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The number of billionaires in the world has almost tripled since 2011. In 2026, Forbes counted 3,428 billionaires, up from 1,210 in 2011. That growth hides a striking split between the United States and Europe. In the United States, new fortunes have become more common. A study of the Forbes 400 found that the share of billionaires who created their wealth rose from 41.5 percent in 1982 to 67.2 percent in 2013. The Forbes-based dataset of all current billionaires Sam Fox and I used for this newsletter points in the same direction more recently. Among all U.S. billionaires, the self-made share rose from 68.9 percent in 2011 to 72.5 percent in 2026. Europe moved the other way. Among European Union nations, the self-made share fell from 49.3 percent to 39.9 percent. Across Europe excluding Belarus, Moldova, Russia, and Ukraine, it fell from 55.0 percent to 44.6 percent.
Two countries can have similar levels of wealth inequality and very different economic systems. In one, the richest people may owe their position mainly to inherited assets. In another, many may have built their fortunes within their own lifetimes. A billion dollars inherited from a great-grandfather and a billion dollars created by building a new company look identical in the statistics. Economically, they tell very different stories.
Made in America
That’s an important distinction because much of the American political debate assumes that large fortunes are accumulated at the expense of others. Sen. Bernie Sanders has said that billionaires should not exist. Rep. Alexandria Ocasio-Cortez put the idea more plainly when she said, “No one ever makes a billion dollars. You take a billion dollars.” Joseph Stiglitz, a Nobel Prize-winning economist, has argued that some large fortunes reflect monopoly power, political influence, and other forms of rent-seeking, an argument he developed in his 2012 book The Price of Inequality.
As Stiglitz correctly points out, some fortunes do come from political privilege, monopoly protection, fraud, or other forms of extraction. However, particularly in the United States, fortunes created in competitive markets often arise differently. A founder builds a company that offers a product, service, or process that customers value more than the alternatives. If the company succeeds on a large scale—as with Bill Gates’ software innovations or Jeff Bezos’ logistics networks—the founder may become extraordinarily rich while customers receive most of the gain.
William Nordhaus, a Nobel laureate, tried to measure the extent to which gains go to consumers.. In a study of U.S. nonfarm business from 1948 to 2001, he estimated that producers captured about 2.2 percent of the total gains from innovation. Most of the gains went to consumers through lower prices, better products, and new capabilities.
That point is easy to miss because the founder’s fortune is visible while the gains to everyone else are spread across millions of people. A $50 billion fortune appears on a list. The billions of dollars’ worth of time saved by better software, the cheaper delivery made possible by better logistics, or the extra computing power produced by better chips do not appear in one place. Yet those scattered gains are often much larger than the fortune that attracts public attention.
The deeper issue is growth. Progressives like Sanders and Ocasio-Cortez who see billionaires as takers prefer redistribution as the solution to perceived or real want in the United States. That can change who receives a given amount of income today. But it comes at the cost of growth, which changes how much income, knowledge, technology, and productive capacity exist tomorrow.
Robert Lucas, another Nobel Prize-winning economist, thought economists paid far too much attention to the question of redistribution and far too little to the question of growth. He called the focus on wealth distribution “the most seductive, and in my opinion the most poisonous” tendency in economics. Looking back at the Industrial Revolution, Lucas wrote that “virtually none” of the enormous improvement in human welfare came from direct redistribution. The potential benefits of redistributing current production, he wrote, were “nothing compared to the apparently limitless potential of increasing production.”
The difference becomes enormous over time. A transfer changes someone’s position once. Higher productivity compounds year after year. Over decades, that process produces higher wages, better housing, safer work, cheaper food, longer lives, and technologies that earlier generations could not buy at any price.
Europe’s recent economic pattern therefore deserves attention. On the classification used in the Forbes-based dataset, 60.1 percent of billionaire fortunes in the EU were not self-made in 2026.
Many of Europe’s largest fortunes remain tied to family-controlled fashion houses, luxury brands, retailers, industrial groups, and carmakers built generations ago. Bloomberg’s ranking of the world’s richest families includes Europe’s Hermès, Albrecht, Ferrero, and other multigenerational dynasties. Europe still creates successful new companies, but relatively few grow large enough to displace the old giants. The International Monetary Fund notes that European firms tend to be smaller, older, and slower-growing than American firms. Mario Draghi, the former president of the European Central Bank and former prime minister of Italy, made the disparity especially clear in his 2024 report on the future of European competitiveness: No EU company with a market capitalization above 100 billion euros ($112 billion) had been created from scratch in the previous 50 years, while all six U.S. companies then valued above 1 trillion euros ($1.12 trillion) had been created during that period.
