The Family Business: How Nepotism Is Rotting the World From the Inside Out
Connection Over Competence, and the World We Built With It
There is a question worth asking before anything else: why do people work hard?
Not rhetorically. Actually. If effort is rewarded, people make more of it. If effort is irrelevant to outcome, they stop. This is not a motivational observation. It is a behavioral fact, documented across economics, psychology, and organizational research, consistent across cultures and time periods. People respond to incentives. Remove the incentive, you remove the behavior.
Nepotism removes the incentive.
Not always. Not everywhere. Not in every case. But systematically, on a global scale, across employment, politics, entertainment, business, and civic life, the practice of advancing people based on connection rather than capability sends one very clear signal to everyone watching: what you can do matters less than who you know. And when enough people believe that, and they are increasingly right to believe it, something starts to break. Not loudly. Not all at once. But steadily, in the places where civilizations store their future.
This is about more than bad hiring decisions. It is about what happens to a society’s character when unearned position becomes normal, when wealth transfers across generations without accountability, when the people who inherited the front of the line start posting about it online, and when the rest of the world, stuck in the back, has to watch.
The Numbers Behind the Feeling
There is a tendency to dismiss concerns about inherited advantage as envy dressed up in political language. That is a convenient framing for the people who benefit from inherited advantage. It does not hold up against the data.
Oxfam’s research tracking global wealth concentration makes the scale clear. In 2024, billionaire wealth grew by $2 trillion in a single year, at a rate three times faster than the previous year. An average of nearly four new billionaires were created each week. Meanwhile, the number of people living in poverty has barely changed since 1990.
The distribution of that wealth is the relevant part. Oxfam’s analysis found that in 2024, for the first time, more billionaires were minted through inheritance than through entrepreneurship. Every billionaire under the age of 30 inherited their wealth. This is the opposite of the story that wealth concentration is driven by exceptional individual achievement. It is a story about transfer.
The richest 1% grabbed nearly twice as much new wealth as the rest of the world combined in 2023. The 12 richest billionaires now hold more wealth than the poorest half of humanity — more than four billion people. Since the turn of the century, the poorest half of the world’s population has received just 1% of the total increase in global wealth.
A 2022 study published in Oxford Economic Papers examined four OECD countries — France, Spain, Great Britain, and the United States — and found that the combined contribution of intergenerational transfers and family background to wealth inequality ranges from 36% in Great Britain to substantially higher in other countries. More than a third of who ends up with what is determined, not by effort or ability, but by parentage.
In 1963, the wealthiest American families had 36 times the wealth of middle-class families. By 2022, they had 71 times as much. The gap didn’t widen by accident. It widened because systems that reward inherited advantage compound over generations.
What It Does to the People Watching
The Oxfam numbers describe outcomes. The harder question is what it does to people’s behavior and psychology when those outcomes become visible and unavoidable.
A survey by Resume.io published in late 2025 found that more than half of 1,000 surveyed US workers reported the role nepotism plays in securing employment. Fifty percent said they lost a job opportunity to a nepotism hire. Seventy-two percent believe who you know is crucial in hiring. Over 40% admitted they have used family connections themselves.
That last number matters. When enough people perceive the system as rigged toward connection, they stop trying to beat it and start trying to join it. The response is rational. If skill and effort are not the primary determining factors in outcome, investing primarily in skill and effort is suboptimal. People redirect. They build networks instead of expertise. They prioritize visibility over competence. They spend less time doing the work and more time positioning themselves near people who can give them unearned access to it.
This is not moral failure. It is adaptation. People adapt to the actual rules, not the stated ones. And the actual rules, in a growing number of industries and institutions, are that proximity to power matters more than demonstrated ability.
The effect on work ethic is real and documented. Research on perceived nepotism in workplaces shows that employees who see favoritism routinely experience stress, dissatisfaction, and frustration that builds over time. The feeling becomes stronger when they know their efforts are not recognized while others benefit due to personal connections. Nepotism hinders employees’ willingness to innovate and take initiative, reducing organizational output and, eventually, personal investment in the work itself.
When people stop believing that effort produces results, they stop making the effort. Some leave. Others stay and disengage. Both outcomes are bad for the organization and, at scale, for the economy and culture that organization is embedded in.
The Entitlement Machine
Now consider what it does to the people on the other side.
Being born into wealth and political power means opportunities and luxuries come by default. This can breed an entitlement mindset — the assumption that what you are enjoying is your birthright.
This is a fair description of a structural problem, not a character attack on individuals. The structural problem is that when someone receives position, access, and resources without having earned them, they have no reliable internal model for what earning things actually requires. They do not know how hard the job is to get because they did not have to get it the hard way. They do not know what the preparation looks like because the preparation was optional for them. And critically, they have no frame of reference for the experience of the people who did it the hard way, because they have never been those people.
