How The Children Of Billionaires Took Over America

In this episode of Ed Elson’s newsletter, Simply Put, Ed unpacks how America gave rise to a new ruling class: the inheritocracy. He breaks down the economic stakes of inherited wealth, and how it could transform society as we know it. Subscribe to Simply Put to get the newsletter in your inbox. Subscribe to the Prof G Markets Youtube Channel Follow Prof G Markets on Instagram Follow Ed on Instagram, X and Substack Send us your questions or comments by emailing [email protected] Learn more about your ad choices. Visit podcastchoices.com/adchoices

• 0:04Speaker 00

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• 1:29Speaker 03

  Welcome to Simply Put. I'm Ed Elson. This week, Inheritocracy.

• 1:41Speaker 03

  After 13 months of bidding wars and lawsuits, Paramount has finally closed its $111 billion acquisition of Warner Brothers Discovery. The merger makes CEO David Ellison by far the most powerful media player in the world, as he now controls, among other things, CBS News, CNN, HBO, HBO Max, TNT, TBS, MTV, Comedy Central, Nickelodeon, The Food Network, Paramount Plus, the Star Trek franchise, the Mission Impossible franchise, the DC Universe, and the Harry Potter Universe. Think of any iconic media asset, David Ellison probably owns it now. So who is David Ellison? Good question.

• 2:24Speaker 03

  Up until recently, he was relatively unknown. His production company, Skydance, had produced a couple of successful films, but nothing groundbreaking. Originally, he wanted to be an actor. After dropping out of USC in 2005, David starred in Flyboys, his first feature film, which grossed less than $20 million on a production budget of $60 million. The movie was a failure, and David struggled to break through. Then, in 2024, David approached Shari Redstone, the chairwoman of Paramount Global, with an $8 billion pile of cash. It was at that moment that he started to turn heads. "Who is this guy?", people wondered. "And where did he get all of that money?". One quick Google search and things were clarified.

• 3:09Speaker 03

  He's Larry Ellison's son. The older Ellison is the founder of Oracle and the eighth richest man on the planet. He also provided his son with more than $50 billion to pursue his dreams, financing everything from Flyboys to his acquisition of Warner Brothers Discovery. While it's possible that David has a knack for media, I doubt that anyone really cares. The true source of his power is who his dad is. We all know someone like David, the guy whose parents got them the job. But few parents have ever been rich enough to give their kid an entire industry, which is why this acquisition is so important. David Ellison's empire isn't just a media story, but a signal of our nation's future.

• 3:54Speaker 03

  Gone are the days when billionaires controlled America. Soon, it will be ruled by their children. Welcome to the Inheritocracy, a world where wealthy children don't receive PlayStations for Christmas, but power. David Ellison is perhaps the most extreme example. As CEO of Skydance, the boy king can now upend the entire American media ecosystem at his will. But he isn't alone. From Fox Corporation to Cantor Fitzgerald, many of America's most powerful companies are no longer run by entrepreneurs, but by their children. The Inheritocracy is most right in the media industry, where dual-class shareholder structures have helped to maintain ownership within families.

• 4:36Speaker 03

  Comcast, Fox, The New York Times, and now Warner Brothers Discovery are all run by people whose parents put them there. Paramount had also been controlled by a billionaire's daughter, Shari, until a richer billionaire's son, David, brought her out. Has America always been this way? No. Due to the extraordinary explosion in wealth inequality, the children of billionaires now sit on $4.7 trillion, more than the entire UK stock market. In 2023, for the first time ever, heirs took in more wealth than founders did. About a third of billionaires now become billionaires not because they built something, but because of inheritance. Being born rich has never paid as well as it does today.

