Inheritance:
the root of Inequality
More about
inequality. Do we ALL start from nothing? Is the starting point the same for
ALL? The answer is: NO. Some people inherit stuff, others don't. Check out the
following article: "How to stay rich in Europe: inherit money for 700 years"[1],
where it states "family fortunes are more prevalent in Europe than in U.S.
or Asia. Their relatively high level is a sign of the continent’s low social
mobility, keeping education, income and social connections from evolving over
generations. In many European countries, not only wealth and income but even
occupations tend to be “sticky,” passed on from generation to generation. More
than one-third of Italy’s richest people inherited their
fortunes, compared with just 29 percent in the U.S. and 2 percent in
China. Overall, heirs and heiresses make up about half of Western Europe’s
billionaires." "In hardly any other country does social origin
influence one’s income as much as in Germany. An example: Count Alexander
Fugger-Babenhausen, a descendant of arguably Europe’s richest man in the 16th
century, says maintaining the fortune’s integrity is a responsibility. The
34-year old returned to Germany to manage the family’s wealth and charitable
activities after working in investment banking and private equity in London".
Interesting the case of Argentina, as always, it stands out. As a country
founded by European migration, the hispanics that were first established 200
years ago took possession of large areas of land called:
"latifundios". European migration that entered the country in the
beginning of the 1900s were promised that if they worked the land they would be
allowed to purchase it and eventually become owners. This never happened. The
rich people, members of the aristocracy and owners of the land, also controlled
the police and the military. In the 1920s, period famous for the appearance of
Carlos Gardel and Tango, Italian workers that were rebelling against the
factory owners to fight for their rights were brutally murdered by the police. Bad
working conditions and a feeling of "longing for home" characterize
Tango, a sad and melancholic music. Violence and government repression against
unions and working class remain even today. See the following chart: "One
Way to Make Money: Percentage of billionaires who inherited their wealth, by
country":
Some economists suggest that the only way to really eradicate inequality
is to abolish inheritance. That would be the only way to secure that everyone
starts from the same level. It is clear though that this will never happen.
Some countries though do introduce heavy taxes on inheritance as a way to
equalize. In the same line of thought, in the article "Inherited wealth
destroying our country"[2]
Nobel Prize winner Paul Krugman, states that the number of self made
millionaires is decreasing, giving room to the rise of an oligarchy. That being
said, the US remains the system closest to a meritocracy in the Western World.
When we think of inheritance however, most people think about money, or
assets. But positions can be inherited as well. Take the example of last names.
1000 years ago, last names would define professions: Smith (for the
Blacksmith), Cook, Butcher, Baker, Taylor... Usually one member of the family
would somehow get into the business, establish a shop and get his children
involved as trainees until they grew older to take charge of the business. An
even better example would be in farming, where owners of large portions of land
usually had up to 10 or 12 children to help them work the land!!! It was so
also that child mortality was very high, so not all children made it to adult
life. It was important to have many children.
The difference between people who inherit and who don't inherit must be
stressed. People who DON'T inherit must work harder to get ahead in life.
People who DO inherit might be a little more relaxed... they know that THEIR
OWN situation is more or less resolved. Once again, entrepreneurial knowledge,
culture and spirit is transmitted from generation to generation. In my case,
coming from a Norwegian business family has given me an unfair advantage.
Due to the strong Networking and relationship-based structures in
European countries, getting ahead in life has been very difficult in Europe for
people with no connections in the business world. Today, however, things are
changing. Revolution 4.0 makes access to information easier than ever. The
Knowledge Based Economy and free and easy access to information has it so that
acquiring knowledge and selling it as a product or service can be done by
anyone. Developed countries already have solid healthcare and education
systems. It is up to YOU and only YOU to change your life. You can take
control, reach people internationally and become a leader in your field. You
don't have to be a genius, you just need to take the initiative... and be a
VISIONARY.
Cristian Bøhnsdalen
CMO/CFO and Co-Founder @ITRevolusjonen
