Intelligence is inheritable. Intelligence is correlated with educational attainment and wealth. People tend to marry within their socio-economic group.
Wealthy people who came from nothing are the exception. Even in places with high degrees of social mobility, climbing the social ladder is a multi-generational saga. Maybe a working class family has a child or two who enter the professional class, then maybe their child has the opportunity for their family to finance a company that goes big, like Dell or Microsoft, or maybe break in as an actor or sports figure. Most likely though, their kids also enter the professional class where the family rolls the dice again the next generation.
This is because intelligence is not all inherited, so those above the mean owe some of their intelligence to luck. Children do not inherit their parents' luck, so they revert to the mean _compared to their parents_. The children retain their inherited advantage over people who didn't get the good genes.
Being smart and working hard will both make most people richer than being stupid and lazy. There’s a share of luck, but that washes out in the population-wide statistical analysis. Plus, if you’re stupid and lazy but you max out on luck and win the Powerball, the odds are surprisingly high that you will eventually go bankrupt, and if you don’t, your children will. So even if you are lucky, you need to be smart and diligent enough not to fuck it up.
Being smart and working hard will do absolutely nothing to make most people richer, unless they work hard in the specific and limited ways that maximise wealth.
Many of those ways happen to be morally questionable at best, and criminal at worst.
An artistic genius is very likely to lose out financially to an averagely intelligent slum landlord no matter how hard they work. Because the opportunities to make money from artistic genius are heavily skewed towards failure, while for slum landlords they're heavily skewed towards success.
The handful of exceptions in the arts are survivor bias. No one hears about the many more failures, by definition.
There is no sense in which wealth is a level playing field. If you're not born into wealth - still the number one way to be wealthy - the most obviously rewarded trait isn't intelligence, it's sociopathy.
The successful ultra-rich are notorious for greed, selfishness, and lack of empathy. Go to any social event for the ultra-rich and you'll find a disproportionate number of criminals, narcissists, and other kinds of damaged people.
Those are the qualities that make someone a "success". IQ certainly helps, but if you lack the pathological motivation to exploit others it's not going to get you far on its own.
> Being smart and working hard will do absolutely nothing to make most people richer, unless they work hard in the specific and limited ways that maximise wealth.
If you’re smart enough, you can figure that out.
> If you're not born into wealth - still the number one way to be wealthy - the most obviously rewarded trait isn't intelligence, it's sociopathy.
That becomes more and more true as your society approaches the state of nature that your namesake discussed, but it’s less and less true in free societies, and as a consequence, those free societies become richer societies.
Except that most rich people come from inherited wealth. Elon Musk is an emerald mine scion, for example. Sometimes it’s intelligence, but mostly it’s not.
Elon Musk didn’t actually inherit any wealth; he emigrated to America essentially broke and didn’t get rich until PayPal. Also, his father is still alive, so any inheritance hasn’t even happened yet.
Setting that aside, how does being the son of a guy who owned an emerald mine in South Africa explain him being richer than the descendants of Henry Ford or John D. Rockefeller? How do explain the children of all the other emerald mine owners?
I don't believe Elon had any more undue privilege than any other Stanford graduate. (Which is not none, but it means none of the emerald stuff matters.)
There's no need for any such influence anyway, getting rich from PayPal is already pure luck and you should be satisfied complaining about that!
What I am doing is falsifying your hypothesis. If being born to rich parents, having connections, and going to boarding schools is the sole reason people get rich, then we would expect that people with richer parents and more connections who went to better boarding schools than Elon Musk would be richer, and people who grew up in similar conditions to Elon Musk would be equally rich. This is not true.
No, I’m looking at two “lottery tickets” with the exact same numbers and asking why one of them one the jackpot and the other one didn’t. The only conclusion: it’s not a lottery and what you have picked out as the winning lottery numbers are not that.
I believe most people mean significant family wealth, not necessarily post-death inheritance.
You can’t seriously claim that he was broke while being part of an emerald mining family? Also, why are you comparing him to other rich/er folk? Is your point that every extra million is an IQ point?
