Wealth inheritance at root of economic inequality, researchers say

Frank Marlowe and Hadza children

When it comes to the ability to pass down wealth from one generation to the next, people in today’s knowledge-based economy are much like hunter-gatherers: They rely on wits and skill to make a living but have relatively few material assets to bequeath to children, according to an international team of researchers that includes a Florida State University anthropologist.

Anthropology Professor Frank Marlowe was part of a team of 26 anthropologists, statisticians and economists who studied intergenerational wealth and the dynamics of inequality in small-scale societies ranging from egalitarian hunter-gatherers to hierarchical farmers and herders in Africa, Asia, Europe and Latin America. Their study is published Oct. 30 in the prestigious international journal Science.

The researchers amassed an unprecedented set of data in their study, with Marlowe contributing data on the Hadza, a Tanzanian people considered the last functioning society of hunter-gatherers in Africa. The researchers found that there are substantial differences in wealth inheritance and inequality that stem from the ways the societies earn their livelihoods. Hunter-gatherers rely on their wits, their social connections and their strength to make a living. In these economies, there is only modest wealth inheritance, and the level of economic inequality is on a par with the most egalitarian of modern democratic economies, those in Denmark, Norway and Sweden.

"Wealth inequality is influenced by wealth inheritance," Marlowe said. "But it may still come as a surprise that people who live in liberal democracies with knowledge-based economies, especially in Northern Europe where there is a fair bit of wealth redistribution, have less disparity than those herding and farming-based societies that long ago gave up foraging but have not yet undergone the Industrial Revolution."

In those herding and farming societies, Marlowe explained, the son of a herder who inherits 200 cows from his father has a great advantage over another boy whose father has only five cows. In fact, in these societies, offspring of the top 10 percent in the wealth distribution are 20 times more likely to attain that status than the offspring of the poorest one-tenth. These societies exhibit levels of wealth inheritance and of inequality rivaling the most unequal national economies in the world today.

That’s different from societies — such as the hunter-gatherers or the modern knowledge-based society — in which wealth is measured by an individual’s own development of embodied capital of inherited genes, health and abilities. The Hadza especially value personal freedom and democracy and are truly egalitarian, Marlowe said. They have no wealth, but all men have a bow and arrows and all women have a digging stick.

Although the emergent knowledge-based economy of today in some ways resembles that of hunter-gatherers in that wealth is less readily passed from parent to child, this does not mean that the information-driven Internet Age will necessarily assure more equality, the researchers said. Institutions and societal norms about sharing wealth also will play a role.

The study is unusual in bringing the tools of economics to the lives of people living in traditional societies where value often lies more in social connections, health and family status than in the forms of material wealth stressed by economists.

The research is part of the ongoing Persistent Inequality project of the Behavioral Sciences Program at the Santa Fe Institute and is coordinated by Monique Borgerhoff Mulder, an evolutionary anthropologist at the University of California at Davis, and Samuel Bowles, an economist at the Santa Fe Institute. Financial support was provided by the Cowan Endowment to the Santa Fe Institute, the Russell Sage Foundation and the National Science Foundation.