• 5:19Speaker 03

  The Inheritocracy might be new in America, but not in the rest of the world. England, for example, used to be ruled by kings, queens, lords, and ladies, all of whom obtained power via inheritance. It wasn't until this year that the UK's hereditary system of peerage was abolished, as the nation finally realized after 700 years that awarding leadership based on who your parents are is both unfair and stupid. Indeed, one of the main reasons America was founded was to not have an Inheritocracy. Soon after establishing independence, the founding fathers took great pains to prevent it. Thomas Jefferson, for example, led Virginia to abolish both entail and primogeniture,

• 6:03Speaker 03

  two laws that preserved large estates and handed them to their eldest sons. Later, Congress established the estate tax, which was designed to redistribute inherited wealth. By the 1940s, the top tax rate on the largest fortunes was nearly 80%. We were okay with this because we knew that their inheritors hadn't earned them. Since then, our anti-inheritocratic infrastructure has been undone. The top estate tax rate is now 40%, and the estate tax exemption, i.e. the amount of money you can pass to your kids tax-free, was just raised to $15 million, up from $675,000 in 2001. Meanwhile, estate tax returns have plummeted, and less than a one-thousandth of American

• 6:47Speaker 03

  estates now pay any estate tax at all. I would care less about this issue if it weren't so economically important. But the amount of money that is about to be inherited is not only enormous, it could also transform society as we know it. An estimated $124 trillion is set to change hands in America by 2048. Roughly half of that will be inherited by the heirs of the top 2% of households. The further up the chain you go, the crazier the numbers get. The children of American billionaires will inherit nearly $3 trillion over the next 15 years. That is enough money to buy the Brazilian stock market three times over.

• 7:29Speaker 03

  Saving money for your children isn't bad, but bending the rules to preserve generational power is. The more we notice that the children of billionaires control our society, the less we will trust it. From David Ellison and Jared Kushner to Don Jr. and Alex Soros, too many Americans control inordinate levels of power, not because they were the right guy for the job, but because their parents bequeathed it. It's not a coincidence that American pride and faith in capitalism are hitting record lows, as the central pillars that made the US exceptional are in structural decline. You can't call it a democracy if power can be bought, and you especially can't call it a democracy if it can be passed down.

• 8:12Speaker 03

  We are rapidly devolving into the English aristocracy that we once shunned. Today's lords are called founders, barons are CEOs. The labels might be different, but the dynamics are the same. Just as every European feudal system caved under the pressure of its own economic oppression, so too will America's. We humans are simply too dignified to accept Inheritocracy. It's too arbitrary, it's too openly unfair. Our end game on this trajectory is quite clear: total and utter chaos. The solution, therefore, is to somehow unwind our Inheritocracy. How?

• 8:55Speaker 03

  Well, there are plenty of peaceful strategies that we could employ. We could eliminate the estate tax exemption, for example. We could increase the estate tax rate. We could also reform the tax code and start taxing capital gains at the same rate as income. These are just a few ideas, I am open to others. The alternative is to wait for things to get worse. David Ellison is likely the first of many other billionaire children who will soon inherit entire industries. Eventually, everything from tech to finance will be consolidated. Americans will look back at the days when only the media was compromised with fondness. They will ask themselves, "Who let this happen, and why?".

• 9:39Speaker 03

  And when they do, we will only have ourselves to blame.

• 9:52Speaker 03

  This edition of Simply Put was produced by Claire Miller and Alison Weiss, edited by Natalia Cabrera and engineered by Benjamin Spencer. Our research associate is Dan Shalan. Our design editor is Olivia Rini-Hall. Special thanks to Vivian Zhang and Rohit Bola. Thanks for listening to Simply Put by Ed Elson. You can find this piece and more on Substack, just go to edredelson.substack.com.

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• 11:08Speaker 02

  Your heart can tell you a lot about your health. Apple Watch Series 12 measures your heart rate every five seconds with the most accurate heart rate sensing in wearable. So your vitals app, now with heart rate variability, can tell you when something is off. And your readiness score can let you know when to rest and when to push. Hear the story in every heartbeat with Apple Watch Series 12. The features described are for wellness purposes only and not for medical use. iPhone 11 or later required. Based on Apple conducted study of heart rate accuracy, August 2026. Visit apple.com slash Apple Watch Series 12.

• 11:39Speaker 05

  Support for the show comes from USA Facts. Income inequality, entitlements, housing costs. Want to really see what the government is up to, what it costs, and who is benefiting? Check out a debate on the American dream between Scott Galloway and Ben Shapiro. It's not your typical soundbites from boring politicians reading talking points. The debate is framed by an informative set of government facts from USA Facts, and then Ben and Scott get into it. There are sharp differences, some common ground, and data and facts that leave you knowing more. Check out the full debate now on the USA Facts YouTube channel.