The result is not necessarily cruelty. It is often something quieter and more corrosive: a genuine incapacity to understand why the system feels unfair to anyone else. If you have always had the door opened for you, you tend to assume the door opens for people who deserve it, and that you deserved it.
Psychologists who study the children of the privileged note that for many, their sense of self is closely tied to their family’s status and wealth. Because their achievements are often dismissed as the product of privilege, they may lean on wealth as a visible marker of belonging and success. In industries like social media and fashion, the image itself functions as currency, and flaunting status symbols helps build an aspirational persona that maintains relevance and influence.
This is not a minor personality quirk. It is a feedback loop with social consequences. The display of unearned wealth as aspiration signals to everyone watching that the destination is achievable without the work. That the journey is optional. That the outcome is the point, not what you did to reach it.
Influencer Culture as Nepotism’s Public Face
The nepo baby discourse that emerged loudly in 2022 and has not quieted since is not primarily about celebrity gossip. It is about what the entertainment industry’s visible dynasties represent.
When New York Magazine identified 2022 as the Year of the Nepo Baby, it was not breaking news that the children of powerful people get advantages. Everyone already knew that. What the cultural moment revealed was the degree to which people were tired of pretending otherwise, tired of consuming stories about individual merit and talent discovery that were, on closer examination, stories about whose parents returned the call.
Columbia University professor Shai Davidai framed it plainly: Americans tend to strongly believe in meritocracy and believe exceptional skill and hard work are rewarded. Nepotism babies deprive people of that feel-good story.
The issue is not that a director’s child gets an audition. The issue is the cultural infrastructure built around the fiction that they got the role on merit alone, and the downstream effect of that fiction on everyone who did not have the audition to begin with. When the entertainment industry, the media industry, and influencer culture collectively present inherited access as individual achievement, they are not just misrepresenting specific careers. They are teaching a generation what success looks like and obscuring what actually produced it.
The fixation on celebrity nepo babies misses the broader reality. Nepotism is often far less visible, operating through everyday networks: internships secured through family friends, graduate roles fast-tracked through referrals, opportunities shaped by informal connections framed as merit or fit. The everyday nepo baby may not have a famous surname, but benefits from proximity to opportunity that most people do not have access to.
This is not exclusively a Western phenomenon. In the Philippines, the term has been applied to children of politicians and government contractors who flaunt their wealth publicly, including during public disasters. Nepali Gen Z protesters explicitly borrowed the term, exposing politicians’ children’s luxury lifestyles on social media as a symbol of systemic corruption, in protests that resulted in deaths. The rage in those countries is not aesthetic. It is about the juxtaposition of visible, inherited, unearned wealth against poverty that is also structural and inherited — but inherited from the other direction.
The Rich-Poor Divide Nepotism Builds
Inherited advantage and nepotistic systems are not separate from the widening wealth gap. They are among its primary mechanisms.
The 2025 Oxfam finding that 60% of billionaire wealth actually comes from family inheritance, monopolies, and cronyism is not an ideological claim. It is an accounting of source. The narrative that extreme wealth is the reward for extraordinary talent or hard work does not survive examination of where the wealth came from. When the rules are written by the people who benefit from them, and when cronyism and corruption allow the super-rich to ensure government works for them, the outcome is a system that perpetuates the starting positions of the people who began with the most.
The chances of democratic backsliding — erosion of rule of law, undermining of elections, suppression of civil liberties — are seven times more likely in highly unequal countries. 2024 was the nineteenth successive year of global decline in civil liberties. There were more than 142 significant anti-government protests across 68 countries in that year, which authorities typically met with force. The connection between inequality, corruption, nepotism, and civic unrest is not theoretical. It is what is happening.
Billionaires are now estimated to be 4,000 times more likely to hold political office than ordinary citizens. A World Values Survey of 66 countries found that almost half of all people polled believe the rich often buy elections in their country. The mechanisms are not hidden. They are just normalized.
When position, wealth, and political access concentrate across generations in the same families and networks, the gap between those families and everyone else does not close. It structurally widens. The people at the top of the wealth distribution write the rules, fund the campaigns, own the media companies, and sit on the boards of the institutions that determine who else gets access to what. Every generation of their children starts further ahead than the generation before. Every generation of everyone else starts from approximately the same place, or further behind.
This is not a conspiracy. It is gravity. Systems in which proximity to power confers more advantage than demonstrated competence tend, over time, to concentrate power. The concentration is self-reinforcing. Nothing dramatic has to happen. The physics of the system do the work.
