But Thomas Piketty, for example, claims he is very much against looking at the Forbes 400 data on methodological grounds. He doesn't believe there is really so much churn among the superrich. Like people who write to tell me that Forbes undercounts the secret wealth of the Rothschilds, Piketty believes there are large numbers of hidden Old Money billionaires out there. Matthew Yglesias sums up Piketty's argument:
Piketty's interesting point on entrepreneurial wealth turns out to be that the famous Forbes 400 list of the richest people in America (and similar lists in other media outlets) is probably mistaken.
Not just mistaken, in fact, but systematically biased to overrepresent entrepreneurs and underrepresent heirs and heiresses. This isn't a matter of ideology (though Piketty does think the publications in question are ideologically biased toward valorization of entrepreneurs) but of the limits of data. After all, the task of estimating the net worth of a major entrepreneur is relatively straightforward. Mark Zuckerberg is rich because as the founder of Facebook, he owns a lot of shares of Facebook stock. ...
But consider Zuckerberg's hypothetical future grandchildren. These grandchildren will, presumably, inherit a lot of money. But it's also reasonably likely that they won't play a management role in Facebook. And the prudent thing for them (or the creators of their trust funds) to do would be to hold a diversified portfolio of wealth rather than a large block of Facebook shares. They would be broadly invested in domestic and foreign stock markets, probably own a bunch of real estate, and maybe include some alternative investments (a hedge fund here, a commodity index there).
Tracking it all down would be possible, though perhaps difficult, in the course of a contentious lawsuit in which someone has the power to issue subpoenas. But a merely curious journalist has no real way of finding out how the holder of a diverse portfolio of inherited financial assets is doing.
In other words, we are almost certainly overcounting entrepreneurs among today's super-rich and undercounting the descendents and past entrepreneurs. And a generation or two from now we are very likely to underestimate the wealth of the descendants of today's entrepreneurial billionaires.
Ballmer, who was chief executive of Microsoft for 14 years, beat out other bidders that included Los Angeles-based investors Tony Ressler and Steve Karsh and a group that included David Geffen, Oprah Winfrey, Larry Ellison and executives from the Guggenheim Group, the Chicago-based owner of the Los Angeles Dodgers.
Are they typically Astors and Vanderbilts or are they Ballmers and Geffens?