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The 'glass floor' keeps the children of the rich at the top
- tengbretson 7y agoIt's not obvious to me that downward social mobility and upward social mobility are the same things. Lamenting the fact that Michael Dell's son "just hasn't become poor like me yet" sounds like sour grapes. This mindset that in order for people like me to make it people at the top have to fall only makes sense if you consider the economy a fixed-sized pie. It's obviously not.
- qazpot 7y agoIt is HuffPo, what do you expect ?
- clairity 7y agothe american dream is built on the ideal (myth?) of meritocracy, so it's not surprising that people want the world to adhere to that ideal: bright and hardworking people rise, dull and lazy people fall. we expect it to work both ways. it's not about the pie.
- tengbretson 7y ago> bright and hardworking people rise, dull and lazy people fall I'm with you on the first part where hardworking people rise, but I don't think the second part necessarily follows. Consider the actual reason at the heart of why we work to accrue wealth in the first place. We try to accrue wealth so that our failings and misfortunes don't set us back. If we accrue $300 dollars we don't lose our apartment when we have to pay for a flat tire. If we accrue $30,000 maybe we gain the confidence to tell our boss to get lost if they ask us for too much overtime. If we accrue $3 billion we can afford to take some risks and still land on our feet. That's the point of being wealthy!
- clairity 7y agoso if you're dull and lazy, but have unearned wealth, you should never fail? why do you want to believe so hard that wealthy people should never lose their wealth in any circumstance? it's a classic misallocation of resources, and how monarchies have time and again fallen into despotism, decay, and eventually overthrow. it's why democracy and capitalism came into being in the first place.
- theflyinghorse 7y agoIt's more about questioning the system in which after certain point your bad decisions have no consequences like losing your wealth and becoming poor for instance. It's not about, and I don't see anyone arguing the point, me being unable to move up the chain without someone moving down.
- tengbretson 7y ago> It's not about, and I don't see anyone arguing the point, me being unable to move up the chain without someone moving down. It's right here in the article > Rather than sending our most brilliant minds up the income ladder, America is ensuring that the wealthy, no matter their mediocrity, retain their grip on the highest rung The assumption the author is making is that both things (sending our most brilliant minds up the income ladder AND the wealthy retaining their grip on the highest rung) cannot be true.
- deleted 7y ago[deleted]
- GauntletWizard 7y agoIn most of the same articles - American cannot be a meritocracy, social mobility isn't 100%! The assumption that a perfect meritocracy would be shown by your income having no correlation to your parents is about as opposite true as can get. If there is any heritability to ability/"merit", that will show up as correlation between parent and child incomes. "Meritocracy" is a poor term regardless, because I have a different definition of "merit" than you do, and so do the authors. I've yet to see an article lamenting inequality that even attempts to define "merit"
- iamasoftwaredev 7y agoExcept Harvard has limited slots and the failsons of the rich buying in takes away a spot from someone who is actually competent and driven.
- nicoburns 7y ago> This mindset that in order for people like me to make it people at the top have to fall only makes sense if you consider the economy a fixed-sized pie. It's obviously not. It's not over the long timescale, but over the short-term it is. Rich kids frittering money away really is preventing others who may need that wealth more from having access to it.
- tengbretson 7y agoI'm not sure what you mean by "having access" to it. What does it mean to "have access" to wealth? Do you mean offering them financing with favorable rates?
- nicoburns 7y agoNope, I mean owning or having control over money (which is effectively a share of societies productive output). The alternative to rich people (in this case kids) having control over this money, is to tax them. That money could then be redistributed to others. The Universal Basic Income is a concrete proposal based around this kind of insight.
- gnicholas 7y ago> Lamenting the fact that Michael Dell's son "just hasn't become poor like me yet" My thoughts exactly. This isn't some generations-long dynasty, with a genius at the top and buffoons all the way down. This kid is literally one generation removed from the guy who made all the money. Even with an Elizabeth Warren-style wealth tax, there is no way that someone who grew up the son of a billionaire would not himself be very, very wealthy (unless his parents cut him off entirely).
- opencl 7y agoWhat makes the economy obviously not a fixed sized pie? Every dollar that Michael Dell's son has came out of somebody else's pocket.
- Andrew_nenakhov 7y agoWell, no. His father has honestly earned his fortune by creating a big business that employs thousands. I suggest you stop preaching this Marxist crap. I was born in the Soviet Union and I tell you what: countries built with such "Rob the rich, give back to the poor" mindset are extremely bad to live in.
