There’s a very deeply rooted part of me that is resentful of generational wealth. Mostly because my ego leads me to believe other people aren’t better than me.
Yesterday we went to Costco and spent nearly $300. And I thought “oh shit!!” because like 3 years ago that would not have been possible.
Then I remembered there are people who do things like buy sports teams and multiple mansions. It’s a whole other plane of existence. I’m not interested in getting there.
I essentially empathise with your take and I think if I had kids would take a similar approach, but for most of human history people have been preoccupied with providing a better life for their children and by extension their children's children and it probably has more to do with biology and evolution than a rational analysis of why such a thing is important. Most people are just hard-wired to do this - give their kids the best circumstances possible, and in our society that generally means passing on accumulated wealth and ensuring access to college. People also want to have influence in the world beyond their deaths.
I, too, lived a traditional middle class suburban childhood with all of my needs and a significant percentage of my wants provided for. Upon moving out of my parents home, I have experienced inability to pay rent, electricity turned off and IRS liens. From this I learned better behavior. I also learned how to make money, capitalizing on acquired skills. Now I am what most would describe as well off. Took 40 years but it was rarely painful once I learned how to live within my means. Those who complain there is no way up are probably, in their particular case, right. But it isn't the fault of the society they live in.
the idea of each generation needing to "re-create" it's class position through something as nebulous as "the meritocracy" is a source of anxiety for middles class people. If you're rich you know your kids can be rich but if you're middle class you have no idea if your kids will possess the necessary "skills" to get a professional job. Of course, there are all kinds of weird class signifiers that people invent for lower ability children of professionals to simulate "winning" at the meritocracy ("bad test taker" "visual learner", etc) but at the end of the day it's a source of anxiety. Hence the desire for generational wealth (formerly in the form of a house, in our unaffordable housing market it now takes different forms which is why it seems new)
This sentiment's resurgence seems to be connected to the idea that hard work isn't enough to get ahead now and that the trend will accelerate in the future.
It makes sense to want your grandchildren to get a job if you're in a group that believes that a W2 job will be able to purchase a house and rear children without fear of scarcity. However if you believe that the recent leaps in lower-class/upper-class stratification will become bigger in the future, almost insurmountably so, then providing a measure of generational wealth to your children will be the only way to give them a fighting chance to live a present-day middle class life
For example, if housing prices continue to outstrip real earnings for the next 50 years, only the top decile of earners might be able to afford to own a home outright by 2070. If you believe that will be the case, then leaving your children with a measure of money that can grow between now and 2070 will be a way to help them purchase a home even with an unknown slurry of future economic conditions.
As with many things, I think this idea is not new but rather the resumption of something quite old after an anomalous pause in the 20th century. Generational wealth used to look like serious landholdings for fancy people, but it also looked like a house and a trade or way of life for almost all regular people for almost all of time. It is historically a very uncommon approach to have kids start from scratch at 18—those kids would not only have the privilege of some legwork done for them by advance generations, but would also have the duty of maintaining that “wealth” (which may have literally looked like a job! skills and access to guild labor positions *was* a form of generational wealth) for future generations. The idea is that you are working to build something in conjunction with those that came before you and those that came after you.
The important question is what is the point of building that thing? Beyond a guarantee of sustenance and survival and basic comfort, why bother building/passing down/keeping up some intergenerational project? This is a bigger question about whether wealth is supposed to be an end in itself, where you stop working once you’ve obtained it (as your post sort of assumes—the idle trust fund kid, people who don’t understand hard work, etc.) or whether wealth is the beginning of something, a foundation which would allow you to work *harder*, in a sense, and make contributions others can’t. “To whom much is given much is expected” type vibe. Admittedly there are depressingly few examples of this in modern culture, but my view is that there is a place for pursuits which can only really be understood as aristocratic—studying ancient Greek, becoming a painter, learning the cello, whatever. Whether you are yourself the aristocrat that performs these activities or whether you are patronized by an aristocrat to do so, I think this is a possible defense of surplus wealth that’s simply not possible if everyone is individually trying to make rent by the end of the month. In some ways I am even more offended by the super wealthy kids I went to school with who are cosplaying status anxiety about getting a 6-figure job to grind it out at McKinsey for 12 hours a day. Why? You’ve already made it; you are uniquely capable of dedicating yourself to projects that our market economy won’t justify (or, if lacking the requisite talent to perform these projects yourself, finding and supporting others who can). I find this grotesque; an abdication of the duty that follows the privilege. If you have something others don’t, you are meant to do something others can’t (which doesn’t mean a life of wasteful self-indulgence).
