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This was posted before and is just as silly as it was then.

Being born rich _is_ success.

Wealth and income, and derivations thereof are the primary metrics by which most societies define success.

You don't have to agree on a personal level (I have issues with it), but the rest of the world continues onwards.

You will have trouble finding anybody who would agree that being born rich equals success. Being born rich and then not blowing it is success.

Families that have been wealthy over generations have figured out how to do this, while the "noveau riche" often fail after one or two generations. There's many stories of famous actors or musicians or lottery winners who went from rags to riches and then right back to rags.

It’s very hard to blow it if you’re born rich. Examples are over-represented in media since they usually involve celebrities & there’s a measure of savage entertainment in the general population, but these outcomes are exceedingly rare. If you’re rich (and in America if you’re also white or male) you just get chance after chance after chance, and you can do horrible things like manslaughter or sex crimes or large-scale fraud and never be penalized, or be penalized in a relatively minor way and bounce right back, usually with family money.

Meanwhile if you’re not born rich, then even completely innocuous mistakes by your parents, like taking out a mortgage in the wrong place / wrong time, or having a sick family elder / child to pay for, can just instantly nuke your chances at college or adequate opportunities / networking that could enable entrepreneurship, etc.

> It’s very hard to blow it if you’re born rich.

It's actually extremely easy to blow money on poor investments, and it happens all the time. People don't just get born with the skill to handle money well.

Over multiple generations, there is no risk-free asset that will beat inflation, and inflation will easily eat up your wealth in that timespan, even if your family lives a modest lifestyle.

Of course the matthew principle still applies, but that's besides my point here.

I think the point is that the ability to achieve success ought not be so skewed towards those whose ancestors achieved success, but rather towards individuals that have worked for it and have legitimate merit in society.

If you’re suggesting that it’s easy to go from being rich to being poor, I think it would be useful to find data that examines how many people born rich become poor over time, and how many people born poor stay poor over time. Like, backing that claim up would make it more believable.

Anecdotally, I don’t think it’s that hard for rich people to be born and then stay rich. Especially considering all the things that money can buy that helps one make even more money. Like a better education, for example.

> If you’re suggesting that it’s easy to go from being rich to being poor, I think it would be useful to find data that examines how many people born rich become poor over time, and how many people born poor stay poor over time. Like, backing that claim up would make it more believable.

It's not easy to get data on the very rich. However, the top fifth of the population is about as likely to become poorer over time as the the bottom fifth is likely to get richer over time (page 6):

https://www.pewtrusts.org/~/media/legacy/uploadedfiles/wwwpe...

In total, only a minority (~40%) maintain their status over the course of a single generation.

You need something like decile transition probabilities, not merely directional changes. Going from the top decile of wealth to the second or third from top is not a significant loss of wealth. Even if “most rich people lost money” over their lifetimes, it would say nothing about how easy it is to go from rich to poor.

How many people who are born into the top decile of wealth end up below the poverty line in total assets + income?

Your definition of “blow it” seems silly and inapplicable. When you have a huge financial parachute behind the scenes, you have room to absorb losses from poor investments, and again the cases when legacy money is mishandled so badly as to lead to ruin are extremely rare and over-popularized in media.

Getting one’s rich parents to fund a dumb start-up idea that wastes millions crashing and burning, and then reluctantly using family connections to get a $400k/year job in a finance or white-shoe law firm is not at all any version of “blowing it.”

> Your definition of “blow it” seems silly and inapplicable. When you have a huge financial parachute behind the scenes, you have room to absorb losses from poor investments, and again the cases when legacy money is mishandled so badly as to lead to ruin are extremely rare and over-popularized in media.

I'm not just talking about total financial ruin, I'm talking about staying rich over multiple generations. Over that timeframe, you'll have wars, market crashes, sovereign debt crises, currency crises, riots, and so on.

Let's say I give you 10 million dollars, which puts you in the top 1% in the US. Over an 80 year lifespan, that's 125,000$ per year. In the period from 1900 to 1980, that money lost about 90% of its purchasing power. If you do "nothing", at the end of that period, you will be poor.

