More than half of all private wealth has been inherited in most of Europe • Hacker News Board

Re: More than half of all private wealth has been inherited in most of Europe

#121

Post by rtpg » Mon, Dec 18, 2017, 8:25 AM UTC

jopsen wrote: post #59

isostatic wrote: post #29

Earlier quoted context omitted.

Why do you tax income? That's a disincentive to be productive, that's not good - we want people to be productive. Taxing wealth is basically paying a rent to the society that allows that wealth to exist. Your land in manhattan is only worth $10m because society hasn't gone all Syrian. Your copyright holding over your film is only worth anything because we don't let people freely copy it. When the wealth is owned by t…

Interesting idea.. so instead of taxing income, you would tax wealth carried from one year to another... That would massively discourage saving. I'm not sure that's great in the long run. In the short run I'll probably lead to massive growth as every goes to burn their dollars on something :) (Arguably it might be a low tax, might even limited to people with a lot of wealth)

why do people save money?

Big purchases, sure. But also as a safety net. As a retirement fund. To help send their kids to college.

The bit extreme extension to this is that if society had strong enough safety nets for everyone, nobody would need savings at all.

Re: More than half of all private wealth has been inherited in most of Europe

#122

Post by arkh » Mon, Dec 18, 2017, 8:27 AM UTC

kiliantics wrote: post #27

Piketty showed in Capital that most modern work about the trends in economic inequality was flawed. We usually think of the industrial revolution and modern era as periods where power and wealth became much more fairly distributed. However, if you go far back enough into the records, as he did, you can see a clear trend of concentration of wealth even now in the current system. The trend was briefly disrupted by the…

There are two extreme ways to remove the inheritance problem. One would be to forfeit personal property: you can't give what you don't own. The other would be to remove the concept of family: when born you are placed in a communal system to be raised by professionals. People start with the same chances, the same level of social knowledge, network and vocabulary, you almost get to a pure meritocratic society (there are still those pesky genes).

Let's not imagine the unwanted effects and just bask in the idea of those kind of perfect societies.

Re: More than half of all private wealth has been inherited in most of Europe

#123

Post by askvictor » Mon, Dec 18, 2017, 8:28 AM UTC

6502nerdface wrote: post #37

A theory... It takes time to create wealth, and a lot more time elapsed before the current generations than has elapsed (or will) during the current generations, thus perhaps it’s not surprising that as time goes on, most of the accumulated wealth around us is from previous generations. Furthermore, when a person dies, their wealth can either be destroyed/lost, inherited by heirs, bequeathed to some institution, or a…

While you raise a very interesting point, I suspect that overwhelmingly wealth is passed down to children; it's a pretty basic human instinct to look after your clan. Though I would like to see some data to be sure.

Re: More than half of all private wealth has been inherited in most of Europe

#124

Post by zokier » Mon, Dec 18, 2017, 8:35 AM UTC

kiliantics wrote: post #27

Piketty showed in Capital that most modern work about the trends in economic inequality was flawed. We usually think of the industrial revolution and modern era as periods where power and wealth became much more fairly distributed. However, if you go far back enough into the records, as he did, you can see a clear trend of concentration of wealth even now in the current system. The trend was briefly disrupted by the…

> It seems that the graphs in this tweet are another confirmation of Piketty's observation.

As far as I can tell, the graph is based on an earlier graph from Pikettys paper:

http://piketty.pse.ens.fr/files/AlvaredoGarbintiPiketty2015....

Compare to Figure 5

Re: More than half of all private wealth has been inherited in most of Europe

#125

Post by askvictor » Mon, Dec 18, 2017, 8:40 AM UTC

gbacon wrote: post #53

ajeet_dhaliwal wrote: post #24

Won’t this eventually happen in the United States too? What’s stopping it other than a later start. There’s more entrepreneurial spirit perhaps but the sons and daughters of wealth creators will still inherit.

Read the chapter “Economic Outpatient Care” in Thomas Stanley’s The Millionaire Next Door to learn how poorly on average American millionaires pass to their children the skills necessary to build wealth.

Americans, perhaps. But whole nobility (more of a European thing) thing is in part to preserve these skills across generations.

