Blimey, this is a surprise, isn’t it?

Britain’s wealth gap will be passed down the generations as well-off older people bequeath property to their already thriving offspring, according to new research from one of the UK’s leading thinktanks.

The Institute for Fiscal Studies (IFS) found that today’s young people were likely to inherit more wealth than their predecessors but the benefits would be skewed to those who were already well off.

Rich people are rich.

Alert the media!

40 comments on “Blimey, this is a surprise, isn’t it?

  1. Not only that rich people are rich but also their children are. It looks like the policy world is catching up with the social sciences:

    https://en.wikipedia.org/wiki/The_Son_Also_Rises_%28book%29

    The Son Also Rises is a 2014 non-fiction book on the study of social mobility by the economist Gregory Clark. It is based on historical estimates of social mobility in various countries made by Clark in collaboration with other researchers, though Clark takes pains to point out from the start the controversial conclusions he draws are his alone.

    I am a great admirer of Clark. But on the other hand I think that everything in the social sciences is likely to be rubbish. Are his books? I don’t know. But he greatly offended the righteous people at the New York Times. So I think he may be on to something.

    What is the controversy?

    Clark controversially hypothesises that the main reason for the unexpectedly high persistence of social status in families (or, put another way, the unexpectedly low degree of social mobility he finds) is that high-status people are more likely to have genes that are beneficial to them achieving high status, and are therefore more likely to pass such genes on to their children.

    Better genes? How about that? If genes differ within populations why wouldn’t they differ between populations?

  2. Better genes? Not entirely sure. Regression to the mean is a powerful force*.

    Better memes? Certainly (and this is the force behind the whole leftist ‘make them all go to shit-hole comps movement.)

    * okay. Powerful reification of a statistical result.

  3. “Better genes? How about that? If genes differ within populations why wouldn’t they differ between populations?”

    Would that be why Jews are all rich bankers and America is in their grip then? Dickhead

  4. I’ve been to a discussion panel on this subject which included Paul Johnson of the IFS and he made some good points. Outside normal biases the IFS tends to be quite sane and follows the data so I think they should get a decent hearing.

    The study concluded that inequality was likely to increase and social mobility hindered as pensioners bequeathed the wealth they had accumulated as a result of rising home ownership and property-price inflation.

    “Between 2002-03 and 2012-13, the wealth of elderly households (those in which all members are 80 or older) increased by 45%, mostly as a result of higher homeownership and rising house prices,” the IFS study said. It added that 72% of those households now expected to leave an inheritance, up from 60% a decade earlier, with a sharp increase in the proportion expecting to leave a large inheritance.

    I don’t buy smfs’s genes arguments but I do think there’s something going on which is causing this effect:

    1. I wanted to ask if assortative mating is having an impact on social mobility as women have entered the professions. I suspect it would be a toxic subject for research but we’ve moved from doctors marrying nurses, managers marrying typists, lawyers marrying sectaries etc to doctors marrying doctors…. It also seems that women are less likely to marry below their social status.

    2. If the State is going to pay for the care of the elderly rather than insist that first they cash in on their property value then of course we are going to see higher inheritances amongst the property rich.

  5. Surreptitious Evil – “Better genes? Not entirely sure. Regression to the mean is a powerful force*.”

    And yet many families manage to remain rich for generation after generation. Certainly true in the UK. Not in my family though. So no doubt Flopsy will take that as proof that genetic arguments must be true.

    “Better memes? Certainly (and this is the force behind the whole leftist ‘make them all go to shit-hole comps movement.)”

    I would lean towards better memes myself, but I don’t see why they wouldn’t trend towards the mean as well. Clark has an interesting and complicated argument for what he believes. I recommend everything he writes despite his odd love of terrible puns based on Hemingway.

    Ironman – “Would that be why Jews are all rich bankers and America is in their grip then? Dickhead”

    There are any number of Jewish scientists who argue that in fact Jews have been breeding for intelligence for a long time. This is an interesting argument because there is an obvious interesting in distinguishing memes from genes. European Jews have traditionally respected education. But they have also rewarded the educated with more children. The argument goes that European-origin Jews test higher on IQ tests, but they are also more likely to suffer genetic diseases related to brain and spinal chord tissue. Things like Tay Sachs. Take a look at Wikipedia’s topics relating to Ashkenazi Jews:

    https://en.wikipedia.org/wiki/Category:Ashkenazi_Jews_topics

    You will notice many of them are diseases. Most are related to brain, nerves or spinal chord. Interesting that is.

