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Contrast between a growing/innovative/free society and a stagnant/authoritarian one. Key difference is meritocracy -- can competent newcomers displace incumbent

Contrast between a growing/innovative/free society and a stagnant/authoritarian one. Key difference is meritocracy -- can competent newcomers displace incumbents? This is mirrored at smaller scales -- good leaders of healthy teams want newcomers to grow and learn and surpass them. Bad leaders are afraid of failure and don't want their people to fundamentally grow and change. Likewise good parents want their children to surpass them; bad parents harass and belittle and shame. When Apple makes it painful to build sizable businesses on their platform, this is intentional stagnation to maximize profit. When billionaires run think tanks, fund political campaigns, and rig laws to increase their power at the expense of the common good, this is intentional stagnation to maximize profit.

eanzenberg 6y ago
When you look at the data, most millionaires and billionaires don’t come from family wealth. Don’t misunderstand, I’m sure they’ve had “leg-ups” like going to private school, or having an SAT tutor, or having a professor at a top20 school as a family friend. So, we don’t really have stagnation of wealth.
- mthoms 6y ago
  I'd be interested in seeing this data. Do you have a source? IIRC, this common refrain is based on a study that required wealthy participants to self-report whether they made their money or inherited it. Every "millionaire" seems to think they're self made, after all.
  - logicprog 6y ago
    The percent of totally self-made rich seems to be around 56%, and partially self-made is at around 30%. Note also that the proportion of self-made rich people is actually growing, even as the amount of wealth the rich has has decreased a bit[1] (methodology of the quoted study[2]). Also take a look at this intergenerational income mobility chart in figure 3 of a Pew study[3]; it says that people are "likely" to stay poor, but that's actually less than half, so I would say it's more like "unlikely." [1]: https://www.cnbc.com/2019/05/10/wealthx-billionaire-census-majority-of-worlds-billionaires-self-made.html https://www.cnbc.com/2019/05/10/wealthx-billionaire-census-m... [2]: https://www.wealthx.com/approach/methodology/ https://www.wealthx.com/approach/methodology/ [3]: https://www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs_assets/2012/pursuingamericandreampdf.pdf https://www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs_a...
    - entropicdrifter 6y ago
      That Pew study you cited is from 2012. It's an interesting read, for sure, but do you have any more recent studies? It seems that some factors that dampen economic mobility have been worsening since then[1] and the wealth gap has grown significantly since then, especially between the top 5% and the rest of us[2] [1] https://www.pewtrusts.org/en/research-and-analysis/reports/2018/04/american-families-face-a-growing-rent-burden https://www.pewtrusts.org/en/research-and-analysis/reports/2... [2]https://www.pewsocialtrends.org/2020/01/09/trends-in-income-and-wealth-inequality/ https://www.pewsocialtrends.org/2020/01/09/trends-in-income-...
  - slg 6y ago
    35% of the Forbes 400 list was born into a middle class or lower household. 22% inherited up to $1m. 12% inherited between $1m and $50m 7% inherited more than $50m. 21% inherited enough for that alone ensure they are on the Forbes 400 list. The first bucket is clearly self made. The last two buckets are clearly not self made. Depending on your definition of "self made" that would leave somewhere between 35% and 69% of these people as self made. https://ips-dc.org/the_self-made_hallucination_of_americas_rich https://ips-dc.org/the_self-made_hallucination_of_americas_r...
