The Four Hundred

by Doctor Science

No sooner did I post about what kind of backround the American super-rich have when Forbes came out with the 2010 list. Of course, I cannot resist a challenge, so I've made a new table, this time with the top 50 names on it -- so far. I also spent a lot of time making sure to document my assertions, and putting in code to make the table sortable in a bunch of fascinating ways.

In sum:

• 16 out of the 50 (32%) grew up in great wealth: they were basically born on home plate.
• another 11 were what I'd call solidly upper class -- not Great Big Trust Fund Rich, but *extremely* comfortable. Altogether, around half of the people on the list were in the top few percent of the population from birth.
• 12 or 13 (depending on how you count Michael Bloomberg's family) are from the upper-middle class. Notably, most of them made their fortunes in the Computer/Internet sector -- not surprising for people who were basically brought up as technocrats.
• 4 are from middle-class families, 2 from the lower-middle class, and only one -- Harold Hamm -- is definitely from the lower class.

Speaking as someone from the "upper-middle tech" class, only those last 7 (or 8) people were really "self-made", everybody else started with enough cultural capital or just plain capital to not really be on a level playing field with the rest of the population. The Forbes list does *not* show the triumph of free-market competition, it shows that, as Forbes itself has admitted, Want to get rich quick? Have a fabulously wealthy family.

If you can't give your children a couple hundred million bucks each for their start in life, you may be wondering about how to up their cultural capital. Putting together this table (and skimming a whole bunch of biographies), I have two suggestions:

1. Be Jewish. My ballpark estimate is that being Jewish gives you an extra economic class(by my definition, e.g. from middle to upper-middle)es worth of cultural capital. I suspect it's due to a very solid tradition of respecting people who go to school, respecting people who make deals, and having more people in an average extended family who have actually done things like go to college or start a business.


2. Marry a well-educated woman. If you sort by class and look at people from below the upper class, I think there are a larger-than-expected number of billionaires whose mothers had jobs requiring higher education: especially in the sciences, though teachers also make a good showing.

But don't let that distract you, tempting though it is. This game isn't completely fixed -- that's how you get the suckers to keep playing and betting -- but it's *mostly* fixed. A huge portion of the wealth -- and thus the power -- in America is concentrated in the hands of people who did nothing to earn it. If that's not aristocracy, what do you call it?

Comments

[Countme?]

Read Russell Lane's "The Zeros" for a look at a good portion of the Forbes 400 who nearly brought the country and a good part of the world to its knees.

He edited the Forbes 400 at one time before going out on his own to put glossy journalistic lipstick on the pigs on Wall Street during the early part of this catastrophic century and their neurotic, damaging, dangerous coterie of followers, henchmen, hitmen, and whores of all kinds.

He regrets it, I think, though for some reason I expect to see him somewhere in the midst of the next bubble, blow-drying the hair of the next group of world-destroyers.

[dr ngo]

If that's not aristocracy, what do you call it?

Plutocracy.

[Jack]

I remember hearing a while back that the Pew Foundation had a study showing that there was more social mobility in European countries than in America - we just keep this myth handy to tamp down social upheaval.

[Doctor Science]

dr ngo:

In general, yes, it's plutocracy. But the handing down of unearned wealth -- and the assault on any kind of estate tax -- that's more an aristocracy kind of thing, it seems to me.

[Tony P.]

"Ariston" means "excellent", at least in modern Greek. I don't know ancient Greek, so perhaps the original meaning connoted hereditary nobility rather than merit. I like to think not, because I should hope that merit is an older concept than nobility.

In any case, I find myself reluctant to call someone like Malcolm Forbes the Younger an "aristocrat". I prefer earthier Anglo-Saxon terms like "rich bastard" which have no connotation of merit about them.

--TP

[Gary Farber]

I believe Countme? is referring to The Zeroes: My Misadventures in the Decade Wall Street Went Insane, by Randall Lane, not Russell.

[liberal japonicus]

Is it just me, or does anyone else feel the urge to do an imitation of Gerald Butler yelling 'This is Spaaaaaaaaarta'?

