I fully agree that we don’t want to live in an aristocratic society in which
already-wealthy families get richer simply by sitting on their laurels and
collecting what Piketty calls “rentier income”—that is, the returns people earn
when they let others use their money, land, or other property. But I don’t think
America is anything close to that.
Take a look at the Forbes 400 list of the wealthiest Americans. About half
the people on the list are entrepreneurs whose companies did very well
(thanks to hard work as well as a lot of luck). Contrary to Piketty’s
rentier hypothesis, I don’t see anyone on the list whose ancestors bought a
great parcel of land in 1780 and have been accumulating family wealth by
collecting rents ever since. In America, that old money is long gone—through
instability, inflation, taxes, philanthropy, and spending.
This was a little disappointing to read. Rentier income, in the context of the book I think includes passed down positions in which the children of the rich continue receiving that high income. That is to say, could the current owners of Walmart have been individuals other than the direct descendants of Sam Walton? If they had been other individuals chosen by a meritocratic criteria and process, Gates' point would stand. As-is, it does not.
Just reading your quote, Gates didn't say "there is absolutely no one who inherits wealth or position." The Waltons are incredibly unusual because they've sustained inherited wealth to a second generation.
It's also pretty silly to expect the makeup of the top .00001 percent to be representative of the top .1 percent. Of course the extreme top would contain a lot of people who are extremely active (and doing riskier things.) That's like characterizing a climate based on its hottest day. Just because Chicago's hottest day was hotter than Tempe's hottest day in a particular year (or every year) doesn't mean that Chicago is hotter than Tempe.
Agreed, his definition of rentier income was very narrow. I would certainly consider the "Windows tax" where most consumers have no option but to pay for a Windows license when buying a computer as rentier income. Not surprising that Bill Gates has a bit of a blind-spot here.