And what good was his family wealth for? How much of it actually played a role and how? Did he get millions from his family to start PayPal?
I hear a lot about the role of "family wealth", but I never actually hear about mechanism, how exactly it helps. If you're a legacy of a wealthy family, and thanks to that, get into Harvard, then sure, that's a real leg up, but it doesn't explain why some Harvard graduates become billionaires, while overwhelming majority do not. Similarly, if your family is rich enough to invest $1M in your startup, that's surely a huge advantage over regular people, but given how easy it is for non-scions to get $1M in investment funding (and it's really easy), I can scarcely believe that "family wealth" is really such a huge causal factor.
I clicked on the first link. Is the point here that Elon Musk is a billionaire because parents bought him a new car when he was in his twenties? If this is the example of how family wealth allows people to get ahead in life, then, well, allow me to continue to disregard it. What kind car you drive has pretty much zero impact when it comes to achieving wealth or success.
To me it falls in a similar category as how highly intelligent people are less likely to be overweight. I think that with intelligence comes a better sense of how to control oneself. Ever seen the stats on how often lottery winners end up going broke? Not that many people have the capacity and knowledge to control their emotions with their reason. Being wealthy is not a question of making money, it's a question of keeping it.
This is the type of statistic that embarrasses statistics. How many of those rated "highly intelligent" (I would be fascinated on how they measured that!) were in an elevated economic group and so now we're reduced to tautology.
Lottery winners have had no experience in managing wealth, often have had years and decades of being impoverished and wishing for products like jewelry that was always out of reach, and then they get inundated with money. They found that who marshmallow experiment was literally kids who have their needs met aren't rushing to consume what's in front of them and that patience pays off.
You're not making any argument here other than when you're born wealthy you're more likely to be wealthy, and that we know.
I'm genuinely curious what point you are getting at. It seems like you are agreeing with the parent post.
>How many of those rated "highly intelligent" (I would be fascinated on how they measured that!) were in an elevated economic group and so now we're reduced to tautology
>They found that who marshmallow experiment was literally kids who have their needs met aren't rushing to consume what's in front of them and that patience pays off.
Yes, this is what they are saying. There are traits that rich people have that seriously help them maintain and acquire wealth.
> There are traits that rich people have that seriously help them maintain and acquire wealth.
I'm saying the only traits that rich people have "that seriously help them maintain and acquire wealth" is that they almost exclusively tend to be born to rich people. That's it. That's the trait.
You don't have to be rich to have your needs met as a child such that you don't need to gobble up marshmallows as soon as you see them, unless you mean rich in the sense that the vast majority of the people in the US are rich compared to the global average. US middle class would be just fine in that regard.
So are you saying that has nothing to do with their upbringing? If someone were born to Rich parents, but adopted by poor parents they would still have those same traits? Seems like there's a lot more to it than what womb you came out of.
I agree genetics could play a small role, but I think developmental environment is a much larger part of the picture
I think your use of birth is the hangup. It's not who you're born to, it's how you're raised
>I'm saying the only traits that rich people have "that seriously help them maintain and acquire wealth" is that they almost exclusively tend to be born to rich people. That's it. That's the trait.
This is saying that self control and delayed gratification isn't a trait. It's saying that financial literacy isn't a trait.
At best it's a gross oversimplification that ignores the fact that a huge number of poor people have acquired these traits
I'm completely agreeing with you. I've argued this in the worst possible way because everyone is assuming I'm saying the opposite. I'm not saying the seed is different, I'm saying those seeds have more fertile ground.
And I didn't mean "genetic trait" but rather "behavioral trait." Of course it's available to everyone just more likely to be found where it's been nurtured. There are dandelions growing in the cracks of a sidewalk; it's possible, just harder.
I think another aspect that a lot of discussions miss is a feeling of hope. Rich kids tend to have hope. Very poor kids can feel stuck and hopeless. When you have a child who, at a young age (think five or six, even) doesn't feel hope for their future, they don't try as hard and they're more likely to give up sooner.