[Earnest O'Nest]

'If that's not aristocracy, what do you call it?'

A bummer.

(but not aristocracy because as you point it out: there's a chance of entering the class, remote enough to keep it consistent but just great enough for the losers to keep trying.)

[ajay]

but not aristocracy because as you point it out: there's a chance of entering the class, remote enough to keep it consistent but just great enough for the losers to keep trying.

Earnest: there's always a chance of entering a true aristocracy - ennoblement, or marriage.

Tony P: the original meaning had connotations of excellence in warfare. The aristocrats deserved their power and status because they led the army in war, which, back in the day, meant they were literally out in front, demonstrating courage, steadfastness and all the other traits that Greeks valued.

I remember hearing a while back that the Pew Foundation had a study showing that there was more social mobility in European countries than in America - we just keep this myth handy to tamp down social upheaval.

Correct. http://www.voxeu.org/index.php?q=node/338

[Earnest O'Nest]

Yes, ajay, but the access is controlled, and here there are no rules for such access. The joining of the ruling class is de facto.

[Tom M]

From the Center for American Progress:

By international standards, the United States has an unusually low level of intergenerational mobility: our parents’ income is highly predictive of our incomes as adults. Intergenerational mobility in the United States is lower than in France, Germany, Sweden, Canada, Finland, Norway and Denmark. Among high-income countries for which comparable estimates are available, only the United Kingdom had a lower rate of mobility than the United States.

[jonnybutter]

In any case, I find myself reluctant to call someone like Malcolm Forbes the Younger an "aristocrat".

Having no Greek, I find nothing dissonant about thinking of these people as The Aristocrats

[jonnybutter]

It's not for nothing that Goldwater is the father of the modern conservative movement. We all know that he was a self-made man - aside from his inheriting a department store chain which got its main original impetus supplying the government...

Let's hear it Barry (from 'Conscience of a Conservative'):

"I have little interest in streamlining government or making it more efficient, for I mean to reduce its size. I do not undertake to promote welfare, for I propose to extend freedom. My aim is not to pass laws, but to repeal them."

This is appropriate to the other thread or this one.

[Slartibartfast]

Unfortunately my workplace has your site blocked, Dr. Science, so viewing of the chart is going to have to wait.

Unless of course you elect to include it in this post.

A 39% inheritance tax would still have the top 25 stuffed with Waltons, I note, but it would cause the Mars family to fall down into the next 25.

[Phil]

At least those Waltons finally got off of Walton's Mountain and found some success after all those struggles through the Depression.

Wait, what?

Oh. Nevermind.

[wj]

Looking to ajay's comment, on the origins of "aristocracy," it occurs to me to wonder: just how many of these folks served (at all, let alone in combat parts) in the military? How about their parents?

[Sator Arepo]

Grr. Dr. Ngo stole my commnent.

Anyway, I think "Plutocrats" would be a great name for a baseball team.

[Sebastian]

I object on general principle about making policy to cater to *or against* the very most outlying tails of distribution. If we cater to an economic design that vastly improves the lives of a vast majority of the population, I don't particularly care if we also get a couple thousand Paris Hiltons on the the top as well. If we aren't doing so for the vast majority of the population, that is *probably* a separate issue from inherited wealth as the tail of that is so small.

I also don't agree with your characterization of 'self-made'. Tens of millions of people qualify under your definition of upper middle class, but only 13 worked their way to the Forbes list. They did a lot with the cultural capital they were given, as opposed to the millions of people with the same or better cultural capital that did much less with the same or even more cultural capital. There is a large element of self-made in that which can't be so casually dismissed. Ignoring that in for example, Page, Brin and Dell strikes me as missing the argument. The same even goes with many of the 'upper' class ones. Dismissing the self made component of Bill Gates, Warren Buffet, and Rupert Murdoch because they started in the upper class seems like a bad place to ground any strong criticism of "free market competition".

Also, note how "My ballpark estimate is that being Jewish gives you an extra economic class(by my definition, e.g. from middle to upper-middle)es worth of cultural capital," undercuts the whole thing. This strongly suggests that there is much more to the story than where you start. Heaven knows I've wasted some of the start I was given (at least if the goal is to earn as much money as possible).