    You do not get a brain development problem from a meme.

  6. “You do not get a brain development problem from a meme.”

    You need to get out more SMFS.

    Whatever potential your genes may give your brain, having your head filled with leftist shite by UK media, schools and Unis will funnel you down to zero if it can.

  7. If genes can influence height, skin colour, susceptibility to disease, athletic ability and so on, I don’t see why they wouldn’t influence intelligence. The brain’s ability to store information is based on it’s physical and chemical make up. That would be a genetic factor.

    To discount it out of hand just seems to be one of those PC “oh no, we can’t say that” view.

    Tall parents tending to produce tall children.

    Intelligent parents tending to produce intelligent children.

    Not every tall child becomes a basketball player but that genetic head start helps.

  8. Andrew C – “The brain’s ability to store information is based on it’s physical and chemical make up. That would be a genetic factor.”

    It is odd that no one would deny that one of the big differences between us and, say, a banana is down to genes. It doesn’t matter how much social enrichment you try, a banana is never going to write something like Hamlet.

    But when it comes to humans this is verboten. Skull size matters if you are a dinosaur but not a modern human. Weird.

    “Not every tall child becomes a basketball player but that genetic head start helps.”

    Obama can recommend a book that claims West Africans have “sprinting genes” and no one cares. Any number of people have argued that Ashkenazi Jews are smarter than everyone else for genetic reasons. The rule seems to be simple – anything that makes a minority look good is totally acceptable. Anything that makes Whites look good isn’t.

  9. Polly Toynbee was interviewed on Radio 4 this morning about this very issue/report.

    Her comments were (approximately) as follows:

    “Taxadytax taxed tax taxing tax tax. . Tax tax taxy tax inequality taxing, tax taxed tax tax.”

  10. Andrew C – “Polly Toynbee was interviewed on Radio 4 this morning about this very issue/report.”

    Ms Toynbee’s number one asset is her name. It got her into Oxford before she flunked out. It got her jobs in the media.

    We do not tax social capital like a network of friends of someone’s father. We do tax actual capital like the money made by someone whose father was a porter at the Billingsgate Fish market.

    Oddly enough Polly is in favour of the latter.

  11. “It is odd that no one would deny that one of the big differences between us and, say, a banana is down to genes”

    Although there are apparently gene sequence similarities of around 50% between humans and bananas.

    Which always make me sceptical of those court cases where DNA evidence is used. Might not have been the accused. Might have been a banana.

  12. Not sure how genes were responsible for being born at the right time to buy property before prices rose to astronomical levels.

  13. “Rob

    Not sure how genes were responsible for being born at the right time to buy property before prices rose to astronomical levels”

    I suspect that those born with superior genetics in the 1990s and later will get on, whatever the rest of the whiny snowflake generation complain about.

    Teaching can make you smarter but its genes that make you smart.

  14. SMFS,

    Judaism places a lot of importance on knowledge. It’s not surprising that they succeed in knowledge-based industries.

    The same applies to the Brahmin caste in India: they were traditionally priests and hence also spent a lot of time studying texts. You’ll often find them working as software developers in the west. (To be fair, you’ll find plenty of other castes too; Brahmins are just over-represented.)

  15. @ Rob
    Please look at the Halifax House Price Index. Most of the rise in house prices to astronomical levels has occurred since two-thirds of all houses were owner-occupied. So more than two-thirds of the population is sharing in the illusion of wealth created by the rise in house prices. It is important to understand that it is an illusion – if the elderly move into a care home that illusory wealth will be used to pay the fees so the only way to cash in is to die and leave it to the younger generation.

  16. If SMFS dropped the word “better” and said “different genes” then even the snowflakes would find it difficult to disagree. As I come from a family with a hereditary tendency to be good at maths (statistically significant at the 0.1% level), I am utterly convinced that intelligence *has a hereditary component*.
    Of course, creating wealth requires a willingness to work hard, not to drink away all your earnings etc so it’s not just down to intelligence.

  17. So Much For Subtlety said:
    “It doesn’t matter how much social enrichment you try, a banana is never going to write something like Hamlet.”

