How Do Millionaires Make Their Money?

by Walter Johnson

According to a 2007 study by the Pew Charitable Trust, almost 70 percent of Americans believe that skill and ability are the primary determinants in the distribution of wealth. At the same time, there is actually little evidence that this is the case. One of the problems is the mentality of the wealthy themselves. How people become millionaires varies based on each person.

Meritocracy

A common view is that the wealthy use intelligence and hard work, and entrepreneurial ability to amass wealth. Therefore, their wealth is earned legitimately and legally and can be morally defended. Increasingly common is the idea that networks of connections among the wealthy themselves are the main determinant of wealth creation. In other words, it's who you know, not what you know. The 2007 study on economic mobility in America sponsored by the Pew Trust suggests that it is the family and their external connections to government and corporate America that create millionaires.

Networks

Another view is that family and other connections is the cause of wealth. The rich get rich because their family and other connections introduce them to methods of earning quick profits. Writers such as Yochai Benkler write that the "networked information economy" is the primary means of attracting wealth. Wealth, in other words, is access to information. This also means that connections among those who control information, and can properly interpret it is the more specific cause of wealth creation and concentration.

Elite Groups

Professor Anthony Sutton of the Hoover Institute of Stanford University has written several books linking secret and semi-secret organizations like Skull and Bones, Bildeberg and Bohemian Grove, among many others, to the main way that America's elite are created. This is a more specific variation on the networking argument. According to Sutton, millionaires and elites in general are the product of a tightly integrated and secret elite that is cut off from the masses.

Elite Networks

Sutton's argument rests on mutual support among the wealthy and powerful. Since they support each others' businesses and political ambitions, the elite create new elites. According to this argument, these are usually from the Ivy League Schools and have close family connections to government and other elite organizations worldwide. The sheer volume of Sutton's data strongly suggest that family connections and networks create millionaires, since these networks serve as financial intermediaries that channel investment money and opportunity to members.

About the Author

Walter Johnson has more than 20 years experience as a professional writer. After serving in the United Stated Marine Corps for several years, he received his doctorate in history from the University of Nebraska. Focused on economic topics, Johnson reads Russian and has published in journals such as “The Salisbury Review,” "The Constantian" and “The Social Justice Review."

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