
Today's rich families in Florence were rich 700 years ago - elberto34
http://www.vox.com/2016/5/18/11691818/barone-mocetti-florence
======
SmellTheGlove
I'm not entirely surprised. In Florence, and probably in lots of other places
too, wealth was amassed in land holdings and gold (florins being the
currency). Land holdings over a 700 year horizon seems like a far better
stability bet than equities, since the land itself has intrinsic value even if
the occasional war or natural disaster gets rid of whatever is happening on
it. Back in the 1400's, the merchant class absolutely made a great living -
upper class even. But the old blue bloods (many families of which even went
broke, in terms of liquidity) and nobility had land. They used that land to
build business and bring in rents, and build business relationships with other
upper class families, but even as the businesses faded the land remained. I
mentioned some of the old Florentine nobility going broke - many of them
preferred hardship to selling their land holdings. Some of them would
eventually marry off a daughter to a family that desired the blue blood
relationship and some land would go as dowry, thus restoring the fortune in
that family (through the wealth of the inlaws). One good example is Lisa
Gherardini's marriage into the del Giocondo family - she was of an old
nobility fallen on harder times, while the Giocondo family were new money
merchants. Some land and a few florins went with her, the Gherardini family
were restored a bit and the Giocondo family remained wealthy for a long time.

I'm not a historian, but I've taken a bit of an interest in Florentine history
as an adult, so take this for what it's worth. A real historian would probably
know better.

~~~
brador
Seems land taxation + basic income would be a great combo to spread wealth
around.

~~~
onetimeusename
It makes more sense to try to grow the GDP and tax income instead. Taxing land
in order to specifically target people with inherited land holdings has all
sorts of unintended (or maybe intended) consequences because these people
often do not have sufficient liquid holdings to pay the taxes. They end up
having to sell off land in parcels which is an arduous and incredibly
inefficient way for a government to raise revenues to 'spread wealth' and land
in these cases often isn't easily parceled. Should a family sell their estate,
the farmland that produces revenue that sustains the estate, or the useless
swamp to cover the taxes? This isn't the sort of situation governments should
be encouraging. If you have no mercy for that family, consider people whose
parents buy a small plot of land that unexpectedly becomes very valuable and
then the children are forced to sell the house on the death of their parents.
Or the same family who finds their tax rate going up but their income staying
the same because their land is suddenly in a trendy area. Taxing income to me
seems like the most fair way to raise revenue because it targets liquid means.

~~~
pyoung
So exempt primary residences from large tax hikes. The original promise of
Prop 13 was to protect grandma from having to sell her home due to rising
property values. But there have been some pretty bad side effects and a lot of
the benefits are going to the commercial property owners and wealthy
individuals and landlords.

~~~
tostitos1979
This could have been solved by square footage or price floors. If grandma
lives in a mansion, maybe she should be paying her share :)

------
cs702
Fascinating: income mobility in one generation (PARENT -> CHILD) cannot be
extrapolated to multiple generations (PARENT -> CHILD -> CHILD ...), because
_socioeconomic status_ persists across generations even if income fluctuates
from one generation to the next.

The example given in the OP is telling: _" It's not unusual for the child of
an economically successful professional to attend an elite educational
institution and then move into an artistic or academic or nonprofit career or
political career that might still involve traveling in elite circles but at a
much lower salary level than his father's. If the professional's grandson then
also attended an elite college and moved into a high-paying career in business
and law, statistics would show a great deal of economic mobility while common
sense would indicate three generations' worth of a high-status family."_

And it's not just Florence. The article mentions another study in Sweden that
reached similar conclusions.

I wonder how the US compares to European cities/countries.

~~~
dionidium
Yglesias has written about this before. Class is about a lot more than your
income in any given year.

[http://www.vox.com/2015/5/12/8592689/income-
class](http://www.vox.com/2015/5/12/8592689/income-class)

~~~
antisthenes
Probably the most succinct illustration of the difference between human
capital, capital (traditionally known as wealth), and income that the vast
majority of the American public confuse all the time and like to use
interchangeably.

