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Personally I think the '3 stylised models' that the author paints as being the possible sources of high inequality are somewhat wide of the mark. The majority
by richmarr 11y ago
Personally I think the '3 stylised models' that the author paints as being the possible sources of high inequality are somewhat wide of the mark.
The majority of 1%ers are there because their parents were 1%ers, and western society is broadly set up to allow those with large amounts of capital to protect it and use it to gain advantage & accumulate more capital. It's not necessarily a bad thing, except where those with capital can use it to bias the system in their favour.
An example is access to education. In the US, the lowest ability quartile of high earners now has a better chance of graduating collage than the highest ability quartile of low earners. From memory it was something like 31% to 29% respectively. The real shame there is the 71% of high-ability low-wealth kids who can't graduate college but really should. That value is being squandered.
However... inequality itself is a trailing indicator of other indicators relating to social cohesion, so it's possible that addressing inequality alone won't have a lasting effect. Robert Putnam is an interesting source on this stuff if anyone is interested.
- bufordsharkley 11y agoYes, I couldn't agree more. Generational passing-down of wealth (largely a result of rents that can extracted from resources kept within one's family) is completely elided in the article.
- pc86 11y agoIntergenerational wealth transfer accounts for almost none of today's inequality. The vast majority of it is gone within a generation or two.[0] [0] http://time.com/money/3925308/rich-families-lose-wealth/ http://time.com/money/3925308/rich-families-lose-wealth/
- richmarr 11y agoIt's not contradictory for a majority of wealthy people to be wealthy because of their parents, and for 70% of wealth to be lost by the 2nd generation, even if both sets of stats were accurate and comparable. What is contradictory is your assertion that the 1st generation wealth, and the remaining 30% at the 2nd generation, translates to "almost none".
- jhundal 11y agoI see this figure around a lot, does anyone have a pointer to the actual study? I got as far as a book called "Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values", no detail on the actual study.