- iamasoftwaredev 7y agoAs opposed to the US where it's rob the poor give to the rich and it's so wonderful?
- dang 7y agoWould you please stop posting unsubstantive comments and using HN for ideological battle, so we don't have to ban you again? If you'd please review https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and post in the spirit of this site, we'd be grateful. It's not hard to use HN as intended if you want to.
- iamasoftwaredev 7y agoIt's pretty hard to use it as you intend. Worst moderator ever.
- tengbretson 7y agoWhen that money came out of those people's pockets they went home with a computer that they obviously valued more than the money itself. By their own judgement they walked out of a store carrying more wealth than they walked in with. Michael Dell made himself wealthy but he made his customers even more wealthy.
- jimbokun 7y agoIt's more about wealthy incompetent idiots running everything into the ground and destroying our institutions, governments, and economy for everyone except them. Also, theoretically the economy is not a fixed pie, but for many years now it has been a fixed or shrinking pie for everyone not at the top of the income distribution.
- xhgdvjky 7y agomaybe they wouldn't be idiots if the top schools took more rich kids! (scarcasm... cue downvotes)
- xhgdvjky 7y agoNo doubt inequality is an issue, but this seems pretty harsh on Zach Dell. His ventures failed... most do. So he tried something else and got what sounds like a pretty reasonable job... 22 year old analyst at a big Corp... not that crazy. I know a few ex-founders who have gone to companies after their ventures failed (and they aren't heirs to bns). the tone of the article sounds like they want to see him go to debtors prison! also... yes... top schools are pandering to the rich. but how else do they offer scholarships? American gov't stays out of this (mostly), so it's up to the schools to make ends meet. the schools want to pay for many families, but to do so they need donors. I actually think that's better than only letting rich people attend (and not having scholarships). it's not a final solution, but in the big picture, it's a step forward.
- CydeWeys 7y agoSimilarly, I was briefly involved in a failed startup in college. We lost, at maximum, something like $20k. I gained a lot of experience doing it and came out of it much better off skills-wise, increasing my value to future employers. It would be absurd to count that experience against me; being involved in a startup in university really should count in your favor. They almost all fail anyway. But I don't come from obscene wealth so no one's gonna bother coming after me.
- deleted 7y ago[deleted]
- davidw 7y ago> how else do they offer scholarships With their massive endowments.
- imgabe 7y ago> And yet, despite helming two failed ventures and having little work experience beyond an internship at a financial services company created to manage his father’s fortune, things seem to be working out for Zach Dell. According to his LinkedIn profile, he is now an analyst for the private equity firm Blackstone. He is 22. I was rewatching Mad Men lately and it reminds of Peter Campbell. Early on, Peter screws up something badly and Don wants to fire him, but he can't because the firm owner Sterling explains, Peter comes from a wealthy family and his family connections bring business to the firm. Sounds like maybe the same thing? Even if Zach Dell just sat a desk and stared at a wall all day, he'd probably be invaluable because his father is a billionaire and he knows other billionaires and he can introduce them to the principals at the firm.
- notfromhere 7y agoIn the biz, its called a "relationship hire." Deutsche got caught hiring the dumb kids of Chinese bureaucrats to win over business recently, but it happens basically everywhere.
- nradov 7y agoMost major financial services companies also make sure to hire a few minor members of the Saudi royal family for the same reason.
- noobiemcfoob 7y agoIf society could admit that this networking has value, instead of trying to awkwardly access it without naming it, I think we would all be a little saner. A person's social network -- particularly when they know billionaires -- is inherently valuable in and of itself. Even in more meritocratic engineering firms, being able to refer competent engineers is often financially rewarded. So let the elite monetize their social networks and let us stop having to not point out they are blatantly bad at their proclaimed job.
- AnimalMuppet 7y agoBy the way, this is why a Harvard education is more valuable than one from Random State University - you get much more valuable contacts there, even if the education is no better.
- spking 7y ago> In 2016, researchers sent hundreds of résumés to high-end law firms. They were identical in degrees and grade-point averages, but researchers tweaked the extracurricular activities to make some candidates seem rich (sailing, classical music) and others seem poor (track and field, country music). At the end of the study, upper-class men had been invited to 12 times more interviews than lower-class men. I think that says a lot more about "high-end law firms" than it does about American society at large.
- xhgdvjky 7y agopotentially OT: I wonder how they put music on a law resume edit.. and for that matter sports... uni groups maybe?