Finance is part of the explanation. An IMF study describes the European financial system as dominated by banks and notes that U.S. equity markets play a much larger role in American corporate finance. Banks are well suited to lending against houses, factories, machines, and other assets that can serve as collateral. A young company with an unproven technology often has little collateral and a high chance of failure. It needs investors willing to lose money on many bets in exchange for the possibility that a few will become very large companies.
Redistribution policies also play a role. The higher tax burdens required to sustain Europe’s robust welfare states directly impact capital formation. Higher corporate and personal taxes leave less private wealth available to flow into the risk-tolerant venture funds needed to scale new businesses, while also reducing the ultimate financial reward for founders and investors who take those outsized risks.
That leaves Europe with smaller pools of such risk capital. The European Central Bank estimates that U.S. venture funds hold roughly 930 billion euros ($1.044 billion), about six times the 150 billion euros ($168 billion) held by EU venture funds. The gap is especially large at later stages, when successful startups need substantial sums to expand. Europe can produce good ideas and still have difficulty financing them all the way to global scale.
Regulation adds another obstacle. European rules often pursue legitimate goals, including privacy, safety, worker protection, and consumer protection. But the costs of regulation do not fall evenly. A large established company can hire lawyers and compliance officers. A young company with 20 employees has fewer resources to absorb the same burden. The European Commission now acknowledges that businesses face high compliance costs and, in some cases, legal uncertainty, and that inconsistent or restrictive rules can make it harder for innovative firms to scale. Its current agenda includes reducing regulatory burdens and making EU rules more innovation-friendly.
The result can be perverse. Rules designed to restrain large firms can end up protecting them. The incumbent already knows how to live with the rules. The startup must learn the rules while trying to survive. Regulation can therefore end up protecting the very companies policymakers hoped to restrain by making it harder and more expensive for new competitors to enter the market.
The American system also has weaknesses. Health spending per person is the highest among Organisation for Economic Co-operation and Development members, while competition and price transparency remain weak in parts of the health system. Private health-insurance markets are highly concentrated in most states. These weaknesses matter, but they are different from the question at hand.
The American economy remains unusually good at allowing new firms to raise capital and grow quickly. Deep stock markets give successful companies another source of financing after venture capital. Unsuccessful firms can also fail, releasing workers and assets for other uses. A review of U.S. bankruptcy law describes bankruptcy as a collective process for resolving debts and determining how assets are divided among creditors. That framework makes commercial failure easier to resolve and capital easier to redeploy.
The Austrian economist Joseph Schumpeter called the larger process “creative destruction.” Capitalism, he wrote, “never is but never can be stationary.” Its “fundamental impulse” comes from new goods, new methods of production and transportation, new markets, and new forms of business organization. That process “incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Schumpeter called creative destruction “the essential fact about capitalism.”
The destruction is easy to see. A factory closes. A familiar company disappears. An old technology becomes worthless. The creative side is easier to overlook. Workers, capital, and customers move toward firms that can produce more value with the same resources. Over time, that churn is one of the ways an economy becomes more productive.
This perspective also complicates the usual discussion of economic mobility. Research on the so-called Great Gatsby Curve shows that countries with higher income inequality also tend to have less intergenerational mobility. In practical terms, the curve asks how strongly a child’s eventual income is tied to the income of his or her parents. A stronger link means that family background matters more and mobility is lower. A weaker link means that parental income does less to predict where a child will end up.
By that measure, the United States is less mobile than several northern European countries. Miles Corak, an economist, estimates that a 100 percent income difference between two fathers is associated with roughly a 50 percent difference between their sons in the United States, compared with less than 20 percent in Denmark, Norway, and Finland. The curve describes an association across countries rather than proving that inequality itself causes low mobility.
