There is the right-wing saying that at the top and bottom of the wealth pyramid consists of an hereditary aristocracy. Let us ignore that the terminology is wrong as the etymological root of “aristocrat” is the Greek aristos, i.e. “the best”. By definition, if you stratify society based on wealth, then the wealthiest end up at the top and thus, via this lens, they are the best. Strictly speaking there is no “aristocracy” at the bottom of the wealth pyramid. Perhaps you could speak of a “welfare ochlocracy”, i.e. a mass of people who live off welfare. Of course, the obvious interpretation is that the welfare aristocracy does not need to work as it can life off capital gains, but not their own. They leech off the collective wealth of society, whereas aristocrats live off money they own themselves.

There is indeed a welfare aristocracy in Europe. In particular, I want to illuminate the situation in Germany. If you follow along, you will learn that these people are easily as well off as a modern-day millionaire, if not better. Today a million is basically chump change compared to what a million dollars or the equivalent in euros used to be worth a hundred years ago. Nonetheless, a million dollars in net worth is still a very significant milestone, and one that is getting increasingly more difficult to reach. Of course, among boomers this number may be almost a given, considering that about 20% of US households have a net worth of over one million dollars.

Let me break down how much money you get in Germany if you do not work. You can use a website run by a leftist organization. They even promote a sense of entitlement among these people by calling the website the German equivalent of, this-is-what-you-deserve.com. Assuming you are a non-working member of society, local or foreign-born, and you have four children, you can easily get over 4,300 euros from the government every single month. Needless to say, these people would most likely not be able to achieve such a standard of living on their own.

Here is the data I have used:
– couple, living together (the martial status is irrelevant)
– two children between the ages of 0 and 5
– two children between the ages of 6 and 13
– rent: 1,800 euros, all-in (1,200 rent + 300 utilities + 300 heating)

The rent is not even particularly excessive in a big city. In Berlin or Munich, you will not be able to rent an apartment big enough for a small family for this amount. Thus, I am deliberately downplaying the numbers in order to not present you with figures that are too difficult to stomach, but we will get to a more realistic example later on.

If you pull out your calculator, you will quickly figure out that 4,300 euros per month equals 51,600 euros per year, after taxes. You would have to earn 75,000 euros, as a sole breadwinner with a wife and four children, to have that much left over. This may not look like a lot if you are used to US salaries but in Germany, you would, for instance have to be employed as a senior engineer to make that much money. To pick a high-status position: many judges do not make this much money.

There are other ways of making money, i.e. capital gains, so let us do a back-of-the-envelope calculation to determine how much you need to have invested in the capital market to be at the same level as the aforementioned list of welfare aristocrats. Assuming a post-tax capital-gains rate of 4% — capital gains tax is a little over 26% — you need to sit on 1,325,000 euros, liquid. I probably do not need to spell out how utterly ridiculous it is that the government allows an unproductive family to live in financial comfort equal to someone who has saved up a little over 1.3 million euros.

The picture becomes even more skewed if we make a few adjustments. This is not at all unrealistic. Children get older, and some people have children earlier than others, so let us use these data:
– couple, living together
– two children between the ages of 14 and 16
– two non-working adult children between the ages of 18 and 25
– rent: 3,000 euros, all-in (2,000 rent + 500 utilities + 500 heating)

Such a family would get 5,856 euros every month, tax-free. This is the equivalent of 70,272 euros, tax-free, per year. As an employee, single-earner, you would need to earn a staggering 105,000 euros per year. Only a few percent of German workers have an income this high. Of course, these people also have other expenses, perhaps suits, expensive shoes, etc., and they also probably work excessive hours. In contrast, the welfare aristocrats have no responsibilities at all. Thus, they can spend their time however they wish, which may of course include arcane studies that add to the wealth of human knowledge. Obviously, they could also idle their time away in front of the TV. There used to be the stereotype of welfare recipients sitting at home, drinking cheap beer. Well, it seems they can comfortably afford to sip cognac instead.

In order to have capital gains that match the income of the second welfare family, aiming again for a post-tax capital-gains rate of 4%, you need to have 1,756,800 euros invested, which is a staggering amount of money. This is three times the wealth (!) the top 10% of Germans enjoy. The reality is thus that the welfare class enjoys a lifestyle, as non-workers, that is out of reach for virtually everybody who works for a living. This is an utterly ridiculous state of affairs. Given the dire situation in the Western world, it is quite obvious that it is not feasible to shower millions of unproductive people with an amount of money they could never earn themselves and which is out of reach for the rest of society, with the exception of a few super-rich households.

A possible solution is simply to radically cut benefit payments. Instead of money, just hand out food and plain clothes. It is also questionable that these people are entitled to live in regular apartments where the rents paid for by government, which pays very generously, leads to increased rents for the rest of society. In cities like Berlin there is the utterly bizarre situation that the most desirable areas are full of people who live off the government while workers are unable to afford rent there. Should it not be the other way round? If these people do not work, have no intention of ever working, or would, for whatever reason, be unable to ever work then they may as well live in regions where there is (cheap) housing but no work. This is not possible, of course, because it is apparently a human right to have society shove several thousand euros into your pockets every month. Without the taxpayer’s involuntary largesse, this abuse of the welfare system would quickly stop.