What the rich really inherit

Some recent research by Simon Boserup and others in Denmark show very clearly that wealth differentials are not passed on to their children if the lifetime of the latter is considered. This is interesting but not surprising. Passing on one’s assets to one’s children is genetic in exactly the same way way that passing on one’s hormonal proclivities — adrenalin in particular when thinking of social inequality — is also genetic.

They are very rare parents who don’t pass on all their wealth to their children or grandchildren. It’s rather amusing that when one hears of some fabulously wealthy — such as Gateses — who declare (ostentatiously) that their children must make their own way in the world happen to leave a few ‘crumbs’ (a few hundred $million n their case !) to their children after the $billions have been distributed.

As to Piketty, the modern-day Marx who thinks that wealth differential are growing I’d have thought by now that someone would have told him to read a bit of history beyond the last 100 years. The 1% of the world’s rich today, relative to the ordinary poor, are nowhere near as rich as the richest 1% of Victorian England. And the further one goes back in time the larger the wealth differentials become.

Returning to today, in practical terms the handing on of wealth is more of a proclivity for wealth rather than a certain absolute gift. It is only very rarely indeed that inherited wealth remains cohesive without declining, usually quite substantially, in the course of the recipient’s lifetime and often totally so. What wealthy people give to their children by way of bringing them up with social ease and confidence plus a parental network of potential friends and sponsors is far more important than any wealth that’s inherited.

2 thoughts on “What the rich really inherit

  1. The 1% of the world’s rich today, relative to the ordinary poor, are nowhere near as rich as the richest 1% of Victorian England. And the further one goes back in time the larger the wealth differentials become.

    That’s a very squishy claim. Because the terms “rich” and “wealth” are ill-defined for them to be of any use here. That is why one can equally easily claim that even those who are considered poor today are immeasurably richer than the wealthiest of 200 years ago.

    How much would you be willing to accept today in exchange for being forced to live as the wealthiest 1 percent of 200 years ago? Would $1 billion be enough? Remember that you would not have access to any of things that technological and scientific advances have made possible since 200 years. I don’t need to list them for anyone who is even minimally aware of history and the contemporary world.

    People think that it would be great to be Alexander but it is not all that great to die young for the lack of simple medical care.

    There are riches that we have but fail to appreciate how marvelous they are. Looking down at the clouds from 38000 feet while traveling in comfort at 900 kms per hour? It would have been infinitely costly just 80 years ago. Communicating with others anywhere on the globe instantly? Unimaginable 100 years ago.

    Knowledge! Atoms? Nope. Genes? Nope. Galaxies? Nope. Higgs field? Nope.

    Atanu

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