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.It presumably was on the materials usedfor the new-style hats.But in order to get this enterprise off the ground, Mrs.Randall neededsome design ability.She also required the skill to convince hat-makers,whose livelihood up to that time depended on selling the prevailing style,to start working on new and untested designs.Finally, she was unlikely to give the hat-makers credit for the time theyspent conferring with her and in making the new-style bonnets.That is,suppose each hatmaker spent ten hours in meeting with Mrs.Randalland making new-style hats.Say that an average wage in those days mightbe 50c an hour.If nobody wanted to buy the new-style hats, each of the A PERSONAL MEMOIR 191hat-makers would be out $5 a lot in those days and Mrs.Randall wouldhave lost nothing.Her only risk would have been confined to the specialribbons and feathers she supplied, as well as the time she invested incoming up with the new design.We still don't know the exact strategy she used to convince tradition-bound hatmakers to take a chance, or the financing arrangements thatwere employed.If we did, new entrepreneurs in the fashion industrymight be able to use her tactics.14.Much of the above sounds, on second reading, as if we weredenigrating Mrs.Randall's undoubted abilities.Even allowing for someexaggeration in the account of a devoted son, her foresight shines downthrough the years.She took buttons that few others wanted, and apparently single-hand-edly created a demand for them.She did the same with buckles andostrich feathers.Her chronicler claims that, in the process, she developedthe concept of chain stores.This may be true, but we were unable to findher name in histories of inventions listed before Woolworth.She wasclearly one of the many creators who made some money, but whose basewas not large enough to carry the concept nationwide or worldwide.Mrs.Randall obviously had a rare shrewdness and energy.There aretwo major questions which still pose themselves to us after this account.First, how much of these abilities are in others, but do not get used becausetheir possessors are in the wrong place, living in the wrong era, or donot have access to capital? If Mrs.Randall had lived in a relatively staticand poverty-stricken society like the European Middle Ages, she couldnot have accomplished what she did.Might Thomas Gray's musing inElegy Written in a Country Churchyard that "some mute inglorious Miltonhere may rest" apply financially to your ancestors or ours?Second, how much should society reward Mrs.Randall, or others likeher, for her astuteness or risk-taking? Most of us would agree that, atleast based on the manuscript, Mrs.Randall should have a higher incomeand net wealth than average.(We will leave aside the possibility that thenarrative presents a false picture of Mrs.Randall's skills and history.) Butshould she receive an income twice as much as the average, ten times,a hundred times, or some other value? This brings us around again, likethe painted horses on a merry-go-round, to our title: How Rich is TooRich? 11A PROPOSAL FORAN ALTERNATIVEDISTRIBUTION SYSTEMWe have made the case that the current wealth and income distributionis enormously skewed toward the highest few percent of the population.As we have noted before, 1986 figures suggest that the top 1% own 31%of total net worth; the lower 90% share 36%.1 In this chapter, we willoutline how wealth can be distributed so that eventually income movescloser to a lognormal distribution.Our goal is to split assets, currently frozen in gargantuan fortunes,among many people in a yeasty infusion of capital.This would percolatethrough the economy in unpredictable but potentially beneficial ways.The changes would occur rather slowly as the current wealth holdersdie yet the effect over time could be profound.Instead of leaving assets effectively locked beyond creative use by in-dividual "beneficiaries," assets would be spread so that unfettered con-trol is transferred, possibly quite early in life.This would give heirs theincentive to use these resources to make their own fortunes.The incen-tive system the foundation of a vigorous entrepreneurial society couldbe harnessed to encourage many with fertile minds and vigor to developassets now managed by stolid banks and other financial institutions.Thiswould release enormous energy throughout the economy.Our plan would cut the Gordian knot between a rich man and hismoney on the day of his demise.Not a penny of the estate has to go tothe IRS if one simple rule is followed estate dispersion.No longer wouldthe estate tax system generate an American royalty those freed from theneed ever to be economically productive.The ADS would generate forall the incentive that most of us have in the outcome of our own economiclives.No longer would a large part of our national wealth be beyondresponsive use. 194 HOW RICH IS TOO RICH?Wealth great enough to entitle one to membership in the elite comesfrom two sources enormous earnings or inheritance.Prudent publicpolicy should allow those who, through individual ingenuity, talent, orluck, gain a fortune to use and enjoy it for life.This will retain the finan-cial encouragements that help fuel the economy
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