Transgenerational advantage

Summary below of a particularly dumb TED talk from a New School professor. The New School is far Left from wayback so the idea presented is as dumb and impractical as you would expect of that. It's true that economic advantage tends to be passed on from father to son but why and how?  The Newschooler doesn't know.  He just knows that it is.  So he resorts to vague generalities -- which apparently sounded clever to his audience. 

That wealth is transmitted in some automatic way once you have it is absolute bunkum.  How many times have we read of people winning big in a lottery and blowing the lot in short order?  Having money does not even encourage you to keep it, let alone pass it on.

But there is no need for "cleverness" in order to explain the phenomenon that our Newschooler has noticed.  It's perfectly plain why rich men tend to have economically successful children.  It's because you have to be pretty smart to get rich (As Charles Murray showed decades ago) and IQ is highly hereditary.  Both father and son get rich because they are both  smarter than the average. 

Giving a son money will do nothing to alter the main operative factor in wealth acquisition: IQ.  If he is smart he doesn't need it and if he is dumb he will simply blow it.


Economists often point out the simple truth that having wealth makes it easier to get more wealth, which means those who have a lot of money pass on an advantage from one generation to the next.

To adjust for that, economist Darrick Hamilton, a professor at The New School in New York, recently proposed a kind of baby trust fund system. His idea is to give all kids in the US a chunk of cash when they’re born, ranging between $US500 and $US60,000 based on their family’s wealth. That would help give all of thems a fair shot at a prosperous future, he said.

“Wealth is the paramount indicator of economic security and well-being,” Hamilton told a crowd at the TED Conferences headquarters in New York in September. “It is time to get beyond the false narrative that attributes inequalities to individual personal deficits while largely ignoring the advantages of wealth.”

SOURCE