealth didn't even exist a generation ago.

pchristensen 19y ago
I agree. Wealth begets wealth, but unearned wealth begets expensive taste :) Looking at the uberwealthy is deceptive, because they're a product not only of their own skill and ambition but the circumstances where they made the fortune. 5 years earlier or later and Bill Gates wouldn't be a billionaire (ditto most computer billionaires - they were the right person in the right window of time). They are outliers, black swans, etc. Hard to make theories based on them. If you look at (to draw an arbitrary line) people making more than $100,000/yr, I'll bet they are either a) business owners or b) highly educated (college and above).
wumi 19y ago
For example, 44% of all STEM degrees (Science, Technology, Engineering, and Mathematics) are going to foreign nationals, who comprise only 10% of all students studying domestically, yet that number is not reflected in the world-wide distribution of wealth. As the average person becomes more educated, there are and will be other barriers to wealth (isn't it not what you know, but WHO you know?) In fact, I would say Y Combinator recognizes and institutes those very principles: offering potential participants a network of expertise, mentoring, and access to venture capitalists the recipe for success doesn't seem to be based on education, or knowledge, but on wealth, and the proximity to that wealth. If you look at all these recent tech-made millionaires, one thing is strikingly similar: they knew someone wealthy who chipped in large amounts of cash. Do you think a Ph.D, or even a guy with a bachelor's half-way across the world will have access to this wealth (monetary or otherwise)? I don't think so.

pchristensen 19y ago

I agree. Wealth begets wealth, but unearned wealth begets expensive taste :) Looking at the uberwealthy is deceptive, because they're a product not only of their own skill and ambition but the circumstances where they made the fortune. 5 years earlier or later and Bill Gates wouldn't be a billionaire (ditto most computer billionaires - they were the right person in the right window of time). They are outliers, black swans, etc. Hard to make theories based on them. If you look at (to draw an arbitrary line) people making more than $100,000/yr, I'll bet they are either a) business owners or b) highly educated (college and above).

wumi 19y ago

For example, 44% of all STEM degrees (Science, Technology, Engineering, and Mathematics) are going to foreign nationals, who comprise only 10% of all students studying domestically, yet that number is not reflected in the world-wide distribution of wealth. As the average person becomes more educated, there are and will be other barriers to wealth (isn't it not what you know, but WHO you know?) In fact, I would say Y Combinator recognizes and institutes those very principles: offering potential participants a network of expertise, mentoring, and access to venture capitalists the recipe for success doesn't seem to be based on education, or knowledge, but on wealth, and the proximity to that wealth. If you look at all these recent tech-made millionaires, one thing is strikingly similar: they knew someone wealthy who chipped in large amounts of cash. Do you think a Ph.D, or even a guy with a bachelor's half-way across the world will have access to this wealth (monetary or otherwise)? I don't think so.