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Old money is "the inherited wealth of established upper-class families (i.e. gentry, patriciate)" or "a person, family, or lineage possessing inherited wealth". The term typically describes a class of the rich who have been able to maintain their wealth over multiple generations, often referring to perceived members of the de facto aristocracy in societies that historically lack an officially established aristocratic class (such as the US).
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.
"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. The lower-upper were those that did not come from traditionally wealthy families. They earned their money from investments and business like John D. Rockefeller, whose father was a traveling peddler, rather than inheritance. In contrast to the nouveau riche, the upper-upper class were families viewed as "quasi-aristocratic" and "high-society". These families had been rich and prominent in American politics for generations in many cases since before the Revolution when their ancestors had accumulated fortunes as members of the elite planter class, or as merchants, slave traders, ship owners, or fur traders. In many cases, especially in Virginia, Maryland, and the Carolinas the source of these families wealth were vast tracts of land granted to their ancestors by the Crown and or acquired by headright during the colonial period. These families sometimes known as American gentry produced several Founding Fathers of the United States and a number of early U.S. Presidents including George Washington, who with an estimated net worth of $525 million (in 2016 dollars) due to his vast holdings of land and slaves, was the wealthiest man to hold the office prior to the election of billionaire Donald Trump in 2016.
During the early 20th century, the upper-upper class were seen as more prestigious than the nouveau riche.During the late 19th century and early 20th century the nouveau rich flaunted their wealth by building Gilded Age mansions that emulated the palaces of European royalty while old money was more conservative. American "Old money" families tend to adhere to various Mainline Protestant denominations; Episcopalians and Presbyterians are most prevalent.
Some families with "old money" include:
- The Randolph family is descended from William Randolph an American colonist, who accumulated a vast fortune including over 20,000 acres (81 km2) of land as a planter and merchant, and played an important role in the history and government of the English colony of Virginia. He arrived in Virginia sometime between 1669 and 1673, and married Mary Isham a few years later. Randolph's descendants have included many prominent Americans including U.S. President Thomas Jefferson, U.S. Chief Justice John Marshall, Confederate General, Robert E. Lee,Peyton Randolph, the first President of the Continental Congress, and Edmund Randolph who served as the seventh Governor of Virginia, the second US Secretary of State, and the first U.S. Attorney General as well as many other notable individuals in Virginia and U.S. politics.
- The Harrison Family came to the colony of Virginia in 1630 and became wealthy as tobacco planters, accumulating thousands of acres of land along the James River. The family was prominent in Virginia and US politics for over two centuries. The family produced Benjamin Harrison V, a signer of the Declaration of Independence several Governors of Virginia as well as two US presidents, William Henry Harrison, and Benjamin Harrison and many other noteworthy individuals including J. Hartwell Harrison a member of the medical team that received the 1961 Amory Prize of the American Academy of Arts and Sciences for bringing kidney transplantation to the world.
- The Roosevelt family of Manhattan arrived from the Netherlands as colonists and later became prominent in politics, producing presidents Theodore and Franklin Roosevelt.
- 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 Lowell family are descended from Boston colonists. Francis Cabot Lowell began the fortune in shipping and later textiles. The family has produced several noteworthy individuals, including Abbott Lawrence Lowell, who presided over Harvard for 24 years.
- The Du Pont family fortune began in 1803, but they became an extraordinarily wealthy family by selling gunpowder during the American Civil War. By World War I, the DuPont family produced virtually all American gunpowder. In 1968, Ferdinand Lundberg declared the Du Pont fortune to be America's largest family fortune. As of 2008 E. I. du Pont de Nemours and Company ranked 81st on the Fortune 500 list of the largest U.S. corporations.
- 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 fur trading, real estate, the hotel industry and other investments.
- The Griswold Family of Connecticut made their fortune in shipping, banking, railroads, and industry. They have been prominent in American politics, producing five governors and numerous senators and congressmen.
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.:115 For example, the Rockefeller family's estimated net worth of $1 billion in the 1930s grew to $8.5 billion by 2000—that is, not adjusted for inflation. 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. When adjusted for inflation, the actual dollar wealth of many of these families has shrunk since the 30s.:115:2
From a private wealth manager's perspective, "old money" can be classified into two: active "old money" and passive "old money". The former includes inheritors who, despite the inherited wealth at their disposal or that which they can access in the future, choose to pursue their own career or set up their own businesses. Paris Hilton and Sir Stelios Iaonnou are examples of this category. On the other hand, passive "old money" are those who are the idle rich or those who are not wealth producers.
