I don't know about other cultures. I would think it's the same everywhere. A lot of other cultures also pass on businesses to the next generation. Is this best for their children? I would argue that the majority are enabled and/or would have had a lot more potential without it.
Well, if you go back to America's earlier roots, we weren't different: Middle and upper earners owned businesses (many of them farms), and those businesses were often passed on to the next generation. And I don't think they were spoiled brats because of it.
However, today we've shifted to a different paradigm: Most people in the upper class get there /stay there through education -- it's true for me and my husband, and I think it's true for most people on this board. And education isn't something you can pass on to your children; you can help them through college, but that's more like recreating the wheel for each new generation.
The idea was to improve whatever it was you got, so you'd have a way to set up your own kids. That worked in an agrarian and even an industrial economy, but it doesn't work in a knowledge based economy unless you're a shareholder in an IPO.
Only recently has it become possible to earn an upper-class or upper-middle-class income and to amass significant amounts of wealth without owning the business you work for. The university-education based system of professions is part of what makes it possible and I'm glad for that. I don't want to imagine someone apprenticing a twelve-year-old to be a brain surgeon. The up-side to a profession is that it's a way to climb the socio-economic ladder. The down-side is that there's no way to pass on the means of income production.
I had been thinking that the widening wealth gap in the last few decades had been due to things like changes in tax rates and pro-corporate court rulings, but now I'm wondering if this might be a significant factor too.
On the plus side, the possibility for social mobility created in an profession-based and education-based economy was a key factor in allowing capitalism to out-compete Marxism.
Here's an idea I've never heard discussed by economists or historians; feel free to kick at it a bit and see if it holds together. The idea is...
a knowledge based economy promotes socioeconomic mobility and pervasive wealth inequality at the same time, but people tolerate the wealth inequality because they like the upward mobility.Definitely there's upward mobility associated with knowledge, but unless the person living out the Horatio Alger story stashes a lot of the cash so that the lifestyle is backed by investments or a transferable business of some kind, his or her standard of living is tied 100% to his or her ability to work and earn an income. Lose that (such as through illness), and everything collapses like a house of cards. So there's downward socioeconomic mobility too. Since so many people insist on living like factory workers of the 1800's and spending every cent as quickly as it comes in, even high income earners are often only one paycheck from homelessness. But, as a group, we're willing to tolerate the risk of downward mobility for large numbers of people if we believe it's a necessary sacrifice we must make to get the upward mobility.
The knowledge economy also hasn't produced lasting wealth for very many people. Unlike a farm or shop, which can be passed down from one generation to the next, a job as a hospital surgeon or aerospace engineer can't be. Each generation has to spend years reinventing the wheel and becoming qualified to take on a similar earning role. People who retire are also living longer and spending down their assets for end-of-life care. So, with little to no accumulated wealth being passed down from one generation to the next, each generation of income-earners or professionals has to make its own way. Contrast this with the generations of hotel owners or store chain owners who no longer have to work, because the businesses make their money for them. They can be FIRE at a much earlier age, without having to go through decades of school or career training, and can set about accumulating more. Thus the wealth increases, one generation after the next, unless of course the people who inherit it are utter fuck-ups.
Now for the capitalism-versus-Marxism angle. Communism looked attractive during the industrial economy because the owner class and the worker class really were separate groups of people, and there was no opportunity for mobility. I'd venture to say that it wasn't the inequality that offended people so much as the fact that the people who had less really didn't have any good way to get more. So, forcibly redistributing ownership of the means of production had to sound like a really, really good idea (especially to people who had no fucking clue how to actually run a factory, farm, or business, and who therefore proceeded to run it into the ground after the leveling initiative was complete). But when there's a way to get a lot of mobility and access to a higher standard of living without all the drama-- as there was because of the knowledge based economy-- violent revolution sounded less attractive. It's a lot easier and more fun to go to college, and there's less personal risk.
It wasn't the Korean war or the Vietnam war that saved the world from a lengthy and disappointing experiment with Communism (which is inherently flawed due to its farcical reliance on human altruism, but humanity didn't know that at the time). It was the GI Bill and Sallie Mae in the United States, and federally subsidized university programs in Europe. Both provided a path to education and professional-class incomes for large numbers of people. Education created enough social mobility opportunity to interest the ambitious, and that was enough to provide a relief valve.
Anyway, people on other threads here have noted that a degree isn't what it used to be. Between student loan debt and other factors, college and university education isn't a reliable path to a higher standard of living. I'd venture to guess that the collapse of that path to social mobility, and the impermanence of wealth created by professional incomes, poses a very credible and long-term threat to the free market economy.
