A Century of Wealth in America

A Century of Wealth in America

Weighing in at 880 pages, Edward Wolff’s A Century of Wealth in America is no light read for the beach. Like Thomas Piketty’s “Capital in the Twenty-First Century,” the book is dense, packed with equations and statistics, citing more references than ten books in the same category. Yet, it is important and timely. Any smart business owner who wants to understand the economic trends that shape our world should put this book in his or her library.

Wolff makes counterarguments to Piketty, who argued that wealth inequality is much higher than it actually is. Although Piketty erroneously stated inherited wealth accounts for as much as 90% of the wealth in economies like the United States, Wolff has found that number to be much lower. From 1989-2013, it averaged 23%, not 90%.

Stated more clearly: over three-quarters of all wealth in the United States is created anew each generation. Is it possible the top 1% of wealth holders in any economy also display an inequality of hours worked, responsibility, creativity, investments and risks made or liabilities shouldered?

Wolff puts to rest the myth that rich people simply inherit their wealth. Surprinsingly even to this author, Wolff shows that inherited wealth is much more important to those who have low net worth, than it is to those who are wealthy. From 1989 to 2013, the top 1% had only 17% of their assets inherited, while those with assets of only $25,000-$50,000, inherited over 52% of their assets.

Dr. Wolff is a professor of economics at New York University. He has a liberal background, but tends to write with much less bias than his contemporaries, especially Piketty, who is now coming under scrutiny for many of his failed theories and assumptions.

Wolff was a rare polar bear in a forrest filled with grizzlies when he spoke out against problems in academia that are leading to  college graduates being underemployed. Although this book is not for the faint of heart, I highly recommend it if you have even a remote interest in economics and political tax policy. It’s required reading for anyone who wants to have open, serious and honest debate about wealth and productivity in our economy without regurgitating soundbites heard on Fox News, CNN or MSNBC.

Worked at Burleson Orthodontics. Attended University of Missouri–Kansas City. Lives in Kansas City, Missouri.