How Nepo Babies Teach Us What Went Wrong With the Economy In a Downwardly Mobile Society, Watching Opportunities Flow Upwards….Sucks Image Credit: Equitable Growth There’s a phrase that’s been on lips for the last month or two. “Nepo babies.” Have you heard it? It means basically kids of the rich and famous and powerful, who make it, because, well, mommy or daddy are there to give them not just a leg up, but more like a jetpack which means they can rocket up the ladder, past everyone else, grinning coyly and waving “bye!” back down, the whole way. The idea of “nepo babies” has become a cultural touchpoint recently, a kind of new absurdist joke about our societies and our world, black comedy, satire-meets-reality. It’s provoked firestorms across front pages and gossip blogs both. And yet it’s blackly funny precisely because, well, it’s all too revealing. Of where our societies and economies really are. “Oh, they’re a nepo baby.” Explains a lot. There’s more truth to this little phrase, then, than might meet the eye. The fact is that “nepo babies” are a symptom, a classic feature, of societies in decline, and economies that are going the wrong way. How so? Take a hard look at our societies. What’s the first thing you see? The most vivid fact the economist in me sees is this: we now have four to five generations in downward mobility. Four to five generations. Gen X did worse than Boomers, and it was kind of funny, Millennials did worse than Gen X, and it wasn’t that funny anymore, Zoomers are doing worse than Millennials, and it’s dire, grim, and a little panic-inducing, if you’re a parent. The great socioeconomic trend of our time, in other words, is downward mobility. Downward mobility explains a lot — and predicts it, too. Men, lashing out, in rage, not getting the jobs, money, sexual partners, relationships they feel entitled to, because that’s what they’ve been told all their lives they deserve, will magically come their way? To the point of massacres? Downward mobility. Or how about the fact that our societies are increasingly indebted: that’s another feature, because of course as generations get poorer, public purses shrink, and so do, well, household ones, and both societies and people have to borrow just to stay afloat. Downward mobility strikes again. But there’s another effect of downward mobility — a set of effects, really — which are a little less well know, more hidden. Let’s put them under the heading of “a return to dynasties.” Dynasties.For a very, very long time, they weren’t just a feature of human society, they were its linchpin, its organizing force. The head most powerful dynasty in society became the “king” or “emperor,” the next ones down the ladder became “nobles,” and so forth. Dynasty, of course, is intimately wrapped up with patriarchy, because at least in most Western societies, dynastic privileges — inheritance of land, money, titles which conferred status and power — went to the first born son, and passed down the line that way. Why does downward mobility produce a regression to dynastic forms of social order? Well, for a very simple reason. Everyone else’s boat is sinking. Except the wealthy and powerful, who are often only gaining, because by now economies have become zero, or even negative, sum games — meaning that for someone to win, someone else has to lose. Think about it: what does “downward mobility” really mean? It means a lack of opportunities, chances, shots. For me to win, someone else has to lose. So. In downwardly mobile societies, what’s really shrinking is opportunity itself. Sure, there’s always going to be the kind of guy who interjects at this juncture and says, beating his chest, “But I made it all by myself!!” Sure, dude. You build those roads and invented the alphabet and printed the very first first note of currency in human history. All by yourself, huh? Nobody does anything all by themselves, from having a baby to…fulfilling any aspect of their potential. Opportunities shrink in downwardly mobile societies, meaning there are less, less good, and less stable ones. Of course for things we usually associate with the term — careers, jobs, degrees, and so forth. But also for the hidden, more intimate stuff of life: relationships. Networks. Friends. Check out how many Americans don’t have any close friends. Ready for a surprise? It’s 12%. More than 1 in 10 people. That’s because they’re usually busy working too hard to afford luxuries like friendship. And that’s a number that has quadrupled in the last thirty years. Are you seeing how “nepo babies” begin to emerge? Let’s crystallize a bit of that. Downwardly mobile societies leave the average person, the average household, struggling to stay afloat. Each generation does worse than the last. Meanwhile, that’s precisely because economies have turned into zero or negative sum games — for me to win, you have to lose, three