I’m not saying the wealthy never make anything of value, but rather that wealth is not necessarily correlated to “output” of any kind.
I don't dispute that many people are born into wealth, but over the past 20 years there has been more wealth produced in the world than ever before. There are more millionnaires and billionnaires than ever before, most of them were not born rich.
You don't become rich by reducing your expenses, you become rich by making something people want and monetizing it.
We can say it allocates capital to other people who then produce things; and so they “produce” at a distance. I think a better description of that is “control” (or “influence” if you are feeling more charitable). They control what value is produced by others, through the trust.
Does the trust really create anything useful on their own, though? Is there value inherent in their control/influence? Is that an optimal way of allocating resources?
Personally, I don’t think so - I think it’s inefficient, and mostly serves as a way for the wealthy to extract rent (so to speak) from society.
I will admit that this is the only world I have ever known, so it’s hard for me to envision an alternate future. But, I don’t think that means what we have today is really a good idea - and I think recognizing who actually produces “value” in society is an important realization to have.
Who knows. The problem is that optimal resource allocation is not an objective concept. You make the argument that the family trust is dead weight, but I would disagree because someone has to do the allocation, and that is real work. Most of that work is done by analysts hired by the family office, and they would just be doing that work for another employer otherwise.
You could also make an argument that the person who has inherited and doesn't have to do any work is economic dead weight. And on that point I would agree with you. But the truth is that the number of people who inherit enough money to never work is vanishingly small. Top 1% in the US is net worth $10 million, and even that is only barely enough after estate tax if they have 1 child. Top 0.1% is 50 million, and that would do it for sure. So we may be losing 0.1 - 1 % of our potential economic productivity to this dead weight, but that's insignificant. And in reality, the people I know from school from families like that are all working anyway. Most rich parents don't want to support dead weight kids even if they can easily afford it.
The family trust having that wealth has to have come from somewhere in the first place though - someone (probably you or your ancestor) has to have made something that people wanted and were willing to pay for (obviously this is in general terms, there are exceptions in unethical stuff like stealing etc)
I broadly agree with your critique of the current system we have - which is why sensible social safety nets should be established and a government should exist as a safeguard and as a check on it.
However, production is entirely different to distribution and we're talking about two different things. I'm talking about how an individual becomes and stays rich, you're talking about the system - I agree with the critiques of the system as a whole.
People get rich by creating something people want. It is not by buying higher quality products or w/e the quote implies. You can buy all the crappy products you want and still be rich as long as whatever you're producing is in demand.
Oh, dear. I can tell from reading your comments that it’s not gonna matter to try to argue with you, so I’ll just say that this is incredibly deeply profoundly naïve.
I don’t find that odd. Even if accurate, “naive” tends to have more negative connotations and typically codes as an insult.
I tend to find other ways to communicate that same information to someone when needed, even if it is less direct or less accurate: it ends up being better received. The communication winds up more successful overall.