So you have to invest the money. Who do you trust? The government? Untrustworthy. The stock market? Highly volatile. Gold? No yield whatsoever. Real estate? Requires upkeep, vulnerable to structural change. Diversify? You may not even beat inflation. It's easy to say in hindsight what is an isn't a dumb investment. You're biased by living in the tail end of the best century of the best economy in the history of humanity.

> Getting one’s rich parents to fund a dumb start-up idea that wastes millions crashing and burning, and then reluctantly using family connections to get a $400k/year job in a finance or white-shoe law firm is not at all any version of “blowing it.”

You think Wall Street just hands out $400k jobs to rich kids because they went to some prestigious school? You believe lawyers are hired on the basis of their inheritance?

"You think Wall Street just hands out $400k jobs to rich kids because they went to some prestigious school?"

I basically agree with your overall point that there are a lot of things that can happen to rich people or families over long periods of time, but I can't help pointing out that yes, Wall Street does just hand out jobs to rich kids:

https://dealbreaker.com/2013/08/sometimes-jpmorgan-hired-the...

"Nepotism is allowed and inevitable; what is punished is clumsy nepotism. Invoking the proper formulas, observing the proper cooling-off periods between hiring a client's kid and using him to seek business, keeping the quid pro quo off of email: that's what counts. Obviously you hire the children of important clients and potential clients, and obviously that helps you at the margin to win business; you just have to do it the right way. There's a reason it's the Foreign Corrupt Practices Act; the goal is to make sure that companies conform their foreign corrupt practices to American standards of corrupt practice. When you follow other cultures' forms of corrupt practice, you get in trouble."

https://dealbreaker.com/2015/02/wait-is-it-not-typical-of-jp...

https://dealbreaker.com/2015/11/jp-morgan-sons-and-daughters

While I think there are several larger factual errors in your comment, it may not matter because it seems like we’re talking about totally different things.

> “I'm not just talking about total financial ruin, I'm talking about staying rich over multiple generations.”

I think the OP and my comments are all only talking about wealth outcomes over a single lifetime for a person born wealthy. AFAICT no part of this thread was about multi-generational wealth, and for multi-generational wealth I largely agree with your broader points.

Not according to this: https://www.daveramsey.com/research/the-national-study-of-mi...

* 8 out of 10 millionaires invested in mutual funds through 401k

* 79% did not receive an inheritance

* top 5 careers include engineer, teacher, accountant, manager, attorney

Inflation means that most millionaires aren't rich anymore. They are just people who have enough retirement savings to retire with a middle-class standard-of-living.
By modern standards, someone with 1 million in wealth isn't rich. Most people who had any career lasting 40 years + a house purchase 30 years ago are millionaires today. That's the power of compound interest & a wild real estate market.
can't help but think that this is sampling bias.
Echoes many of the findings of the Millionaire Next Door.

https://www.marketwatch.com/story/heres-how-you-can-be-the-m...

I just find it amusing that anyone ever thought otherwise. At the end of the day, having capital means you don't have to have a job while you're in school, you can do extracurriculars to gain a leg up, you can start a business, or you'll have friends in high places or who own business to network with and get jobs from.

Self-preservation is in everyone's nature. If you're rich, you're going to do the most for your family, your children and you're going to make sure it stays that way.

Education doesn't lead to social mobility, redistribution of wealth does. The countries with the most social mobility as well as the most equality have fairly 'socialist' political and economic systems. Of course, going full communist has been shown to have disastrous effects, so there's obviously a balance somewhere, but it seems that in the US and UK for sure the systems are still tipped a little too much towards the rich.

>>Education doesn't lead to social mobility, redistribution of wealth does.

Two random thoughts:

Education is good for everybody - the poor may perhaps not gain on the rich, but their quality of life will be better than their similarly poor parents.

Severe redistribution of wealth can have second-order effects : people stop working and producing if too much of their labor is taken from them.

