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Comment by alister | Hacker News Reader

Can we conclude that this is the wistful daydream equivalent of the "Maserati Problem"

I'll go out on a limb and say that even normal retirement planning (50 years into the future) is a Maserati Problem.

Everybody that makes very long-term projections about money -- whether it's the gloomy "interest on $4m won't last 40 years" variety to the rosy "save $300 a month and the compound interest will make you a millionaire in 50 years" -- commits the same error: They neglect the fact that wars, revolutions, devaluations, confiscations, and other economic disasters have wiped out all savings at frequent points throughout history.

There should be some trillionaires walking around whose ancestors started saving in the Renaissance when modern banking began -- but there aren't.

So if you're talking time scales of 50 years, there is significant probability that your carefully calculated spending or savings plan is self deceit.

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There should be some trillionaires walking around whose ancestors started saving in the Renaissance when modern banking began -- but there aren't.

The reason for that isn't financial but usually due to wealth dissipating though marriage. Some wealthy families relied on arranged marriages to keep the wealth in the family, but this kind of arrangement had it's own problems (first cousins marrying each other for multiple generations has clear genetic issues).

Nevertheless, some examples still exist: http://en.wikipedia.org/wiki/Rothschild_family (often claimed to have controlled the largest private fortune in history) http://en.wikipedia.org/wiki/House_of_Medici (although the Medici's lost most of their fortune in the 18th century)

Many rich European families were ennobled at some point, which makes their history more confusing. For example, the Duke of Westminster (6th richest man in the UK) is rich mostly because of his London land holdings. There are numerous other examples like that.

"There should be some trillionaires walking around whose ancestors started saving in the Renaissance when modern banking began -- but there aren't."

Carlisle Cullen. ;-)

Anyway - this is a really good point, but I'll point out something else. Most of the wealthy would-be trillionaires whose fortunes got wiped out passed down another inheritance: their genes. Those same disasters that wipe out the savings of the rich tend to kill the poor, who simply can't afford transportation away from disaster areas, bribes for border guards and security forces, political connections to ensure safety for their children, or information savvy to know when a crisis is coming.

Most of today's middle class is descended from the kings and nobility of the high middle ages. The peasantry just mostly died out, leaving no descendants.

Most of today's middle class is descended from the kings and nobility of the high middle ages. The peasantry just mostly died out, leaving no descendants.

Source?

My Google-fu is failing me at the moment. It was from an absolutely fascinating article that suggested that the middle-class arose because of downward social mobility in post-Plague Europe. With the serfs mostly killed off by Black Death, the 3rds and 4th sons of the nobility typically couldn't support a feudal household, and so they had to take jobs as merchants or artisans in the emerging market economies. Along the way, they brought with them some of the values of the nobility (most notably, not having kids until they could support the lifestyle they were accustomed to as children), which allowed Europe to escape the Malthusian trap of the Dark Ages.

IIRC, the genealogical records (of most present-day Europeans and Americans being descended from the nobility) was presented as fact, but the causal link with the rise of the middle class was more tenuous.

I'll look again after I've gotten some actual work for $realjob done.

Sounds like _A Farewell to Alms_ by Clark. Though as far as I can remember the data showed the "merchant class" crowding out the lower classes, not the nobility. Nobles only had about an average amount of surviving children while rich merchants had an above average one. Makes more sense that way: medieval nobility doesn't sound like a great base for middle-class values...

I'm not totally convinced about the theory, but the book was a surprisingly good read.

Most of today's middle class is descended from the kings and nobility of the high middle ages. The peasantry just mostly died out, leaving no descendants.

That's simply untrue. For example, the majority of people of European decent in the US, Canada & Australia are from the "peasantry" classes (ok, by the time mass emigration was happing the "peasantry" class had mostly migrated to the factory cities in Europe, but they were still the poor people).

In Australia's case the early white population was mostly prisoners who were almost entirely poor, unprivileged and most certainly not nobility.

I'd like to see a source for this. It seems counter-intuitive. A lot of the peasantry were sent to the United States as indentured servants. Most of the white poor land working classes from 17th century on. And it would be consistent with birth rates everywhere else in the agricultural world, that these people had more offspring than the wealthy. So. It just doesn't seem that this would be correct.

That being said. What we call 'The Middle Class' in the United States is kind of deceiving. Class can't simply be a function of how much cash income you bring in a year. Class has more to do with where that income comes from.

Those of us trading our time in exchange for money are working class, even if ( in the rarer case ) it is a greater dollar amount from a person whose primary source of income is the buying low, and selling high of commodities... such as, human labor, or pork bellies... and accumulating and reinvesting the difference.

Most of today's middle class is descended from the kings and nobility of the high middle ages.

Not true for Britain. The peasantry did mostly die out but the nobility did very badly as well. The middle classes were the forefathers. Sources etc. in "Farewell to Alms" by Gregory Clark

  >> There should be some trillionaires walking around whose ancestors started saving in the Renaissance when modern banking began

This ignores that people born to wealth do not have the same sense of frugality of the people who build the wealth.

""From shirtsleeves to shirtsleeves in three generations.": moneycentral.msn.com/content/retirementandwills/planyourestate/p147046.asp

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