Durable Wealth: Institutions, Mechanisms, and Practices of Wealth Perpetuation

Abstract

Research indicates that positions of very high private wealth can often be maintained by families over many generations. This article puts front and center the institutions, mechanisms and practices through which families at the very top of the wealth distribution protect and enlarge their wealth. Opportunity hoarding is based on legal institutions, most importantly inheritance law, trust law, advantageous financial regulations and estate tax policies. Wealthy owners also pay for a growing number of legal and financial experts whose task it is to protect their fortunes. The stipulations of legal institutions are shaped through lobbying, campaign donations and the influencing of public opinion, facilitating the intergenerational preservation of large fortunes. Philanthropy appears to be not primarily a means of supporting general welfare, but rather a further instrument of wealth protection of the super-rich through its role in legitimizing large fortunes and the reaping of tax benefits. The entrenched character of large fortunes opens up questions regarding the normative identity of contemporary societies.