Inherited Wealth (Opinion)

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    Krugman says, “the conditions are now ripe for the re-establishment of patriarchal capitalism”. Do you agree with this statement? Support your answer.



    Yes I do agree with that statement. As the graph shows, we are in an era the rate return of capital (after capital losses and taxes) seems to be surpassing the growth rate of the world. Prior to the twentieth century, when similar conditions existed, the economy was one where those who owned capital were almost guaranteed a 4-5% return on their investment, which when coupled with very low taxes, allowed them to build up and accumulate wealth. This wealth could not possibly all be spent, and so it was put away to give to the next generation when the owner passed away. In today’s society we see multimillion dollar companies being passed through family lines, and many of the worlds richest earning their rank due to name rather than work. In a time when those who own capital are not always progressively taxed, we can expect to continue seeing an increase in the buildup of wealth which, once the investor dies, has to go somewhere, most likely in the pockets of their children and their children’s children afterwards.

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