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Interesting point. One thing that speaks for the relative harmlessness of hereditary wealth is, what happens when it gets passed on to an insane/idiotic/psychop

Interesting point. One thing that speaks for the relative harmlessness of hereditary wealth is, what happens when it gets passed on to an insane/idiotic/psychopathic heir. In these cases, it normally gets rapidly redistributed, as the heir wastes their fortune. In the case of normal 'power', it doesn't get really redistributed, so everybody has to deal with Emperor Caligula.

coldtea 8y ago
>Interesting point. One thing that speaks for the relative harmlessness of hereditary wealth is, what happens when it gets passed on to an insane/idiotic/psychopathic heir. In these cases, it normally gets rapidly redistributed, as the heir wastes their fortune. We are past that now. Now we have advisors, funds, elite accountants, and all kinds of dead easy ways to invest and keep huge wealth long term, for even the most inane person. Plus those people are not accountable to anyone. It's not like a hated heir of a royal who has to tread lightly anymore, lest the senate or the people take them down... In fact, inane people can even make a great fortune from scratch in this era, what with the various famous-for-being-famous celebrities...
- agent008t 8y ago
  Wrong. Keeping wealth long term is difficult. 1. Advisors and accountants do not own the wealth - you set the goals. If you want to spend it or mismanage it, they are not going to stop you. 2. The wealthier you are, the more difficult it is to maintain the real value of your wealth, in general. 3. If you have 3 children, they have 3 children and so on, and you split your wealth equally among your children, even a billion turns into only 5 million within 5 generations - and that is if they manage to maintain its real value over time. And if they do manage it cleverly and get to keep the real value of the wealth? Great! Society is better off, because that means they allocated capital productively within our society, making the economy more efficient.
  - coldtea 8y ago
    While this was quite common (money being squandered after several generations), it's not necessarily as common today among the ultra-rich. Among the upper middle class, yes, it's common to happen. E.g. maintaining the "real value" is not as much of problem for people having tens of billions (as we increasingly see today). Even if the value drops, they're still multi-billionaires. And diversification strategies today span the globe. And the "3 children inheritance diffusion" problem is easy to solve: rich people have less kids today than historically. There's also that: https://qz.com/694340/the-richest-families-in-florence-in-1427-are-still-the-richest-families-in-florence/ https://qz.com/694340/the-richest-families-in-florence-in-14...
    - agent008t 8y ago
      1. If a family that gets wealthy, stays wealthy, that's great - the number of wealthy families can only go up, so over time there will be more and more wealthy families. 2. If, on the other hand, there is some survivorship bias going on there and wealth rotates a lot, and some members of wealthy families keep their wealth, that is not as good an outcome but it is still not so bad, as it suggests that as a family's culture degrades their wealth will likely degrade as well.

coldtea 8y ago

>Interesting point. One thing that speaks for the relative harmlessness of hereditary wealth is, what happens when it gets passed on to an insane/idiotic/psychopathic heir. In these cases, it normally gets rapidly redistributed, as the heir wastes their fortune. We are past that now. Now we have advisors, funds, elite accountants, and all kinds of dead easy ways to invest and keep huge wealth long term, for even the most inane person. Plus those people are not accountable to anyone. It's not like a hated heir of a royal who has to tread lightly anymore, lest the senate or the people take them down... In fact, inane people can even make a great fortune from scratch in this era, what with the various famous-for-being-famous celebrities...

agent008t 8y ago
Wrong. Keeping wealth long term is difficult. 1. Advisors and accountants do not own the wealth - you set the goals. If you want to spend it or mismanage it, they are not going to stop you. 2. The wealthier you are, the more difficult it is to maintain the real value of your wealth, in general. 3. If you have 3 children, they have 3 children and so on, and you split your wealth equally among your children, even a billion turns into only 5 million within 5 generations - and that is if they manage to maintain its real value over time. And if they do manage it cleverly and get to keep the real value of the wealth? Great! Society is better off, because that means they allocated capital productively within our society, making the economy more efficient.
- coldtea 8y ago
  While this was quite common (money being squandered after several generations), it's not necessarily as common today among the ultra-rich. Among the upper middle class, yes, it's common to happen. E.g. maintaining the "real value" is not as much of problem for people having tens of billions (as we increasingly see today). Even if the value drops, they're still multi-billionaires. And diversification strategies today span the globe. And the "3 children inheritance diffusion" problem is easy to solve: rich people have less kids today than historically. There's also that: https://qz.com/694340/the-richest-families-in-florence-in-1427-are-still-the-richest-families-in-florence/ https://qz.com/694340/the-richest-families-in-florence-in-14...
  - agent008t 8y ago
    1. If a family that gets wealthy, stays wealthy, that's great - the number of wealthy families can only go up, so over time there will be more and more wealthy families. 2. If, on the other hand, there is some survivorship bias going on there and wealth rotates a lot, and some members of wealthy families keep their wealth, that is not as good an outcome but it is still not so bad, as it suggests that as a family's culture degrades their wealth will likely degrade as well.