- np_tedious 7y agoNew grads naming their club involvements during college is pretty commonplace, esp if they held leadership position in them
- tyingq 7y agoAn "interests" area is somewhat common as well. Also awards..."NCAA rowing championship" or similar.
- Ancalagon 7y agoSide note: I had no idea track and field was considered a “poor” activity!
- ulises314 7y agoThe whole idea of making amounts of money beyond your expense capacity is so your dumbs kids thrive, this is no a problem with American society, but is deeply ingrained in capitalism itself.
- natechols 7y ago"Deeply ingrained in human nature" is a more accurate statement, unless you believe that socialist economies are magically immune to nepotism.
- dmix 7y agoThis is what people far often don't get, the alternatives are almost always much worse. The best we can do is try to fix what we have and try to be better. Naming and shaming like this article is part of that process. Throwing the baby out with the bath water over a few bad actors has consistently failed and left people far, far worse off. You don't even need to look far back in history to see examples, South American countries were still obsessed with the Bolivarian idea of "capitalism is the root problem" nonsense well into the 2000s... until they ran out of money which masked the unsustainability of their alternative, like we're now seeing in Ecuador and other countries.
- iamasoftwaredev 7y ago> like we're now seeing in Ecuador and other countries. The protests in Ecuador are about IMF austerity measures. The sort of cruel anti-working class policy we've been seeing peddled by neo-liberals for a long time. The sort of policy that is now seeing a resurgent fascism and socialism.
- dmix 7y agoEveryone loves to blame the austerity measures. Not the people or ideology that got them into the mess in the first place. I'm sure the government can find better ways to pay the money back but it's still a massive burden put onto an already struggling economy which didn't have to exist.
- throwaway713 7y ago> The app failed almost instantly Hell, at least he’s trying to do something. I can’t imagine many billionaire’s children trying that much.
- zip1234 7y agoI would expect nothing less of people than to help their kid succeed in life. It seems like parents are spending money as expected. Of course, the article doesn't look at what happens to those kids once the parents are gone or what happens to the grandchildren.
- whack 7y agoA lot of the comments here seem obsessively focused on Zach Dell. I can understand why, the author is (perhaps unfairly) hard on him. But the rest of the article seems to be ignored completely, and that's where the real meat of the article lies. We live in a society where more and more institutions, both public and private, are increasingly becoming dominated by personal connections and family wealth. We are seeing this in academia, in government, and in corporations. I missed the memo on when meritocracy became a bad word, but the children of the wealthy and privileged are taking full advantage of meritocracy's retreat. There is no one solution that will fix everything, just like there doesn't exist any one drug that can cure cancer. But with sustained effort along many different fronts, we can work towards restoring social mobility and equality of opportunity for all.
- JMTQp8lwXL 7y agoThere will always be a place for meritocracy because, at lower levels of the employment ladder, someone competent will need to get something done in order to operate a profitable company. You can't have straight incompetence from the C-suite down without eventually running a business into the ground. Although family money gives unfair advantages, you can make a nice life for yourself and earn above the median wage through acquiring in-demand skills through the meritocratic system. It isn't perfect, but it at least gives those who don't come from money --which is by and large, most people-- a chance at a decent life.
- danharaj 7y agoAnother way of seeing it is that we are all denied a decent life unless we are competent and sell our competent labor to uphold a system that keeps idiots at the top.
- JMTQp8lwXL 7y agoThis supposes that all executive leadership is incompetent. That isn't the case. There are companies that, if you replaced the competent executives with idiots, the company would fall apart.
- invalidOrTaken 7y agoGood! Good! At least someone has some security...
- api 7y ago"Glass floor" is a brilliant concept. You can reach a point at which you can simply take a lot of money, park it in index funds, and spend the rest of your life drooling and your wealth will grow. If you are just minimally smart enough to not spend your nest egg there is not much you can do short of criminal activity that will bring you down. Of course it's all relative. If you live in a developed nation with a social welfare system there is a much lower but still above starvation and death "glass floor" below which it is hard to fall.
- blunte 7y agoIt's worth remembering that these rich kids don't have a perspective other than the one they grew up with. Hating on them specifically isn't helpful. The flower shirt guy is probably really trying, and he probably really believes that his hard work and passion is driving his success (assuming he's still doing that thing). But it's hard to ignore the possibility that his success is just based on connections, financial backing (which means no lean times, no failure moments, etc.).