Anyway. I mainly wanted to point out that intergenerational cooperation in the pursuit of stability and prosperity (as prerequisites for doing great works, should your family attain them!) is by far the historical norm, not a modern aberration.
Due respect Freddie, but this feels like the lefty version of bootstrapping Boomers saying “I had to suffer, so you should too,” under the misguided notion that suffering automatically builds character. Sure, it can under the right circumstances. However, suffering can just as easily turn people into avaricious monsters. In fact, a recent study revealed that those born into wealth are more likely to feel sympathy for the poor, while wealthy people of humble origins tend to be more dismissive. After all, if they can overcome the odds and succeed, what excuse do other people have?
For what it’s worth, Goldman Sachs reptile Lloyd Blankfein grew up in poverty while the aristocratic FDR gave this country the New Deal. As flawed as the old system was, at least elites used to have some sense of noblesse oblige. I’m glad your experiences led you to a humane, socialist perspective. However, given socialism’s weak presence in the United States, most people’s response to financial anxiety is probably different from yours.
The irony is that I have seen many families destroyed by generational wealth — the stress and strife of inheritance can bring out the worst in people. And frankly, one of the joys of life is accomplishment , and to take that drive from your children is not really doing them a favor. I do want my children to be safe and protected from financial despair, but great wealth is not beneficial.
I think the problem is that the definition of "wealth" in economics is different than the popular understanding of "wealth" as in "wealthy." Wealth is any kind of financial asset, regardless of whether it allows you to wallow around lighting cigars with $100 bills whilst traveling on your private jet, or if it allows you to use savings to purchase your child a college education, thereby increasing the likelihood they will use that education to accrue their own wealth.
Anybody who dies and leaves a house or an insurance settlement to the next generation has given that recipient "generational wealth." If you don't ever buy a house and don't buy life insurance, then there is no wealth to pass to the next generation. It is a LOT easier to avoid falling out of the middle class if at some point granny dies and leaves you a car, so instead of having to make car payments in your '20's you can drive around in a free Buick. Or if your parents manage to avoid having to sell their home to qualify for Medicaid to keep them in the nursing home, and you inherit said house and whatever they have in the bank. Generational wealth doesn't mean that anybody who inherits it is wealthy--but it does insulate and protect the next generation from quickly falling into poverty should something like illness or job loss happen to them.
I don't see anything wrong with that kind of wealth transfer--but if you play games with assets so that your parents can qualify for Medicaid while still having assets, that is wrong. If you are so rich that your kids never have to work, that is wrong--estate/inheritance taxes SHOULD be brutal--nobody has a right to be rich just because their parents were.
There are some limited situations where on paper a family is quite wealthy, but the assets aren't liquid, so must be sold to pay inheritance taxes. These are what Republicans use to argue against "death taxes"..regularly trotting out a poor family farmer whose kids will have to sell the farm to an evil developer rather than continue the family farm tradition. Same with some family businesses. That is so easily fixed by deferring tax owed until the business (a farm is a business) is sold.
Sometimes it's not the "thing" but what's behind the thing. So coming from the right, they want you to believe that generational wealth is possible for *everybody*. It's not. We have less class mobility (and "class" in the modern US generally is based on economics) than nearly any society at any point history. In fact, children in the US are likely to fall down a class than move up.
And coming from the "left"? The left wants you to believe that generational wealth is a great evil, but much of what they define as generational wealth is that thing that parents give their children just to make sure they start from the same place they did. In a world where a college education at even a state-run school will set you back years with loans, in fact where just breathing requires a health insurance premium in the hundreds of dollars per month (and don't start with "Obamacare." Before COVID the cutoff for help was so ridiculously low that two self-employed people who made $60K a year could expect to spend half that *gross* on premiums and deductibles before the insurance kicked in), and we have loans for everything: houses, cars, furniture. The fact that we can finance anything means, everything costs more because there are no real limits. On top of that, nothing lasts anymore: major appliances, cars, everything breaks down and it's "cheaper" to replace than to fix, if it can be fixed. In other words, you can have a fine life if you don't mind spending most of it in debt living paycheck to paycheck, but that's more and more of us.
So, yes, people are "obsessed" with generational wealth, but "generational wealth" is a murky term that requires a lot of nuance to understand what's being hidden behind the concept and why.
Funnily enough the libertarian philosopher par excellence Robert Nozick had similar qualms about generational wealth. He thought that you should be allowed to pass on your wealth to your children but they shouldn't be able to pass that on to their children.
There’s a very deeply rooted part of me that is resentful of generational wealth. Mostly because my ego leads me to believe other people aren’t better than me.
