America's top 10 billionaires are mostly innovators, while many of Europe's richest billionaires are heirs, but the United States appears to be becoming more European.
Billionaires may be different from the rest of us.But they also acquired their wealth in different ways.In general, they fall into two categories: innovators and successors.
The most striking thing about America's top 10 billionaires is that they are mostly innovators.Some of them have started their own technology businesses, including Amazon's Jeff Bezos, Microsoft's Bill Gates, Google's Larry Page and Sergey Brin.
Today, Microsoft and amazon are each worth more than the 30 biggest listed companies in Germany's Dax index combined.It's a victory for big tech and the new rich.
By contrast, many of Europe's richest billionaires are old money.Their median age is also nearly 20 years older than that of American billionaires.Often, they come from the heir class, winning the lottery for being born into an established industrial, real estate and retail empire.The Sunday Times list of billionaires living in the UK, published last week, includes several royal heirs, property tycoons and foreign oligarchs.
In the top 10, there is still the seventh Duke of Westminster, heir to the estate empire and duchy created by Queen Victoria in 1874.Only James Dyson, the richest man on the list, seemed like a truly American innovator, creating his own business fortune.
This model of wealth creation fits the stereotype that American capitalism is dynamic while rent-seeking prevails in backward Europe.But will there be a twist to this story?Is Europe becoming increasingly American in terms of wealth creation, and the us increasingly European?
In his book The Great Reversal, Thomas Philippon, a professor at New York University Stern School of Business, argues that The us has abandoned The free market while Europe has ultimately embraced it.Twenty years ago, air travel, telephone service and Internet access were all much cheaper in the us than in Europe.Now, thanks to the concentration of power in us business and the increasing competitiveness of Europe's single market, the reverse is happening.
This trend is good for European consumers, and theory suggests that increased competition should promote innovation.But even if the ingredients are now in place in Europe, the three dishes won't necessarily come out of the woodwork.
Market dynamics in Europe are certainly moving in the right direction, but they may be moving too slowly, says Mr Philippon."It's a bit like predicting that Brazil is the country of the future - and always will be," he says.I'm afraid it's a bit similar in Europe."
A study of 20 years of data from Forbes' list of the world's billionaires by the Peterson Institute found that wealth is increasingly being created, rather than inherited, around the world, and that wealth creation is strong in developing countries.
But the paper, published in 2016, also notes that the rate of billionaire defections in the us is falling, suggesting that extreme rents are emerging in some sectors of the economy, particularly in resources and finance.In that sense, the us may indeed be becoming more European.