Inherited wealth is increasingly rivaling earned income in importance, especially in advanced economies. As populations age and accumulated wealth grows, inheritances are becoming larger and more frequent, flowing disproportionately to the already wealthy. This exacerbates inequality, entrenches existing class structures, and potentially undermines the meritocratic ideal of social mobility based on hard work. The article argues that governments need to address this trend through policies like inheritance taxes, not just to raise revenue, but to promote fairness and opportunity across generations.
The blog post "Money lessons without money: The financial literacy fallacy" argues that financial literacy education is largely ineffective because it fails to address the fundamental problem of insufficient income. Teaching budgeting and saving skills to people who barely have enough to cover basic needs is pointless. The post contends that focusing on systemic issues like wealth inequality and advocating for policies that increase wages and social safety nets would be far more impactful in improving people's financial well-being than traditional financial literacy programs. It uses the analogy of teaching dieting to starving people – the issue isn't lack of knowledge about nutrition, but lack of access to food.
HN users largely agreed with the article's premise that financial literacy education is ineffective without practical application and access to financial resources. Several commenters shared personal anecdotes reinforcing this point, describing how abstract financial concepts became meaningful only after encountering real-world financial situations. Some argued that focusing on systemic issues like predatory lending and wealth inequality would be more impactful than financial literacy programs. A few dissenting voices suggested that basic financial knowledge is still valuable, particularly for young people, and can help avoid costly mistakes. The discussion also touched on the importance of teaching critical thinking skills alongside financial concepts, enabling individuals to navigate complex financial products and marketing.
Summary of Comments ( 546 )
https://news.ycombinator.com/item?id=43213143
HN commenters largely agree with the premise that inherited wealth is increasingly important for financial success. Several highlight the difficulty of accumulating wealth through work alone, especially given rising housing costs and stagnant wages. Some discuss the societal implications, expressing concern over decreased social mobility and the potential for inherited wealth to exacerbate inequality. Others offer personal anecdotes illustrating the impact of inheritance, both positive and negative. The role of luck and privilege is a recurring theme, with some arguing that meritocracy is a myth and that inherited advantages play a larger role than often acknowledged. A few commenters point out potential flaws in the Economist's analysis, questioning the data or suggesting alternative interpretations.
The Hacker News post "Inheriting is becoming nearly as important as working" sparked a lively discussion with a variety of perspectives on the increasing role of inheritance in wealth accumulation. Several commenters agreed with the premise, pointing to the rising cost of living, particularly housing, and stagnant wages making it nearly impossible for younger generations to amass wealth at the same rate as their predecessors. They argued that inheritance is becoming a necessary leg up, not just a bonus, for many to achieve financial stability, let alone prosperity. The concept of "unearned wealth" and its societal implications were also debated.
Some users challenged the article's assertions, questioning the methodology and data presented. They argued that the article oversimplified a complex issue and didn't adequately account for factors like differing savings rates, investment strategies, and entrepreneurial endeavors. One commenter suggested that the article focused too much on Western economies and overlooked the global picture.
A significant portion of the discussion revolved around the fairness and ethical implications of inherited wealth. Some commenters advocated for policy changes, such as higher inheritance taxes, to address wealth inequality and promote social mobility. They argued that inherited wealth perpetuates a system where opportunities and outcomes are heavily influenced by family background rather than merit. Others defended inheritance as a legitimate form of intergenerational wealth transfer, emphasizing the importance of family support and the right to bequeath assets to loved ones.
The discussion also touched upon the broader economic and social consequences of rising wealth inequality, including its potential impact on social cohesion, political stability, and economic growth. Several commenters expressed concerns about the long-term effects of a society where inherited wealth plays such a significant role in determining life outcomes.
Finally, a few commenters shared personal anecdotes about their own experiences with inheritance, offering nuanced perspectives on the emotional and financial complexities involved. Some described the relief and opportunities afforded by inheritance, while others reflected on the challenges and responsibilities that come with it.