Millionaires, inheritance and meritocracy
Spain has 246,000 super-net-worth individuals, defined as those with at least $30 million in convertible assets. This represents 0.51% of the country's population. Three-quarters of these individuals owe their fortune to the efforts, vision, or luck of an ancestor, who accumulated their wealth.
Although it is difficult to calculate an objective indicator that measures the intergenerational transmission of wealth, there is consensus in accepting the so-called Matthew effect: "Those who already have advantages tend to accumulate more." In other words, wealth is easily passed on from generation to generation. A genealogical study in the United Kingdom traced the family income levels of the wealthiest individuals from the Victorian era to the present day, over a period of a century and a half. The conclusion is overwhelming: the descendants of wealthy families remain richer than the average population. And not only is there a high correlation of income between generations, but this correlation also holds true in other areas: in professions, in social networks, and in the neighborhoods chosen to live in.
To try to correct this bias, some countries apply wealth or inheritance taxes, with the aim of reducing the cumulative effect of wealth and helping to redistribute it. These are controversial and sensitive taxes, with large differences in their application both internationally and within Spain itself. And, why not say it, the greater the fortune, the more tools there are at hand to avoid them.
It should also be noted that below these large fortunes are small millionaires – people with a million dollars in convertible assets – and many families with some property and certain savings, even if they do not reach that threshold. Right now, those born during the baby boom are preparing their wills, and young people who inherit their assets will have an easier time than others. Inheriting wealth shouldn't be seen as a problem; on the contrary. But this must be balanced by a society with social mobility, in which opportunities don't depend on birth. If this factor doesn't exist, instead of a meritocracy, we find ourselves with another reality: a heterocracy.
To find out which one Kratos We live in, a question must be answered: with equal talent and effort, what is the comparative advantage of someone born into a wealthy family compared to someone who hasn't been so fortunate? Is this difference fair? We don't have recent objective data, but the perception is that it's widening. Just think of a young person who can access housing thanks to family assets versus someone who must do so with their own means, starting from scratch.
Therefore, it's important not to forget that our current situation is, at least in part, determined by how our ancestors fared. And that what we do today can affect the quality of life of our great-grandchildren and great-great-grandchildren. According to the latest World Wealth Report, another 5.3 million millionaires are expected to be created worldwide in the next four years. Let's see if we're lucky and one is created nearby!