Re: More than half of all private wealth has been inherited in most of Europe

#126

Post by chillydawg » Mon, Dec 18, 2017, 8:41 AM UTC

arkh wrote: post #122

kiliantics wrote: post #27

Piketty showed in Capital that most modern work about the trends in economic inequality was flawed. We usually think of the industrial revolution and modern era as periods where power and wealth became much more fairly distributed. However, if you go far back enough into the records, as he did, you can see a clear trend of concentration of wealth even now in the current system. The trend was briefly disrupted by the…

There are two extreme ways to remove the inheritance problem. One would be to forfeit personal property: you can't give what you don't own. The other would be to remove the concept of family: when born you are placed in a communal system to be raised by professionals. People start with the same chances, the same level of social knowledge, network and vocabulary, you almost get to a pure meritocratic society (there ar…

We already have inheritance tax laws, they are just not very good. They need to target trusts and other ways that rich families get around it.

Re: More than half of all private wealth has been inherited in most of Europe

#127

Post by woodpanel » Mon, Dec 18, 2017, 8:42 AM UTC

This statistic is from the DIW, a German think-tank which is known for it's left leaning/biased views. It cost them their membership in the country's "council of economic experts" once.

PS: That doesn't mean that the claim is false. But you could - as is often the case - draw different conclusions from the data. E.g. that the European countries have heavy welfare and tax burdens that reduce social mobility and the chances of earning private wealth through work.

Re: More than half of all private wealth has been inherited in most of Europe

#128

Post by letsgetphysITal » Mon, Dec 18, 2017, 8:50 AM UTC

arkh wrote: post #122

kiliantics wrote: post #27

Piketty showed in Capital that most modern work about the trends in economic inequality was flawed. We usually think of the industrial revolution and modern era as periods where power and wealth became much more fairly distributed. However, if you go far back enough into the records, as he did, you can see a clear trend of concentration of wealth even now in the current system. The trend was briefly disrupted by the…

There are two extreme ways to remove the inheritance problem. One would be to forfeit personal property: you can't give what you don't own. The other would be to remove the concept of family: when born you are placed in a communal system to be raised by professionals. People start with the same chances, the same level of social knowledge, network and vocabulary, you almost get to a pure meritocratic society (there ar…

> you almost get to a pure meritocratic society (there are still those pesky genes).

That's OK, we can use CRISPR tech to solve that problem.

Brave New World in 3.. 2.. 1..

Re: More than half of all private wealth has been inherited in most of Europe

#129

Post by jondubois » Mon, Dec 18, 2017, 8:54 AM UTC

wycs wrote: post #86

ekianjo wrote: post #72

Earlier quoted context omitted.

Relevant part: > If a parent's income had no effect on a child's opportunity for future upward mobility, approximately 20% of poor children who started in the bottom quintile (in the bottom 20% of the US range of incomes) would remain there as poor adults. At the other end of income spectrum, if children were born into wealthy families in the top 20%, only 20% would stay in that top income category if their mobility…

This would all be true if we were all genetically identical. However psychometrics has proven and now cognitive genomics is confirming that valuable mental characteristics have very large genetic components. Intelligence is the capacity to achieve your goals. Intelligence is highly heritable. A goal of most people is to become wealthy. So people who acquire wealth tend to be much more intelligent than average, as wea…

I'm a strong believer of the influence of genes on human behavior but I don't think that it has much to do with the ability to make money.

The ability to make money has more to do with dumb luck and confidence than any kind of value-creating intelligence.

The ability to keep money once you already have it might have a stronger genetic component however but it has nothing to do with value-creation.

Re: More than half of all private wealth has been inherited in most of Europe

#130

Post by ramblerman » Mon, Dec 18, 2017, 8:56 AM UTC

arkh wrote: post #122

kiliantics wrote: post #27

Piketty showed in Capital that most modern work about the trends in economic inequality was flawed. We usually think of the industrial revolution and modern era as periods where power and wealth became much more fairly distributed. However, if you go far back enough into the records, as he did, you can see a clear trend of concentration of wealth even now in the current system. The trend was briefly disrupted by the…

There are two extreme ways to remove the inheritance problem. One would be to forfeit personal property: you can't give what you don't own. The other would be to remove the concept of family: when born you are placed in a communal system to be raised by professionals. People start with the same chances, the same level of social knowledge, network and vocabulary, you almost get to a pure meritocratic society (there ar…

There is a third (equally extreme) but much simpler way.

Keep everything as is, but don't allow inheritance, or cap it at some number.