This paper develops a model of intergeneratiotial mobility and intragetierational inequality that allows us to explore the relationship between economic growth and social mobility. The model is used to analyze the neo-liberal theory of stratification and to assess the consequences of some of the criticisms that have been made of it. In particular, the intergenerational transmission of wealth and privilege, and the existence of ethnic, gender and other forms of ascriptive disadvantage, reduce economic efficiency, although they do not always diminish the extent of social mobility. Furthermore, excessive intragenerational inequality may inhibit, rather than encourage, economic growth. We show that there is no necessary link between rates of social mobility and levels of economic growth. This, we suggest, provides an explanation of why rates of social mobility show very little cross national variation and display no very evident trend over time towards greater societal openness.