What It Costs the People at the Bottom
The argument for tolerating nepotism often relies on its invisibility to the people it disadvantages. If the costs were clearly labeled, acceptance would be harder to maintain.
Research published in the Journal of Economic Behavior and Organization found that perceived nepotism reduces effort at school and cognitive ability of the workforce, reduces aggregate productivity and technological advances, and can explain low economic growth and, at the extreme, stagnation in a culturally determined poverty trap. Societies where people correctly observe that connection matters more than competence produce populations that invest less in becoming competent.
That is not a bug in the system from the perspective of the people at the top of it. A workforce that has stopped believing in meritocracy is also a workforce that is less likely to compete effectively for the positions occupied by people who did not earn them. The learned helplessness reinforces the structure.
Meanwhile, the talented people who do compete, and lose, do not simply accept the outcome. The most capable leave. In Nigeria, thousands of doctors and nurses leave annually for the UK, Canada, and the United States. The cause is not primarily salary alone. It is governance failure. It is watching positions in public institutions go to connected people who manage those institutions badly. It is working in a degraded system produced by nepotistic appointment and deciding the degradation is not worth tolerating.
The pattern repeats across the developing world and increasingly in developed countries too. When qualified people correctly conclude that a system rewards connection over performance, the most qualified are the first to find systems that do not. What remains is a selection pressure toward mediocrity in the institutions where that selection is operating.
The public pays this cost directly. In government, there is no competition to punish the underperformance. Citizens are captive customers of whatever quality of governance they receive. If the ministry was staffed through political patronage, the ministry performs at the level patronage hires perform at, and the people who depend on the ministry’s services receive that performance.
The Philosophical Case, and Why It Still Fails
There is a serious argument for the defense. Family networks transmit real knowledge, real values, and real trust. A second-generation professional in a field often carries genuine advantages: earlier exposure, clearer norms, stronger professional vocabulary. Not every inherited position is occupied by a fraud.
This is true. It is also a weak argument for the system as a whole.
Trust and competence are related but distinct attributes. A person can be genuinely loyal, honest, and personally admirable while also being wrong for the role. The question is not whether some nepotism hires work out. Some do. The question is whether selecting for family connection rather than demonstrated ability produces better outcomes than selecting for demonstrated ability. The research is consistent that it does not.
Aristotle’s argument in the Politics was that justice in governance means giving people what they are owed according to their contribution, not their birth. He was making a case against aristocracy. The argument applies with equal force to a hiring manager who gives the open position to his cousin instead of the most qualified candidate. The mechanism is smaller. The principle is identical. Substituting birth for merit is the definition of aristocracy. The fact that we call it something else now does not change what it is.
The Compounding and the Exit
What makes nepotism particularly stubborn is that it corrects slowly and collapses quickly.
In the slow phase, which can last for decades, the system accumulates incompetence at decision-making levels while pushing competent people into peripheral positions or out of the system entirely. The costs are real but diffuse. No single bad hire is the thing that breaks anything. The system functions, poorly, and the people inside it adapt to its dysfunction, and over time that dysfunction becomes the baseline expectation.
In the collapse phase, something fails visibly enough that the connection between the hiring practices and the outcomes is impossible to ignore. A hospital with leadership hired through patronage runs out of critical supplies. An infrastructure project built by a contractor with the right connections fails. A government staffed by relatives cannot respond effectively to a crisis. Zimbabwe. Lebanon. Numerous examples, various scales.
The problem is that by the time visible collapse occurs, the institutions capable of reforming the system have often already been compromised by it. Reform requires institutions. Nepotism eats institutions.
A Case Study in Plain Sight
If you wanted to design an illustration of everything described in this article, you would be hard pressed to improve on Donald Trump.
This is not a political observation. It is a factual one, and the facts are documented in detail.
Trump has described his start in business as a “small loan” from his father. A 2018 New York Times investigation, based on more than 100,000 pages of tax returns and financial records, found 295 distinct revenue streams that Fred Trump created over five decades to channel wealth to his son. The present-day equivalent of what Trump received from his father and his father’s estate over his lifetime is at least $413 million. He was, according to the Times, a millionaire by age 8. The transfer of wealth involved sham corporations, undervalued assets, and arrangements that allowed the family to avoid what investigators estimated should have been over $500 million in gift and inheritance taxes — with records showing only around $52 million was actually paid.
The mechanism by which Fred Trump brought his son into business is also instructive. When Donald Trump joined the family real estate operation after college, Fred Trump’s choice of heir was visible to everyone around him. He had passed over his eldest son, Fred Trump Jr., who was considered by family and employees not to be a viable heir apparent. Donald was installed as vice president of multiple subsidiaries. The family name, the family capital, and the family connections opened every door.
