The rise of self-made billionaires and the fall of economic dynamism

Economic progress has slowed down, not sped up

Billionaires’ Row in New York City (Photo by Gary Hershorn/Getty Images)

Paul Graham, the influential venture capitalist, wrote a good essay recently looking at the difference between the richest people in America today versus the richest people in the America of 1982.

It’s a good essay and you should read it, but the spoiler is that today a much larger share of the richest people are founders especially of “tech” companies.

And he goes on to lay out what is, I think, a widely-shared Silicon Valley View of the past 40 years of the American economy, namely that the rise of today’s ultra-rich founders in contrast to the heirs and heiresses of 1982 reflects the rise of a more dynamic economy:

So it's not 2020 that's the anomaly here, but 1982. The real question is why so few people had gotten rich from starting companies in 1982. And the answer is that even as the Herald Tribune's list was being compiled, a wave of consolidation was sweeping through the American economy. In the late 19th a…