"I don’t see anyone on the list whose ancestors bought a great parcel of land in 1780 and have been accumulating family wealth by collecting rents ever since."
What you do see though, in the same Fortune 400 list is that 6 of the top 10 people on that list didn't build their companies (in the sense that Bill Gates did), they inherited them.
I don't know how much the current crop Kochs or Waltons are responsible for the current success of their ventures, but this is the type of thing I believe Piketty had in mind as much as the "parcels of land" approach. Also rent seeking is a problem distinct from a rentier class.
Can you argue convincingly that these people would have been just as successful without the advantages of their births? I suspect that would be quite difficult.
> What you do see though, in the same Fortune 400 list is that 6 of the top 10 people on that list didn't build their companies (in the sense that Bill Gates did), they inherited them.
But 10 out of the top ten did not have billionaires for grandparents. The Kochs and Waltons are second-generation billionaires. They're not the product of hundreds of years of steadily accumulating wealth. So there's a flaw in the thesis that wealth continues to grow. There's a significant amount of churn in the ranks of the superwealthy.
Piketty addresses this specifically in pointing out that wealth had to be reconstructed almost from scratch following WW2. If you buy his thesis, then this wealth will be inherited by third- and fourth- generation billionaires next, unless another shock at the scale of WW2 happens.
True! For the US, concentration of wealth was lower than Europe pre-WW2, but is higher today. According to him, that's because the wealthy here only had to contend with the Depression, and avoided most of the shocks of WW2.
The ratio of capital-to-labor money was at an unusual low even in the US during that era. It has since been returning to its pre-WW2 levels. Piketty addresses WW2 a lot in his book, for many reasons including that this economic anomaly occurred during this period.
Does churn from super-wealthy to "merely" wealthy address Piketty's thesis?
For that matter, does it matter if the names change? Distribution of wealth skewing towards a small number of people is still inequality in the sense that Piketty is talking about, even if the names of the people change every 10 years, let alone every few generations.
In other words I think what Piketty is getting at is if there is a decay term, it has to act fast enough that the wealth is distributed broadly before it is all collected up by some other small group of people, otherwise there is little functional difference to dynastic wealth.
Top 400 is misleading. In US capitalism, single winners like Gates and Zuck Rockettes to the top. Look at the next many thousands, the grandchildren of previous barons who each have a share of inheritance, still far in excess of the productive classes.
Look at the Bush and Kennedy dynasties in government.
>Can you argue convincingly that these people would have been just as successful without the advantages of their births? I suspect that would be quite difficult.
Why shouldn't people be advantaged because of their birth? The most important thing to progenitors is usually their progeny. Many would even say securing privileges for their progeny is the reason they built what they did in the first place. If I work hard and build something, you can be assured I would want my son and 3 daughters to be able to share in the benefits, and I would hope that my work makes them more successful in their lives than they otherwise would've been. How is there any problem with that?
The real issue is that we don't want people to be unfairly advantaged and we don't want to have a system that builds exclusive monarchies and dynasties. We don't have such a system. You can still become a self-made man in the United States, and thousands of people do it every year.
I don't see how the system of inheritance we have now is unfair, except insofar as many people are jealous and want to take things neither they nor their parents have earned.
What you do see though, in the same Fortune 400 list is that 6 of the top 10 people on that list didn't build their companies (in the sense that Bill Gates did), they inherited them.
I don't know how much the current crop Kochs or Waltons are responsible for the current success of their ventures, but this is the type of thing I believe Piketty had in mind as much as the "parcels of land" approach. Also rent seeking is a problem distinct from a rentier class.
Can you argue convincingly that these people would have been just as successful without the advantages of their births? I suspect that would be quite difficult.