------
seizethecheese
Ugh. If you look at the sourced article[1] the effect is actually very small:

"When regressing the pseudo-descendant’s earnings on pseudo-ancestor’s
earnings, the results are surprising: the long-run earnings elasticity is
positive, statistically significant, and equals about 0.04. Stated
differently, being the descendants of the Bernardi family (at the 90th
percentile of earnings distribution in 1427) instead of the Grasso family
(10th percentile of the same distribution) would entail a 5% increase in
earnings among current taxpayers (after adjusting for age and gender)"

[http://voxeu.org/article/what-s-your-surname-
intergeneration...](http://voxeu.org/article/what-s-your-surname-
intergenerational-mobility-over-six-centuries)

~~~
jerf
This strikes me as proving an awfully small result too concretely. Across the
several thousand ancestors you have going back 600-700 years (if not millions
of ancestors; a rather conservative "one generation every 25 years" for 600
years yields 2^24-ish possible ancestors, ~16 million, though most people's
family trees do not actually branch that much in the less mobile times of the
past), the one from which your patrilineal name comes from is even 5% relevant
to your life today? Is this one of those cases where hard science and math
prove something very counterintuitive, or one of those cases where soft
science and math gets popular because it was poked and prodded until it yields
a counter-intuitive result that would get into the news?

~~~
panglott
My thought was similar: how long ago was the most recent common ancestor of
Florentines (barring immigration)?

------
flubert
>Today's rich Florentines had rich ancestors

Doesn't everybody alive today have rich ancestors? Like pretty much everyone
is related to Charlemagne or Genghis Khan?

[https://www.google.com/#q=related+to+charlemagne](https://www.google.com/#q=related+to+charlemagne)

[http://www.nature.com/news/genghis-khan-s-genetic-legacy-
has...](http://www.nature.com/news/genghis-khan-s-genetic-legacy-has-
competition-1.16767)

~~~
tropo
Indeed, because the lower classes tended to die.

~~~
ptaipale
Not necessarily; just that classes mix and have always mixed (partly out of
wedlock of course).

When you go back, say, twelve generations, almost everyone has a few upper
class ancestors among the 8190 (part of them are anyway overlapping
duplicates).

(FWIW, I have an ancestor 12 generations ago who was almost a nobleman,
plundering Germany in 30 Years War and getting in return an estate that was
tax-free for some generations, as long as the owner promised to send in a
cavalryman to the Swedish king's service. But most of my ancestors were dirt-
poor peasants like almost everyone was.)

------
enoch_r
I found this quite interesting:

> We also find two further interesting pieces of evidence. First, we show that
> intergenerational mobility in the 15th century was much lower than at
> present – the intergenerational earnings elasticity between two successive
> generations was estimated to be between 0.8 and 0.9, thus depicting a quasi-
> immobile society in 1427. It is plausible, though we do not have direct
> evidence for this, that earning elasticity was close to 1 until the 20th
> century (before the Italian industrial revolution and mass schooling) and
> lower in the subsequent period. This may explain why we still find some
> degree of inheritance of socioeconomic status after six centuries.

So Yglesias, playing the "debunked!" card[0], says "look--here is proof that
our estimates of intergenerational income mobility are TOTALLY WRONG!" In
fact, there's a good chance that current studies (showing high mobility) are
perfectly consistent with this paper, since it found that moblity rose
dramatically since the beginning of the studied period.

[0] [http://slatestarcodex.com/2014/12/13/debunked-and-well-
refut...](http://slatestarcodex.com/2014/12/13/debunked-and-well-refuted/)

~~~
strictnein
Yglesias consistently strikes me as someone who was told they were very clever
far more than was actually warranted.

------
theandrewbailey
> A lot has changed in the Italian city of Florence in the roughly 700 years
> since the 1427 census

The author must have been using some _really_ bad floating point math, there.

~~~
Luc
1\. 15th century (1427)

2\. 16th

3\. 17th

4\. 18th

5\. 19th

6\. 20th

7\. 21st (now)

~~~
theandrewbailey
That makes about as much sense as counting the 4 months of November to
February as 2 years because it exists in 2 calendar years.

~~~
maxerickson
It can be an explanation of the error without being a defense of it.

------
btilly
If you're going to add theories about why, let's add some more.

1) Last names matter. If you have a name associated with success, you get more
chances, which results in more opportunities and a better chance of success.

2) Genetics matter. A person whose parents were unsuccessful but whose
background includes genetics for intelligence and beauty will tend to have an
innate advantage.

