Inequality and the Sergey Brin Effect

Arnold Kling and Nick Schulz say that to understand what’s driving inequality in America, it helps to study the founder of Google:

When politicians and pundits decry growing inequality in America, they are talking about Sergey Brin. A co-founder of Google, Brin is the fifth richest man in the United States, with a net worth of over $18 billion. He is just 35 years old and became spectacularly rich at a rate faster than people such as Warren Buffett and Bill Gates. And he epitomizes the main forces at work in widening the income gaps in this country. He represents:

Technology: Brin’s wealth comes from the famous search engine he pioneered with cofounder Larry Page. Their company is a mere ten years old. And yet in the blink of an eye, he has become one of the richest men in the world.

Winners-take-most markets: Certain mass-market fields tend to simulate tournaments in that they produce just a few big winners along with many losers. These include technology/software, as in the case of Google, but also entertainment (Céline Dion), book publishing (Stephen King), athletics (Tiger Woods), and even some parts of academia, finance, law, and politics (as the impressive post-presidential earnings of George H. W. Bush and Bill Clinton demonstrate).

Family structure: Both of Brin’s parents were highly educated mathematicians. This increased the likelihood that Brin, too, would be well educated. He studied computer science at the University of Maryland and was in graduate school at Stanford when the Internet business he had built lured him away.

Immigration: Brin was born in Russia, and his family moved to the United States when he was six. He and other foreign-born executives such as Andy Grove of Intel have built wealth at the top of the income distribution. At the same time, a large influx of hard-working but low-skilled immigrants has enlarged the bottom of the income distribution, at least until they achieve the assimilation that historically has required a couple of generations.