Trump’s subsequent business record is part of the public record. His companies filed for bankruptcy six times. He was found liable in 2024 for $355 million in disgorgement plus interest after a court determined he had committed fraud against banks and insurers by systematically exaggerating his net worth and overvaluing assets for years. A financial analysis cited during the fraud proceedings noted that Trump Tower was claimed in documents to be roughly triple its actual size, and Mar-a-Lago was valued at approximately 22 times its true worth.
His presidency took the pattern into government. After a campaign in which he promised to surround himself with the best and most serious people, Trump appointed his daughter Ivanka Trump and his son-in-law Jared Kushner as senior White House advisors. This appointment appeared to directly violate the federal anti-nepotism statute — originally passed after Kennedy appointed his brother as attorney general — which forbids public officials from hiring family members, and explicitly includes sons-in-law. Four prior presidents had attempted to appoint family members to lesser positions and been advised by Justice Department lawyers that the anti-nepotism law prohibited it. The Trump administration’s Justice Department issued a different opinion on January 20, 2017, the day Trump took office.
Kushner’s assigned portfolio included brokering Middle East peace, solving the opioid crisis, reforming the criminal justice system, improving government through data and technology, reforming veterans care, and managing diplomatic relations with Mexico and China. His prior experience was in real estate and newspaper ownership. He had taken over his family’s real estate company in 2005 after his father was convicted on criminal charges. Neither Kushner nor Ivanka Trump had prior qualifications for the work they were assigned. The appointments were made on the basis of their relationship to the president.
The financial consequences of holding those positions are documented. While serving as unpaid White House advisors, Kushner and Ivanka Trump made an estimated $82 million in outside income in 2017 alone. After leaving office, Kushner’s private equity firm received a $2 billion investment from a Saudi sovereign wealth fund. Republican presidential candidate Chris Christie, no hostile witness, described it plainly during the 2024 primary: the Saudis gave Kushner $2 billion and he has not made any investments with it, collecting tens of millions in management fees while the money sits. “We are not a third-world republic,” Christie said.
Trump also, during his second term, launched his own cryptocurrency, which temporarily gave him an estimated paper net worth of $58 billion, much of it tied to assets whose value depends on his own political profile. The presidency as a financial instrument.
None of this is the story of a self-made man. It is the story of a man whose access to capital, connections, legal workarounds, and institutional cover came from his family name and his father’s wealth. The “self-made” framing was always the point. If the origin story had been accurate, the career would have looked different at every stage.
What Trump represents in the context of this article is not primarily a political critique. It is an example of what the research describes: inherited advantage compounding across a lifetime, position substituting for competence, the structural use of family connection to access power that then produces more family connection to more power. The pattern is not unique to him. It is simply unusually well-documented and unusually visible, because most people who benefit from this system are careful not to claim they didn’t.
What Fixes It, and How Long It Takes
The honest answer is that this is hard.
Structural fixes exist and work where implemented: blind application processes, standardized testing for public service roles, independent civil service commissions, meaningful anti-nepotism enforcement, and inheritance taxes that prevent unlimited intergenerational transfer of wealth and power. The Bank for International Settlements research is clear that limiting nepotism in corporate hiring could increase both firm value and aggregate private investment in the economy. The tools are known. The resistance to them comes from the people who benefit from the status quo, who are, as noted, disproportionately likely to hold political office.
Cultural fixes are slower. Societies do not change their norms quickly. They change when the costs become visible and undeniable, when the most qualified people stop coming home, when the public institutions fail in ways that cannot be explained away, when people in the back of the line stop blaming themselves for not getting to the front.
That last shift may already be happening. The nepo baby discourse, the global protests, the anger at visible wealth displayed against visible poverty, these are not the causes of a cultural shift. They are the symptoms of one. People are naming the thing more precisely than they used to. That is typically how change starts: the problem gets named clearly enough that the excuse stops working.
The Point
Every generation gets the institutions it builds.
We are building institutions where inherited access compounds over time, where connection substitutes for competence, where the display of unearned wealth functions as a cultural aspiration, and where the people who started further ahead write the rules that determine how far everyone else can go.
The institutions we get back will reflect those choices. They already do.
The cost is not abstract. It is in the morale of the person who prepared longer and performed better and watched someone else get the job. It is in the student who stops studying hard because she can observe that studying hard does not determine outcomes. It is in the qualified professional who leaves for a country where what he knows matters more than who his father is. It is in the public that receives degraded services from institutions staffed by people who were not selected for competence. It is in the wealth gap that widens each year between the people who inherited proximity to power and the people who did not.
None of this is complicated. It is just uncomfortable to say plainly, because the people in the best position to say it plainly are often the people with the most to lose from saying it.
The rest of us can say it. We should probably say it more.