This is all much easier if you grow up wealthy. If you start life with a trust fund and people around you who know how to manage wealth, you have a huge advantage
Many children of the UHNW families I know are raised by a rotating cast of nannies and emotionally neglected by their parents. It's heartbreaking to watch the psychological damage being done. Given a choice for my embryonic self I'd choose an upper middle class couple with high degrees of empathy, one mostly stay at home parent and an obsessive focus on curiosity, knowledge, and self-education.
I personally don't no. I have been ill, I have had to give up on a career in an industry that died and retrain. I have been subject to a very costly legal challenge that was not even close to being of my own making. I am moderately intelligent, but luck didn't care.
I’m sorry to hear that, and I’m agree it isn’t your fault or the result of some personal flaw on your part that you’re not personally rich. What I’m saying is that on a larger statistical level, when we are talking about entire populations, those random factors still exist but nonrandom factors also exist, and the nonrandom ones are the ones that show up in aggregate once you have enough of a sample size.
If you’re going to use that example, surely you’ve heard of “wealth barely lasts 3 generations”? Surely smart gene rich people could sustain it indefinitely?
No because "smart" genes don't sustain. Like 50% is volatile noise. So that would actually line up. I.e. Two 150 IQ don't have a 150 IQ on avg. They have a 125 IQ, and then the two 125 IQ have a 112, and the two 112 IQ have a 106 and voila.
No, because this regression towards the mean tends to pull the children of below-mean parents up, just as much as it pulls the children of above-the-mean parents down.
That said, the grandparent's figure are rather wrong, for two reasons. First is that the heritability of IQ is typically estimated to be around 0.8 instead of 0.5, which means that the expected IQ of parents with IQ of 150 is 140, instead of 125. Second is that this is only the expected IQ. If they have multiple children, some will typically be above the expectation, and some below. More specifically, given standard deviation of 15, around a quarter of children of parents of 150 IQ will have IQ of 150 or higher.
Should get a different word then, since you can't get rid of confounders like prenatal diet and environment that aren't genetic but can cause you to be the same as your parents.
In fact, you can. See, for example ACE model, which explicitly attempts to separate generic causation from shared environment and from non-shared environment. This can be done using twin studies, by comparing correlations between monozygotic vs dizygotic twins on various variables of interest, see Falconer’s formula for example.
This research is not new, it has been done for many decades now. The word “heritability” has a well established technical meaning.
OF COURSE smart people are more likely than average to become rich! How could it be otherwise, unless the only way to become rich was luck?
Now, some people are born rich! But even if it's just the self-made rich that are smarter than average, and people born rich are exactly average (unlikely as intelligence/attractiveness/etc are at least partly inheritable), that means that rich people are ALSO smarter than average. ('above average' averaged with 'exactly average' is still 'above average')
Okay, rather than being pithy, perhaps you could explain succinctly why people are rich, then?
Or perhaps you can admit that in many cases people have achieved moderate to high wealth in democratic free market societies by either working harder or worker smarter than their peers?
One big reason people get rich is because their parents were rich. Rich parents pay for a better education for their children. This gives them access to the best jobs, and most valuable of all a network of people to give them a leg up. This also gives them better access to capital. It is also much easier to try your business idea if failure means moving back into Daddies pool-house, rather than complete ruin. I have worked with a lot of 'entreprenuers' and they are overwhelmingly from rich backgrounds. 'Started it with a small loan from my father of 1m' is a quote I heard more than once.
Another reason is luck. My father worked from nothing to owning a house in a nice place because he had a skill that was in demand. He nearly lost it all and is now scraping a living in his 70's, because technology made his skill less valuable. 10 more years of luck he would have retired at 50 and I would have had the advantages...
Someone, mentioned that rich people were better looking. Perhaps they are just healthier, better dressed, and better groomed?
This is all true. If this was the only factor though, there wouldn’t be any social mobility at all, certainly not in any downwards direction but also not upwards. The richest 50 people in the world would have the top 100-200 children in the world in terms of opportunities and the billionaires list wouldn’t have a single surname that wasn’t represented in the 19th century elite. This is clearly not the case, though.