    - sharkmerry 6y ago
      >35% of the Forbes 400 list was born into a middle class or lower household. Just to provide a little more clarity. Those numbers are from 2012. In 1997, 31% were in born "in the batters box" However, there is a wide range of circumstances in the batter box. Defined as: "individuals and families whose parents did not have great wealth or own a business with more than a few employees." Perhaps we differentiate on self-made, but some of those 35% I would not consider self-made either.
      - eanzenberg 6y ago
        I think focusing on “self-made” is a red herring. No one is truly self-made. The point is, a good portion of the top wealthy people were not born into families of the top wealthy people, 1 generation ago.
        slg 6y ago
        It depends on definitions of "good portion" and "top wealthy people", but I don't think the numbers show the conclusions you are drawing from them. The numbers vary by year as people enter or drop out of the Forbes list. However generally speaking you can probably divide that list into rough thirds. One third is the first generation experiencing any wealth. One third was born into enough wealth that they likely would never have to work a day in their life, except they decided to work and were able to compound that wealth into a obscene amount of money. The last third was already born with that extravagant wealth and may or may not have done anything to increase it. Back to the topic at hand, a wealth tax would not have prevented those first two-thirds from earning their fortune. It would only negatively impact the starting position of that last third. The primary impact of a wealth tax would be to decrease generational billionaires which serves to increases the meritocracy.
  - deleted 6y ago
    [deleted]
- ihm 6y ago
  To the sibling commenters, even if 100% of billionaires did not come from family wealth, that doesn't mean they should exist. A tiny rotating ruling class is no different from a hereditary one from the point of view of everyone else in society.
  - zozbot234 6y ago
    A "rotating" ruling class is a lot more contestable than a hereditary one. That makes it at least potentially more meritocratic. (It could also theoretically be less meritocratic, depending on how power is contended in any given case. But typically, the "hereditary" case involves battle-axes, dark intrigues and treacheries, which is the polar opposite of actual merit.)
    - nwienert 6y ago
      It’s not very democratic. Someone was in the right place at the right time as much as they earned it, do they then deserve to have basically 100s of orders of magnitude more influence for their life? Just doesn’t add up.
- DylanDmitri 6y ago
  Shorter timescale than generational. Once anyone becomes a billionaire incentives push them towards extracting rents rather than creating wealth. Rich founders who get pushed out often start new companies (Pixar, SpaceX, Square, etc..) Rich founders who stay waste their talent & access to capital on moat digging. Why did Gates, after inventing personal computing, spend the 90s killing Netscape and stagnating browser standards? The trend of wealthy founders leaving their companies to become mentors/investors for the next batch of startups is likely the biggest contributor to the ongoing success and prosperity of Silicon Valley.
  - WalterBright 6y ago
    > after inventing personal computing Not hardly. Gates just astutely got on the bandwagon that was already moving.