    That’s just your cultural preference. The banana can produce something that is just as valid as Hamlet.

  18. “Richard

    So Much For Subtlety said:
    “It doesn’t matter how much social enrichment you try, a banana is never going to write something like Hamlet.”

    That’s just your cultural preference. The banana can produce something that is just as valid as Hamlet.”

    Just so long as the bananas don’t try any cultural appropriation.

  19. Richard – “That’s just your cultural preference. The banana can produce something that is just as valid as Hamlet.”

    I hadn’t thought of that. I have to confess to being musaphobic!

    Andrew C – “Just so long as the bananas don’t try any cultural appropriation.”

    Blood south-east Asian immigrants thinking they have a right to be in Carmen Miranda’s hat! Actually the whole banana name is culturally appropriated – it is African of some sort I think. Still, Ms Miranda was a Portuguese girl with a Spanish name but Brazilian nationality pretending to be Central American so it is all a bit complex.

  20. @ Andrew M
    Good point – I was quoting the only readily available statistic and didn’t stop to query its relevance.
    Take the Resolution Foundation with a ladleful of salt – a single lodger is *not* a family so their headline is a deliberate lie.

  21. There are many things at play here. But one not mentioned so far is the tyranny of low expectations. The more that this meme that there is no social mobility is repeated, the more it becomes a self fulfilling prophecy, as those not already gilded decide they’ve lost before they started. Which suits the Left just fine as they want a client state.

  22. john77,
    Yes I agree they’ve tilted the figures the other way. If two of those single people get married, the number of “households” decreases, thus pushing up their home-ownership metric (even if the couple continue to rent). But it was still news to me – I firmly believed in the two-thirds figure!

  23. @ Andrew M
    They have not just tilted the figures, they have produced a set of numbers and labelled them something else. According to RF over 10% of “Families” are an Adult child or full-time student living in their parents’ home. That isn’t even a household, let alone a family. They are liars.
    Divide 51% by 83% to exclude the three non-family categories and you get just over 60% of households being owner-occupiers. The two-thirds figure isn’t that far wrong even though the owner-occupier proportion has declined.

  24. Of course intelligence has a hereditary element. I was just perplexed by how it allowed people to buy houses when they were 3x average income instead of 6x now.

  25. “And five unrelated people who share a house? They would be counted as one rented household rather than the five separate renters that most would intuitively regard them to be.” That depends on where your intuitions developed. I would regard 500 students living in a Cambridge College as a single household, as the expression “junior members” implies. Hell, they eat together, share loos and showers, buy their newspapers collectively …

    Mind you, I think the BBC would like to treat them as separate households so they can extort the licence fee from each of them.

  26. “Rob

    Of course intelligence has a hereditary element. I was just perplexed by how it allowed people to buy houses when they were 3x average income instead of 6x now.”

    Yeah it was all one way traffic for us baby boomers.

    The Halifax House Price Index shows average prices peaked at £70,247, in May 1989, and then a long run of monthly losses and stagnation continued until it bottomed out, in July 1995, at £60,965.

    So you can see how easy it was to make money back then. 6 years and….er….a 13.2% loss. Bloody baby boomers. Always had it easy.

    True, I only needed a mortgage of 48,000 when I bought my first house. But the interest rate on it was 11.95%.

    You might need a mortgage 5 times that now. Just googled first time buyer’s mortgages and see HSBC are doing one at 2.34%.

    Which is one-fifth the interest rate I was paying.

    OK, true I had to find a 10% deposit. While HSBC are asking for a………..10% deposit.

    So yeah. Clearly things are a whole lot worse than they were 25 years ago.

  27. Oh, yeah. Almost forgot. I had one of those fantastic endowment mortgages. Guaranteed quids in when the policy matured. That was how easy it was back then.

  28. Is high intelligence strongly correlated with wealth? I know many highly intelligent people who have not done very well financially and/or have frittered away inheritances.

    The behavioural traits that seem to assist in wealth accumulation – eg ability to defer gratification – are not the same as intelligence, though it helps not to be thick. Apparently, genes account for about 60% of behavioural traits, so I suspect that genes have quite a lot to do with a person’s ability to accumulate wealth and to be upwardly mobile.

  29. @ dearieme
    Quite! Not to mention all the poor, deprived 18-year-old “adults” at Eton and Harrow who don’t have a home of their own and have to live with their parents…
    The five are jointly and separately liable for the rent so I cannot see how any *sane* person’s intuition could regard them as five separate renters.