> Education is good for everybody - the poor may perhaps not gain on the rich, but their quality of life will be better than their similarly poor parents.

I'm not in the UK, Canada rather, but our generation is more educated than our parents' by a rather large margin, yet we're the first generation that's going to be poorer than the previous. Not sure this is progress.

While we have computers and cell phones nowadays, buying a house and raising children on a single income is a pipe dream for most. Wages have stagnated in a bunch of industries. Yet the rich get richer.

> Severe redistribution of wealth can have second-order effects : people stop working and producing if too much of their labor is taken from them.

I did mention that, and yes it does. Hence a middle ground.

>Severe redistribution of wealth can have second-order effects : people stop working and producing if too much of their labor is taken from them.

I guess the key is to only take from people who do absolutely nothing.

Taking from people who have absolutely nothing might be a flawed plan...
People deciding to stop working is a good thing. It means they have market power and potential employers need to take that into account.
>Education doesn't lead to social mobility, redistribution of wealth does.

I cannot name a single example that would prove this. Having little education and redistribution of wealth has led to whole nation simply getting poor in every example I can think of.

Social mobility != wealth and doesn't even necessarily correlate. Some countries have high mobility and are rich (Germany, Sweden, Canada). Some countries have low mobility and are still rich (US, UK, or maybe for a more extreme example, Saudi Arabia). Some relatively poor countries have low mobility (Brazil, Argentina). Some poor countries have high mobility where the topline is still poor.

Education does help the total wealth of a nation. But education doesn't necessarily help anyone change their social standing within a single country.

My understanding is that you claimed that education does not help one bit to social mobility. On national level, to big groups of people. I still think that is false and I still have not seen any one example that would even rise a suspicion that your claim could be sometimes true.
Doesn't high mobility actually mean that outcomes aren't correlated to inputs, which doesn't seem like an obviously good thing? Low mobility would also mean the same thing. Somewhere in between would be where the actual difference between generations equals the difference in outcomes.
> The countries with the most social mobility as well as the most equality have fairly 'socialist' political and economic systems.

Which countries are you talking about? There are almost no countries left that actually have socialist economic systems, because they just don't work. Countries like Sweden, Denmark, Netherlands or Norway that are often misleadingly described as "socialist" (positive or negative) all have free-market capitalist economic systems. In some cases more free than in the US. The difference is usually in that they have socialized both health care and pensions, as well as somewhat more comprehensive social security programs.

Furthermore, it is unsurprising that low inequality often leads to higher social mobility[1], because income strata are closer together. It tells you nothing about how much of an improvement moving upwards is in real terms, nor does it say anything about the real level of wealth.

Case in point, income in the US is more unequal, but income and purchasing power is generally higher[2].

[1] https://en.wikipedia.org/wiki/Socioeconomic_mobility_in_the_...

[2] https://www.economicpolicyjournal.com/2015/10/the-truth-poor...

Going to split hairs over the definition of socialism?

Also, the US is closest on the chart to Singapore and Argentina, two places with disparate purchasing power. Maybe that's not correlated? On the other hand, inequality and social mobility do seem somewhat more connected.

It's also obvious that all the countries with lower inequality and higher social mobility have higher living standards than the opposite, with a few potential outliers.

> Going to split hairs over the definition of socialism?

Absolutely. Socialism equals failure born out of ignorance. Bernie Sanders is a socialist. Ocasio-Cortez is a socialist. These people are clueless about the economy, as well as the countries that they themselves refer to as socialist[1].

[1] https://acton.org/publications/transatlantic/2019/01/17/denm...

Social democracy works. Obama is a social democrat. A welfare state can work, if there's an economy to support it. Socialism ends up destroying the economy, which ultimately destroys the welfare state as well.

The American socialists will not destroy the economy by turning the means of production over to the state, like the Soviets. They will destroy the economy with reckless spending programs that will create so much debt, it will either bankrupt the state or destroy the US dollar - the one major export good that the US has left.

> On the other hand, inequality and social mobility do seem somewhat more connected.

