The fallacy that most wealth is earned

Today’s Morning Report interviewed Oliver Williams from something called Wealth Insight, a consultancy, arguing that the world’s first trillionaire would be created within 50 years.

Predictably, Williams tried to claim that to get that rich “you would have to invent something or create something”. But as Thomas Piketty’s new book Capital in the Twenty-First Century points out, most wealth is actually inherited. In the 19th century, 90% of all wealth was inherited; that figure fell to below 50% in 1970, but is now back up to 70% and rising.

Williams pointed to the example of Bill Gates to back up his argument, but in fact, as Piketty again shows, the wealthy are just as likely to be someone like Lilianne Bettencourt, the heir to the L’Oreal fortune, whose wealth has increased just as fast as Gates’s in the last few decades despite her not ever having worked for it.

Whenever the world does get a trillionaire, in other words, they are likely to have inherited the vast majority of that money. A fact that isn’t convenient if you want to argue that the wealthy deserve every cent they have, but which is nonetheless true.