- iamasoftwaredev 7y agoThat's because people like Michael Dell have truly absurd sums of money. 30 billion dollars. His failson can piss away money all day every day and never even make a dent.
- eadmund 7y ago> His [son] can piss away money all day every day and never even make a dent. His son is 22. Life expectancy right now is about 93 I think, so he has 71 years of life left. Ignoring interest, he could spend $1,000,000 a day every day for the rest of his life. Yeah, he could spend an awful lot of money. Must be nice!
- AnIdiotOnTheNet 7y agoChrist, I had to actually sit here for a moment and imagine how I could even possibly manage to spend $1M a day. I can only think of two things: 1) hiring people to work on things I know are unprofitable but want done, and 2) giving it away.
- selimthegrim 7y agoIt's not (all) his money
- madengr 7y ago“Having a college degree is most beneficial to the kids who aren’t that smart,” So lets just water things down so the "kids who aren’t that smart" can get a college degree.
- iamasoftwaredev 7y ago> Eight of the nine Supreme Court justices graduated from just two law schools. The latest two went to the same high school.
- dpflan 7y ago"One of Reeves’ studies found that 43% of the members of upper-class households had skills and intelligence that predicted lower incomes." Wow, that is a large percentage! There are some interesting data points, but that percentage stands out to me. There must be some sort of evolutionary-economic angle to this.
- xyzzyz 7y agoThis is simply regression towards the mean. Same reason why children of two tall parents, while taller than general population, will on average be shorter than their parents.
- headmelted 7y agoI'm not sure what's controversial here. This is capitalism. Get money put away and your whole family will accumulate wealth at (give or take) 8% per year (and thus stay rich), save for gross incompetence and catastrophically bad bets. Short of replacing capitalism itself this will always be the case.
- AnIdiotOnTheNet 7y agoActually you could just remove the notion of "family" and it would go away too. If you don't raise your children and never know who they are, you can't give them any money.
- headmelted 7y agoThis is objectively true but it broke my brain.
- TimTheTinker 7y agoThis paragraph captures what I think is the most worthwhile substance in the article: > “The greater the inequality, the greater the impact on opportunity,” Fishkin said. “There’s a self-fulfilling class anxiety among the middle- and upper-middle class because they sense that the spaces are scarce now. There are fewer secure jobs. And the scarcer they are, the more valuable they are.” But in my opinion, it's a bit much to call "class anxiety" a self-fulfilling prophecy for middle-class people, since most of what we're seeing economically is due to the decisions of those in power -- either government or corporate (i.e. not the middle class) -- especially around international trade and outsourcing.
- exabrial 7y ago> And yet, despite helming two failed ventures and having little work experience beyond an internship at a financial services company created to manage his father’s fortune, things seem to be working out for Zach Dell I have a really hard time believing someone else's fortune means that I cannot also be fortunate. I find the premise of articles like this sad. It's riddled with overtones of jealously, mediocracy, and comparison (which is the thief of joy).
- csb6 7y ago> I have a really hard time believing someone else's fortune means that I cannot also be fortunate I don’t. There is a limited amount of wealth in the economy at any given moment. There is also a limited amount of well-paying jobs, which can lead to social mobility, and there is also a limited amount of wealth for investing in new ventures. Since these things are finite, one person being 20x richer than you or me means they are sitting on money and taking opportunities that others cannot. Time and money are not infinite because Earth’s resources are not infinite. And yes, Zach Dell alone being wealthy or taking a lucrative job does not substantively affect everyone’s wealth. He is just one person. But I hope you can realize that the author is employing a literary device known as an anecdote or an example to start off their piece in order to illustrate a larger issue, which is that the wealthy are able to get opportunities and more wealth just by virtue of what family they were born into. Whether this is a problem or not is up to you, but I think reducing the article to “overtones of jealously” and “mediocracy” is misleading, although in an unintentionally amusing way; the author is actually calling out the blatant “mediocracy” that is inherent to privilege in our so-called merit-based society. I think this is a valid issue to write about and discuss.
- exabrial 7y agoBold claim for a person with potable running water, internet access, flushable toilets and living above the poverty line.