Yes, as I explained, if equality is low, it easier to move up or down an income strata, but it also means less in terms of wealth.

> It's also obvious that all the countries with lower inequality and higher social mobility have higher living standards than the opposite, with a few potential outliers.

Similar reason, if the standard of living is generally lower, it's relatively easier to rise up in absolute numbers. That is, if you want to go into the top percentile in Denmark, you'll need to earn maybe half a million euros (couldn't find a number), whereas in China you only need to earn less than 100,000$[2].

[2] https://blogs.wsj.com/chinarealtime/2013/09/23/what-percent-...

Socialism seems to act like a societal micronutrient. A deficiency leads to the possibility of wide range of social sicknesses whereas overdosing on it (communism) is acutely (one generation) fatal.

Like everything else, moderation and balance.

Look at the parliaments of European countries, actual socialists are generally in the small minority.

People mistake socialism with social democracy, which is more or less the same as what moderate democrats in the US are espousing.

I would measure socialism not by the number of people who call themselves socialists. Europe is farther to the left on the spectrum, so today’s moderate are yesterday’s core socialists. Look at the tax burden, state role and involvement in business and personal lives.
As a software engineer who makes $150,000 per year, I'm wondering why you assume that inequality is bad? It's possible that we could improve the conditions of the poor while also increasing inequality, so that means that there's never any reason to discuss wealth redistribution as a possible solution to poverty. Also, it's human nature to want to help your offspring, so therefore it's immoral to ever even think of doing anything to reduce the advantages that rich kids get. After all, I'm for equality of opportunity, not outcome.

If you really want to help the poor, the priority should be growing the economy, which should be measured by how well my stocks are doing. This article should be flagged as a propaganda piece from the far-left publication Vice.

This binary "inequality is bad/good" is a straw man. In the 1960s when the average CEO made 20 times the average worker, that's still inequality, but when it grows to over 300x as it is today, it doesn't seem inconsistent to me to argue that is a problem.
This all sounds rather tone deaf. What is the point, in your mind, of "equality of opportunity" if it doesn't result in any outcome? How exactly are people at the poverty level helped, this month, by the performance of the stock market?

When someone making more than triple the median salary in this country (who I'm guessing has never had to live on minimum wage) says we don't need to discuss wealth redistribution, but without offering any concrete suggestions about how to help the poor today, I find it hard to take that seriously.

Equality of opportunity means that if a homeless person and a rich kid work exactly as hard and get the same grades on the same tests and both perform the same at work they end up in the same place. That means if they both do great they could both end up well off, and if they both decide they don't need to work and skirt their responsibilities they can both end up out of a job and not in a good place, at least until they start doing better at their jobs again.

Equality of outcome means a lazy drunk who never cracked a book would get the same as an industrious person who makes great sacrifices for their career and education.

I assure you that you should take my opinion very seriously. After all, I'm smart enough to type JavaScript into a text editor, which makes me more qualified to make judgments about political/social issues than any journalist or politician.

Equality of opportunity means that no one is a serf or a slave, except people in the third world, who obviously don't count. It's important because it means no one can ever accuse me of having an unfair advantage over anyone else.

The stock market helps the poor by giving money to job creators, meaning that it might reach the poor eventually. Didn't you ever read Basic Economics?

Look to countries like Brazil, Mexico, India, Russia to see why too much inequality is bad. Like I said, there's a balance.
https://www.justfacts.com/news_poorest_americans_richer_than...

The poorest 20% in the U.S. have it better than the middle class in most countries, despite the inequality.

The point is that inequality causes a bunch of societal ills (crime for example), nevermind what the actual living standards are.
Inequality is not the cause of crime. Poverty is the cause of crime. Just because there is inequality, doesn't mean certain people have to be poor. Wealth is not a pie with a limited number of pieces to go around. Wealth is created.

For example, you could fish all day and you've created wealth. This doesn't necessarily exclude the possibility of someone else fishing and creating wealth themselves.

You’re assuming the natural order of society is to preserve the wealth of the wealthy. Which may not be true at all.