Recently, we’ve been hearing a gloomy story. Younger generations of Australians (millennials and Gen Z) are doing worse than their boomer parents, according to Generation Gap, a study of wealth distribution in Australia from the Grattan Institute. As a result, we are failing to maintain the “generational bargain” in which each generation does better than the last.

Talk in terms of conflict between generations is familiar and fits easily into our standard framing of social issues. However, this framing misses the real story, buried in the body of the Grattan report – the (re)emergence of a “patrimonial” society in which wealth, particularly inherited wealth, is the crucial determinant of life chances.

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The return of the patrimonial society was a central theme in Thomas Piketty’s Capital in the 21st Century, the surprise bestseller of 2013. Piketty began his research career by looking at growing inequality in incomes in the US, Britain and France, with particular emphasis on the share going to the top 1%. In Capital, he shifted attention to the growing imbalance between labour and capital and to the rise of inherited wealth.

Looking at both the literature of the 19th century and statistical evidence from the 20th, Piketty pointed out the exceptional nature of the economy that emerged from the chaos of the Depression and world wars of the first half of the 20th century. This economy, in which the children of the baby boom grew up, was one of unprecedented economic equality in terms of both outcomes and opportunity.

The Grattan Institute report is the latest piece of evidence that this age of equality is ending. The real division, as in the 19th century, is increasingly not between the old and the young, but between those who own and control capital and those who rely on wages. Because labour’s share of income is declining, accumulating wealth by saving out of one’s own income (forgoing smashed avocado as the current cliché has it) becomes less and less feasible.

Since total wealth per person is increasing, the current younger generation must ultimately be richer (on average) than the current older generation. However, the distribution of this wealth is increasingly unequal. As a result, even if average (that is, mean) wealth is increasing, the average (that is, median) person may have less wealth than in the past.

This is already happening in the United States. Average household wealth has grown strongly, nearly doubling in the last 30 years. But median wealth (that of a household in the middle of the income distribution) is lower than it was in the 1980s, and barely changed from the 1960s. All of the gains have gone to households in the top 20% of the income distribution, and the lion’s share has gone to those in the top 1%.

At the top end of the wealth distribution, as reported by the Forbes list of Australia’s richest people, the patrimonial society has already arrived. Of the top 10 on the list, seven are either men in their 80s or the heirs of super-rich parents.

Even in Australia, the trend for the rich to get richer outweighs age group effects. As the Grattan Institute report shows, the wealth of the richest subgroup of the young has increased, even as that of other young households has stagnated or declined. In fact, the richest 20% of households in the 25-34 age group have done better, in terms of percentage growth in wealth, than the majority of working age households (those with heads aged 25-64).

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An emphasis on inequities associated with age isn’t wholly misplaced. A characteristic of the patrimonial society, central to the plot of many 19th century novels, is the key role of inheritance, and the resulting power of the old over the young whose futures they control. Those inequities are now re-emerging.

As the report notes, inheritances will do little to mitigate wealth gaps between the old and the young since they are mostly received in middle age. However, as housing becomes less and less affordable, we are seeing more transfers (gifts and loans on easy terms) from the ‘‘bank of mum and dad” to those young people fortunate enough to have wealthy and generous parents.

The Grattan report’s coverage of these issues is excellent, and raises, once again, the question of why inheritances are subsidised by the tax system while wage income is taxed in full, with payroll tax and other charges on top. It’s just a pity that the presentation of the report encourages framing in terms of tired cliches of intergenerational conflict. The real issue, now and increasingly into the future, is the conflict between those with capital and those without.

• John Quiggin is professor of economics at the University of Queensland. His latest book is Economics in Two Lessons: Why Markets Work so Well, and Why they can Fail so Badly