A new report from the Institute for Policy Studies , a progressive nonprofit, shows this proliferation in quantitative terms. But at a certain stage, some of these creators—or their descendants—shift resources to consolidate their wealth, fend off competition, and create monopolies. You may not have heard the term, and why would you?
After all, these are private companies that extraordinarily wealthy families create solely to manage their investments and personal affairs. The precursor to the modern family office came about in , when the family of financier JP Morgan established the House of Morgan to oversee its sprawling assets.
The Rockefellers followed in , and the office they created is still in operation. The billionaires themselves rarely do the lobbying and financial voodoo that let them grow and protect their wealth.
This family office is located in a nondescript building in downtown Bentonville, Arkansas, across the street from a Cajun restaurant called the Flying Fish. They do a lot of stuff. Larger offices hire CEOs and chief information officers, and are overseen by boards consisting of family members and outsiders. They manage vacation properties, planes, yachts, and household employees. They book meetings, travel, and medical appointments.
They work with architects and contractors and security consultants and see to the education and financial literacy of children and grandchildren. But these operations often pay for themselves and then some. Because what they do really, really well is tax avoidance. The ultimate task of these private armies of lawyers, accountants, and lobbyists is the perpetuation of dynasties that come together when necessary, like the cells of a slime mold, to create the conditions under which the aristocracy can thrive and reproduce.
Assets must be easily transferable from one generation to the next. And tax policies must be put in place that allow the family to share as little of their wealth as possible with the government. In the wake of the Great Recession, as part of the sweeping package of reforms in the Dodd-Frank financial legislation, the Obama administration and congressional Democrats proposed to make private investment partnerships—private equity funds, hedge funds, and the like—divulge more information about their holdings.
French aristocrats had special rights and privileges, such as the right to hunt, to wear a sword, and to own land. They were also exempt from paying property taxes. In return, these aristocrats were expected to be loyal to the French king and serve him. In the French Revolution of , the French aristocracy was briefly abolished. It was restored in , but had very limited privileges. During the Revolution, the French aristocracy was again abolished, though hereditary titles were still granted until These titles, however, came with no special privileges.
Aristocracies are still alive and well in some societies throughout the world. Familial aristocracies, for example, control the Arab countries of the Persian Gulf. The aristocracies of Europe, however, have generally been reduced to being ceremonial, if they exist at all. Aristocracy Aristocracy literally translates as rule by the best. It is a form of government in which the rulers are a handful of the most intellectually and morally superior people in a society.
If in an aristocracy the people are virtuous, they will always enjoy, more a less, a feeling of contentment equal to that of a popular government, and the state will become powerful.
The spirit of moderation is what one calls virtue in an aristocracy ; it takes there the place of equality in a popular state. The modesty and simplicity of manners constitute the strength of aristocratic nobles. If the nobles had personal and individual prerogatives, distinct from the corporative body, an aristocracy would diverge from its nature and its principle, in order to take those of monarchy.
There are two principle sources of disorder in aristocratic states: excessive inequality between those who govern and those who are governed, and inequality among those who govern.
The first of these inequalities will occur if the privileges of the principal [citizens] are honorable only because they are shameful to the people, and if the condition relative to taxes is different among citizens. Commerce is the profession of equal persons; the nobles must therefore not participate in trade in an aristocracy. The laws must be such that the nobles are constrained to render justice to the people. They must mortify entirely the desire to dominate. It is necessary that there be, either temporarily or perpetually, an authority that is feared by the nobles.
Aristocrats, especially in governmental aristocracies, may be chosen based on their superior intellect and proven leadership ability. Aristocrats may also be selected by favor—the granting of high rank by monarchs to individuals who have served them best. Finally, positions within the aristocracy may be based purely on personal wealth, either earned or inherited.
In wealth-based aristocracies, members of the lower economic classes have no chance of attaining political power, no matter how great their intellect or merit. In modern times, membership in the aristocratic ruling class may be based on heredity, wealth, military or religious status, education, or a combination of similar attributes.
In any of these cases, the people of the common classes are not allowed to participate in an aristocratic government, as they are in a representative democracy or a parliamentary monarchy. Aristocracy and oligarchy are both forms of government in which the society is ruled by a small group of people. However, there are some key differences. Aristocracies are comprised of individuals considered best fit to rule because of their nobility—a level of moral and intellectual superiority that is assumed to have been genetically passed down through family lines.
Oligarchies, on the other hand, are made up of people who are simply more wealthy and powerful than the rest of the population. Since their position is typically insured through inheritance, aristocrats tend to act in the best interest of society.
In contrast, oligarchs, whose status is typically dependent on maintaining their current level of wealth, tend to act out of their economic self-interest. In this manner, oligarchy is often associated with corruption, oppression, and tyranny. First conceived in Ancient Greece by philosopher Aristotle , aristocracy grew to be the predominant form of governmental power throughout Europe.
In these medieval aristocracies, the aristocrats were chosen simply because they were considered to be the best suited to rule and lead their particular community.
As societies grew larger and more economically diverse during the late Middle Ages CE , people began to demand more than mere leadership from their ruling classes. Eventually, the power and privilege afforded to the aristocracy became reserved for a few upstanding social leaders and military heroes. During the early 18th century, the prosperity created by the Industrial Revolution in Europe allowed many wealthy businessmen to buy their way into the aristocracy.
However, as the middle class began to become more prosperous after the s, more aristocrats lost their dominance over wealth, and thus, their political power. By the end of the 19th century, aristocracies still maintained precarious political control in Great Britain, Germany, Austria, and Russia. By , however, that control largely evaporated as a result of World War I.
While social aristocracies still exist in most countries today, they have little if any political influence. While it has lost most of its original monarchial political power, the British aristocracy continues to evolve today as reflected in the history of the British Royal Family. By the 14th century, the House of Commons, with its elected representatives from the towns and shires, joined the hereditary nobles in the House of Lords to form the British Parliament.
Appointed by the Crown, life peers are members of the aristocracy whose positions cannot be inherited.
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