Are the super-rich only heirs without their own merit, living off the successes of their ancestors? The legend spread by social democrats like Andrea Nahles or Martin Schulz is refuted by the latest study on the super-rich.
The economic agency Bloomberg has published the list of the richest people in the world. Every reader knows the products through which these entrepreneurs have become wealthy. And certainly, many people use at least some of them: for example, Amazon, which Jeff Bezos invented, or programs from Microsoft, founded by Bill Gates, or Google, made big by Larry Page and Sergey Brin, Facebook by Mark Zuckerberg, or Oracle software by Larry Ellison.
Legend of passive income
These men are not heirs, but self-made entrepreneurs who had good ideas and implemented them into economic reality. They are not only found in Silicon Valley. For example, Amancio Ortega is the son of a railway worker. His career began at the age of 14 as a laborer in a clothing store in La Coruña, a city in northwest Spain. His most significant company is the clothing chain Zara. Its stores are present in all shopping centers and downtowns around the world. Larry Ellison also comes from humble beginnings. An illegitimate child and college dropout, he founded the software company Oracle in 1977, which today, with 135,000 employees worldwide, produces similar products to the German SAP, making him one of the richest men in the world. These super-rich individuals, achieved through their own strength and effort, are not exceptions: According to a 2015 study by the consulting firm PwC and the bank UBS, the proportion of self-made billionaires among billionaires worldwide has increased from 43 to 66 percent over the past 19 years. We are living in the era of self-made billionaires.
Superwealth is diminished by heirs: The industrial families of the 19th century have long disappeared
Left-wing authors like Thomas Piketty ("Capital in the Twenty-First Century") want to convince us that the super-rich mainly live off passive incomes, that is, from inherited money; and this thesis is constantly repeated by many leftists and social democrats. This idea has nothing to do with reality. Yes, family entrepreneurs pass on their businesses to their children, especially in Germany. And if the children are smart and capable, they continue to run the business well. Or maybe not. Even very wealthy heirs often lose their fortune within two or three generations. In 2015, scientists Arnott, Bernstein, and Wu demonstrated that most fortunes of the super-rich are soon diminished again. They ask: "Where are the descendants of the great entrepreneurial dynasties of the past today - the Astors, Vanderbilts, Carnegies, Rockefellers, Mellons, and Gettys?" The founders of major companies and fortunes are exceptional cases - perhaps one in a million people have this power.
THE 10 RICHEST Bloomberg has now released the list of the richest people in the world. Here are the top ten (in parentheses: estimated wealth in billion US dollars)
Jeff Bezos (101.1B)
Bill Gates (89.2B)
Warren Buffett (79.2B)
Amancio Ortega (75.9B)
Mark Zuckerberg (75.4B)
Carlos Slim Helu (63.0B)
Bernard Arnault (61.6B)
Larry Ellison (52.8B)
Larry Page (52.8B)
Sergey Brin (51.5B)
In contrast to them, the descendants of the super-rich only rarely possess this genius. Typically, the generation of descendants halves the inherited wealth, measured against the growth of the economy roughly every 20 years or even in shorter periods. Today, the great fortunes of the 19th century have almost disappeared, and a large part of the corporations created 50 years ago have also vanished from the scene.
The logic of the market makes one rich
Left-wing redistributors do not understand at all how wealth is created. They believe that wealth is a result of wrong "redistribution." Bertolt Brecht classicly formulated this thinking in his poem "Alphabet":
"A rich man and a poor man stood there and looked at each other, and the poor man said pale: If I weren't poor, you wouldn't be rich."
This is how leftists and greens envision economic life, globally. According to them, rich countries must give some of their prosperity to poor countries and rich people to the poor. From their perspective, it is only due to the selfishness and lack of goodwill of the rich that there are still so many poor people. In fact, in earlier societies, wealth often relied on theft - some enriched themselves at the expense of others. The market system, on the other hand, works completely differently. It is based on the principle that one becomes rich by satisfying the needs of as many consumers as possible. That is the logic of the market. Looking at the list of the richest people in the world, one can see that these individuals did not become rich by taking something away from others, but because as entrepreneurs, they provided great value to society by introducing completely new products and services into the world. It is the entrepreneurial vision that changes the economy - and makes inventors rich.
