Rich Families

Over at TNR, Niall Ferguson takes a crack at David S. Landes’s new book on how dynastic families endure.

Why do some families become very wealthy? Why do a small number of those families remain very rich over more than a couple of generations? Landes observes that business historians have as a rule paid too little attention to such questions, preferring to study the rise and the fall of corporations rather than of family enterprises. As he rather startlingly points out, 90 percent of American firms and almost as high a proportion of European firms are family businesses, accounting for half of all employment in the United States and two-thirds of jobs in the European Union. Nor are all of these firms mere minnows. Around one-third of Fortune magazine’s top 500 firms are family-controlled or at least partly family-managed. According to BusinessWeek, the big family-run firms have recently out-performed public corporations, which are owned by multiple unrelated shareholders and managed by salaried managers.

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