people have to lose, ten have to lose. Who survives in a milieu like that? Well, those with resources do. Resources: money and power. But power, especially, of a certain kind: relationships. Relationships begin to matter intensely when opportunities are scarce, because there are some things that even money can’t buy. Want an internship with, I don’t know, some Hollywood studio or some famous music producer or whatnot? Go ahead and offer them money — they’ll laugh at you. That’s when it helps to have a mommy or daddy who’s known them for most of their adult life. So. Nepo babies are the return of dynastism. Now, a curious thing happens to…people. People have this innate drive to…revere…dynasties. For some reason. Me? Not so much. Maybe not you, either. But a whole lot of people are just struck dumb by the idea of…dynasty. Look at how many fans there still are of royal families. I’m far from an “anti-royalist” but I’m not exactly out there building a shrine to Prince Harry, either. Think of how people fawn and gush over the Kardashians. Who’ve contributed exactly nothing to human civilization. That’s pretty sad, but that’s human beings for you. Dynasties inspire an almost sanctified response in many people. That, too, is an effect that’s amplified by downward mobility. What’s the one thing that’s the most out of reach for the average person right now? A life better than their parents. Go ahead, be the one guy that tells me you did it. Good for you, guy, the statistics, which are about everyone else, paint no uncertain portrait of societies in which most people have little to no hope of doing better than their parents. And in that context, the unattainable becomes the very thing that provokes a reaction of intense desire, adoration, almost worship. Wow, look at those people! See how rich and famous they are! And yet at the same time, of course, we resent the nepo babies. Because while we might grudgingly admire their riches and power and fame, we know that something’s wrong with it. That something’s pretty obvious, too. When you look at a nepo baby, what strikes you? It’s not that they’re all talentless — they’re not. But it is that, well, they’re mostly mediocre. Maybe even more so than many of us, who’ve had to hone and refine our talents. What’s unfair about the rise of the nepo baby is that they exemplify mediocrity rising to the top — unfairly. Which is precisely what happens in downwardly mobile societies. That’s a little more complex to understand, so let me spell it out. If you and I — people with no real inherited advantages of money and power — spend our lives working hard and playing by the rules, to the point of getting advanced degrees and holding down careers and whatnot…what do we get? Not a lot. By this juncture in the decline of our societies, you can do all that…and still not be able to afford a house. Owning a home, in our societies is something of a singular accomplishment. But it’s just…a place to live. Just having a place to live that’s really your own is something you can barely eke out…if you spend your life working hard and playing by the rules. All that points to system failure. Institutional corrosion and corruption and breakdown. It’s not just at this juncture in human history that, say, owning a home should be easily accomplished if you work hard, live an honest life, play by the rules, and so on. That should be true at any juncture in human history. Sure, the comforts of homes might change and evolve — now you have heating and air conditioning, before it was just a mud hut or stone villa — but the economics remain the same. People should be able to afford decent lives by living decent lives. That’s no longer true in our societies, though. Why? Well, because we have what are known as “winner-take-all economies,” but to a degree that’s probably unprecedented in human history. By many counts, the richest take more than 100% of the gains in the economy. That has to be true, of course, because of course that’s the only way to get to downward mobility when, say, an asteroid hasn’t wiped out your entire economy. Our winner take all economies are off the charts extreme. Billionaires can afford to do things like wipe out the debts of entire countries. Or all the students in this one. Buy up the housing stock of entire towns and cities. And that’s just because they won at some pretty basic task — they made a corporation or some such thing that went big. But should someone really be that rich just because, I don’t know, they’re selling a gadget or a car or some such thing? Even if it means everyone else lives a worse and worse life? Winner take all economies are what are producing this return to dynastism. You see, the super rich these days have so much money they literally have no way to spend it in ten, a hundred, a thousand lifetimes. The average billionaire could literally buy one of