Corak’s finding is important, but the very top of the economy raises a different question. Who gets to create the next great company and challenge the current elite? That question matters for long-run growth because new firms can create new industries, technologies, and sources of productivity. Immigrant entrepreneurship offers one indication of openness. In 2023, 44.8 percent of Fortune 500 companies had been founded by immigrants or their children.
Europe also loses some of the companies it produces. The ECB reports that close to 30 percent of European unicorns founded between 2008 and 2021 relocated abroad, with the vast majority moving to the United States. The companies cited better access to capital, a larger unified market, and simpler regulation. That relocation can have cumulative effects because future hiring, investment, supplier relationships, and spinouts may increasingly occur elsewhere.
The broader economic gap between the United States and Europe has widened as well. In 2010, IMF data put the United States and the European Union at roughly the same nominal economic size, at about $15 trillion each. By 2026, the data put U.S. GDP at about $32.4 trillion, compared with roughly $23 trillion for the European Union. The gap exceeds $9 trillion, and the EU economy is about 71 percent as large as the American economy in nominal dollar terms.
The divergence extends beyond exchange rates and nominal GDP. On the OECD’s purchasing-power-adjusted measure for 2025, GDP per person was about $90,000 in the United States and $64,600 in the European Union, a gap of roughly 39 percent. OECD productivity data show that output per hour worked in the EU fell from about 90 percent of the U.S. level in 2000 to 75 percent in 2024. U.S. labor productivity grew by an average of 1.8 percent a year from 1995 to 2024, compared with 1.1 percent in the EU.
Some European countries still outperform the United States on particular measures. In 2024, Denmark produced about $92.20 of output per hour worked, compared with $84.10 in the United States using the OECD’s constant purchasing-power measure. The EU-wide trend nevertheless runs the other way. Small annual differences in productivity growth compound into large gaps over time.
Household data point in the same direction. OECD data on gross adjusted household disposable income, measured per person and adjusted for purchasing power, put the United States at about $71,300 in 2024. The comparable figures were about $61,300 in Germany, $53,500 in France, $49,400 in the United Kingdom, $47,500 in Italy, and $44,600 in Spain. Americans therefore had about 16 percent more money to spend than Germans, 33 percent more than the French, and 60 percent more than Spaniards on this measure.
The adjusted measure matters because it includes social transfers in kind such as publicly provided healthcare and education. It therefore captures part of the value of Europe’s larger welfare states rather than simply ignoring those services.
None of this means that every billionaire is a hero or that every inheritance is harmful. A fortune built on political favoritism tells us something different from a fortune built by making a product cheaper or better. An inherited company can remain innovative. A self-made fortune can depend on monopoly power. The origin of wealth is a clue, not a verdict.
Still, the contrast is revealing. The Forbes-based data used here show more turnover at the top in the United States and more inherited wealth in Europe. The differences in venture finance, scale-up conditions, and productivity are consistent with that pattern.
Large fortunes are not, by themselves, evidence of economic health or decay. Their origins tell us more. A market economy works best when new firms can challenge old ones and failure releases resources for better uses. The American advantage is not the existence of billionaires. It is the greater turnover behind them.
Markets FTW
I hate mosquitoes. I realize that hatred is not an especially sophisticated philosophical position, but some creatures make nuance difficult. Mosquitoes arrive uninvited, take your blood without asking, and leave behind pain, irritation, and sometimes disease. I have been known to joke that they are the socialists of the insect world. So, I was delighted to discover Terratis, a French startup whose business model is, essentially, to ruin the sex lives of mosquitoes.
Founded in 2024 and based in Montpellier, Terratis breeds enormous numbers of male tiger mosquitoes, Aedes albopictus. Workers then expose them to X-rays in batches of roughly 400,000, rendering the males sterile. The company releases the sterilized males into populated areas, where they compete with fertile males for females. The females mate, but lay eggs that don’t hatch. There is an additional beauty to the scheme. Male mosquitoes do not bite. Only females take blood meals.
Terratis currently produces about 1.5 million sterile mosquitoes per week and hopes to reach 40 million per week within two years. The early results are encouraging. In Brive-la-Gaillarde, where the company released 11 million sterile mosquitoes beginning in May 2025, Terratis reported that roughly half of the eggs awaiting hatching in spring 2026 were sterile. The company expected that share to reach 90 percent by the end of the summer.
