Has Thomas Piketty been vindicated? The Economist just declared that inheritance is now the key to financial security, a claim that seemingly echoes the French economist’s central thesis.

Donald Trump surrounding himself with billionaires is also reigniting concerns stateside about how the super wealthy could capture democracy and entrench themselves. And with left-leaning policymakers searching for big ideas, Piketty’s warnings about wealth concentration are regaining traction, not least through the Law and Political Economy movement in the US.

Scratch beneath the surface, however, and it quickly becomes apparent that the central theoretical claim of Piketty’s ‘Capital in the Twenty-First Century’ – of an inevitable slide towards inheritance-dominated capitalism – remains evidence-free speculation.

Remember Piketty’s core thesis: given returns on capital (r) tend to outpace economic growth (g), we have an in-built feature of capitalism that leads wealth inequality to spiral upwards, inevitably creating a new aristocracy whose position is determined by birth rather than merit or hard work. Without aggressive interventions – a global wealth tax, astronomical top marginal tax rates – we’d supposedly tumble back into a Victorian-era world dominated by inherited privilege in the coming decades.

The Economist’s recent narrative seems to suggest Piketty was onto something. Inheritance, it notes, is rising as a proportion of GDP. Yet this phenomenon is more a quirk of demography – an ageing, wealthy generation finally passing on its accumulated assets as people die – than proof of a rentier class effortlessly pulling away from everyone else. The critical distinction is that Piketty’s entire argument depends on wealth continually compounding across generations without significant interruption. The reality of top wealth, however, continues to tell a very different story.

Take the Forbes global top 10 richest people by net worth, first published in 1987. Then, the top 10 names were Yoshiaki Tsutsumi, Taikichiro Mori, Shigeru Kobayashi, Haruhiko Yoshimoto, Salim Ahmed bin Mahfouz, Hans and Gad Rausing, Paul Reichmann and Brothers, Yohachiro Iwaski, Kenneth Thomson, Keizo Saji. Unless you’re a historian of 1980s Japanese real estate, you probably haven’t heard of these men. Many of their fortunes evaporated in market crashes, bad investments or legal scandals. Tsutsumi, for example, had his Seibu Railway delisted from the Tokyo Stock Exchange in 2004 following the discovery that he had participated in insider trading and falsifying shareholder records. Mori’s family’s wealth has around halved in cash terms.

True, half of the heirs still remain on the longer top 400 Forbes billionaires list. But the others have become largely irrelevant, with little information available about their companies or their current wealth. None of those families are on the top 10 list by wealth today and most saw negative returns, rather than capital income rates outpacing economic growth. Hardly indicative of the rich being able to simply live off their assets and pull away from the rest.

The full Forbes 400 list tells a similar story of churn in top wealth. Only 18 individuals from the inaugural 1982 list were there in 2024. Even when including their heirs, only 44 are still present – little evidence of a permanent, hereditary aristocracy. Consider the Walton family’s wealth, divided among seven descendants, each with varying degrees of prominence. Even Donald Trump has bounced on and off the Forbes list, highlighting the churn and volatility with market and industrial trends, rather than enduring privilege.

Not only is the composition of who is wealthy changing, but over time more of the super-rich are actually getting there more through business activity, rather than inheritance. Eight of the current Forbes top 10 world’s wealthiest are tech entrepreneurs or CEOs of companies (notable examples being Elon Musk and Jeff Bezos), individuals who have become valuable by providing immense products to customers.

An analysis by Steve Kaplan and Joshua Rauh of Stanford found that, in 2011, just 32% of the Forbes list came from very rich families, in fact, down from 60% in 1982. A huge 69% of those on the 2011 list started their own business, up from 40% in 1982. Reflecting this shift, Forbes introduced a self-made scoring system in 2014. Today, two-thirds of those on the list remain classified as self-made.

The UK reveals the same upward trend. The Sunday Times Rich List used to be dominated by aristocratic dynasties; now it’s filled with business innovators. In 1989, fewer than half of Britain’s wealthiest were self-made. By 2018, that number soared to over 94%, according to the paper. Jim Ratcliffe, Britain’s richest man in 2018, famously grew up in public housing before creating the chemical giant Ineos. Even accounting for the criticism that the newspaper counted those who turned moderate wealth into extreme wealth as generating their own wealth, at least 60% of the UK’s wealthiest today can be described as genuinely self-made. The growing importance of business wealth is undeniable.

Rather than a rigged game of dynastic wealth, today’s economy is still one of dynamism, churn and creative destruction. To date, the past hasn’t devoured the future, as Piketty warned. When his book was published, a Kent Clark survey of top economists found that just 2% of economists agreed that r > g was the main driver of US inequality up to that point, making his forecast about ‘patrimonial capitalism’ a highly speculative prediction.

It remains just that. Presuming r > g leads to ever-rising wealth inequality assumes that it’s the wealthy that own the capital, that they reinvest rather than spend it, that it’s not diluted through large families across generations and that those returns are near enough a given, rather than reflecting returns to risky business capital that can get usurped by creative destruction. Capitalism, it turns out, is far too unruly to stick to Piketty’s tidy equations.