Work hard, children are told, and you will succeed. In recent decades this advice served the talented and the diligent well. Many have made their own fortunes and live comfortably, regardless of how much money they inherited. Now, however, the importance of hereditary wealth is rising around the rich world, and that is a problem.
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This article appeared in the Leaders section of the print edition under the headline “The new inheritocracy”
Leaders
March 1st 2025
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- →Inheriting is becoming nearly as important as working
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- →Prabowo Subianto takes a chainsaw to Indonesia’s budget
- →CRISPR technologies hold enormous promise for farming and medicine
From the March 1st 2025 edition
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34 Comments
pseudolus
https://archive.ph/kAVoo
kleton
Becoming? This may sound like a trope and a canard, but indeed this very publication, The Economist is partially owned and controlled by the Rothschild dynasty.
andy_ppp
People really should look at the work of Gary Stevenson here: https://youtu.be/TflnQb9E6lw
The truth is economic growth hasn’t been occurring in real terms for most people for a long time and the rich have been transferring money from the poor to themselves at a dramatic rate.
I’m starting to think the entire system is corrupt and we are headed for a destroyed Europe and a civil war in the US. Maybe I’m very pessimistic but this moment in history feels like the end of the American empire, what comes after this is extremely uncertain but people only seem to demand a fair piece of the wealth after a world war.
henning
The purpose of a system is what it does. The system is working as intended. This is not a problem for capitalism, this has always been the goal.
the_gipsy
Inheriting is the root cause of all corruption. We can never, ever, have a just society based on the principle of giving our children wealth that they did not earn nor deserve.
bgun
The idea that an average person, working hard, can eventually own part of a nation's land and resources, setting up their family with generational wealth, is derived from the pioneer days when land was plentiful.
This was never going to be able to last forever as long as the population keeps increasing. This is why settlers left Europe etc in the first place to seek fortune overseas. And since there is no un-owned land remaining, the market price for land will match or exceed regional population growth worldwide forever, unless a whole lot of people start dying.
Working hard is necessary in its own right for many reasons, but promising everyone that if they "work" hard enough, they too can set up their heirs, is pure marketing. So is shaming anyone who fails to achieve it as "lazy", when it was never going to be possible for more than a fraction.
TZubiri
I think we need to shift from seeing inheritance as something we benefit from.
Every positive comes with a negative, nothing is created nothing is destroyed.
Chemistry found it to be so in the physical domain, confucians in the spiritual domain, and accountants in the wealth domain.
I won't deny that you CAN ignore the responsibilities that come from inheriting wealth, yes you can sell your father's company and life mission, but you destroy your legacy, and your children will destroy yours.
Wealth comes with its own set of problems if taken. Sure we may argue about which problems are worst, but must we? Each is born into a place, each is born into a class. And the principle of balance shall bring equity in the form of responsibility (to paraphrase Spiderman's uncle).
I just feel it's a more appropriate response to tell your parent "I will take care of it" rather than "thank you" and selling it to go on trips and snort cocaine. I'm not saying I'm free of sin and don't indulge in the pleasures of hedon, be it in a coffee (brought to me by a less attractive waiter of a distinct race from other commensals serving a publicly traded company, and made with beans grown and brought under a veil I can assume hides even more injustices) or in the wasting of my intellectual and physical talents on the pursuit and satisfaction of short term audiovisual novelty, but I will do so in guilt damnit!
jimbohn
If skills and knowledge matter less and less because technology and automation grow over time, what matters if not already existing wealth? Might be an hyperbole dictated by the current times, who knows.
nemo44x
When you look around at how expensive homes are in certain areas and continue to lose the auction because everyone else had a cash bid, realize a lot of people are getting a lot of money from their aging and dying boomer parents. Where I live nearly everyone had a lot of help from mom & dad.
tehjoker
In other words the rich are an increasingly large parasite that is increasingly impairing the functions of real society and subverting it to their ends. Two oligarchs are running the country right now in their own interest.
BenFranklin100
A dirty little secret is that that over a third of Gen Z and Millennials get down payment help from their home-owning parents. In expensive cities, the percentage is even higher. When you add the number of parents who co-sign in order to secure the mortgage, the number could reach 2/3rds in expensive metros.
It’s the new feudalism.
https://investors.redfin.com/news-events/press-releases/deta…
mattigames
I like how they always forget to mention the elephant in the room, 8 billion in absurd amount of any living organism, by many estimates we already surpassed the number of rats in the world, but the responses about doing anything at all to reduce that number in the long-term are all emotionally charged and empty of any rational thought.
In the context of capitalism as we known scarcity increases value, such thing is true for number of employees available, the less employable people around the higher the wages and therefore the quality of life of the living.
femto
As predicted in Piketty's book "Capital in the Twenty-First Century". He posited that wealth trumps labour and the post-war period was an anomaly. His proposed solution is a wealth tax. I can't see those with wealth/power implementing a wealth tax, so the alternative is to invest to accumulate wealth and know that your children, who are not in a position to invest, will probably be relying on that wealth.
fumeux_fume
Most of my friends who bought a house in Seattle in their 20s or 30s used inherited funds. When I worked in mortgage lending it was basically universal that anyone younger than 30 was getting a lot of help from parents. There's a massive advantage to owning a house when you're young, especially pre-rate hike.
rqtwteye
We are building a new aristocracy where people are better than others just by virtue of being born into the right family. And if we don't limit the ability to inherit this process will just accelerate.
