Wealth in America Is Getting Increasingly Dynastic: We Should Be Ashamed
Stay up to date with the latest headlines via email.
For more than 30 years, Forbes magazine has been publishing a list of the 400 richest Americans. These annual celebrations of wealth are often accompanied by text emphasizing entrepreneurship. Readers are supposed to come away with the conclusion that these tycoons earned their treasure.
Now, in a move that says a great deal about where American society is headed, Forbes has published its first ranking of America’s Richest Families. No longer is the individual striver being venerated; now we are supposed to marvel at the compilation of 185 families with accumulated wealth of at least $1 billion. Forbes, unselfconsciously using a phrase that could have been penned by ruling class analyst William Domhoff, headlines the feature “Dominant Dynasties.”
Perhaps a bit uneasy about glorifying financial aristocracies, Forbes writes: “One thing that stands out is how many of the great fortunes of the mid-19th century have dissipated. The Astors and the Vanderbilts, the Morgans and the Carnegies, none make the cut.”
The fact that not all 150-year-old family fortunes have survived hardly makes the United States a model of economic egalitarianism. Forbes has to admit that the du Ponts, whose wealth dates back two centuries, are still high on the list (to the tune of $15 billion), as are the Rockefellers ($10 billion). The magazine chose to put on its cover members of the sixth and seventh generations of the Mellon dynasty, whose wealth is pegged at $12 billion.
Even among the newer fortunes, many go back several generations. Few of the listed families include living founders. In some cases family members are living off the success of their forebears; in other cases, they have built on the achievements of their parents and grandparents. Yet in all cases they have benefited from a tax system that increasingly favors inherited wealth.
That tilt dates back to initiatives taken by the man responsible for the fortune enjoyed by the individuals on the Forbes cover: Andrew Mellon (illustration). As Secretary of the Treasury in the 1920s he unabashedly pushed for reductions in income and estate tax rates, even though as one of the country’s richest men he had a great deal to gain personally from those cuts.
Aside from the questions relating to the perpetuation of class structure, there is the issue of where the fortunes came from in the first place. That subject cannot be avoided when the family at the very top of the list, the Waltons, enjoys wealth estimated at $152 billion thanks to their affiliation with a retail empire built on cheap labor, union-busting and a variety of other sins.
The Kochs, number two with $89 billion, have grown rich through the exploitation of fossil fuel-based industries that are threatening the planet, as did the Rockefellers and many others on the list. The du Pont fortune was originally based on gunpowder and was later enhanced by inventions that included dangerous chemicals such as perfluorinated compounds (used in Teflon) linked to serious health and environmental problems.
Lower down on the list is the Steinbrenner fortune ($3.1 billion), which is based not only on the absurd appreciation in the value of the New York Yankees but also from a shipping business whose interests were furthered by illegal campaign contributions to Richard Nixon in the 1970s. There’s also the Lindner fortune ($1.7 billion), which was built in part by Carl Lindner’s close association with the junk bond empire of the felonious Michael Milken.
Balzac is credited with the statement that “behind every great fortune is a great crime.” Further research will be required to know if that is true of all the entries on the Forbes list, but there are no doubt plenty of examples. And along with any specific crimes is the offense against democracy generated by the unbridled accumulation of intergenerational wealth.