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by perneto 6236 days ago
A lot of people in the US seem to believe this - it's the essence of the American dream after all.

But if you actually take a look at the Wikipedia article, you'll see this: "France, Germany, Sweden, Canada, Finland, Norway, and Denmark all have more relative mobility than the US, while only the United Kingdom is shown to have less mobility [1]" [1] http://www.economicmobility.org/assets/pdfs/EMP%20American%2...

It's still possible that the majority of millionaires in the US be self-made (although I'd argue that a middle-class born Web entrepreneur cashing out is far from self-made - see other comments about the importance of a middle-class upbringing).

But that doesn't necessarily give the US a very high economic mobility: here, like often, it's easy to only look at a few extreme cases and forget the averages.

The way I see it, the American dream is but a myth perpetuated by the wealthiest: if I believe I'll strike it rich someday, I won't want more high-income taxation or estate taxes... even though there's actually very little chance it'll happen.

3 comments

It's not an absolute good to maximize economic mobility, at least as it's defined here. Here, mobility is inextricably tied to outcomes. There's no reason to believe economic outcomes should be randomly distributed in each generation.

People should be perfectly free from government interfering with their ability to pursue success, but one would expect the children of successful people to be more successful simply because of inherited traits alone. Moreover, even aside from money, to the extent that a child's environment is his relationship with his parents, you'd expect children of successful parents to be more successful.

There's also something to be said for parents being able to give their children an advantage in life.

A society that maximized economic mobility would not be a fair one. It would mean arbitrary wealth transfers from the richer to the poorer.

Personally, I'm in favor of a 100% inheritance/estate tax, with every citizen's child given an equal share of society's inherited wealth on his 18th birthday. It would be sad to give up parents' rights in this way, but I think it would be well worth it on a public policy level.

A society that maximized economic mobility would not be a fair one. It would mean arbitrary wealth transfers from the richer to the poorer.

...

Personally, I'm in favor of a 100% inheritance/estate tax, with every citizen's child given an equal share of society's inherited wealth on his 18th birthday.

How ironic.

> I think it would be well worth it on a public policy level.

Loose ideas for counterarguments follow.

This policy is as arbitrary as the voting and drinking age. I think the age restrictions are utterly stupid (it completely ignores the huge variance of physical and mental development speed), and it is likely that the basis of this 18 stems from the same reasoning. Sure, there may be good reasons to pick 18 out of all other ages, but it is still based on scant information and remains mostly the arbitrary opinion of a few people. One who promotes Free Choice (which I suppose you are, because it is more friendly to ideas that are meant to promote social mobility) is not so likely to agree with this sort of mostly baseless policy.

Next, this system is very easily gamed. Suppose it really comes into effect. One way to go around is to start a business and transfer assets with it. Suppose you erect a barrier against that. Easy: immigrate out, immigrate back. Your society will want that immigrant money. Suppose you further erect barriers. Still easy: if the parents know that at age 18, the child will have total loss of control over the assets, all they will do is set up all the pieces before that birthday. Whatever safety net that was supposed to last 18+N years now is compressed into 18 years, with every penny spent the most expensive schools, equipment, teachers, social parties, and connection building. Other parents in the same situation would do the same, and you just constructed, in one generation, the noble class.

Third, some parents or potential parents will completely change their life strategy. For example, it becomes far less in their interest to have children to begin with.

Personally...

personally, I don't believe a fair system is possible. Blame gene recombination. You can only make it easier for the longs of one group to complement the shorts of other, hopefully balancing overall group happiness and overall group advancement.

>"France, Germany, Sweden, Canada, Finland, Norway, and Denmark all have more relative mobility than the US, while only the United Kingdom is shown to have less mobility [1]"

That report again! All I see is: some professor came up with his own definition of economic mobility (some unitless score, what the hell is it?) and now we are supposed to take these conclusions as a gospel.

UPDATE: Apparently I can't reply to the comment below, so I have to do it here. The comment only confirms what I wrote and does not answer the question: what is that score? How is it computed?

The report uses two metrics of economic mobility: absolute mobility, and relative mobility. Relative mobility is unitless because it's an elasticity: it measures how much parent income influences children income.

This is from note 13 in the report. Also, the authors didn't come up with this themselves. The data comes from here: http://www.iza.org/en/webcontent/publications/papers/viewAbs...

This explains nicely where the use of elasticity comes from.

Do you have other data that contradicts these conclusions?

> "France, Germany, Sweden, Canada, Finland, Norway, and Denmark all have more relative mobility than the US, while only the United Kingdom is shown to have less mobility"

The key is the word relative. It's extraordinarily difficult to move out of the middle class, in both directions (up: tax, down: welfare). The difference between lower and upper middle class is maybe $75-125k income/yr, and completely reasonable to navigate.