3) Family stories matter. People who know their ancestors did amazing things
sometimes try to live up to the family reputation with good results.

------
mrow84
You can get a large inequality effect just from differences in inheritance
between children. If we call the child who gets the bulk of the inheritance
the "first child", then the first child of the first child, etc., will end up
being very wealthy.

You can see it in a very simple model:

1\. start with a fixed size population, each starting with the same amount of
wealth

2\. pair the members of the population randomly to form two "parents"

3\. combine the wealth of the two "parents"

4\. split the wealth into two unequal parts with some fixed ratio (say 3:1)

5\. assign the two parts to two "children" of the "parents", resulting in a
population of the same size as the original

If you repeat the above procedure (from step 2) for only 5 or 6 generations
then you get a distribution that is positively skewed, to a degree depending
on the ratio (3:1 gives quite a large skew). It is a simple model, and I have
only evaluated it numerically, but it shows how strong an effect you can get
from only a single process (differential inheritance in this case). I am
fairly certain that things like assortative mating would produce similar
(compounding) effects.

~~~
mrow84
So I just did an experiment with simple assortative mating, where the
population is drawn into an ordered list, with the probability of selection
being proportional to wealth, and then paired off according to their order in
the resulting list (so the wealthy are more likely to mate with each other).
The results surprised me somewhat, though as with most things are somewhat
obvious in retrospect.

If you take a (model) world with unbiased inheritance (a 1:1 split between the
two children), then no "mating strategy" is able to increase wealth inequality
- at worst it can keep it the same as it was. This can be seen by noting that
neither of the children of the two wealthiest members of the population can
have more than the wealthiest of their two parents. Over many generations,
unless the mating selection is _extremely_ carefully chosen, the wealth
distribution will collapse to perfect equality, for any mating strategy.

Assortative mating therefore can at worst exert a drag on the (natural)
restoration to equality. In a (model) world with biased inheritance this leads
to greater amounts of wealth inequality, because the expansion of inequality
through the unequal inheritance is "resisted" less by the reduction in
inequality caused by mating.

In conclusion: try and treat your kids the same if you want a more equal
world!

------
mfoy_
>relatively low 0.2 percent elasticity of income in the Nordic countries and a
relatively high 0.5 percent elasticity of income in places like the UK, the
US, and Italy. An elasticity of 1 would mean that income status is perfectly
inherited between father and son, whereas an elasticity of 0 would mean no
inheritance.

I assume the author means 20% and 50%, respectively? If "1 percent" is all of
it and "0 percent" is none of it then I assume he confused percentages with
probabilities.

~~~
tokai
Wouldn't you say that 50/100 = 0.5?

~~~
mfoy_
I would!

However, a "probability of 0.5" and "0.5 percent" are different things by _two
orders of magnitude_. "0.5 percent" is "0.5%" which is 0.5/100, not 50/100.

~~~
thechao
Verizon ... statistics?

------
forkandwait
The discussion of Becker reinforces my belief that the discipline of Economics
exists primarily to justify pre existing power structures by using assumptions
which are convenient but empirically unfounded.

~~~
enoch_r
A paper by two economists finds evidence that intergenerational wealth effects
have persisted over very long periods of time. They note that their results
are "new and remarkable" in the context of a large existing body of empirical
work studying and estimating historical intergenerational mobility.

If the above reinforces your belief that "economics exists primarily to
justify pre existing power structures by using assumptions which are
convenient but empirically unfounded," then what exactly would weaken your
position?

------
leroy_masochist
I am skeptical of any study that uses Italian tax records as an empirically
sound data source.

Additionally, Yglesias' writeup of the study is short on specifics. What was
the number of people with a given surname in 1427, and in 2011? In other
words, is it possible that "Family A" was a big, wealthy and powerful family
in the 1400's, but today there are only four people with that last name in
Firenze and three of them happen to be in high-wage jobs?

Are income figures median, or mean? Neither Valentino nor Vasco Rossi lives in
Firenze, but if they did, they'd be skewing the mean income score for the
Rossi name.

Are we sure the people today with a given surname are the actual descendants
of people in 1427? And, if they are, what do we know about whether the family
has stayed wealthy in the years between then and now?

All in all, this article seems more clickbait-y than insightful.

------
jerryhuang100
I guess this eco-mobiilty all depends on the social structures and political
environments. There is a Chinese proverb "富不過三代", or, fortune won't last three
generations. The Chinese genealogy is relatively complete and you can actually
trace Confucius' offspring to this date. But you'll be surprised to find big
names today rarely also have some big name ancestors 500 years ago. One reason
is that the Chinese social and political are constantly changing. In China the
longest dynasty Ching lasted 268 yrs. Basically every 70-150 years there is a
game-of-thrones type of revolutions going on, and the entire soc-pol systems
flopped. Another reason is that a common used punishment by the emperor in the
past is collective punishment, i.e. if someone is sentenced to death, all
his/her relatives up to three upstream and three downstream, sometimes even
all cousins, are also sentenced to death. If someone did escaped they would
just change their surnames (and Chinese people change surnames relatively more
frequently than we would think.) That's probably why a big-shot in the history
book might have no offspring to be found nowadays.

------
jkot
> _The truth, however, is that we don 't really know what's going on._

Over 14 generations you will get ~ 50k relatives who live today. I bet some of
them are not rich.