JimmyBuckets
https://archive.is/RKUl4
brine
Fuck off with your paywall…
fragmede
Shit, I would have chosen richer parents if you'd just told me before I was born.
lanthissa
In a stable society where you dont tax wealth, this is the inevitable outcome.
raminf
Relevant Calvin and Hobbes: https://www.gocomics.com/calvinandhobbes/1991/11/29
drivebyhooting
What value can most US educated bring to the economy? I count myself included.
They’re not hardcore enough to do meaningful research.
They’re too expensive to work in factories. (And not going to compete with Chinese slave labor)
What’s left? Hard to automate or offshore labor: service, or menial labor.
Surely you can’t become wealthy that way?
I just happened to blunder my way into tech despite subpar education.
georgeburdell
This is why I believe the Financial Independence movement is too rearward looking, if you have children. Parents now need to plan for the college (and graduate school) tuition and the house downpayments of their children, because the cost of both have increased by an order of magnitude in the last 50 years.
jarsin
A groundbreaking 20-year study conducted by wealth consultancy, The Williams Group, involved over 3,200 families and found that seven in 10 families tend to lose their fortune by the second generation, while nine in 10 lose it by the third generation.
This study matches my anecdotal experiences. Second and third generations of wealth don't respect money and this manifest in all kinds of bad behavior that leads to wealth destruction.
focusgroup0
part of the reason marriage was invented as a social technology was intergenerational transfer of wealth. so, inheritance has been 'nearly as important' as working for millennia.
starioIC
What is opposing theory to this? I.e., idea that inequality bad
Maybe I’m in a bubble that I seem to hear this and while I do agree I would still like to know what the opposing idea is here.
UncleOxidant
https://archive.is/M5kId
asdf6969
Almost everyone I know got several hundred thousand dollars gifted for a down payment and most of these people are from typical middle or upper middle class backgrounds. I have a top 2% income (by Canadian standards) but the best I can do is a 2 bedroom condo or a bottom of the market townhouse with a long commute
I don’t know a single neighborhood in this city where the average household in that neighborhood makes enough to live there with current prices.
I genuinely don’t know why I even work anymore. I don’t have any achievable financial goals except save as much as I can until I move away to live off my savings in a cheap area
talkingtab
In United vs FEC, corporations were granted to the ability to be treated as persons – with all the rights – when it was good for them. And to enjoy the protections of being a corporation when that was good for them. This was a unilateral decision by the US Supreme Court.
The result is that corporations now choose who candidates are in the US and who gets elected. Once a candidate is elected they serve the master who got them elected. Not, We the people. Any even casual evaluation of the laws passed confirms this. Affordable medical care, which the People want and need? No. Obscene profits from corporations overcharging people for medical care? Great!
Regular people push addictive drugs? Jail. The Sackler Family, probably the biggest cause of drug overdoes deaths ever? Are they in jail? And what about the millions of stock owners who made a tidy sum? Did they lose their money, are they in jail? Nope.
We are not a democracy, we are a corpocracy. Because of a US Supreme Court decision. We need to fix this. And hint: is the word corporation in the US Constitution. Hint #2 does the 14th amendment prohibit unequal protection under the law.
In a democracy the representatives represent the will of the people. In a corpocracy they represent the will of the wealthy corpocrats and corporations. We have two corpocratic parties to choose from. Democrats and Republicans.
We need to fix this.
boelboel
Housing is the obvious problem, only way to fix this is by making it easier to build houses and some kinda land value tax (higher property taxes would work but not as well). Problem is most western countries are gerontocracies and property taxes are the most hated tax. If you didn't get lucky you might as well give up on ever owning a house.
fsckboy
>People in advanced economies stand to inherit around $6trn this year—about 10% of GDP
this is mixing apples and oranges. Let's say the stock market yields 10% annual returns on average (it doesn't, but it's a round number in the ballpark). Let's say you inherit a million dollars. That million dollars invested in the stock market would return $100,000 to you as annual income. THAT number is comparable to GDP which is a measure of income. So, in other words, "people in advanced economies stand to earn annually from their inheritances less than 1% of GDP (yawn) not 10%"
other nits, the baby boomers were an unusually large population group in an unusually prosperous and healthy period of history: we've known they would die for quite some time and we've known they would leave a lot of money. It's not "a trend" and it's not "news". It's a well known anomoly, a blip/bulge passing through the system. It's interesting but it's not alarming.
encoderer
As long as most millionaires are self-made, we are ok.
My dad worked at a gas station and I run a tech company.
guywithahat
This doesn’t hold up logically. To inherit money means the generation before you saved it, but for it to be generational wealth you must then pass on more than you inherited. Further it doesn’t serve as a major investment, because your parents only die ~25 years before you do, meaning it can’t be used to start a business or something similar.
For inheriting wealth to be important to your success, it would either have to come much sooner or you would have to have no kids of your own
DrNosferatu
The Economist agreeing with Piketty???
The world has truly gone mad!
DrNosferatu
So wealth wasn’t all merit then?
Who would say…