Job Creators and Social Class

As Nick Hanauer and many others have pointed out, economic growth comes from the middle.  Always has.  100 million  "thousandaires", taken together,  buy a lot more stuff than a few thousand multimillionaires.  but they stop doing doing it if they go broke.   It's not the very rich that start companies, either, although a small fraction of them do, true entrepreneurs like Hanauer, and NOT the vast majority of rich--the hedge fund barons and dividend collectors.   The vast majority are started by the middle class.  People who know that taking a risk and losing won't put them and their families on the street to starve.  Without a safety net or equivalent support system, they are trapped working for somebody else--or not at all.

Paul Allen wasn't rich when he started Microsoft.  His father was a librarian.  Bill Gates was rich--his great grandfather founded a bank--but he made a big point of not using his family money.  I'm not sure he had access to it.  Warren Buffett's dad was a businessman, and congressman for a time, but not rich.   Larry Page's father is a computer scientist.  Sergei Brin's father is a college professor.  Henry Ford's father was a reasonably successful farmer. John D Rockefeller's father was a traveling salesman.   Bill Hewlett's father was a professor of Medicine.  David Packard's father was an attorney.   Steve Jobs' adoptive father was a comfortably middle class carpenter and electronics hobbyist.  Fred Koch's grandfather was a physician.  His son Harry founded a series of businesses, many of which Fred merged into Koch Industries.

All of these people and many more like them share two properties:  All grew up (including Gates) in a very middle class environment, reasonably comfortable, and all had parents that supported their budding interests. None of their families, except Gates and Fred Koch, had more than a middle class income.

Andrew Carnegie was that rarest of things, a true rags to riches story.  He was born very poor in Scotland, came to the US as a child, worked a series of jobs which, some of which exposed him to opportunities.  But his mother supported him always.  Thomas Edison (founder of GE) was also poor, although not as poor as Carnegie--his father was a lumberman and had briefly been active politically--but Thomas rescued a small boy from a moving train, and the boy's father (a telegrapher) took him under his wing, so he effectively had three supportive parents.

I can't find a single example where the founder of a great business didn't have great support from his family, although many were openly skeptical.   I can find very few examples where that family was already wealthy, although they do exist.  I suspect this is because real entrepreneurship is distributed fairly uniformly throughout the population, and there aren't as many rich people as middle class..  All the rags or near rags to riches stories I can find occurred in the 19th century and a strongly determined, supportive parent or patron looms large in every one.  I suspect entrepreneurship is just as common among the poor as anywhere else, but they have a lot fewer opportunities.

I can find lots of examples of rich people providing funding for a business which was really created by someone else--sometimes taking it over, frequently destroying it.  I can find very few businesses founded by rich people that actually do something productive--lots of financial houses and such.  Mitt Romney's Bain Capital is a perfect example: they bought controlling interests in businesses purely to extract the money, consequences be damned.   Very few survived.