Tag: wealth (page 1 of 3)

Tax and/or eat the rich

I’m essentially just bookmarking this in case I think that I’ve misremembered the astounding difference in global wealth between the top 1% and bottom 90% mentioned in this article

The report said that for every $1 of new global wealth earned by a person in the bottom 90%in the past two years, each billionaire gained roughly $1.7m. Despite small falls in 2022, the combined fortune of billionaires had increased by $2.7bn a day. Pandemic gains came after a decade when both the number and wealth of billionaires had doubled.

Source: Call for new taxes on super-rich after 1% pocket two-thirds of all new wealth | The Guardian

Wealth is a product of luck

This seems obvious to me: that luck plays a great part in success. Well, serendipity, perhaps which can always be given a helping hand by elite networks and pushy parents…

Definition of luck

The conventional answer is that we live in a meritocracy in which people are rewarded for their talent, intelligence, effort, and so on. Over time, many people think, this translates into the wealth distribution that we observe, although a healthy dose of luck can play a role.

But there is a problem with this idea: while wealth distribution follows a power law, the distribution of human skills generally follows a normal distribution that is symmetric about an average value. For example, intelligence, as measured by IQ tests, follows this pattern. Average IQ is 100, but nobody has an IQ of 1,000 or 10,000.

The same is true of effort, as measured by hours worked. Some people work more hours than average and some work less, but nobody works a billion times more hours than anybody else.

And yet when it comes to the rewards for this work, some people do have billions of times more wealth than other people. What’s more, numerous studies have shown that the wealthiest people are generally not the most talented by other measures.

What factors, then, determine how individuals become wealthy? Could it be that chance plays a bigger role than anybody expected? And how can these factors, whatever they are, be exploited to make the world a better and fairer place?

Source: If you’re so smart, why aren’t you rich? Turns out it’s just chance. | MIT Technology Review

Image: CC BY-ND fearthekumquat

100% inheritance tax?

If we can’t stop people raking up ridiculous sums of money, we can definitely prevent them passing on that wealth to their kids. Thankfully, more enlightened rich people (in this case actor Daniel Craig) are already putting their own measures in place.

In a Hollywood interview published this week in Candis magazine, Mr Craig made reference to Andrew Carnegie, the Scottish-born US industrialist and one of the wealthiest men in history.

“Isn’t there an old adage that if you die a rich person, you’ve failed?” he said. “I think Andrew Carnegie gave away what in today’s money would be about $11 billion, which shows how rich he was because I’ll bet he kept some of it too.“

But I don’t want to leave great sums to the next generation. I think inheritance is quite distasteful. My philosophy is: get rid of it or give it away before you go.”

Source: ‘Inheritance is distasteful’: Daniel Craig’s children will not be getting his Bond millions | The Telegraph