Someone should start a program to inoculate future generations of economists against Pikettism by introducing to them to some second and third generation heirs.
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I realize there is a narrative about dissolution and return to the mean to be told here, but have to also mention one reason for this is that the world was much poorer four generations ago than two generations ago, to a degree we often fail to appreciate.
There were some very great fortunes built in the US during the Gilded Age. That's why it was called that. And it was far enough back to yield 4th generation wealth if there was such a thing.
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Even if heirs weren't feckless, the US custom of equal inheritance (vs primogeniture) means fortunes get broken up at an exponential rate. 4 generations of 2.5 children = 39.
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If each generation earns market returns on their wealth & takes ~25 years, doesn't it about balance out?
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My impression is that there are indeed hundreds of Rockefellers who are somewhat wealthy by middle class standards, but they are much much less numerous than people whose grandfather was a doctor or similar, who number in tens of millions.
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Or, to put it another way, almost all of the wealth in America (and the world) came after the Gilded Age. (My too-late-to-check-stats guess would be that 95-98% or so was after WWII.)
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Anderson Cooper is a 5th generation Vanderbilt. Of course, he didn’t inherit most of his wealth, but his mother had about $200m in her estate. Wealth dilutes over time, but privilege doesn’t.
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One of Rockefeller's grandchildren was worth about $3B and died a few years ago at 101, https://en.wikipedia.org/wiki/David_Rockefeller … - I'd imagine he generated some significant 4th-gen heirs.
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