that confers the right to property. (Durkheim 1992: 123)
Marx viewed intergenerational transfers of wealth as an extension of private property. Inheritance enhances the concentration of productive property in the hands of the few, promotes the exploitation of the propertyless workers, and serves as a fundamental instrument of the reproduction of inequality. Consequently, abolishing the rights of inheritance was viewed as an inevitable step toward a society in which “the free development of each is the condition for the free development of all” (Marx and Engels [1948] 2017: 84).
More than a century after the publication of these classical theories, studies on increasing inequality in the distribution of wealth in OECD countries identified two prime culprits: one is the changing price of assets—specifically, the rise in stock and housing prices—and the accessibility of credit; the other consists of family intergenerational transfers of wealth, predominantly from older to younger generations (see Chapters 3 and 4 here).
In addition to their ongoing use in contemporary commentary, the social processes of exchange, transfer, and exclusion remain fundamental components in more recent definitions of private property. Echoing Durkheim’s assertion that property both defines the boundary between individuals and groups (for which see also Beckert 2002: 110) and establishes the basis for social interactions, Davis (1949: 452) emphasized the dual nature of property:
[Property] consists of the rights and duties of one person or group (the owner) as against all other persons and groups with respect to some scarce good. It is thus exclusive, for it sets off what is mine from what is thine; but it is also social, being rooted in custom and protected by law.
Addressing the general neglect of private property as a topic of sociological research, Carruthers and Ariovich (2004: 24) provide a definition of private property that maintains a similar foundation: “Owner (A) owns property (P) if and only if (1) A has the right to use P; (2) A may exclude others from using P; and (3) A may transfer rights defined by rules 1 and 2 to others by consent.” Earle (2000: 40) notes that cultural anthropologists view the right to exclude as the primary function and the only pancultural attribute of property. Economist Yoram Barzel’s work underscores the link between legal rights and economic rights; this link centers on the owner’s control over the use of an asset, as manifested in the rights to “consume, obtain income from, and alienate these assets.” “Legal rights, as a rule,” he writes, “enhance economic rights, but the former are neither necessary nor sufficient for the existence of the latter” (Barzel 1997: 2).
Both early and more contemporary perspectives demonstrate the social function of private property. If, at the outset, property ownership appears to involve relations between a person and an asset, the view presented here suggests that it always involves triadic relations among owner, property, and non-owners (Carruthers and Ariovich 2004).
Moreover, as a scarce economic resource that is manufactured through the social processes of exclusion, exchange, and transfer, property ownership inevitably produces two outcomes. One is the extreme concentration of wealth at the top; the other is the attribute of convertibility, which allows wealth-related disparities to permeate other economic and non-pecuniary forms of capital through social and economic exchanges. Drawing mainly on the classical theorists, the next section addresses these two hallmarks of wealth.
Wealth stratification: Concentration and conversion
A main focus of the early sociological works—which, as mentioned, were written during a period of increasing economic inequality—was concern about the concentration of private property and wealth into the hands of a few. Private property occupies a central position in Marx’s writings on class structure, but Marx’s emphasis on production relations has unavoidably led to a conception of property according to which property consists almost exclusively of the means of production. Drawing on the Marxist tradition, Wright (1997) asserts that control over the means of production enables the capitalist class to appropriate the labor efforts of the propertyless working class; excluding workers from access to productive property—the “exclusion principle”—enables the owners of the means of production to reap economic advantages by appropriating the labor effort of the workers—the “appropriation principle” (see Wright 1997: 10; 2005).
Having to rely on the only commodity they possess and can exchange in the market—their labor effort—propertyless workers are exceptionally vulnerable to exploitation. Low wages that yield surplus value for the owners of the means of production further inhibit the working class’s prospects of asset ownership and wealth accumulation, which in turn produces greater class polarization. It is not surprising that the growing concentration of property and wealth ownership led Marx to consider private property the leading culprit of class inequality:
You are horrified at our intending to do away with private property. But in your existing society, private property is already done away with for nine-tenths of the population; its existence for the few is solely due to its non-existence in the hands of those nine-tenths. (Marx and Engels [1948] 2017: 74)
Thorstein Veblen, an economist best known for his work on the theory of the leisure class, offers an explanation for the concentration of wealth that shifts the emphasis from production relations and economic class to consumption processes and social status. According to this narrative, in an affluent “private property society,” where basic economic needs are met and financial security is no longer a strong incentive for wealth accumulation, social status emerges as a key motive for wealth accumulation. Under these circumstances, wealth accumulation takes the form of competition over the material comfort of life (Veblen 1899). This competition, known as pecuniary emulation, has raised the level of what is commonly perceived as the “conventional standard of wealth.” Under these circumstances of affluence and pecuniary emulation, members of the privileged class, suitably called the leisure class, are engaged in non-industrial occupations and are involved in the “non-productive consumption of time.” Not only does wealth accumulation in such cases entail the detachment of wealth from productive labor, but conspicuous consumption and the social status associated with a command over economic resources is also greatest for those whose wealth has been inherited rather than built up through effort and merit. Thus, inherited wealth “presently becomes even more honorific than wealth acquired by the possessor’s own effort” (Veblen 1899: 29). The dramatic turn in narratives of wealth creation and inequality from the purely economic sphere of production and exploitation to the sphere of consumption, idleness, and the display of wealth as part of pecuniary emulation unveils the relative dimension of wealth inequality and affirms the potential impact of the leisure class on the consumption patterns of other classes (see Hirsch 1976; Frank 2011).
Ownership of material property represents an important component of Weber’s analysis of class formation. Weber’s definition of social class evolved with time, but the highly cited and quoted definition found in his essay “Class, status, party” demonstrates his clear and succinct vision of property and class formation:
We may speak of a “class” when (1) a number of people have in common a specific causal component of their life chances, insofar as (2) this component is represented exclusively by economic interests in the possession of goods and opportunities for income, and (3) is represented under the conditions of the commodity or labor markets. [These points refer to “class situation.”] (Weber 1958: 181)
Three observations about this definition are warranted. First, ownership of material property is an important component of class distinction, a point clearly stated in Weber’s conclusion: “‘property’ and ‘lack of property’ are, therefore, the basic categories of all class situations” (Weber 1958: 181). Second, economic resources are valuable only in the context of exchange in the market (Breen 2005). Third, the reference to property and its exchange in the (commodity) market as a source of income captures
