individuals’ ascent to great wealth, or to their fall down the economic ladder, can be found in a plethora of religious texts, literary works, news reports, and documentary films, as well as in recent popular movies such as The Social Network and The Wolf of Wall Street. The societal, moral, and political consequences of the accumulation and concentration of wealth and power into the hands of a few have been, and continue to be, extensively explored and debated.
Despite this long-standing fascination with wealth and inequality, there is a growing sense among the public, scholars, and policy makers that the role of wealth in society has drastically changed over the past 50 years. News articles cite statistics on the staggering amount of wealth held by the “super-rich,” reporting, for example, that the “[w]orld’s 8 richest have as much wealth as [its] bottom half” (Mullany 2017). Other reports describe the mounting economic hardship faced by millions of households on account of home foreclosures, record-high levels of student-loan debt among young adults, and a decline in savings among baby boomers on the verge of retirement. Blogs promoting the FIRE (Financial Independence, Retire Early) movement share the secrets to retiring rich by 40, while self-help books offer readers aphoristic advice on wealth accumulation: “The object is to want money, and to be so determined to have it that you convince yourself that you will have it” (Think and Grow Rich); “The key to financial freedom and great wealth is a person’s ability or skill to convert earned income into passive income and/or portfolio income” (Rich Dad, Poor Dad). “Show me the young twenty-something who got rich clipping coupons. Where are these people? They don’t exist” (The Millionaire Fast Lane) (all cited in James 2013).
Opinion polls confirm that the public recognizes the importance of wealth holding for a family’s financial security but is generally apprehensive about rising wealth and income inequality. A recent survey on inequality, for instance, revealed that the majority of the population in 44 sampled countries viewed inequality as a “big problem,” since young people generally express greater concern about the economic gulf (Pew Research Center 2014).
The results of various national surveys reveal that, when asked about the sources of mobility and inequality, many participants still view individual attributes (e.g. talent, education, hard work) as the key determinants of social mobility and of one’s relative position on the socioeconomic ladder. This assumed link between individual merit and economic status has critical policy implications. People who tend to embrace individualistic attributions for inequality and poverty—a pattern that is more pronounced in the US than in other economically developed countries—are more likely to blame the poor for their economic conditions and less likely to express support for redistributive policies (Svallfors 1997; McCall and Kenworthy 2009).
Conversely, the wealthy are, generally though not uniformly, more favorably portrayed in the media. Media frames of the wealthy depict them alternatively as generous and caring, as personifying the “American dream,” and, less flatteringly, as unhappy, dysfunctional, or morally flawed (Kendall 2011). There is, however, evidence to suggest that these perceptions are contingent on the visibility and perceived utility of wealth: while wealth as a means of financial security and autonomy is generally viewed positively, conspicuous consumption and displays of excessive wealth are often regarded as immoral (Sachweh 2012).
Beyond the dominant individualistic attributions for poverty and inequality, a considerable number of participants in public opinion polls support explanations for wealth and inequality that are external to individual merit and talent. The factors that these accounts resort to range from social capital (“knowing the right people”) through parental economic resources (“being born to a wealthy family”) to fatalistic explanations (unfortunate circumstances, bad or good luck, and so on). Most scholars studying patterns of social mobility and stratification would ascribe a small role to luck in wealth accumulation. However, the truth of the matter is that, in relation to other measures of socioeconomic status, the processes surrounding wealth mobility are multifaceted, difficult to study, and poorly understood.
Why wealth? Why now?
What do social scientists really know about wealth mobility and inequality? While research on education and labor market attainment has been quite extensive, wealth analysis was marginalized or entirely overlooked for most of the twentieth century. This perplexing neglect can be attributed to the theoretical emphasis, particularly in the US, to individual educational and occupational attainment; on the lack of reliable data concerning assets and wealth holding; and to the absence of substantial wealth among the majority of the population. Since the mid-1980s, though, there has been renewed interest in wealth accumulation and inequality as a topic of social research. This welcome development coincides with what I will later term “the rise of wealth”—that is, the general growth in asset ownership, the advent of wealth as a key determinant of living standards and well-being, and the increase in wealth inequality.
Conceptually, the study of wealth represents a drastic shift in the way social scientists view the origin and consequences of social mobility and stratification. As an accumulated stock of tangible and financial assets, wealth holding provides economic security and has been associated with self-sufficiency and the owner’s ability to circumvent the demands of the collective and decrease reliance on members of the community (Penalver 2005). A lack of assets and wealth, on the other hand, results in dependence on others (employers, family members, welfare officers) as a way of maintaining an adequate standard of living. Meade (1964: 39) succinctly describes these features of wealth:
A man with much property has great bargaining strength and a great sense of security, independence, and freedom … The propertyless man must continuously and without interruption acquire his income by working for an employer or by qualifying to receive it from a public authority.1
As well as having these more generalized benefits, household wealth can be used as collateral for loans, in order to overcome liquidity constraints or to finance consumption during times of crisis, for example during illness or disability, incarceration, unemployment, divorce, and other situations involving unexpected expenses (Spilerman 2000). Ownership of financial assets (bank deposits, stocks, and bonds) can generate income, and ownership of tangible assets has important use value: a car, for example, enables mobility as well as access to employment opportunities, while homeownership has been associated with greater individual autonomy, long-term investment planning, and access to public services (Sherraden 1991; Gibson-Davis 2009).
Finally, material possessions convey the owner’s social standing and influence in the community, and command over great wealth has been associated with political power (Mills 1956; Domhoff 2002; Khan 2012). Moreover, intergenerational wealth transfers in the form of inter vivos gifts (gifts between two living persons) and bequests (gifts made through a will) are an important mechanism of parental investment in their children’s human capital and economic well-being (Grinstein-Weiss et al. 2014; Conley 2001), and one that has significant implications for the reproduction of socioeconomic inequality. The substantial amount of wealth transferred every year from older to younger generations—estimated to be between $600 billion and $900 billion in the US and between €150 billion and €200 billion in Germany (Beckert 2008: 14)—is likely to only intensify wealth inequality in the future (Piketty 2014).
In addition to the intrinsic importance of wealth as a measure of well-being and living standards, the research population in wealth analysis is notably broad. The conventional unit of analysis in general stratification research is an individual worker within a limited age range: typically, a 25–65-year-old. However, since the life expectancy in economically developed countries now exceeds 80 years (its highest recorded level), conventional stratification research captures only a limited, and gradually decreasing, segment of the population. By contrast, wealth research is unrestricted by constraints such as age and employment status. The age range of the research population in wealth studies extends beyond the typical working age and continues into post-retirement life; nor is the research population restricted to individuals who are in the labor force—it encompasses
