Forward Economics
Chapter 14
Solving the Problem of Modern Feudalism (a.k.a. Inheritance)
"Virtue is not hereditary."
— Thomas Paine, Common Sense, 1782
“I am a 44-year-old man and have been married to my spouse for 10 years. We’ve been together for 15. Unbeknownst to my spouse, I have a trust fund that provides me with a monthly income of $25,000... My dilemma is whether I should reveal the truth about my trust fund. My family has always advised against it, but the weight of this secret is becoming difficult to bear.”
— Name Withheld, submission to The New York Times “Ethicist” column, August 11, 2023
The Return of the Aristocracy
The anonymous confession above in the letter to the NY Times above is more than a personal moral quandary. It’s an example of symptom of a deeper social illness that’s befallen our country — the quiet manifestation of hereditary privilege in a nation that once defined itself by rejecting it.
Most Americans still believe that wealth should come from work, not from inheritance — from creating value in the world, not from being born into it. That belief is woven into our founding DNA. The United States was, after all, the first modern nation built on rebellion against aristocracy.
But somewhere along the way, the old hierarchy has crept back in. Instead of castles, we have trust funds. Our gilded age wears Patagonia vests, attends Ivy League schools, and its courtiers sit on corporate boards instead of thrones.
The Scale of the Modern Feudal State
In 2023, the Federal Reserve estimated total U.S. household wealth at roughly $140 trillion. According to Cerulli & Associates, a Boston-based market intelligence and research firm, $84 trillion of that — nearly 60 percent — will transfer from one generation to the next over the next 25 years. This will be the largest intergenerational wealth handoff in human history.
If that wealth were broadly shared, it might not be a problem. But it isn’t. The bottom half of Americans hold just 2.5 percent of national wealth. The top 10 percent own nearly 70 percent. The pattern is unmistakable: dynastic wealth is consolidating power, and we are rebuilding the very class system our founders revolted against.
From Meritocracy to Dynasty
In Chapter 6, we saw how the backward business model encourages today’s shareholders to hoard profits instead of sharing them — fueling income stagnation. Inheritance is the other half of that equation. Once profits are captured, they are fenced off and passed down to heirs tax-free, cementing privilege across generations.
It wasn’t always this way. In the 1930s, America led the world with inheritance tax rates above 70 percent. That moral clarity has faded. Since 1980, the top federal rate has fallen three times, now down to 37 percent. The top 400 billionaires, according to IRS data, pay an average effective rate of just 24 percent. And estates can now transfer the first $25 million tax-free to heirs.
Meanwhile, politicians like Senator Jon Thune and former Senate majority leader Mitch McConnell — both multimillionaires — have championed bills to abolish the estate tax entirely. Their proposed Death Tax Repeal Act would enshrine modern feudalism in law.
It’s easy to see why heirs and elites would support this. It’s much harder to see why a democracy would.
The Meritocracy Principle
A healthy economy must continuously refresh itself — allowing new talent, new ideas, and new leaders to rise. A decaying one promotes the children of yesterday’s winners simply because of their names. Warren Buffett once likened this to the Olympics: imagine sending the children of last generation’s athletes to compete. Any nation that did this would fail spectacularly. A national economy is no different.
This is why a forward economy is so strategic for us to adopt. It keeps America’s leadership class open — where status and power are achieved through service and contribution, not inheritance.
How the Forward Economy Breaks the Cycle
The forward business model attacks this problem structurally, at its roots. In a forward economy, ownership is held not by dynastic families but by decentralized forward funds — enterprises that reinvest profits continuously into new ventures, local economies, and worker prosperity – all the time.
A $100 million forward fund might begin with ten companies. As reinvestment compounds, those businesses grow and replicate. Profits create new enterprises, which themselves generate more reinvestment. Over time, the fund may manage 25 or 30 businesses — and when it grows too large, it splits in two by design and according to an operating agreement (which is a corporate governing constitution). Power disperses. Opportunity multiplies.
Unlike traditional private wealth, forward funds never channel profits to idle heirs. They channel them to working Americans building new companies, hiring people, and solving real problems. The more forward businesses succeed, the more we put people to work. At the same time, the old, tired businesses — those that simply extract and pass down — disappear.
Over time, inheritance and nepotism lose their economic oxygen.
A Nation of Doers Again
Consider this in hard numbers. Roughly $67 trillion of America’s net worth is held in corporate stock. The top 10 percent own $60 trillion of that. Most of it is poised to pass to heirs who will never have to work a day in their lives — heirs who, like the anonymous trust-fund recipient at the start of this chapter, quietly opt out of productive society.
That is capital and working hands gone idle. And it breeds stagnation, national decay, and resentment.
In the forward economy, those same trillions are owned collectively through forward funds get perpetually reinvested into innovation, clean industries, and new enterprises. The result is a living, ever-renewing economy, not a hereditary one.
The Moral of the Story
America’s founders had it right: virtue is not hereditary. The promise of this country was never that you could be born into greatness — but that you could earn it.
We can build that promise again. By redesigning how capital flows — from inheritance to innovation, from idleness to contribution — we can make the economy reflect the moral architecture of democracy itself.
It’s time to stop sending the children of yesterday’s athletes to run today’s race. Let’s hand the baton fully to the people running hardest now and working to make our country successful.