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The first paragraph says: > The popular view of America's upper class is that of an ossified aristocracy. But research from the National Bureau of Economic Rese

The first paragraph says: > The popular view of America's upper class is that of an ossified aristocracy. But research from the National Bureau of Economic Research shakes up this view, at least among America's richest individuals. Not much has shaken up this view. Half of the list inherited $400 million or more upon turning 18. Even the other half of the list are from among a small percentage of America's upper middle class. #1 Bill Gates. Father a wealthy lawyer. His grandfather was a national bank president. He went to an elite private grammar school, which had teletypes and computer timesharing back in the 1960s. His mother was on the board of United Way with the CEO of IBM - a helpful thing for a son who became a billionaire by riding IBM's coattails. Despite all of this, he is still on the bootstrapped, self-made side of the F400 list. He is not one of the heirs. Next is Warren Buffett. His father was a congressman. His grandfather owned a string of stores. And so on. The rest of the top ten are the Waltons, who inherited Wal-Mart on birth, the Koch brothers, who inherited an oil company on birth, plus Larry Ellison and Michael Bloomberg. Ellison and Bloomberg are the only middle class people on the list. I do think there are new trends happening at this level, but they don't point to what the blog post authors are pointing to.

morley 13y ago
The article goes on to address your point. From the article: During the period the researchers investigated, the number of individuals on the Forbes 400 who were the first in their family to run a business rose from 40% to 69%. Sixty percent of individuals on the list grew up wealthy in 1982 while only 32% did in 2011.
- stormbrew 13y ago
  This strikes me as likely to be just a delayed propagation of the increase in upward mobility seen in the post-war years. It seems entirely reasonable for that to take a couple of generations of people building on their parent's wealth accumulation to propagate upwards to the very top. How many of those people's success could you trace back to the GI bill? Gates' father attended university because of it, for example.
  - rafcavallaro 13y ago
    Gates's maternal grandfather, a multimillionaire bank president, left him a million dollar trust fund; his mother was on the a United Way board with an IBM exec which is how he got the contract for DOS. The GI Bill had little or nothing to do with Gates's success.
    - adventured 13y ago
      How much of that trust fund - which Gates never asked for and had nothing to do with - did Bill Gates invest into starting Microsoft? All I'm seeing here is Bill Gates bashing with no actual substance. If Gates didn't have the trust fund, and didn't invest it into Microsoft, then why are you referring to it as somehow indicting his success? In fact, the IBM exec is not how Microsoft got the contract for DOS. Microsoft was already a very successful software company by the time the deal with IBM was signed, they had millions in profit in 1980 (in 1980 dollars). They already had the equivalent of $60 to $80 million in sales (2013 dollars) in fiscal 1980, with 40 employees. They did the equivalent of $130 million in sales in 1981 (DOS 1.0 was first released in August 1981). If you understand anything about the software market's history, you understand how already substantial that was at the time for a stand-alone software business. Fact is, Microsoft was already one of the biggest software companies before they ever signed that deal. IBM was looking to compete with Apple and others in a very important, fast growing market for personal computing. A multi-billion dollar market opportunity at the time (1980 dollars at that). Your claim is that IBM would have just given that opportunity to any 'kids' with a half-way connection to an IBM exec (that one of the most powerful companies on earth would rest a multi-billion dollar, critical, opportunity with somebody just over one modest connection). It's an absurd position to put it nicely.
      - codexon 13y ago
        The right question is if Gates would have started Microsoft if he didn't have a trust fund safety net if MS failed.
      - r00fus 13y ago
        > How much of that trust fund - which Gates never asked for and had nothing to do with - did Bill Gates invest into starting Microsoft? All I'm seeing here is Bill Gates bashing with no actual substance. This is specious reasoning. The safety net provided by a trust fund (even if you didn't ask for it), is quite significant and allows you to take significant risks. Let's take the analogy of FU money. The whole point of having it is that you can take risks or breaks in the future (saying F-U to any/all VCs/Investors/bosses without impact to your financial security). You don't need to invest any/all of it, since you can generate more, but if you choose paths that don't generate that wealth, you haven't squandered your financial comfort.
adventured 13y ago
Bill Gates shouldn't be listed as someone who inherited his wealth: he did not inherit it. The $100 billion he'll give away was of his own creation, spurred from effort of his own mind, from a company born of his own fingers and imagination. We're having this conversation thanks to the Internet, probably via relatively inexpensive tools/gadgets. Which means we've all inherited an extraordinary privilege - courtesy of the immense efforts of countless others and countless invested wealth - that I would argue is drastically beyond anything Gates had the benefit of despite his family. What have you done with it? (rhetorical) The privilege we're all enjoying right now - all of this easily accessible, relatively cheap, amazing technology - is beyond anything being born to a successful Seattle lawyer is worth. Why aren't we all millionaires N times over? If you understand that point, then you understand why Gates deserves credit for his wealth. His mother didn't make the deal with IBM (in fact Ballmer was arguably most instrumental in the nuanced legal structure that gave Microsoft its position), and his mother didn't execute and build software for 30 years against tremendous odds and competition either. Is your theory that Bill Gates should be penalized for being born into a family and situation that was not of his own choosing? Such that you pretend his wealth wasn't of his own creation and is null and void, because his father was a lawyer (remind me again what making $100k a year as a lawyer in 1970 has to do with your son generating a $100 billion fortune in 2000, seems to me there are a lot of extraordinary steps required to get from one to the other no matter how good your first step is, whether you're Steve Jobs or Bill Gates). There are 9 million millionaires in the US currently, and this country has been rich for a long time now. Why aren't we drowning in Bill Gates clones? The answer is obvious. Any idea how many successful lawyer sons didn't generate $100 billion in wealth the last 40 years? All of them but one. Gates is one in a million even by that narrow-down. I'd counter argue that Buffett would have been successful regardless of his father being a Congressman (it's absurd to think that a one term trip to DC is what made Buffett what he is). Indeed, using Buffett as an example is the absolute worst thing you could do: the market doesn't care if your daddy was a Congressman, it was his massive results that spoke volumes, got people to invest with him over time, and made him rich. Some of his shareholders held for decades. It was his understanding of how to make money, and his ability to sell that vision, that scored his first investments. Even doctors don't like to lose $100k to some idiot kid, no matter who their father is (his father wasn't that important, and his grandfather's stores weren't that wildly successful). Or did you think people were buying Berkshire at $100 because his daddy was a a borderline irrelevant Congressman for one term?
nostromo 13y ago
Your comment has sparked a debate that always plays out the same way. Let's just jump to the punchline and argue if the universe is deterministic or not.
- selmnoo 13y ago
  From a broadly macroscopic point-of-view, it most definitely is. A child in Nigeria born to dirt poverty has near zero chance of, for example, having a stable, respectable salary (of our definition) in his or her future. I think microscopically it might be a little controversial to call it deterministic, but my personal anecdotes certainly point that way. I attended a public school in the inner city when I was young, and later moved out of there to a suburbun school. Looking at where the two sets of folks are now with a little Googling and a little Facebooking, the former are not doing well at all; the latter are doing very well. What's more, the folks I expected to be doing well from the inner city crowd are not doing well, and conversely a lot of the slackers from the suburban school are actually doing remarkably, surprisingly well in some cases.

