The Forbes 400: 'A Lesson in Economics' Old Media Won't Learn

When elitist politicians and pundits in Old Media rail against "the rich," the implicit assumption is that it's the same people, year after year, who are getting over on the rest of us.

On Friday, using the 1982 and 2007 Forbes 400 lists (2007's main page is here), John Tamny at Real Clear Politics nuked that perception (HT Instapundit; bolds are mine), and landed a not-so-subtle broadside on the campaign of John Edwards:

..... capitalist economies are far from stationary, and for evidence we need only look to a graph in the latest issue that shows the makeup of the first Forbes 400 in 1982 compared to the latest.

Even though the wealth gap is a positive in most economies for driving the economic creativity of those not-yet-rich, much is made of it in the media and among politicians who worry about individual wealth consolidation even more than they do the corporate kind. A quick look at the Forbes 400 would surely assuage some of their fears.

Indeed, of the charter members of the first Forbes 400, only 32 remain today. Far from a country where only the rich get richer, the wealthy in the US are very much a moving target. While there are 74 Forbes 400 members who inherited their entire fortune, 270 members are entirely self-made. Though many attended Harvard, Yale and Princeton, there are countless stories within of high school and college dropouts, not to mention others who grew up extremely poor. Politicians who regularly engage in class warfare would do well to keep the Forbes 400 out of the hands of their constituents, because it makes a mockery of the kind "Two Americas" rhetoric suggesting the existence of a glass ceiling that keeps hard workers at the bottom of the economic ladder. To read the Forbes 400 is to know with surety that the U.S. is still very much the land of opportunity.

To read many business journalists today, one might assume that the U.S. economy is stratified, offers little room for advancement, and that those at the top are impervious to market forces while enjoying market power that enables them to fleece the less fortunate. Thanks to the lessons offered up yearly in the Forbes 400, we know the opposite is true. Successful people are that way because they make our lives exponentially better, while yearly dropouts from the Forbes list frequently offer evidence showing that consumers punish those who falter. For that, we should be glad that the Forbes 400 goes against the conventional grain and celebrates successful American enterprise.

This previous post at BizzyBlog from September 2005 ("Income Inequality + Economic Mobility = Long-Term Prosperity"), based on income-inequality information from the Census Bureau, and economic mobility data from the Heritage Foundation, goes into more detail.

Cross-posted at BizzyBlog.com and the Cleveland Plain Dealer's "Wide Open" blog.