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.: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.:17
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. 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. The British concept is analogous to good lineage and it is not uncommon to find someone with "old money" who is actually poor or insolvent. By 2001, however, those belonging to this category - the aristocratic landowners - are still part of the wealthiest list in the United Kingdom. For instance, the Duke of Westminster, by way of his Grosvenor estate, owns large swaths of properties in London that include 200 acres of Belgravia and 100 acres of Mayfair. There is also the case of Viscount Portman, who is the owner of 100 acres of land north of Oxford Street.
Influences on popular culture
The ITV television series Downton Abbey frequently contrasts the differences between Old Money and New Money in Britain during the early 20th century. Notably between the newspaperman Sir Richard Carlisle and the heiress Lady Mary Crawley, the distinction being the aggression of the parvenu Sir Richard and the noblesse oblige of the Crawleys.
Perhaps the greatest literary critique of the tension between Old Money and New Money can be found in F. Scott Fitzgerald's The Great Gatsby. The characters in possession of old money represented by the "Tom Buchanan" family (Tom and Daisy), get away with (literally) murder; while those with new money, represented by Gatsby himself, are alternately embraced and scorned by other characters in the book. Fitzgerald vastly critiques people in possession of old money through his narrator Nick Carraway: “They were careless people, Tom and Daisy- they smashed up things and creatures and then retreated back into their money or their vast carelessness or whatever it was that kept them together, and let other people clean up the mess they had made.”
- American gentry
- Grand Burgher (German Großbürger)
- Hanseaten (class)
- High culture
- La Distinction
- Landed gentry
- Nouveau riche
- Patrician (post-Roman Europe)
- Social environment
- Social status
- Status–income disequilibrium
- Symbolic capital
- Rentier capitalism
- White Anglo-Saxon Protestant
- "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
- 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.
- Warner, William Lloyd (1960). Social Class in America: A Manual of Procedure for the Measurement of Social Status. Harper & Row.
- Ayres Jr., B. Drummond (2011-12-19). "The Episcopalians: An American Elite With Roots Going Back to Jamestown". New York Times. Retrieved 2012-08-17.
- Davidson, James D.; Pyle, Ralph E.; Reyes, David V. (1995). "Persistence and Change in the Protestant Establishment, 1930-1992". Social Forces. 74 (1): 157–175 [p. 164]. doi:10.1093/sf/74.1.157. JSTOR 2580627.
- Sankey, Margaret D. "Randolph, William". Oxford Dictionary of National Biography (online ed.). Oxford University Press. doi:10.1093/ref:odnb/23125. (Subscription or UK public library membership required.)
- Emory G. Evans, A "Topping People": The Rise and Decline of Virginia's Old Political Elite, 1680–1790 (2009), pp. 18–19
- Dillon, John Forrest, ed. (1903). "Introduction". John Marshall; life, character and judicial services as portrayed in the centenary and memorial addresses and proceedings throughout the United States on Marshall day, 1901, and in the classic orations of Binney, Story, Phelps, Waite and Rawle. I. Chicago: Callaghan & Company. pp. liv–lv.
- Boston Globe (1984)
- Murray (1990)
- Lundberg, Ferdinand (1968). The rich and the super-rich. New York: Bantam Books/Lyle Stuart Publishing. pp. 165‒177.
- "Fortune 500 2008: Fortune 1000 1-100". Fortune. 2008-05-05. Retrieved 2008-12-02.
- Phillips, Kevin P (2003). Wealth and democracy: a political history of the American rich. New York: Broadway Books. ISBN 9780767905343.
- Haseler, Stephen (2000-05-05). The Super-Rich: The Unjust New World of Global Capitalism. Palgrave Macmillan. ISBN 9780312230050.
- Essvale Corporation Limited (2008). Business Knowledge for IT in Private Wealth Management: A Complete Handbook for IT Professionals. London: Essvale Corporation Limited. p. 45. ISBN 9780955412493.
- Ferguson, Niall (1999-11-01). The House of Rothschild: Money's Prophets: 1798-1848. 1 (First ed.). New York: Penguin Books. p. 481‒85. ISBN 0140240845.
- Popova, Elena (2008). Through Alien Eyes: A View of America and Intercultural Marriages. New York: Algora Publishing. p. 51. ISBN 9780875866390.
- Brass, Tom (2014). Class, Culture and the Agrarian Myth. Leiden: BRILL. p. 240. ISBN 9789004259973.
- Haseler, Stephen (2012). The Grand Delusion: Britain After Sixty Years of Elizabeth II. London: I.B. Tauris. p. 258. ISBN 9781780760735.
- Aldrich, Nelson W. (1996). Old Money: The Mythology of Wealth in America. New York: Allworth Press. ISBN 9781880559642.