[Rob in CT]

Fair points, Sebastian.

I think that this points to an underlying problem, but I also agree that if the system is functioning well for the vast majority of the population, it may be best to leave well enough alone. I have the distinct impression, however, that things are NOT functioning well for the vast majority of the population, and the conditions that allow for this concentration of intergenerational wealth are part of the reason. Tom M links to a report that indicates that the USA's vaunted social mobility is actually lagging in comparison to many other Western nations (by how much? I need to invest a little time and read the report, obviously).

[latinist]

"Marry a well-educated woman" and/or, if you are a woman, get a good education.

Don't mean to be a twit about it, but that seems worth fixing.

[Rob in CT]

And marry a well-educated man...

Basically, pair up with somebody who is likely to be a big earner.

Works for me...

[Slartibartfast]

I'd say that "marry rich", in general, is a good tactic for moving up in the world, if that's what you're about.

That applies to both sexes.

[Hogan]

Trouble is, the trend now is for highly educated high earners to marry each other.

[Rob in CT]

ttp://www.slate.com/id/2268981

Appropriate to the discussion, I think.

...

Well, Hogan, how many people meet their spouses in college, like I did (not that either of us is *particularly* highly educated - just bachelors degrees)? Is this odd?

[Rob in CT]

http://www.slate.com/id/2268981

Sorry, somehow the "h" got left out before. Poor copy & paste by moi.

[Hogan]

I didn't say it was odd, just that the advice to "marry up" cuts against the last forty years of trendlines.

[GoodOleBoy]

' As of 2006, the United States accepts more legal immigrants as permanent residents than all other countries in the world combined.[1] Since the liberalization of immigration policy in 1965,[2] the number of first- generation immigrants living in the United States has quadrupled,[3] from 9.6 million in 1970 to about 38 million in 2007.[4] 1,046,539 persons were naturalized as U.S. citizens in 2008. The leading emigrating countries to the United States were Mexico, India, and the Philippines.[5]'

From Wikipedia

Assuming some level of accuracy, I suggest this contributes a lot to the US downtrend in social mobility when compared to western Europe. It's likely that the US has more illegal immigration than all the rest of the world combined as well. The children of all first-generation immigrants may not reach a level of social mobility seen in the past since assimilation (a requirement for most such mobility, IMO) consumes much of their energy or effort,(that is for those who make the effort).
There are many more immigrants today who fail to assimilate than in the early and middle periods of the 20th century.

I wonder how we would look if an adjustment were made for these factors.

[Nate]

"There are many more immigrants today who fail to assimilate than in the early and middle periods of the 20th century."

On what evidence, and what definition of assimilation? Most of the kids of immigrants I've met have been fluent in English, follow the same general media, care about the same sports teams, listen to many of the same kinds of music, etc as anybody else. I don't see where the failing to assimilate claim comes from.

[GoodOleBoy]

'On what evidence, and what definition of assimilation? Most of the kids of immigrants I've met have been fluent in English, follow the same general media, care about the same sports teams, listen to many of the same kinds of music, etc as anybody else. I don't see where the failing to assimilate claim comes from.'

My sense on this is informed more by observation than research. My spouse is a legal immigrant from South America. She came to the US in the fifties with the knowledge that she would need to speak English to function effectively here. She, all her relatives who immigrated, and most all of our social contacts who are from latin America, assimilated in a fashion similar to most immigrants who came prior to her time. In the most recent period, say since the Reagan amnesty, large numbers of immigrants enter the country and form their own communities, using their native languages to communicate within that community, and basically seeming to try to sustain the cultural environment that they left behind. I don't find this objectionable, but it is not the surest or quickest path to upward social mobility. I think it works to their detriment.

[Phil]

There are many more immigrants today who fail to assimilate than in the early and middle periods of the 20th century.

