FacebookTwitterRedditEmail

How Aristocracies are Born

This year’s stock market saw high returns for month after month, as retirees and stock runners alike saw their portfolios rise. Then one day this fall, the market took a turn, and all of the increases of the past several months vanished.

That’s how it goes for the market. Sometimes you’re up, sometimes you’re down.

For the three wealthiest families in the country, however, the market only ever shoots skyward. The Waltons of Wal-Mart, the Kochs of Koch Industries, and the Mars of Mars chocolate own a combined $348.7 billion. Since 1982, their wealth has skyrocketed nearly 6,000 percent.

None of the living members of these families founded the companies from which their fortunes come — all were started by earlier generations.

In fact, more than a third of the Forbes 400 inherited the businesses that generated their wealth. These modern wealth dynasties exercise significant economic power in our current gilded age of extreme inequality.

A new report I co-authored with my colleague Chuck Collins at the Institute for Policy Studies, Billionaire Bonanza 2018, looks at the rise of these wealth dynasties. The Forbes 400 combined own $2.89 trillion, we found. That’s more than the combined wealth of the bottom 64 percent of the United States.

The median family in the United States owns just over $80,000 in household wealth. The richest person in the United States (and the world), Jeff Bezos, has accumulated a fortune nearly 2 million times that amount.

These pictures paint a grim picture of wealth inequality in the United States in 2018.

Wealth is concentrating into fewer and fewer hands while the rest of the country struggles to get by. One in five families has zero or negative wealth. Two in five Americans couldn’t come up with $400 if they needed it in an emergency.

Previous generations tried to warn us about economic inequality. Former President Teddy Roosevelt said in 1913, “Of all forms of tyranny, the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of a plutocracy.”

A generation later, Supreme Court Justice Louis Brandeis warned in 1941, “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”

And for a time, we heeded these warnings. Wealth and income inequality peaked in the 1920s before the passage of high personal income tax rates on the rich, a federal estate tax, and other inequality-fighting public policy measures took hold. Americans enjoyed a general flattening of the economic pyramid up until the 1980s when the modern period of tax cuts for the rich and austerity for the rest of us begun.

It’s safe to say that a country in which three individuals own more wealth than half the country — as Jeff Bezos, Bill Gates, and Warren Buffett do now — is not what Brandeis or Roosevelt hoped for the direction of the country.

Without action, French economist Thomas Piketty warns, the United States will devolve into a “patrimonial capitalism” where the heirs of today’s billionaires dominate our politics, culture, and economy.

The good news is we have solutions to avoid this.

A smart step forward would be instituting a federal wealth tax on assets above $20 million, which would raise an estimated $1.9 trillion over 10 years that could be invested in generating economic opportunities for low-wealth families. Another good idea is to tax large inheritances — people’s genetic lottery winnings — as ordinary income.

There’s nothing natural or inevitable about wealth dynasties. Our ancestors recognized this and took action. We can too.

More articles by:

Josh Hoxie directs the Project on Opportunity and Taxation at the Institute for Policy Studies (IPS-dc.org).

bernie-the-sandernistas-cover-344x550
August 21, 2019
Craig Collins
Endangered Species Act: A Failure Worth Fighting For?
Colin Todhunter
Offering Choice But Delivering Tyranny: the Corporate Capture of Agriculture
Michael Welton
That Couldn’t Be True: Restorying and Reconciliation
John Feffer
‘Slowbalization’: Is the Slowing Global Economy a Boon or Bane?
Johnny Hazard
In Protest Against Police Raping Spree, Women Burn Their Station in Mexico City.
Tom Engelhardt
2084: Orwell Revisited in the Age of Trump
Binoy Kampmark
Condescension and Climate Change: Australia and the Failure of the Pacific Islands Forum
Kenn Orphan – Phil Rockstroh
The Dead Letter Office of Capitalist Imperium: a Poverty of Mundus Imaginalis 
George Wuerthner
The Forest Service Puts Ranchers Ahead of Grizzlies (and the Public Interest)
Stephen Martin
Geopolitics of Arse and Elbow, with Apologies to Schopenhauer.
Gary Lindorff
The Smiling Turtle
August 20, 2019
James Bovard
America’s Forgotten Bullshit Bombing of Serbia
Peter Bolton
Biden’s Complicity in Obama’s Toxic Legacy
James Phillips
Calm and Conflict: a Dispatch From Nicaragua
Karl Grossman
Einstein’s Atomic Regrets
Colter Louwerse
Kushner’s Threat to Palestine: An Interview with Norman Finkelstein
Nyla Ali Khan
Jammu and Kashmir: the Legitimacy of Article 370
Dean Baker
The Mythology of the Stock Market
Daniel Warner
Is Hong Kong Important? For Whom?
Frederick B. Mills
Monroeism is the Other Side of Jim Crow, the Side Facing South
Binoy Kampmark
God, Guns and Video Games
John Kendall Hawkins
Toni Morrison: Beloved or Belovéd?
Martin Billheimer
A Clerk’s Guide to the Unspectacular, 1914
Elliot Sperber
On the 10-Year Treasury Bonds 
August 19, 2019
John Davis
The Isle of White: a Tale of the Have-Lots Versus the Have-Nots
John O'Kane
Supreme Nihilism: the El Paso Shooter’s Manifesto
Robert Fisk
If Chinese Tanks Take Hong Kong, Who’ll be Surprised?
Ipek S. Burnett
White Terror: Toni Morrison on the Construct of Racism
Arshad Khan
India’s Mangled Economy
Howard Lisnoff
The Proud Boys Take Over the Streets of Portland, Oregon
Steven Krichbaum
Put an End to the Endless War Inflicted Upon Our National Forests
Cal Winslow
A Brief History of Harlan County, USA
Jim Goodman
Ag Secretary Sonny Perdue is Just Part of a Loathsome Administration
Brian Horejsi
Bears’ Lives Undervalued
Thomas Knapp
Lung Disease Outbreak: First Casualties of the War on Vaping?
Susie Day
Dear Guys Who Got Arrested for Throwing Water on NYPD Cops
Weekend Edition
August 16, 2019
Friday - Sunday
Paul Street
Uncle Sam was Born Lethal
Jennifer Matsui
La Danse Mossad: Robert Maxwell and Jeffrey Epstein
Rob Urie
Neoliberalism and Environmental Calamity
Stuart A. Newman
The Biotech-Industrial Complex Gets Ready to Define What is Human
Nick Alexandrov
Prevention Through Deterrence: The Strategy Shared by the El Paso Shooter and the U.S. Border Patrol
Jeffrey St. Clair
The First Dambuster: a Coyote Tale
Eric Draitser
“Bernie is Trump” (and other Corporate Media Bullsh*t)
Nick Pemberton
Is White Supremacism a Mental Illness?
Jim Kavanagh
Dead Man’s Hand: The Impeachment Gambit
FacebookTwitterRedditEmail