The target is worth attacking. Tiger mosquitoes can transmit dengue, chikungunya, and Zika. France recorded 809 locally transmitted cases of chikungunya and 30 of dengue in 2025, a record year. The mosquito, originally native to Southeast Asia, has spread around the world and is now established across much of France.
Tiger mosquitoes do not transmit malaria. That (dis)honor belongs to infected female Anopheles mosquitoes. But the history of malaria gives some sense of what humanity has suffered from mosquito-borne disease.
The historical numbers are staggering. Researchers have estimated that malaria killed somewhere between 150 million and 300 million people during the 20th century, accounting for perhaps 2 to 5 percent of all human deaths during those hundred years. The disease may have accounted for as much as 10 percent of all deaths worldwide early in the century.
Modern medicine, insect control, bed nets, better housing, drainage, antimalarial drugs, and other innovations have produced enormous progress. According to the World Health Organization’s 2025 World Malaria Report, malaria interventions have averted an estimated 14 million deaths since 2000.
Yet malaria remains horrifyingly common. In 2024, the WHO estimated 282 million cases and 610,000 deaths worldwide. Africa accounted for 95 percent of malaria deaths, and roughly three-quarters of malaria deaths in the African region occurred among children under 5.
Those numbers explain why mosquito control deserves considerably more attention than the irritation of being eaten alive during dinner on a patio. Mosquitoes remain extraordinarily effective delivery systems for human misery.
Terratis now faces the difficult part that separates an ingenious idea from consequential innovation: scale. Producing 1.5 million mosquitoes a week sounds impressive until you contemplate how many mosquitoes inhabit a city. Frederic Simard of France’s Institute of Research for Development describes the technology as being at the “iPhone 1.0 stage.” Terratis wants to get production into the tens of millions per week. Researchers can imagine an industry eventually producing billions.
That requires automation, capital, experimentation, falling unit costs, and customers willing to pay. I wish Terratis every success. Humanity has spent several thousand years providing mosquitoes with free meals. It seems only fair that capitalism should finally make their sex lives miserable.
Markets FTW, indeed.
Chart of the Week
My Cato Institute colleague Gale Pooley has a useful new example of why long-run price comparisons require more care than they usually receive. The average U.S. price of regular gasoline reached about $4.47 a gallon in late September. That sounds expensive. Yet the dollar price by itself tells us remarkably little about affordability over time.
The first necessary adjustment is for income. Using blue-collar hourly compensation, Pooley calculates that in 1929 an American worker had to work about 24 minutes to earn enough money to buy a gallon of gasoline. Today, the same gallon costs roughly 6.5 minutes of work. The money price rose enormously, but the time price fell by about 73 percent. Put differently, the amount of work that bought one gallon in 1929 buys about 3.7 gallons today.
That distinction is central to the work that Gale and I developed in our 2022 book Superabundance: The Story of Population Growth, Innovation, and Human Flourishing on an Infinitely Bountiful Planet. We measure prices in time rather than money. A time price is simply the money price divided by hourly income. The method captures something that conventional price comparisons often miss. Innovation can reduce the cost of producing goods while also making workers more productive and raising their earnings. Looking only at the sticker price therefore tells only part of the story.
Pooley’s gasoline example adds another necessary adjustment. The usefulness of the product can change dramatically. A gallon of gasoline powered a popular Oldsmobile Cutlass about 20 miles in 1980. A modern Toyota Camry Hybrid can travel about 50 miles on the same gallon. What ultimately matters to the consumer is transportation, rather than gasoline for its own sake. A gallon that carries you two and a half times as far provides much more transportation.
The same problem appears when comparing the cars themselves. A 1980 Cutlass cost about 738 hours of blue-collar compensation. A modern Camry costs about 753 hours. The time prices are similar, but the products differ greatly. Today’s car offers better fuel economy, safety, reliability, emissions control, electronics, comfort, and performance. When Pooley combines the cost of the car with the gasoline required to drive 100,000 miles, the time required falls from about 1,209 hours in 1980 to 980 hours today, a decline of roughly 19 percent.
That is the broader lesson. Nominal price comparisons across long periods can be deeply misleading. Even inflation-adjusted prices do not fully capture changes in earnings, product quality, and performance. Proper comparisons should ask how much work people must exchange for a good and what that good actually delivers. Over long periods, both sides of that equation can change enormously.
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