I'm going to simply gainsay you and state that this is categorically untrue. In the early and middle periods of the 20th century, a sufficient number of immigrants remained unassimilated that even small cities had a variety of ethnic social clubs and meeting halls, and enclaves of residences, where immigrants could wall themselves off from the larger culture and not be expected to learn or speak English. That's less and less true today, at least in all the placed I've lived.

(Anecdote: My wife used to work in a law office that catered to Cleveland's east side Slovak community, and the two partners there had a number of non-English-speaking clients. Not one of them was not a senior citizen.)

It's likely that the US has more illegal immigration than all the rest of the world combined as well.

I suspect the correct answer to this question is "Russia," but I'll wait for your cite, which I just know is forthcoming.

[Phil]

Also: My wife's grandparents on both sides were first-generation Americans, their families having emigrated from Poland and Czechoslovakia. Her great-grandparents never spoke a word of English, and her grandmother did not speak it at home, ever, until her parents were dead. I don't believe she even learned it until she was a teen.

[Nate]

"...arge numbers of immigrants enter the country and form their own communities, using their native languages to communicate within that community, and basically seeming to try to sustain the cultural environment that they left behind."

Ever heard of Chinatown(s)? Or Irishtown, or Little Italy, Little India, or Greek Town (like Chicago's, where even as of a couple years ago, the CVS has signs in English and in Greek?) Ethnic neighborhoods exist all over. All places where the immigrants who moved in tried to sustain the cultural, religious, and linguistic communities they left behind. Seen My Big Fat Greek Wedding, or an American Tale? Often times the first generations of those waves of immigrants would never end up learning English very well, either.

Generally the course with immigrants is the first generation assimilates the least, the second generation tries to fashion a mixed identity, the third generation's pretty much indistinguishable from Americans here however long, and the fifth generation starts bitching about all these damn immigrants coming to spoil their country. (May also occur in the third and fourth generations)

[GoodOleBoy]

I know the truth of all these responses, but I think the numbers are much bigger now. In many of these earlier periods, one of the purposes of controlling the number of immigrants was the recognition of the need for assimilation and if the numbers are too big, assimilation is more difficult to attain.

And the issue this was pointing to was 'social mobility'. Is the current immigration situation a significant positive, negative, or no impact on social mobility?

[Phil]

I know the truth of all these responses, but I think the numbers are much bigger now.

The limited experience is really showing. It's less than useless when comments emerge from sources based solely on ignorance and bias. If you actually know something about immigration and assimilation, and how they scale, please enlighten us.

[Hogan]

I don't find this objectionable, but it is not the surest or quickest path to upward social mobility. I think it works to their detriment.

And to the extent that that's true, I think they realize it. The incentives are aligned the way they always were: assimilation is more politically, socially and economically rewarding than not assimilating. Learning English as well as, or even instead of, the language of the old country makes things easier. Either we're getting less rational immigrants than we did in the old days, which I doubt, or the effects you're seeing are caused by a bump in either the number of first-generation immigrants or the number of immigrants who don't intend to stay permanently, and therefore don't have those incentives. Or maybe both.

[liberal japonicus]

GOB, this might be a moment when you reflect on the possibility of your prejudices are driving your observations (I hasten to add that I think we all have prejudices, so I'm not trying to make you out as some sociopath here) Linguistic studies of current day immigrants suggest the process of linguistic assimilation is occurring not on the time frame of 2 or 3 generations, but within a single generation, with the ability of younger sibilings to converse in their heritage language dropping precipitously.

I'd also suggest that today, advances in technology cause you to have many more opportunities to be confronted by the existence of non English speaking minorities. Whereas 100 years ago your daily encounters with German language newspapers, or going into a store where the help would only speak German would be very rare, but now, you see Telemundo in between your ESPN and CNN, and you are much more likely to run into people speaking Spanish because they are filling up those lower income jobs that help you shop at Walmart. Furthermore, the turn of the century German could only go back to the home country to see relatives at the latter portions of their life, and it would have been a once in a lifetime trip, whereas now it is possible to keep in touch with extended family. You can say you are a conservative and want to turn back the clock, but you can't pick and choose which things you want to turn the clock back on. Immigrant labor cleaning at Walmart, who have opportunities to either go back or at least communicate, and and having the Spanish speaking maid or restaurant worker or gardner take a job in an upper class neighborhood and still be able to live in a place where Spanish is the language of daily communication are all things that are woven into the fabric of having cheap prices at Walmart, the ability to travel for leisure and have a lifestyle that is possible without live in servants. It's a full set.

