Even more surprising, inherited wealth is much more important in the lives of those who have relatively little wealth than it is in the lives of the super rich. For the top 1% of wealth holders from 1989 to 2013, inherited wealth accounted for only 17% of their assets. (The 1%, in this analysis, is an overwhelmingly self-made group.) By contrast, for those with assets of just $25,000-$50,000, inherited wealth accounted for 52% of their worth.
As a bizarre consequence of this pattern, African-Americans, who have low levels of net worth on average, are the social group for which inherited wealth represents the largest share of their net worth. Another odd implication is that inheritances tend to make overall wealth-holding more equal. Were inherited wealth to be completely abolished, the wealth of the poor would decline more than that of the rich. Inherited wealth is the great equalizer. Who knew?
Steve taught me—by doing it in front of my eyes—that thinking like an economist is not the same as possessing this or that technique of math or econometrics. I have nothing against math or econometrics (well, maybe a little against the more silly uses of them). But I do think an economist should be one, as Steve is an economist right down to his fingertips. To see what I mean, look at the bottom of p. 6 of the English translation of Thomas Piety’s Capital in the Twenty-First Century, and note that Piketty, trained in France and MIT, does not understand supply response to increasing scarcity.