Yesterday we went to Costco and spent nearly $300. And I thought “oh shit!!” because like 3 years ago that would not have been possible.
Then I remembered there are people who do things like buy sports teams and multiple mansions. It’s a whole other plane of existence. I’m not interested in getting there.
The rich know work-originated-wealth is done for so they're getting theirs for theirs now while they can.
I essentially empathise with your take and I think if I had kids would take a similar approach, but for most of human history people have been preoccupied with providing a better life for their children and by extension their children's children and it probably has more to do with biology and evolution than a rational analysis of why such a thing is important. Most people are just hard-wired to do this - give their kids the best circumstances possible, and in our society that generally means passing on accumulated wealth and ensuring access to college. People also want to have influence in the world beyond their deaths.
I, too, lived a traditional middle class suburban childhood with all of my needs and a significant percentage of my wants provided for. Upon moving out of my parents home, I have experienced inability to pay rent, electricity turned off and IRS liens. From this I learned better behavior. I also learned how to make money, capitalizing on acquired skills. Now I am what most would describe as well off. Took 40 years but it was rarely painful once I learned how to live within my means. Those who complain there is no way up are probably, in their particular case, right. But it isn't the fault of the society they live in.
the idea of each generation needing to "re-create" it's class position through something as nebulous as "the meritocracy" is a source of anxiety for middles class people. If you're rich you know your kids can be rich but if you're middle class you have no idea if your kids will possess the necessary "skills" to get a professional job. Of course, there are all kinds of weird class signifiers that people invent for lower ability children of professionals to simulate "winning" at the meritocracy ("bad test taker" "visual learner", etc) but at the end of the day it's a source of anxiety. Hence the desire for generational wealth (formerly in the form of a house, in our unaffordable housing market it now takes different forms which is why it seems new)
This sentiment's resurgence seems to be connected to the idea that hard work isn't enough to get ahead now and that the trend will accelerate in the future.
It makes sense to want your grandchildren to get a job if you're in a group that believes that a W2 job will be able to purchase a house and rear children without fear of scarcity. However if you believe that the recent leaps in lower-class/upper-class stratification will become bigger in the future, almost insurmountably so, then providing a measure of generational wealth to your children will be the only way to give them a fighting chance to live a present-day middle class life
For example, if housing prices continue to outstrip real earnings for the next 50 years, only the top decile of earners might be able to afford to own a home outright by 2070. If you believe that will be the case, then leaving your children with a measure of money that can grow between now and 2070 will be a way to help them purchase a home even with an unknown slurry of future economic conditions.
As with many things, I think this idea is not new but rather the resumption of something quite old after an anomalous pause in the 20th century. Generational wealth used to look like serious landholdings for fancy people, but it also looked like a house and a trade or way of life for almost all regular people for almost all of time. It is historically a very uncommon approach to have kids start from scratch at 18—those kids would not only have the privilege of some legwork done for them by advance generations, but would also have the duty of maintaining that “wealth” (which may have literally looked like a job! skills and access to guild labor positions *was* a form of generational wealth) for future generations. The idea is that you are working to build something in conjunction with those that came before you and those that came after you.
The important question is what is the point of building that thing? Beyond a guarantee of sustenance and survival and basic comfort, why bother building/passing down/keeping up some intergenerational project? This is a bigger question about whether wealth is supposed to be an end in itself, where you stop working once you’ve obtained it (as your post sort of assumes—the idle trust fund kid, people who don’t understand hard work, etc.) or whether wealth is the beginning of something, a foundation which would allow you to work *harder*, in a sense, and make contributions others can’t. “To whom much is given much is expected” type vibe. Admittedly there are depressingly few examples of this in modern culture, but my view is that there is a place for pursuits which can only really be understood as aristocratic—studying ancient Greek, becoming a painter, learning the cello, whatever. Whether you are yourself the aristocrat that performs these activities or whether you are patronized by an aristocrat to do so, I think this is a possible defense of surplus wealth that’s simply not possible if everyone is individually trying to make rent by the end of the month. In some ways I am even more offended by the super wealthy kids I went to school with who are cosplaying status anxiety about getting a 6-figure job to grind it out at McKinsey for 12 hours a day. Why? You’ve already made it; you are uniquely capable of dedicating yourself to projects that our market economy won’t justify (or, if lacking the requisite talent to perform these projects yourself, finding and supporting others who can). I find this grotesque; an abdication of the duty that follows the privilege. If you have something others don’t, you are meant to do something others can’t (which doesn’t mean a life of wasteful self-indulgence).