~~~
civilian
You're not taking cousin marriage into account--- a lot of those 50k people
are the same people. And I'm using the loose definition of "cousin"\-- any
non-immediate, however distant, family relative.

------
phantom_oracle
Anybody curious to know how wealth can be preserved in perpetuity should read
up on what John D. Rockerfeller said about it.

Taxation on income is a pittance to where wealthy individuals source majority
of their income.

A rich guys 3 kids could virtually pay zero income-tax their whole lives but
live princely lives with capital gains, trusts, etc.

------
lifeisstillgood
This looks like brand longevity - the nobility has great brand name awareness,
and as they come under financial threat there are plenty of investors willing
to marry in to the name and provide new liquidity.

I doubt all the rich families of 1300 survived but I also doubt that the
winners never took outside investment

~~~
internaut
Yes, families of the past were a lot more like corporations today. House this
or Clan that. It was basically GOT.

The modern family must look weird from a historical perspective. Also in Japan
men are often adopted into families to continue that line for the corporation.

[https://en.wikipedia.org/wiki/Japanese_adult_adoption](https://en.wikipedia.org/wiki/Japanese_adult_adoption)

------
Kinnard
Would love to see an analysis predating the Renaissance and the Black Death I
imagine these had a big impact but analyses of China and England have shown
even revolutions fail to displace entrenched power blocs:

[http://qz.com/314720/heres-the-surprising-social-trait-
that-...](http://qz.com/314720/heres-the-surprising-social-trait-that-the-
english-and-chinese-have-in-common/)

[https://medium.com/@blackbitcoiners/bitcoin-has-failed-
cdad9...](https://medium.com/@blackbitcoiners/bitcoin-has-failed-cdad9ea3bf55)

[http://www.lse.ac.uk/economicHistory/workingPapers/2013/WP18...](http://www.lse.ac.uk/economicHistory/workingPapers/2013/WP181.pdf)

I'd love for pg to way in too as a former florentine, an expert of the
Renaissance, a promulgator of a contemporary renaissance(through YC
[hackers==painters]), and thereby, a wealth transfer/creation expert.

------
jhallenworld
The wealth certainly does not always last, one example is the Vanderbilts:
[http://www.nytimes.com/1989/09/24/books/more-money-than-
anyo...](http://www.nytimes.com/1989/09/24/books/more-money-than-anyone-
else.html)

------
lormayna
Florentine here. The owner of my company is one of them, he is from a very
ancient and important family.

------
pattisapu
> As Gary Becker and Nigel Tomes concluded back in 1986, "Almost all the
> earnings advantages or disadvantages of ancestors are wiped out in three
> generations."

Ibn Khaldun said something similar too.

~~~
buckbova
[https://en.wiktionary.org/wiki/clogs_to_clogs_in_three_gener...](https://en.wiktionary.org/wiki/clogs_to_clogs_in_three_generations)

I've heard it "sandals to sandals in three generations" as well.

~~~
cmdrfred
I like the Italian "from stables to stars to stables"

------
otempomores
Todays rich familys tell todays peasants that hard work will get them there?

------
mcv
700 years since 1427? What century are we in again?

