Government trusters and advocates of violent redistribution of wealth frequently claim that the superrich are hoarding and amassing inherited investment wealth at rates that surpass the upward mobility of working classes. For example, government-trusting economist Thomas Piketty made such a claim in his book Capital in the 21st Century (2014). Piketty argued that economic inequality increases as capital accumulates in the hands of ultra-rich families.
But recent research has shattered this argument (again). There is, in fact, rapid turnover among people in the “super rich” category. Estates rise and fall. “[A]t any given time, roughly half of the collective worth of the hyper-wealthy is first-generation earned wealth, not inherited wealth,” according to the authors of the study.
Dynastic wealth accumulation is simply a myth. The reality is that each generation spawns its own entrepreneurs who create vast pools of entirely new wealth, and enjoy their share of it, displacing many of the preceding generations’ entrepreneurial wealth creators. Today, the massive fortunes of the 19th century are largely depleted and almost all of the fortunes generated just a half-century ago are also gone.
The study can be downloaded here. A writeup in Reason Magazine can be found here.