eanzenberg 6y ago

When you look at the data, most millionaires and billionaires don’t come from family wealth. Don’t misunderstand, I’m sure they’ve had “leg-ups” like going to private school, or having an SAT tutor, or having a professor at a top20 school as a family friend. So, we don’t really have stagnation of wealth.

mthoms 6y ago
I'd be interested in seeing this data. Do you have a source? IIRC, this common refrain is based on a study that required wealthy participants to self-report whether they made their money or inherited it. Every "millionaire" seems to think they're self made, after all.
- logicprog 6y ago
  The percent of totally self-made rich seems to be around 56%, and partially self-made is at around 30%. Note also that the proportion of self-made rich people is actually growing, even as the amount of wealth the rich has has decreased a bit[1] (methodology of the quoted study[2]). Also take a look at this intergenerational income mobility chart in figure 3 of a Pew study[3]; it says that people are "likely" to stay poor, but that's actually less than half, so I would say it's more like "unlikely." [1]: https://www.cnbc.com/2019/05/10/wealthx-billionaire-census-majority-of-worlds-billionaires-self-made.html https://www.cnbc.com/2019/05/10/wealthx-billionaire-census-m... [2]: https://www.wealthx.com/approach/methodology/ https://www.wealthx.com/approach/methodology/ [3]: https://www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs_assets/2012/pursuingamericandreampdf.pdf https://www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs_a...
  - entropicdrifter 6y ago
    That Pew study you cited is from 2012. It's an interesting read, for sure, but do you have any more recent studies? It seems that some factors that dampen economic mobility have been worsening since then[1] and the wealth gap has grown significantly since then, especially between the top 5% and the rest of us[2] [1] https://www.pewtrusts.org/en/research-and-analysis/reports/2018/04/american-families-face-a-growing-rent-burden https://www.pewtrusts.org/en/research-and-analysis/reports/2... [2]https://www.pewsocialtrends.org/2020/01/09/trends-in-income-and-wealth-inequality/ https://www.pewsocialtrends.org/2020/01/09/trends-in-income-...
- slg 6y ago
  35% of the Forbes 400 list was born into a middle class or lower household. 22% inherited up to $1m. 12% inherited between $1m and $50m 7% inherited more than $50m. 21% inherited enough for that alone ensure they are on the Forbes 400 list. The first bucket is clearly self made. The last two buckets are clearly not self made. Depending on your definition of "self made" that would leave somewhere between 35% and 69% of these people as self made. https://ips-dc.org/the_self-made_hallucination_of_americas_rich https://ips-dc.org/the_self-made_hallucination_of_americas_r...
  - sharkmerry 6y ago
    >35% of the Forbes 400 list was born into a middle class or lower household. Just to provide a little more clarity. Those numbers are from 2012. In 1997, 31% were in born "in the batters box" However, there is a wide range of circumstances in the batter box. Defined as: "individuals and families whose parents did not have great wealth or own a business with more than a few employees." Perhaps we differentiate on self-made, but some of those 35% I would not consider self-made either.
    - eanzenberg 6y ago
      I think focusing on “self-made” is a red herring. No one is truly self-made. The point is, a good portion of the top wealthy people were not born into families of the top wealthy people, 1 generation ago.
      - slg 6y ago
        It depends on definitions of "good portion" and "top wealthy people", but I don't think the numbers show the conclusions you are drawing from them. The numbers vary by year as people enter or drop out of the Forbes list. However generally speaking you can probably divide that list into rough thirds. One third is the first generation experiencing any wealth. One third was born into enough wealth that they likely would never have to work a day in their life, except they decided to work and were able to compound that wealth into a obscene amount of money. The last third was already born with that extravagant wealth and may or may not have done anything to increase it. Back to the topic at hand, a wealth tax would not have prevented those first two-thirds from earning their fortune. It would only negatively impact the starting position of that last third. The primary impact of a wealth tax would be to decrease generational billionaires which serves to increases the meritocracy.
- deleted 6y ago
  [deleted]
ihm 6y ago
To the sibling commenters, even if 100% of billionaires did not come from family wealth, that doesn't mean they should exist. A tiny rotating ruling class is no different from a hereditary one from the point of view of everyone else in society.
- zozbot234 6y ago
  A "rotating" ruling class is a lot more contestable than a hereditary one. That makes it at least potentially more meritocratic. (It could also theoretically be less meritocratic, depending on how power is contended in any given case. But typically, the "hereditary" case involves battle-axes, dark intrigues and treacheries, which is the polar opposite of actual merit.)
  - nwienert 6y ago
    It’s not very democratic. Someone was in the right place at the right time as much as they earned it, do they then deserve to have basically 100s of orders of magnitude more influence for their life? Just doesn’t add up.
DylanDmitri 6y ago
Shorter timescale than generational. Once anyone becomes a billionaire incentives push them towards extracting rents rather than creating wealth. Rich founders who get pushed out often start new companies (Pixar, SpaceX, Square, etc..) Rich founders who stay waste their talent & access to capital on moat digging. Why did Gates, after inventing personal computing, spend the 90s killing Netscape and stagnating browser standards? The trend of wealthy founders leaving their companies to become mentors/investors for the next batch of startups is likely the biggest contributor to the ongoing success and prosperity of Silicon Valley.
- WalterBright 6y ago
  > after inventing personal computing Not hardly. Gates just astutely got on the bandwagon that was already moving.