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How the .0001% Made Its Money

priceonomics.com

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Re: How the .0001% Made Its Money

#71

Post by gbhn »

vidarh wrote: post #51
adventured wrote: post #39

Earlier quoted context omitted.

Are you suggesting his privilege wrote his software for him? Much less had the vision to start a software company in the 1970s - which his parents thought was a bad idea. They did not like the idea of him dropping out, he did it anyway. Paul Allen didn't come from any kind of privilege. So is the theory that he should be robbed of his amazing success and effort also, by association with Gates' association with his fa…

Many people wrote software in the 1970s and started software companies in the 1970s. He is not suggesting his privilege wrote Gates software for him, but that privilege gave Gates a substantial advantage over the large number of other people writing software and starting software companies at the same time. His privilege is unlikely to have been a sufficient condition to explain his success, but it is also entirely u…

Something I think often is left out of success accounting is an advantage almost everyone born in a large, well-functioning society enjoys: access to a large, well-functioning society.

If the civilization into which Bill Gates sold software were 1/10th the size, it would have generated 1/10th the value with almost the identical amount of work on his part. There's an enormous lift given to fortunes just by the fact that they are built in the context of a civilization which is large enough to support them.

None of that is to say that either specific inherited status or personal hard work aren't huge contributors to success as well, but it takes an enormous amount of work and attention to make sure that a large, well-functioning civilization remains large and well-functioning, and that's an oft-neglected factor in how big these large fortunes become.

Re: How the .0001% Made Its Money

#72

Post by umeshunni »

dustinrodrigues wrote: post #31
adventured wrote: post #30

Earlier quoted context omitted.

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…

It's not that he inherited his wealth, it's that he grew up in a privileged environment that gave him opportunities most other people didn't have.

> he grew up in a privileged environment

Sure, as did you when compared with 99% of the worlds' population.

Re: How the .0001% Made Its Money

#73

Post by [deleted] »

scotty79 wrote: post #56
cylinder wrote: post #44

Earlier quoted context omitted.

What you're saying is "The surest way to get rich is to be rich." Real estate is just a way to invest money you already have. It doesn't generate wealth unless you have access to capital and can put deals together to develop properties and take a chunk. But that might as well put you in the "Finance" category.

You can build real estate gradually, starting with one, two, three apartments paid for with your job and rent your tenants pay. At some point, pretty early you could stop working but if you don't you can buy additional apartments faster. During first generation, I think, you could buy around 10 if you have a good job. Your children will be able buy faster, their grandchildren even faster.

[deleted]

Re: How the .0001% Made Its Money

#74

Post by vidarh »

elp1stolero wrote: post #63
werner34 wrote: post #19

Earlier quoted context omitted.

Exactly my opinion. And even though I normally lean towards free market related views when it comes to regulation and government, I think a high inheritance tax would be justified in western countries. With it universities & infrastructure could be funded and possibly enable more people to get a university degree. My underlying reasoning: Every new generation is a giant possiblity for mankind. Now who do we want to c…

I certainly feel your sentiment, werner38 (Re: Paris Hilton - right?), but I disagree with your conclusions. And I agree with you that it is not necessarily a positive outcome that a king's heir would assume the wealth of the king. However, I think the trade-off of using law to essentially plunder property (again, assuming the property was acquired through no act of injustice), undermines the purpose of law - to defe…

The idea of property as legitimate is pretty much arbitrary - others have indeed come out on the other side of the fence: Considering the enforcement of property rights to land akin to theft (e.g. Proudhon) or illegitimate use of force, on the simple premise that it deprives others of use of a shared resource.

The libertarian fetish for accepting the use of force to protect one arbitrary artificial construct as somehow critical to liberty, while rejecting the use of force to protect other artificial constructs strikes me at the same time as deeply comical, and ridiculously hypocritical on the other.

Re: How the .0001% Made Its Money

#76

Post by stormbrew »

morley wrote: post #27
firstOrder wrote: post #23

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 midd…

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.

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.

Re: How the .0001% Made Its Money

#77

Post by gph »

nether wrote: post #45
dustinrodrigues wrote: post #31

Earlier quoted context omitted.

It's not that he inherited his wealth, it's that he grew up in a privileged environment that gave him opportunities most other people didn't have.

Everyone has unique opportunities. We'll never have perfect equality of opportunity or social connections. Buffett and Gates weren't born into the lower strata of society, but nor were they born into the very upper elite. How many of Gates's classmates at his prep school or at Harvard did nearly as well as he? How often do children of congressmen/women become multibillionaires? We can divy up privilege endlessly (for…

I don't know, I think the point of the article was to show that the uber-wealthy of America is more of a meritocracy than most think.

While that's somewhat true, the fact remains that almost all of the people on that list might not be there if they weren't born into at least the upper middle class. They took advantage of the privileges given to them, so it's not like they don't deserve it. But there are likely those from poverty and the lower middle class who work their ass off setting up businesses in things they have access to, mainly restaurants/stores, and only ever move into the upper middle class as hard as they try and as gifted/intelligent as they may be.

Re: How the .0001% Made Its Money

#78

Post by rafcavallaro »

stormbrew wrote: post #76
morley wrote: post #27

Earlier quoted context omitted.

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.

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.

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.

Re: How the .0001% Made Its Money

#79

Post by rafcavallaro »

nether wrote: post #45
dustinrodrigues wrote: post #31

Earlier quoted context omitted.

It's not that he inherited his wealth, it's that he grew up in a privileged environment that gave him opportunities most other people didn't have.

Everyone has unique opportunities. We'll never have perfect equality of opportunity or social connections. Buffett and Gates weren't born into the lower strata of society, but nor were they born into the very upper elite. How many of Gates's classmates at his prep school or at Harvard did nearly as well as he? How often do children of congressmen/women become multibillionaires? We can divy up privilege endlessly (for…

It's just that some people's unique opportunity is to be sold into child slavery.
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