everything in the economy, from a super yacht to a mega mansion, and it wouldn’t even make a dent. So what is there left for them to do? Establish dynasties, that’s what. Give their kids a jetpack to the top — even if it comes at the cost of everyone else’s opportunities. That’s why we’re resentful of nepo babies. It’s not that the average person’s “jealous” of their wealth and fame and power. Maybe many are, but that’s not what really fuels the intense resentment. It’s that they’re taking opportunities from people who deserve them more, often much more — in an age where opportunities themselves are dwindling and declining. That’s what economists call “opportunity cost” — it’s literally the cost of lost opportunities. And nepo babies inflict what we might call a social opportunity cost on us all. How big is it? Worse, we’ll never know. Who’s to say who might’ve been a great film director…if they had a chance. A great singer, if it hadn’t been for that nepo baby releasing that awful album? What about that nepo baby with, LOL, their own makeup line? Couldn’t those resources have been to put to way, way better use, investing in literally anything else, started by literally anyone else, that had some kind of redeeming value? Perhaps you see my point. It’s true that some nepo babies are pretty good at what they do. But to say that misses the point. As a social group, the emergence of nepo babies is…a problem. It means that all of us are paying the price, incurring the opportunity cost. We don’t know how big it is precisely, but we can say, with a fair degree of certainty, that it’s probably transformative. That kid, the poor one, in a crap school somewhere — he’s never going to get to be tomorrow’s Truffaut or Einstein or Salk, or Diana Ross or Nile Rodgers or what have you, because there are nepo babies, monopolizing precisely the resources that could’ve made his or her opportunities real. So we have this conflicted relationship with nepo babies. On the one hand, many are glued to their glittering, glamorous lives, in a kind of catharsis from the poverty and misery of their own, which are just the grueling enactment of downward mobility, day after day. On the other hand, we all know, even if we can’t articulate it, know it intuitively, that nepo babies have an opportunity cost on the rest of us — there they are, monopolizing opportunities that should surely go to more deserving people, in an age of dwindling oppprtinites to begin with. Worse, by doing that, they leave the average person a little demoralized: what’s the point of even honing my talents, putting my nose to the grindstone, if what it really takes to make it is…mommy and daddy? Where does nepotism end? Well, in a return right back to pre-modern forms of social order. Societies run by aristocracies — remember those? Nobles. Kings. Etcetera. “Nepotism” is a bad word precisely because it’s a value and a practice that we had to work very, very hard — for centuries and millennia — to undo, and make equality the basis of modernity instead. Hey, just because you were born with some dumb title doesn’t mean you’re better at anything. Have more to contribute, give, more potential than any of the rest of us. Nepo babies inspire such resentment because our systems and institutions treat them as having more potential than the rest of us — and that’s just not true. Of course, nepo babies are here to stay. From Trumps to Kardashians, they’ve become part and parcel of our world. They’ll be there as long as downward mobility is the fundamental social trend, and winner take all economies the primary economic one. Together, those two things are a one-two punch to the heart of modernity. They force a regress back to dynastism, that most ancient of ills. Sure, we all want the best for our kids. But that should never mean denying anyone else’s kids a fair shot, too. And we should all remember, too, that yesterday’s nepo babies? They were called “dauphins” and “barons.” Humanity lived in the shadow of that folly for millennia, until at last Enlightenment and Democracy set us — at least many of us — free. None of us should want to go backwards to the Dark Ages where some people were better than the rest, by blood, which really just meant: mommy and daddy have titles and friends and money and power. The price, after all, is the modern world itself. Umair January 2023 https://eand.co/how-nepo-babies-teach-us-what-went-wrong-with-the-economy-264b79aaedba
Good read. Mediocre nepo dynasty baby W. Bush led to over a million dead and our economy in shambles. Medicore nepo dynasty Clinton lost as a piss poor candidate to mediocre nepo dynasty Trump who cost us a million American dead via COVID and wrecked our economy even further. Was Reagan nepo?
Conservative think tanks have estimated the share of wealth today owing to inheritance to be about 40%. Liberal think tanks put the number at 60%.