Not really about books, but PG found this interesting.
From Quartz:
The richest families in Florence, Italy have had it good for a while—600 years to be precise.
That’s according to a recent study by two Italian economists, Guglielmo Barone and Sauro Mocetti, who after analyzing compared Florentine taxpayers way back in 1427 to those in 2011. Comparing the family wealth to those with the same surname today, they suggest the richest families in Florence 600 years ago remain the same now.
“The top earners among the current taxpayers were found to have already been at the top of the socioeconomic ladder six centuries ago,” Barone and Mocetti note on VoxEU. The study was able to exploit a unique data set—taxpayers data in 1427 was digitized and made available online—to show long-term trends of economic mobility.
Link to the rest at Quartz and thanks to Morgan for the tip.
Unlike the New World wealth, the Old World is operating under a feudal mentality. The base of their riches is land. Land is a limited quantity, and you can not create or multiply land. Once you acquired it, you never sell it, never divide it. Second you need children to continue the Family. Males are preferred and they are properly educated to preserve their assets. The slackers and pot-smokers are disowned; blood is thicker than water, but the Family fortunes are more important. Usually the first male born takes the reins and inherits most of the Family wealth. The females are married to other rich heirs, and therefore establish a financial network that serves well all its members. Short of being conquered by a foreign power, or a communist revolution, which will confiscate your land and fortunes, the Families can preserve and even expand their wealth.
Does this happen in the New World? First it’s too new, and since you were able to make millions not depending on land ownership, while being born in modest wealth, you can do it again. Maybe.
Bet if you go to Brescia Italy, you would find that the Beretta family has continued to be one of the richest / locally powerful since around 1526.
When your ancestors found a business and it manages to stay in business for centuries your chances of becoming “comfortable” increase exponentially over most everyone else.
Here in the U.S. there are families that have been in the upper 1% since the country was founded.
And there are people today that are in the 1% that were not there 10 years ago.
The ability to use ones intelligence to stay in the 1% is not easy.
See anecdotal evidence of major lottery winners who end up broke in a few years.
One-percenters don’t rely on lotteries. 😉
Gates used to be a hot poker player in his younger days but these days he mostly plays bridge with Buffett.
Haven’t heard what Bezos plays.
I lived in Florence a goodly portion of my adult life and I think people would be astounded to know that many of these rich families remained rich by spending about a generation in the Communist party, which was a center of power.
As leaders, right?
Communist leaders are always “more equal”.
That should be no surprise. If fascists would be the dominant political power, they would be fascists. Preserving your wealth you must be apolitical, in a sense. However, should Italy become a true communist state those people would kiss their fortunes goodbye. Except for their foreign holdings.
We all know it was in Italy where Pareto posited the 80/20 rule, right? 80% of the land was owned by 20% of the population?
IMO Vilfredo Pareto was the best economist of the 20th century. He observed and recorded. He did not prescribe.
But how could he provide cover for politicians? 😉
Bah!
Last I heard, the biggest landholder families in the UK have been there for a thousand years or so.
Yeah, the article mentions the English at the end. What I’d really like to know is if new[er] names were ever added. Did some families that weren’t rich in 1427 get rich in 1627? 1827? 1927?
It’s not really surprising that a family able to stay in one town for centuries is able to stay rich, too. If part of getting / maintaining wealth is related to being “connected” I could see them keeping the wealth if they stay in place.
All kidding aside, retaining wealth over centuries of war, social change and, more recently, tech disruptions isn’t trivial. It does argue in favor of the strength of family structure and culture as a means of power conservation.
We are seeing something similar in modern times, especially in the US, where the best indicator of a young person’s success is the education level and type of education of the parents. We may be developing a new kind of aristocracy, one tied not to holdings or riches per se but rather achievement.
Might be useful for SF world building.
Yes, the culture preservation is what I was thinking of as a wealth preservation aid. People who have to move after their neighborhoods gentrify cite loss of connections and institutional knowledge as a huge hurdle, and I think it works at the opposite end, too.