The net result is that the process of getting rich is often a multigenerational effort where each generation does everything they can to give their own children more opportunities than they ever had. And if you talk to the people who do that, they’re often motivated by the experience of being poor and hungry and deprived and being willing to do whatever it takes to give their own kids a better chance. Conversely, if you’re born rich, sometimes you’re complacent and entitled and probably spoiled and lazy. There’s a proverb about how many generations it takes to go from rags to riches and back to rags.
Without causing this to become an argument of semantics, generally speaking, the US has higher class mobility than the rest of the world. No, it is not commonplace for someone born in abject poverty to become fabulously wealthy, it's not commonplace for anyone to become fabulously wealthy. That said, it is rather common for folks to come to the US in pretty close to abject poverty and grow to sustain a middle class lifestyle, something which is nearly impossible in most of the rest of the world. Is someone with a middle class lifestyle in the US "rich"? I guess it depends on your outlook, and this is where semantics plays a part. Mobility is not entirely caused by intelligence or hard work, but they definitely play a part.
You are correct that the best way to become rich is to be born into a rich family and inherit the wealth (or the opportunities that create wealth). But it is simply false to state that this is the only way, or even the predominate way, in which people become rich in democratic free markets. There are a LOT of small business owners in the US that, are at least on paper, millionaires, and most of these people were not born into rich families. Through my life I've known many wealthy people, and only a handful were born into generational wealth, the majority grew their wealth during economic booms and worked to entrench it so they could survive busts, most by starting a small business in a high-value niche. By global and national standards, many people who are simply professionals and not even business owners, are rich or wealthy, just by being smart with their money. If you own a home and are working a job that pays six figures for your entire career and invest well, you will retire a millionaire without much difficulty, which definitely puts you in the upper quintile in the US.
This fatalistic, defeatist, and frankly infantile attitude from some people that acts as if wealth is only ever granted by random chance and at birth is utterly ridiculous, doesn't help anyone, and is factually incorrect from every angle. Your comment clearly illustrates an understanding of this, but you seem bent on defending the thrust of the comment I was replying to from the other poster.
It's likely true that it's fallen, because inflation affects people further down the quintiles more than people at upper quintiles, and directly reduces class mobility. That said, just looking at how the GSMI is scored, it appears that they aren't outcome-focused, and instead look at correlative factors like educational access (which is tied to cost of education) and health metrics which drags down the US against its peers. By sheer outcomes, the US is in the top 3 most socially mobile countries in the world.
Rousseau said, "Money is the seed of money." We can guess at the myriad of reasons but we don't have to wonder if it's true. I'm sure you've read this but if not, it's fascinating:
The Wealthy in Florence Today Are the Same Families as 600 Years Ago
People are mostly rich because their parents were rich. Rich people do not come from poverty. Why is that? Do you think it's because impoverished people are not smart?
Sometimes rich people do come from poverty. Sometimes middle class people come from poverty and rich people come from the middle class. And sometimes rich heirs and heiresses go bankrupt and fade into obscurity. Why does this happen? Because the people who improve their position are either intelligent or diligent and the people who decline in position are either stupid or lazy.
To whatever degree these traits are genetic, you’d expect them to get roughly sorted out to the point where social mobility would decline, but it wouldn’t disappear entirely.
> Because the people who improve their position are either intelligent or diligent
Or corrupt, or given a leg up through connections of ones father or school.
> and the people who decline in position are either stupid or lazy.
Or unlucky. Or got ill.
Your ideas sound very Victorian to me. I have noticed that most people who did get rich assume it is something special about themselves that did it, I'm guessing you are one of them.
I’m talking about broad population-level averages. Maybe you define “luck” as an actual quantifiable trait that measures whether or not you’re blessed by God, but I define luck as a completely random variable that produces noise in the individual case but does not affect population-wide averages.
Its not quite as damaging as 'people are rich because they work harder' but its really not far off