morley 13y ago

The article goes on to address your point. From the article: During the period the researchers investigated, the number of individuals on the Forbes 400 who were the first in their family to run a business rose from 40% to 69%. Sixty percent of individuals on the list grew up wealthy in 1982 while only 32% did in 2011.

stormbrew 13y ago
This strikes me as likely to be just a delayed propagation of the increase in upward mobility seen in the post-war years. It seems entirely reasonable for that to take a couple of generations of people building on their parent's wealth accumulation to propagate upwards to the very top. How many of those people's success could you trace back to the GI bill? Gates' father attended university because of it, for example.
- rafcavallaro 13y ago
  Gates's maternal grandfather, a multimillionaire bank president, left him a million dollar trust fund; his mother was on the a United Way board with an IBM exec which is how he got the contract for DOS. The GI Bill had little or nothing to do with Gates's success.
  - adventured 13y ago
    How much of that trust fund - which Gates never asked for and had nothing to do with - did Bill Gates invest into starting Microsoft? All I'm seeing here is Bill Gates bashing with no actual substance. If Gates didn't have the trust fund, and didn't invest it into Microsoft, then why are you referring to it as somehow indicting his success? In fact, the IBM exec is not how Microsoft got the contract for DOS. Microsoft was already a very successful software company by the time the deal with IBM was signed, they had millions in profit in 1980 (in 1980 dollars). They already had the equivalent of $60 to $80 million in sales (2013 dollars) in fiscal 1980, with 40 employees. They did the equivalent of $130 million in sales in 1981 (DOS 1.0 was first released in August 1981). If you understand anything about the software market's history, you understand how already substantial that was at the time for a stand-alone software business. Fact is, Microsoft was already one of the biggest software companies before they ever signed that deal. IBM was looking to compete with Apple and others in a very important, fast growing market for personal computing. A multi-billion dollar market opportunity at the time (1980 dollars at that). Your claim is that IBM would have just given that opportunity to any 'kids' with a half-way connection to an IBM exec (that one of the most powerful companies on earth would rest a multi-billion dollar, critical, opportunity with somebody just over one modest connection). It's an absurd position to put it nicely.
    - codexon 13y ago
      The right question is if Gates would have started Microsoft if he didn't have a trust fund safety net if MS failed.
    - r00fus 13y ago
      > How much of that trust fund - which Gates never asked for and had nothing to do with - did Bill Gates invest into starting Microsoft? All I'm seeing here is Bill Gates bashing with no actual substance. This is specious reasoning. The safety net provided by a trust fund (even if you didn't ask for it), is quite significant and allows you to take significant risks. Let's take the analogy of FU money. The whole point of having it is that you can take risks or breaks in the future (saying F-U to any/all VCs/Investors/bosses without impact to your financial security). You don't need to invest any/all of it, since you can generate more, but if you choose paths that don't generate that wealth, you haven't squandered your financial comfort.

