Old money

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This article is about the socioeconomic term. For other uses, see Old money (disambiguation).

Old money is "the inherited wealth of established upper-class families (i.e. gentry, patriciate)" or "a person, family, or lineage possessing inherited wealth."[1] The term typically describes a class of the rich who've been able to maintain their wealth over multiple generations, often referring to perceived members of the de facto aristocracy in societies which for historical reasons lack an officially established aristocratic class (typically, the United States of America).

United States[edit]

American locations such as the Upper East Side of Manhattan; Westchester County, New York; Long Island's North Shore; Fairfield County, Connecticut; Newport, Rhode Island; Boston's Back Bay and Beacon Hill; Weston and Wellesley, Massachusetts; Philadelphia's Main Line; Chicago's North Shore suburbs; and the Grosse Pointe area of suburban Detroit, Michigan are associated with old money. Ironically, these areas' inhabitants that are colloquially described as "old money" are almost always descendants of the people the term "nouveau riche" (new money) was originally coined to describe: nineteenth century industrialists, bankers, and builders. Traditionally, wealth was associated with landowning and these Gilded Age fortunes made money in a new way, hence the term new money. Edith Wharton, among Gilded Age America's greatest chroniclers, referred to industrialists and their ilk as "brazen new money".

Wealth—assets held by an individual or by a household—provides an important dimension of social stratification because it can pass from generation to generation, ensuring that a family's offspring will remain financially stable. Families with "old money" use accumulated assets or savings to bridge interruptions in income, thus guarding against downward social mobility.[2]

"Old money" applies to those of the upper class whose wealth separates them from lower social classes. According to anthropologist W. Lloyd Warner, the upper class in the United States during the 1930s was divided into the upper-upper and the lower-upper classes.[3] The lower-upper were those that did not come from traditionally wealthy families. They earned their money from investments and business rather than inheritance. In contrast to the nouveau riche, the upper-upper class was families viewed as "quasi-aristocratic" and "high-society".[3] These had been rich for generations. They lived off idle inheritances rather than earned wealth.

During the early 20th century, the upper-upper class were seen as more prestigious.[3]

"Old money" contrasts with the nouveau riche and parvenus. These fall under the category "new money" (those not from traditionally wealthy families). Some families with "old money" include:

  • The Cabots arrived in Salem from the Isle of Jersey in 1700 and made fortunes in shipping. At the age of 21, Godfrey Lowell Cabot (see Lowells below) founded the Cabot Corporation, the largest producer of carbon black in the country.
  • The Forbes family of Boston made their fortune in the shipping and later railroad industries as well as other investments. They have been a prominent wealthy family in the United States for 200 years.
  • The Astor family made their fortune in the 18th century, through real estate, the hotel industry and other investments.

Although many "old money" individuals do not rank as high on the list of Forbes 400 richest Americans as they once did, their wealth continues to grow. Many families increased their holdings by investment strategies such as the pooling of resources.[6]:115 For example, the Rockefeller family's estimated net worth of $1 billion in the 1930s grew to $8.5 billion by 2000. In 60 years, four of the richest families in the United States increased their combined $2–$4 billion in 1937 to $38 billion without holding large shares in emerging industries.[6]:115[7]:2

Europe[edit]

The Rothschild family, as an example, established finance houses across Europe from the 18th century and was ennobled by the Habsburg Emperor and Queen Victoria. Throughout the 19th century, they controlled the largest fortune in the world, in today's terms many hundreds of billions, if not in trillions (US$). The family has, at least to some extent, maintained its wealth for over two centuries. The Rothschilds were not, however, considered "old money" by their British counterparts. In Britain, the term generally exclusively refers to the landed gentry, usually the aristocracy and nobility who traditionally live off the land inherited paternally.[8]

Effects of World War II[edit]

Economists assert that the largest transfer of wealth will be as the older generation leaves wealth to the baby boomers. Inheritance has been estimated to make up 6% of the US GDP each year.[7]:16 The current generation is wealthier than any generation before. This increase in wealth and inheritance indicates a rise of "old money" in American families. Stephen Haseler argues that America is becoming an inheritance culture in which much economic opportunity is from family inheritance and not personal achievement.[7]:17

See also[edit]

References[edit]

  1. ^ "Old Money" The American Heritage Dictionary of the English Language, Fourth Edition. Houghton Mifflin Company, 2004. 5 Nov. 2008. Dictionary.com http://dictionary.reference.com/browse/oldmoney
  2. ^ Scholz, Claudia W.; Juanita M. Firestone (2007). "Wealth". In George Ritzer (ed.). Blackwell Encyclopedia of Sociology. Blackwell Reference Online. Malden, MA: Wiley-Blackwell. ISBN 1405124334. 
  3. ^ a b c Warner, William Lloyd (1960). Social Class in America: A Manual of Procedure for the Measurement of Social Status. Harper & Row. 
  4. ^ Lundberg, Ferdinand (1968). The rich and the super-rich. New York: Bantam Books/Lyle Stuart Publishing. pp. 165‒177. 
  5. ^ "Fortune 500 2008: Fortune 1000 1-100". Fortune. 2008-05-05. Retrieved 2008-12-02. 
  6. ^ a b Phillips, Kevin P (2003). Wealth and democracy: a political history of the American rich. New York: Broadway Books. ISBN 9780767905343. 
  7. ^ a b c Haseler, Stephen (2000-05-05). The Super-Rich: The Unjust New World of Global Capitalism. Palgrave Macmillan. ISBN 9780312230050. 
  8. ^ Ferguson, Niall (1999-11-01). The House of Rothschild: Money's Prophets: 1798-1848 1 (First Edition ed.). New York: Penguin Books. p. 481‒85. ISBN 0140240845. 

Further reading[edit]

  • Aldrich, Nelson W. (1996). Old Money: The Mythology of Wealth in America. New York: Allworth Press. ISBN 9781880559642.