{"id":119395,"date":"2026-08-19T15:30:09","date_gmt":"2026-08-19T15:30:09","guid":{"rendered":"https:\/\/www.europesays.com\/europe\/119395\/"},"modified":"2026-08-19T15:30:09","modified_gmt":"2026-08-19T15:30:09","slug":"is-it-better-to-be-rich-in-europe-or-in-america","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/europe\/119395\/","title":{"rendered":"Is It Better To Be Rich In Europe Or In America?"},"content":{"rendered":"


\n\tAmerica remains the best country in the world to get rich. Some see this as cause for celebration<\/a>, while others view it as evidence<\/a> of a broken capitalist system. As an economist, I am less interested in debating whether billionaires (or trillionaires<\/a>) should exist than in asking what the alternative is. One of those alternatives is Europe, where the system ensures that the richest are not too rich\u2014and that their wealth is inherited rather than earned. \n<\/p>\n


\n\tIn Florence, the richest families have occupied that position for six centuries<\/a>, with hardly any turnover. This is an extreme case, but it is not unusual in Europe for the wealthiest families to be the same for generations. In the U.S., by contrast, the richest tend to be self-made. The difference is about policy as much as culture. \n<\/p>\n


\n\tIn 2007, two economists looked at the richest families in the U.S.<\/a> and noted that in the 1960s, women made up half of the top 0.01%, but by the turn of the century, they made up less than a third. The explanation, the authors speculate, is that there are more self-made men in the top 0.01%. When wealth is based on inheritance, men and women are equally represented. But because women are (sadly) less likely to accumulate wealth, their smaller share suggests that self-made entrepreneurs dominate America\u2019s wealthiest ranks\u2014which a glance at this list<\/a> can verify. <\/p>\n


\n\tAmerican philanthropist and former hedge-fund manager John Arnold recently noted<\/a> that some European countries require between 50% and 75% of estates go to heirs. There are far fewer<\/a> wealthy Europeans than Americans among the signers of the Giving Pledge<\/a>, the promise to give away most of your fortune.<\/p>\n


\n\tThat\u2019s in part because in Europe, charity largely comes from the state, which is funded by taxes, and the structure of that tax system makes it more difficult to accumulate a fortune. Europe taxes income<\/a> and consumption<\/a> at higher rates. Regulations on businesses and financial markets also make it harder to launch a successful business.<\/p>\n


\n\t\"\"<\/p>\n


\n\tDefenders of the extremely wealthy (including me<\/a>) argue that it\u2019s more important for an economy to enable upward mobility than it is for it to limit extreme wealth. And some European countries are more egalitarian.<\/p>\n


\n\tIn Denmark, for instance, less than 20% of income advantages<\/a> are passed on from parent to child\u2014compared to 50% in the U.S. And overall, there is more wealth mobility in Denmark<\/a> than in the U.S. But the linkages between parent and child wealth are still strong for the top tier of wealth: Being wealthy as a child or young adult, usually because of inheritance, is extremely predictive<\/a> of being wealthy as a 45-year-old.<\/p>\n


\n\tOf course, in many ways the tax policy of a country reflects the values of that country. Which is more desirable: More security and better odds of reaching the middle class if you aren\u2019t born into it, or the ability to become fabulously wealthy? There is no right answer. It comes down to values around risk<\/a>.<\/p>\n


\n\tIt\u2019s not as if self-made billionaires don\u2019t exist in Europe. But its system puts a premium on security and safety, high income taxes, and regulations that ensure more predictability, worker protection and government benefits. This ensures that more people don\u2019t fall into deeper poverty and have the chance to join the middle class. But it also makes it harder for anyone to become a billionaire (or even a millionaire) if they aren\u2019t born that way. The U.S. system is far more tolerant of risk\u2014including the upside of becoming a millionaire (or even a billionaire).<\/p>\n


\n\tOn first impression, it may seem like the European way is preferable. Isn\u2019t an economy that offers easier access to the middle class better than one that rewards a handful of billionaires?<\/p>\n


\n\tBut it is important to remember that middle-class Americans (and in some cases lower-middle-class Americans) often live better than middle-class Europeans<\/a>. And that\u2019s partly because what made the billionaires wealthy\u2014technological or business innovations that lead to better services\u2014also improved the quality of life of middle-income Americans. Yes, a lot of people get rich, but so does society overall.<\/p>\n


\n\tAllison Schrager is a Bloomberg Opinion columnist covering economics. A senior fellow at the Manhattan Institute, she is author of An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk.<\/p>\n


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