Anyway. I mainly wanted to point out that intergenerational cooperation in the pursuit of stability and prosperity (as prerequisites for doing great works, should your family attain them!) is by far the historical norm, not a modern aberration.
Due respect Freddie, but this feels like the lefty version of bootstrapping Boomers saying “I had to suffer, so you should too,” under the misguided notion that suffering automatically builds character. Sure, it can under the right circumstances. However, suffering can just as easily turn people into avaricious monsters. In fact, a recent study revealed that those born into wealth are more likely to feel sympathy for the poor, while wealthy people of humble origins tend to be more dismissive. After all, if they can overcome the odds and succeed, what excuse do other people have?
https://journals.sagepub.com/doi/10.1177/19485506221098921
For what it’s worth, Goldman Sachs reptile Lloyd Blankfein grew up in poverty while the aristocratic FDR gave this country the New Deal. As flawed as the old system was, at least elites used to have some sense of noblesse oblige. I’m glad your experiences led you to a humane, socialist perspective. However, given socialism’s weak presence in the United States, most people’s response to financial anxiety is probably different from yours.
The irony is that I have seen many families destroyed by generational wealth — the stress and strife of inheritance can bring out the worst in people. And frankly, one of the joys of life is accomplishment , and to take that drive from your children is not really doing them a favor. I do want my children to be safe and protected from financial despair, but great wealth is not beneficial.
I think the problem is that the definition of "wealth" in economics is different than the popular understanding of "wealth" as in "wealthy." Wealth is any kind of financial asset, regardless of whether it allows you to wallow around lighting cigars with $100 bills whilst traveling on your private jet, or if it allows you to use savings to purchase your child a college education, thereby increasing the likelihood they will use that education to accrue their own wealth.
Anybody who dies and leaves a house or an insurance settlement to the next generation has given that recipient "generational wealth." If you don't ever buy a house and don't buy life insurance, then there is no wealth to pass to the next generation. It is a LOT easier to avoid falling out of the middle class if at some point granny dies and leaves you a car, so instead of having to make car payments in your '20's you can drive around in a free Buick. Or if your parents manage to avoid having to sell their home to qualify for Medicaid to keep them in the nursing home, and you inherit said house and whatever they have in the bank. Generational wealth doesn't mean that anybody who inherits it is wealthy--but it does insulate and protect the next generation from quickly falling into poverty should something like illness or job loss happen to them.
I don't see anything wrong with that kind of wealth transfer--but if you play games with assets so that your parents can qualify for Medicaid while still having assets, that is wrong. If you are so rich that your kids never have to work, that is wrong--estate/inheritance taxes SHOULD be brutal--nobody has a right to be rich just because their parents were.
There are some limited situations where on paper a family is quite wealthy, but the assets aren't liquid, so must be sold to pay inheritance taxes. These are what Republicans use to argue against "death taxes"..regularly trotting out a poor family farmer whose kids will have to sell the farm to an evil developer rather than continue the family farm tradition. Same with some family businesses. That is so easily fixed by deferring tax owed until the business (a farm is a business) is sold.
I mean, avoiding inter-generational poverty certainly seems like a good thing. But your point is taken.
Sometimes it's not the "thing" but what's behind the thing. So coming from the right, they want you to believe that generational wealth is possible for *everybody*. It's not. We have less class mobility (and "class" in the modern US generally is based on economics) than nearly any society at any point history. In fact, children in the US are likely to fall down a class than move up.
And coming from the "left"? The left wants you to believe that generational wealth is a great evil, but much of what they define as generational wealth is that thing that parents give their children just to make sure they start from the same place they did. In a world where a college education at even a state-run school will set you back years with loans, in fact where just breathing requires a health insurance premium in the hundreds of dollars per month (and don't start with "Obamacare." Before COVID the cutoff for help was so ridiculously low that two self-employed people who made $60K a year could expect to spend half that *gross* on premiums and deductibles before the insurance kicked in), and we have loans for everything: houses, cars, furniture. The fact that we can finance anything means, everything costs more because there are no real limits. On top of that, nothing lasts anymore: major appliances, cars, everything breaks down and it's "cheaper" to replace than to fix, if it can be fixed. In other words, you can have a fine life if you don't mind spending most of it in debt living paycheck to paycheck, but that's more and more of us.
So, yes, people are "obsessed" with generational wealth, but "generational wealth" is a murky term that requires a lot of nuance to understand what's being hidden behind the concept and why.
Funnily enough the libertarian philosopher par excellence Robert Nozick had similar qualms about generational wealth. He thought that you should be allowed to pass on your wealth to your children but they shouldn't be able to pass that on to their children.