  30. @ Theophrastus
    Correlated – yes. But many highly intelligent people don’t regard wealth as the highest goal in life; some rank their faith/religion higher than worldly concerns (a disprortionate number of major scientific discoveries have been made by Anglican clergymen and catholic monks); some of us choose other priorities once we have enough money for a comfortable life; some of us piss self-important people off by being obviously brighter than they are,
    Despite all the media demonisation of those better-off than run-of-the-mill journalists (apart from the millionnaire journalists who are, of course, heroes) being a nice guy is second to working hard as the most important character trait for those earning wealth from a standing start.

  31. “(a disprortionate number of major scientific discoveries have been made by Anglican clergymen and catholic monks”

    But many recently? Working in the god-bothering industry was very much a career move, until relatively modern times. And one of the few would let you get on with making stinks & dissecting animals, not for the table, without bothering too much about your production targets. S’pose the military was another. But that career tended to cost money rather than earn it.

  32. @ bis
    Being a monk was a lifetime job not a career – Gregor Mendel, whose work founded the theory of genetics, would have been much better-off inheriting his father’s farm – to such an extent that his younger sister financed his studies by donating her dowry when he ran out of money.
    Fairly recently (OK, some years ago when I was still pretending to be young) I attended a talk by the relatively young senior partner of a stockbroker who had been dragooned into the job from Research Partner (where his efforts had lifted the firm from insignificance to a place in the respectable second tier whose quality compensated for their small size) by his partners and someone asked about his high income “Well, I can always give it away”. After three years as senior partner he resigned to become a “non-stipendiary” (unpaid) curate in a City of London Church.
    There were a handful of “Vicars of Bray” thoughout the centuries (and still are in the USA where televangelists can be rich). Clever clogs can make more money faster in secular society than in the church: when I became PCC Hon Treasurer in my previous parish I looked at various stuff and was shocked to find that in my early 30s, I earned (despite the worst efforts of HR department who really disliked me) more than the Archbishop of Canterbury.

  33. “Regression to the mean is a powerful force”

    Only if the mating is random ie a successful person is as likely to mate with an unsuccessful one as a successful one, and that randomness continues for every generation.

    If on the other hand you mate parents with high levels of characteristic X over many generations, selecting specifically for that characteristic from the progeny in each cycle, you end up with progeny that look (and act) very different to the original. Hence why livestock today look nothing like the livestock of even 50 years ago, let alone 100. Selective breeding you see.

    Thats whats happening with humans in Western societies. Those with characteristics that allow them to succeed increasingly mate with similar, and those with characteristics that preclude success are mating with similar. And even if an person is born with successful characteristics from unsuccessful parents via genetic randomness, because of the opportunities available for them to get on in life (free education etc) they are likely to escape their upbringing and most like find a mate from a more successful background. So the gene pools diverge.

  34. It’s an indisputable fact that the most robust predictor of socioeconomic status is IQ. Doesn’t mean that all clever people are rich, or that all rich people are clever, just that once you’ve extracted all the confounding factors it’s the one that has the strongest signal. And intelligence seems to be more heritable than, for example, height*. Assortative mating is entrenching the difference. Disentangling nature from nurture may be impossible even in principle: even if, say, children from violent homes tend towards more criminality, how do you compensate for the possibility that the genes that predispose someone to breaking the law are the same ones that when found in their parents predisposed them towards hitting their children?

    * which means—and the importance of this cannot be overstated—that a greater proportion of the variance in a characteristic is genetic.

  35. Andrew C,

    Don’t forget that we also had to demonstrate at least 6 months saving at the rate of the mortgage repayment to show we could live of our reduced disposable income.

  36. @ BiND
    I don’t remember that but as I was an Actuary in my late-middle 30s when I bought my flat maybe they took that as read.

  37. Bloke in Costa Rica – “Assortative mating is entrenching the difference.”

    Which is why it is important for everyone with a STEM degree and a reasonable income to marry a stripper. It is not about the hot sweaty freaky sex with someone with a borderline personality disorder. It is about the social justice and the striving for more equality.

  38. “So Much For Subtlety

    hot sweaty freaky sex with someone with a borderline personality disorder”

    Reminds me of my ex-wife.

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