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America remains the best country in the world to get rich. Some see this as cause for celebration, while others view it as evidence of a broken capitalist system. As an economist, I am less interested in debating whether billionaires (or trillionaires) 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 — and that their wealth is inherited rather than earned.
In Florence, the richest families have occupied that position for six centuries, 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 US, by contrast, the richest tend to be self-made. The difference is about policy as much as culture.
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Allison Schrager is a senior fellow at the Manhattan Institute, a contributing editor of City Journal.