In this interesting post ‘How People Get Rich Now‘ by Paul Graham, he makes the point that the origin of the fortune of the richest people has changed dramatically since the 1980s. Heirs and oil fortunes have been significantly displaced by entrepreneurs and financiers. I believe it is due to the shift to a new Age, the Collaborative Age.
“In 1982, 84% of the richest 100 people got rich by inheritance, extracting natural resources, or doing real estate deals.” “In 1982 the most common source of wealth was inheritance. Of the 100 richest people, 60 inherited from an ancestor. There were 10 du Pont heirs alone.” Today, “Roughly 3/4 [got rich] by starting companies and 1/4 by investing“. This makes a huge difference.
Looking at it with an even wider historical perspective one “1892 looks even more like today. Hugh Rockoff found that “many of the richest … gained their initial edge from the new technology of mass production.” That was a time of intense entrepreneurship with the Industrial Revolution, when railroads and factories were built generating huge changes.
It is where I beg to differ from Paul Graham interpretation about the future. It seems to me that the situation in the 1980s was due to a mature Industrial Age, driven by large corporations that exerted scale effects on mature technologies of the Industrial Age. With the technological revolution, we enter a new Age, the Collaborative Age, and like in the 1880s many new companies are blossoming up and new wealth is created accordingly. But in a few decades we may be in another mature Collaborative Age and maybe the richest people will remain the heirs to the Apple, Amazon and Facebook founders.
Nevertheless the statistics shared by Paul Graham show that we are in a period of Opportunity where value is created from new technology, upending the more traditional wealth ranking.