adventured 13y ago

Bill Gates shouldn't be listed as someone who inherited his wealth: he did not inherit it. The $100 billion he'll give away was of his own creation, spurred from effort of his own mind, from a company born of his own fingers and imagination. We're having this conversation thanks to the Internet, probably via relatively inexpensive tools/gadgets. Which means we've all inherited an extraordinary privilege - courtesy of the immense efforts of countless others and countless invested wealth - that I would argue is drastically beyond anything Gates had the benefit of despite his family. What have you done with it? (rhetorical) The privilege we're all enjoying right now - all of this easily accessible, relatively cheap, amazing technology - is beyond anything being born to a successful Seattle lawyer is worth. Why aren't we all millionaires N times over? If you understand that point, then you understand why Gates deserves credit for his wealth. His mother didn't make the deal with IBM (in fact Ballmer was arguably most instrumental in the nuanced legal structure that gave Microsoft its position), and his mother didn't execute and build software for 30 years against tremendous odds and competition either. Is your theory that Bill Gates should be penalized for being born into a family and situation that was not of his own choosing? Such that you pretend his wealth wasn't of his own creation and is null and void, because his father was a lawyer (remind me again what making $100k a year as a lawyer in 1970 has to do with your son generating a $100 billion fortune in 2000, seems to me there are a lot of extraordinary steps required to get from one to the other no matter how good your first step is, whether you're Steve Jobs or Bill Gates). There are 9 million millionaires in the US currently, and this country has been rich for a long time now. Why aren't we drowning in Bill Gates clones? The answer is obvious. Any idea how many successful lawyer sons didn't generate $100 billion in wealth the last 40 years? All of them but one. Gates is one in a million even by that narrow-down. I'd counter argue that Buffett would have been successful regardless of his father being a Congressman (it's absurd to think that a one term trip to DC is what made Buffett what he is). Indeed, using Buffett as an example is the absolute worst thing you could do: the market doesn't care if your daddy was a Congressman, it was his massive results that spoke volumes, got people to invest with him over time, and made him rich. Some of his shareholders held for decades. It was his understanding of how to make money, and his ability to sell that vision, that scored his first investments. Even doctors don't like to lose $100k to some idiot kid, no matter who their father is (his father wasn't that important, and his grandfather's stores weren't that wildly successful). Or did you think people were buying Berkshire at $100 because his daddy was a a borderline irrelevant Congressman for one term?

nostromo 13y ago

Your comment has sparked a debate that always plays out the same way. Let's just jump to the punchline and argue if the universe is deterministic or not.

selmnoo 13y ago
From a broadly macroscopic point-of-view, it most definitely is. A child in Nigeria born to dirt poverty has near zero chance of, for example, having a stable, respectable salary (of our definition) in his or her future. I think microscopically it might be a little controversial to call it deterministic, but my personal anecdotes certainly point that way. I attended a public school in the inner city when I was young, and later moved out of there to a suburbun school. Looking at where the two sets of folks are now with a little Googling and a little Facebooking, the former are not doing well at all; the latter are doing very well. What's more, the folks I expected to be doing well from the inner city crowd are not doing well, and conversely a lot of the slackers from the suburban school are actually doing remarkably, surprisingly well in some cases.