Wealth

Books on wealth

One interesting issue in economics is the distribution of income and wealth. These two factors are not as correlated as one would expect. While people are keenly aware of income, wealth is often ignored, and even data on wealth is hard to obtain. The following books provide a picture of wealth in America, who has it, and how it is distributed.

The Wealth and Poverty of Nations : Why Some Are So Rich and Some So Poor by David S. Landes.

This book takes a broad historical perspective on why Europe made it rich in the 1700's and 1800's, when countries such as China had a technological, economic, and cultural lead for centuries. It covers factors such as geography, willingness to innovate, openness to other cultures, and freedom from foreign invaders. It examines former powers such as the Netherlands, Portugal, and Spain and shows where they slipped up.

Black Wealth, White Wealth : A New Perspective on Racial Inequality by Melvin L. Oliver, Thomas M. Shapiro.

While blacks in America are reducing the income gap with whites, the wealth disparity is truly shocking. A typical black family possesses on average only 11% of the wealth of a white family. This book does a good job of illustrating the wealth disparity. The explanation, however, didn't seem as solid. Inheritance and lesser appreciation of black houses are targeted as key culprits. Read an interview with the author.

The Millionaire Next Door: The Surprising Secrets of America's Wealthy by Thomas J. Stanley, William D. Danko.

This book, the result of surveys of American millionaires, illustrates that the average millionaire isn't a big-spender living the high life, but someone running a boring business and living frugally. This book does a great job of illustrating the difference between high income and high wealth and shows that many who appear rich are merely spending their entire income. The key equation of this book: average personal wealth = age * annual income / 10. If you have twice this, you're saving well, and if you have half this, you're an under-accumulator of wealth.

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Ken Shirriff: shirriff@eng.sun.com This page: http://www.righto.com/books/wealth.html
Copyright 1998 Ken Shirriff.

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