Giving Compass' Take:
- Garrett Neiman shares an excerpt from his new book, Rich White Men, which deconstructs how inherited unearned privileges perpetuate inequity.
- Why do media narratives abound about wealthy white men having earned their privilege? How can these narratives be deconstructed in service of equity?
- Read about solutions privilege in philanthropy.
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I’ve come to think of the life-changing impact that occurs when unearned advantages intervene at key moments in our lives as “compounding unearned advantage.” Similar to compound interest, the unearned advantages people inherit gild their paths and shut other people out. When those with advantaged identity markers receive better treatment from teachers, police officers, doctors, professors, hiring managers, bosses, sponsors, politicians, and others who have power to bend their trajectories, even small unearned advantages can swell into great advantages.
Compounding unearned advantage says nothing about how hard any individual works or the quality of their choices. Rather, it simply acknowledges that those who benefit from unearned advantages receive a premium on their positive efforts and a discount on their missteps. And the basics of compound interest dictate that even a slightly higher return compounds into great advantages over time. The compounding nature of unearned advantage is the reason even the most subtle negative stereotypes and unconscious biases have massive pernicious effects.
If there’s one thing that rich white men know like the back of their hand, it’s compound interest. When I was a kid, my dad taught me the rule of seventy-two, which is a way to estimate the number of years it takes for an investment to double in value. The way the rule of seventy-two works is that you divide seventy-two by the rate of return you’re getting on your investment. For example, an investment with a 5 percent annual return will double every fourteen years (seventy-two divided by five is about fourteen). By contrast, an investment with a 10 percent annual return will double twice as fast—every seven years. Over time, the differences compound. For example, a $10,000 investment with a 5 percent rate of return will be worth about $100,000 in fifty years. How much would that same investment be worth with a 10 percent rate of return? $1.2 million. Each incremental increase in annual return fuels an exponentially different outcome.
Read the full article about inherited privileges by Garrett Neiman at Stanford Social Innovation Review.