From Pakistan to Japan, a common cultural theme, indeed a trope, is the importance of business dynasties to the culture, not just dynasties of wealth passed on to the next generation, but the neopotistic tradition of passing on management of family businesses to the next generation. You see it in fiction, but also in exchange students from these places under pressure to step into these roles. I have less of a finger on the pulse of this kind of tendency outside Asia, although there have certainly been eras in modern Europe where you saw similar trends.
There have been times when this was also a consideration in the American business landscape. But that time seems to have passed, or at least, receded in importance since the 1960s. Perhaps it is a manifestation of the fact that the United States economy has a thriving market in business interests that makes it possible to transfer wealth divorced from management of that wealth. Perhaps it reflects the fact that big business is dominant in the American economy to such an extent that no one family dynasty is wealthy enough to own the predominant interest in many businesses of any economic importance (the S&P 500 accounts for 75 percent of the market capitalization of 20,000 or so publicly traded companies in the U.S., and publicly traded companies account for a very large share of the U.S. economy by almost every measure (5/6ths give or take by most measures), and even more when franchises are considered as single businesses). Perhaps it reflects a cultural preference for at least the appearance of meritocracy and for individual autonomy for the children of business chiefs.
Honestly, in the course of doing estate planning and business succession work, it seems as common for the older generation to doubt the younger generation's ability to carry on the business as it is to trust it. Even when some children are continuing to manage a business, others don't. And, while it is possible under current law to create very long lived dynasty trusts that pass wealth many generations into the future, even among the wealthiest individuals, I see little passion for providing financial benefit to generations anything more remote than grandchildren. The donative instinct, it seems, tends only to extend to people whom the donors have actually met. The wealthiest individuals, indeed, are often skeptical of even leaving their whole fortunes to their descendants, fearing that they would be too deeply spoiled in the process. The want their children and grandchildren to have good educations and a good start in life, but are less concerned about providing them with a financial boost once they move beyond young adulthood.
We surely still have a sentimental attachment to businesses managed by successive generations of the same family that appears in the form of opposition to the estate tax (despite the limited relevance of the estate tax to these situations), and in advertising campaigns from dynastic family businesses, and I've represented families that do carry out such plans. But, they are rare and tend to be small to medium sized businesses rather than the big businesses at the heart of the economy. As often as not, the bigger family businesses that I've encountered in my own practice are businesses where the first generation of business founders included multiple members of the same business, rather than businesses inherited by siblings from a single founder in an older generation.
The prototypical scion of the American scene is the self-indulgent trust funder who cares little for the values that brought his or her parents wealth, not the neoptistically favored junior manager of a large and successful enterprise with considerable personal power within the business. I've seen at least as many failed attempts to get children to take the reins as I've seen successes.
Is it a case of American exceptionalism, or is it simply a stage of economic development?
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