The global economy is undergoing an enormous human sorting event. Over the past several years there has been a well-documented and blunt increase in global income and wealth inequality. Society is being cleaved into two segments – the smart/lucky/successful and everyone else. Part of it is due to cumulative advantage (children of the rich stay rich). But it’s also driven by vast differences in how well different businesses compensate their employees and the profitability of the best companies versus all others. Here’s a recent article on it:
The winner-take-all economy is creating a growing chasm between winners and losers attributable to this talent sorting effect. The segregation of people is not just about hard skills and ability. It’s also about soft skills, too, as top performing firms vacuum up the most-desirable workers. The above article indicates that nice, fun, polite people are sorting into some firms, and assholes are sorting into others. Guess who gets paid more?
Ruthless economic competition means that successful individuals and businesses are now cementing their market power and locking down financial security without much competition or threat. It’s economic warfare as companies and individuals consolidate their positions. Capital is shoring itself up. America has always been an oligarchy – it’s just becoming more pronounced now. Individuals and businesses, having reached economic victory, are now fortifying their status. Once successful, they can draw up the drawbridge.
Your Estate Planning War Chest is in a symbolic economic castle surrounded by a legal moat. You are in charge of the drawbridge. Life is a competitive blood sport. It’s brutal warfare resulting in a few winners and many, many losers. Be happy that your family is winning the war…. for now. To the victor go the spoils. Next week, we’ll look at “the luxury of patient capital”.