…A key empirical question in the inequality debate is to what extent rich people derive their wealth from “rents”, which is windfall income they did not produce, as opposed to activities creating true economic benefit.
Economists define “rent” as the difference between what people are paid and what they would have to be paid to do the work anyway. The classical example is the farmer who owns particularly fertile land. With the same effort, she can produce more than other farmers working on land of average productivity. The extra income she gets is a rent. Monopolists also get rent by overcharging customers as compared to what they could charge in competitive markets. …
Data limitations do not allow us to compute rents anywhere close to accurately. But if I had to give a single number to settle the debate, it is this: when it comes to the very richest Americans (Forbes’ billionaires), 74% of their wealth is derived from rents.
This finding has important moral, economic, and policy implications. To the extent that it is driven by rents as opposed to productive activities, the extreme concentration of wealth we observe is not fair according to a meritocratic conception of social justice. Moreover, because rents do not compensate productive activities, redistributing them through taxes or regulation does not harm the economy, and could even boost economic growth. As wealth inequality has become so extreme, even modest redistribution could have significant positive impact for the poor and the middle class.
They Don’t Just Hide Their Money. Economist Says Most of Billionaire Wealth is Unearned. – Evonomics
Inequality By Didier Jacobs The concentration of wealth from rent-seeking The 62 richest people in the world own as much wealth as half of humanity. Such extreme wealth conjures images of both fat cats and deserving entrepreneurs. So where did so much money come from?