If you’re in Florence you know you have to see Fredo to get X done, and that Guido will help you with Y. That’s useful knowledge, especially if you’re on your tenth generation of Fredo’s family always helping your family. In perilous times you can call on ties to Fredo and Guido, who may protect you just as you’ll protect them.
But if you move to Milan where you don’t know anyone, who tells you to see Luigi about X and Enrico about Y? And when you do figure out about Luigi, you can’t reminisce about the good old days with his grandfather. If trouble strikes, it’s not a given that Luigi or Enrico will be thinking of you; they have their own connections to look after.
As to the last point, agree that the effects of “assortive mating” could get very interesting. McArdle had a post years ago about Laura Ingalls Wilder, a teacher, marrying Almanzo, a guy who never had much interest in book learning. It’s a pairing that seems much less likely these days.
But the new aristocracy seems to hinge on credentialism. If a college degree weren’t a barrier to entry, how much would having one matter? How would the aristocracy shake out in that scenario? It is a great topic for sci-fi, definitely.
That too, but also the family’s own “culture”, as in their institutional knowledge; how they raise their children and the attitudes they instill in them. As in “the acorn doesn’t fall far from the tree.”
Rather like the Medicis, the Rothchilds, the various princely dynasties, but writ on smaller scales.
Just chiming in to say that culture matters too. The whole American Dream thing, and being able to make something out of nothing with a government that supports that type of innovation can make a huge difference.
In Italy, I don’t think that the culture allows for that type of flourishing innovation like it has in America where there’s plenty of new money. For example billionaire Mark Cuban who grew up poor. Steve Jobs, Bill Gates, George Soros, Warren Buffet (who still lives in a modest, middle-income home).
That said, I think it was Rockefeller (owner of Standard Oil) who had an accountant come to him. Letting him know if he kept the money he had and let it continue to grow, that he’d be worth more than entire nations. It was at this point that he began to give his money away. To become a philanthropist. The Rockefeller family is still wealthy, but if he had kept his money it might have begun a pattern in America similar to the dynastic families in Italy.
“… retaining wealth over centuries of war, social change and, more recently, tech disruptions isn’t trivial. It does argue in favor of the strength of family structure and culture as a means of power conservation.”
It isn’t trivial. But it is important to note that it’s very unlikely that all the heirs of vast fortunes benefited equally. Particularly years past, most of the wealth would transfer to specific chosen individuals (usually male, usually eldest). Along the way, many, many heirs were left behind and had to accept modest lives. The real money ended up in the hands of a tiny percentage of the actual family members. (See: Gentleman’s Guide to Murder.)
It’s less likely to have much to do with family and culture than areas with high real estate value where property rights were enforced over long periods of time, like Florence or England. Not many old rich Russian families survived change in that country regardless of culture or family values. Same in China.
While it’s not particularly surprising that families that owned a lot of wealth, particularly property, did well, there are plenty of stories of fortunes lost by heirs, even in stable countries.
Meanwhile, Steve Jobs, who was adopted by parents without a college education and who dropped out of college, became one of the most important business people in modern history. Making money wasn’t his primary goal, but the amount that he had when he died probably dwarfs most of those old Florence families.
Insane amounts of money are being created in the tech world and the beneficiaries are often young and from modest backgrounds. (Often without college degrees.) I suspect there are probably dozens of young Silicon Valley types who could easily buy up enough real estate (and maybe a title or two) to be listed among the richest individuals in Florence if they wanted to.
Steve Jobs often mentioned that he was extremely lucky to have been born in close proximity to Silicon Valley at just the right time in history. The advantage of being born in Cupertino in the late 1950’s might outweigh the advantages of being one of many heirs fighting for real estate in Florence.
It’s easier to make two million from one than it is to make a million from none.
Even easier to make $100 from $1,000,000.