[Gary Farber]

"It's likely that the US has more illegal immigration than all the rest of the world combined as well."

What's your understanding of how much illegal immigration Russia, China, India, the European Union, and the rest of the world have, that leads you to this conclusion?

[wj]

For those saying that the US has more immigrants than all the rest of the world, a quick question: How are you counting those, like the third generation Turks in Germany, who have never known any other home, but are not legally allowed to be "Germans"?

Are they immigrants, even though they haven't moved from the country where they (and their parents, for that matter) were born? Or are they "Germans," even though Germany doesn't agree? (Not to pick on Germany. It just happens to be an example which a lot of people will recognize. Koreans in Japan would work equally well.)

[Sebastian]

"Are they immigrants, even though they haven't moved from the country where they (and their parents, for that matter) were born? Or are they "Germans," even though Germany doesn't agree?"

To the extent they don't count as unemployed Germans, for the purposes of this discussion they don't count.

[Doctor Science]

latinist:

I meant, perhaps too subtly, to imply that an educated woman might be a good spousal investment for a woman, too. Looking through the data and skimming the biographies, I suspect the education level of the mother (or primary caregiver) is more important than that of the father or secondary parent.

[Nate]

It's also possible that GOB lives somewhere where there are more Spanish-speaking immigrants now but also somewhere where large groups of earlier immigrants didn't end up, like portions of the Southwest. Which doesn't make him right, but it could be the first time he's run into ethnic enclaves in his area. Though, as I mentioned before, their existence in places like San Francisco, New York, the DC area, Boston, etc that were centers of earlier waves of immigration is pretty broadly known and pretty closely woven into the story and shared cultural heritage of America.

[Doctor Science]

Sebastian:

If we cater to an economic design that vastly improves the lives of a vast majority of the population, I don't particularly care if we also get a couple thousand Paris Hiltons on the the top as well.

I find this frankly kind of shocking. I was brought up to think of aristocracy -- hereditary power -- as *intrinsically* a bad idea, for moral reasons as well as practical ones.

It's true that the "super-wealthy tail" is a very small number of people. But surely you can see that they are extremely, disproportionately powerful. That's why I call them an aristocracy.

[Nate]

The problem with aristocracy and trying to have an economic design that vastly improves the lives of the vast majority of the population is if you're not careful and watchful, the aristocracy will start changing that economic design so it marginally improves their lives, at the vast expense of the rest of the population.

[wj]

Also, the issue isn't the occasional Paris Hilton, who merely flaunts (i.e. spends wildly) her wealth. The issue is those use their wealth for the control (read distort) of major segments of the economy or for political control.

[wj]

Sebastian: "To the extent they don't count as unemployed Germans, for the purposes of this discussion they don't count."

But while they are counted in German's overall unemployment numbers, they don't count as "unemployed Germans" because they are not, in Germany's legal systems, Germans.

Actually, though, I was asking relative to GOB's quote from Wikipedia about who accepts the most immigrants.

[Doctor Science]

GOB's bringing in of immigrants, especially illegal ones, is an example of something I've seen a lot of but don't know quite how to describe.

I've encountered a *lot* of Americans who almost have a mental block against blaming the rich and powerful.

So for instance, I'd say it's quite probable that huge numbers of illegal immigrants *do* tend to go along with depressed wages for citizens -- but to my mind the problem is that employers encourage illegal immigration *because* it depresses wages. The rich (and powerful) are most to blame, not the poor, immigrant or otherwise.

But when I bring this up, people nod and say, "how true" -- and then starting talking about anchor babies or something again. It's as though the idea that "the rich are to blame" doesn't have any traction in their minds, it just slides away.

[Hogan]

As Utah Phillips said, blame travels downward.

[buy taobao]

Live and let live.