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

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

#81
post #54

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…

How then is it possible that some four in five American millionaires inherited no more than ten thousand dollars, according to The Millionaire Next Door by Thomas Stanley?

Isn’t this article about Europe though?

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

#82

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…

[deleted]

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

#83

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…

Didn't Rognlie @ MIT show that almost all of the out-performance of wealth was due to real estate prices? Couldn't the solution to wealth inequality therefore be a radically different approach to building codes and land value taxes? And doesn't it follow that wealthy landlords in California massively benefiting from proposition 13 and decrying wealth inequality at the same time sit at the pinnacle of political and economic hypocrisy?

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

#84
post #59

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)

That is kind of what we do with property taxes. Taxes on the value of the property from year to year.

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

#85

When I was stationed in Germany in my twenties as an American military wife, the Berlin Wall came down and the Two Germanies reunited. An East German aunt went to visit West German relatives, then visited relatives who had immigrated to the US. She said that "Compared to East Germany, everyone in West Germany looks rich. Then you go to the US and everyone looks like on (the nighttime soap) Dallas ." My maternal grand…

> I guess mom made the right decision coming here Where's here? Oh, from your Hacker News profile -> Twitter profile ( https://twitter.com/doreen_michele ) which says "Southwest Coastal Washington".

I'm sure you were just making polite conversation but it's maybe not so great to follow two pointer hops to someone's personal details. People have many reasons for being sensitive about these things.

I've never thought about it before, but your comment made me realize that maybe the best thing is to feel free to mention what's in someone's HN profile but leave it at that. On the other hand, I broke that myself only this afternoon: https://news.ycombinator.com/item?id=15947396. So I don't know.

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

#86
post #72

Earlier quoted context omitted.

Fortunately, we don’t have to rely on guesses, we have measures of economic mobility. In particular, how likely is it that someone born into a particular quintile moves to a higher (or lower) quintile? https://en.m.wikipedia.org/wiki/Socioeconomic_mobility_in_th... Answer: it’s not great and getting worse, but not as dire as you portray.

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 wealth is graded on a curve. Thus though there is regression to the mean, their children will be more intelligent than average, and so worth more as employees and more likely to succeed even if they were put up for adoption.

This has unfortunate class implications, but putting cotten in our ears is not going to help. We must separate the normative from the descriptive. This is horrible and unfair. But natural selection is heartless algorithm literally running on death and suffering. We should not expect it to distribute capacities in a manner that is aligned with the prescriptions of our flimsy ideologies.

Wealth distribution would not fix this.

But let us seize the high-IQ alleles and distribute them to the proletariat!

Such thoughts are verboten now, even as our tools for such interventions get ever sharper and assortative mating magnifies these differences to a point where it is getting difficult to ignore.

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

#87

It is quite sad, but predictable, that people are trying to silence your voice with their votes. Piketty’s observations dovetail nearly with this article. And a world where r>g, and inherited wealth dominates is a world of economic inefficiency; where lucky sperm dominate all aspects of life regardless of their talent or their value.

> It is quite sad, but predictable, that people are trying to silence your voice with their votes

Would you please read https://news.ycombinator.com/newsguidelines.html, which ask you not to post like this? The parent comment has actually been decisively upvoted. It takes time for the community verdict to become clear.

Also, the "people are trying to silence your voice" thing is an internet trope that is best left elsewhere. We're hoping for thoughtful, non-repetitive discussion on this site, not boxing matches.

Edit: actually, since it looks like you're using this site for ideological battle and have done it multiple times before, I've banned this account. Please don't create accounts to break the HN rules with.

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

#88

Earlier quoted context omitted.

> The land you inherit is not "justly yours". It was the previous owner's thing. You are getting it but it is not your divine right, except that you won the birth lottery by being born into this family. Of course those arguments apply to governments as well, since they don't derive their law-making authority by claim to divinity - at least in modern times. Why should a government be specially privileged over a citize…

> Of course those arguments apply to governments as well, since they don't derive their law-making authority by claim to divinity - at least in modern times. You could use that statement to argue about anything a government does. Why does the inheritance tax need a special justification?

Why do laws that appropriate private citizens wealth need to be justified?

Well, the alternative is wonderful stuff like civil forfeiture law. Whereby a policeman without evidence or proof of criminal wrongdoing can take that $2000 in your glovebox in the name of a defacto beneficiary (the state), because on a balance of probabilities he thinks he has a better claim than you do.

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

#89
This doesn't surprise me at all. Based on my observations, I would say that at least the bottom 80% lives solely on income from labor, and accumulates no wealth. Of the upper 20%, some live below their means, some earn slightly more from their labor than necessary to live, and others make enough to accumulate capital. Once you begin to accumulate capital, you earn money from the capital itself. Some accumulate enough capital to earn enough income to quit earning income from labor entirely. Some use the excess capital income to accumulate even more capital. Capital is then passed down to heirs. So the accumulated capital is about equal to new capital generated.

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

#90

I was just discussing this as a result of watching this video: https://www.youtube.com/watch?v=-asltUUvcGU in which they discuss the result of the western capitalist system loosely resembling a meritocracy, except in the case of inherited wealth. An exceptionally productive individual can generate billions, but then when he dies the money goes to his heirs which may not have done anything to deserve commanding that m…

> deserve ?? Who gets to determine who deserves what?

Not who, but what. Fate and/or hard and smart work determine who gets the wealth. Don't worry about it and get busy and be persistent. Right?
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