- csb6 7y agoThat’s a pretty low bar in a world where a handful of people have literally hundreds (if not more) of times the amount of wealth as you and I, and yet still a significant portion of Americans live below or near the poverty line. I contend, not unreasonably, that we can do better than internet access, drinkable water, and other basic necessities of post-industrial living and still have plenty of inequality to make rich people feel superior or whatever. The U.S. economy is tremendously more productive than it was even 20 years ago, but have wages and prosperity risen proportionately among the lower and middle classes over that timespan? No. Yet wealthy children are able to exploit their privilege to get positions that “ladder climbers” could have gotten. But yes, let us thank our benevolent masters, who throw pennies from their high castles at us commoners as we bow and scrape for their favor. Nothing to see here, folks, poor children get potable water and rich children get seven figure salaries! What inequality and nepotism do you speak of?
- munificent 7y agoI haven't been able to find the source since but I learned in a philosophy class ages ago that one of the classic philosophers (Plato? Aristotle?) said that a society can never be perfectly fair and just. * To be just, parents should be free to provide for their own children. * To be fair, every person should be given an equal opportunity to succeed. These are fundamentally in opposition: every extra dollar a parent gives to their child is an unfair (in the sense that the child only earned by virtue of "choosing" that parent) benefit. This was one of those moments that really turned on a lightbulb in my head when I think about how a society collectively raises each generation. I now think that a healthy society shouldn't "solve" this problem, they should just try to find the sweet spot that balances these two opposing forces. And, interestingly, this is something that really affects me in a material way. My kids go to a public elementary school. My taxes fund schooling for all children in the area. The school also does donation drives and other things that let me opt in to giving money to benefit all children. But I also can choose to spend money on private classes, tutors, and other extra-curricular activities that only benefit my own children. So I have a very direct set of levers where I can choose my own particular moral position on this continuum. Personally, my feeling is that we should mostly lean towards justice and equal opportunity. Most resources spent towards educating children should go in ways that benefit all kids. Fewer private schools, more public funding. My argument is that being a child of wealthy parents is already a tremendous ambient benefit. The child has a more comfortable, stable home environment, and fewer worries around material needs. They are more likely to get quality, prompt mental and physical healthcare. All of those give them a huge advantage compared to other kids.
- gandreani 7y agoThanks for sharing this. I had similar thoughts/feelings on the philosophical perspective on providing for your children and this is really well presented.
- southerndrift 7y agoThis assumes that parents know what's best for their children. Is it just to the children that parents can spend a fortune on miseducating their children? (The Dutch family wasn't rich, but there can be seen that parents can totally go astray. [1]) Being a rich son (70% work for their father according to a linked study in the article) is essentially like being Tim Cook. It's a nice job that pays handsomely but who has the character to walk away and do what they really want to do? This links back to the beginning of my comment: do rich parents prepare their children for that move or do they try everything to lock their children into their heritage? This is not an argument for standardized schooling. I am just wondering if being a rich kid actually comes with a huge price. [1] https://news.ycombinator.com/item?id=21260112 https://news.ycombinator.com/item?id=21260112
- everdrive 7y agoEven on a level playing field, people would occupy a bell-curve. There will always be have-nots, at least as long as they're being measured relative to the haves. And to be sure, the have-nots will always be able to claim some disadvantage, even in a "perfect" meritocracy. Your skill and personality provide for opportunities, which are the groundwork for future opportunities. ie, excellent performance in school allows for a scholarship to the best universities. Excellence at the best universities lines you up for your pick of the litter to the best jobs. The best jobs are filled with the best people, and allow for 1) far better networking opportunities, and 2) far more experience and opportunities for advancement, which in turn provides for even better jobs. I'm certainly NOT suggesting that the world is currently fair, or devoid of favoritism. I just want to note that even in a true meritocracy there will be a stringent class divide. It's almost unavoidable, unless people with less skill are afforded the same opportunities as people with more skill. In this sense, it would be hard for a theoretical "perfect" meritocracy to survive multiple generations. The most talented people would quickly accumulate wealth and prestige.
- rtkwe 7y agoThe issue is you're not really measuring skill at any step just past performance which is what leads to the feedback loop of privilege begetting privilege.
- mbostleman 7y agoI don't see the connection as to how a rich kid not being able to create market value as an entrepreneur keeps a poor kid from providing value as an entrepreneur. Is there a fixed number of ideas and the rich kids with poor insight are using them all up leaving none for the less fortunate?
- RickJWagner 7y agoRich, undisciplined kids go on to be big spenders who need to hire people to cater to their needs. What kind of 'answer' could there possibly be? The system works, as it always has. The huge majority of wealthy families squander it all away in a few generations. It's a self-correcting problem.