How the British aristocracy preserved their power

https://www.theguardian.com/news/2017/sep/07/how-the-aristocracy-preserved-their-power

106 74 9 years ago

pjc506• 9 years ago

TLDR: property ownership, including leasehold; tax avoidance, such as through trusts; and the House of Lords.

There are a lot fewer aristocracy than there were at the start of the 20th century, but those that remain are extremely wealthy.

cmdkeen• 9 years ago

Chris Bryant is of course a Labour MP. Intriguingly he was also caught up in the expenses scandal. One does wonder whether his book (which is being serialised here) manages to wonder about how the occupants of "the other place" get and hold onto power.

It also manages to recycle many of the popular tropes about the aristocracy avoiding taxes, perfectly legally, while ignoring the concept of noblesse oblige which was for a long time the flip side of aristocratic privilege. We're starting to see a similar concept return in the form of billionaires being criticised if they fail to sign up to donate their money.

coldtea• 9 years ago

It also manages to recycle many of the popular tropes about the aristocracy avoiding taxes, perfectly legally, while ignoring the concept of noblesse oblige which was for a long time the flip side of aristocratic privilege.

Yeah, so noble of them...

gadders• 9 years ago

Not the only scandal he's been involved in: https://en.wikipedia.org/wiki/Chris_Bryant#Media

MarchHare• 9 years ago

avoiding taxes, perfectly legally

Given the undemocratic and privileged positions many enjoy in the house of lords, some could say the legality of their methods is nothing more than corruption.

Sacho2• 9 years ago

tl;dr: they're good businessmen and do their best to preserve the wealth they were handed over from their parents.

The article spends too long telling irrelevant stories to make its few points:

- owning land is a great way to get rich

- the rich evade taxes by restructuring their business

- investing in business keeps your family's wealth intact

- networking from elite clubs helps you find opportunities to invest in

None of these points are specific to aristocrats. We all strive towards these goals - my family started out living in a rented apartment, and their first milestone was buying their own house. They wanted their kids to go to an elite university so we could get good networking opportunities. Investing in business is just a truism - past a certain point of wealth, it's no longer worth it to sell your time for money, compared to investing.

The writer also spends some time carefully conflating the aristocracy of old with the modern aristocrats, in a weird non-sequitur parallel. People of old did something bad, therefore...what, exactly? This is bigotry and prejudice, but we hate rich people, so it's okay.

As a whole this reminds me of Varys's riddle from Game of Thrones - if you are so incensed at the aristocracy, why do you keep giving them power?

pjc506• 9 years ago

carefully conflating the aristocracy of old with the modern aristocrats
preserve the wealth they were handed over from their parents

There's a conflict between these. If your father got his wealth by driving out subsistence farmers at gunpoint, to what extent can you say it's nothing to do with you and that your wealth is a totally meritocratic inheritance?

Note that owning land is a great zero sum way to get rich. If the Duke of Westminster owns half of London, and isn't interested in selling it, you can't invest there.

if you are so incensed at the aristocracy, why do you keep giving them power

Please explain how the people are incensed are also "giving them power" in any meaningful sense?

Sacho2• 9 years ago

There's a conflict between these. If your father got his wealth by driving out subsistence farmers at gunpoint, to what extent can you say it's nothing to do with you and that your wealth is a totally meritocratic inheritance?

Because it wasn't your father, it was your...how many generations are there between us and the middle ages, again? This is a time jump in the article itself:

Historically, the British aristocracy’s defining feature was not a noble aspiration to serve the common weal but a desperate desire for self-advancement. They stole land under the pretence of piety in the early middle ages, they seized it by conquest, they expropriated it from the monasteries and they enclosed it for their private use under the pretence of efficiency.
.....
And when democracy finally and rudely shunted them aside, they found new means of preserving their extravagant riches without the tedium of pretending they sought the common interest. Far from dying away, they remain very much alive.

Moreover, the UK has been a democracy for quite some time now, and has had ample time to address inheritance law, and land ownership law. Like the article states:

That is no accident. British laws on land tenure, inheritance tax, corporate governance and discretionary trusts still make it easy to hide wealth from public view. Land is subsidised, and taxed more lightly than residential property. Unearned income bears less of a burden than earned income.

The article claims that this is the secret to the power of the aristocracy. This power is given to them by laws, designed and voted in by MPs, who are in turn voted in by the people.

sjellis• 9 years ago

"Note that owning land is a great zero sum way to get rich. If the Duke of Westminster owns half of London, and isn't interested in selling it, you can't invest there."

This is the point: an aristocracy is a closed shop. The article points out that land and titles can be bought, thus getting a few people and their descendents in, but it is still a system that is designed to exclude the merely capable. Schools like Eton, the London clubs and the House of Lords seats exist to create near-automatic privileges for the lucky few who were born into the "right" families.

charlesdm3• 9 years ago

- the rich evade taxes by restructuring their business

It keeps amazing me how many people write 'evade' while they actually mean 'avoid' (or they use it as if it's exactly the same). Avoiding taxes is legal, kids. Evading taxes means you'll (eventually) end up in jail.

I personally know a few Belgian aristocrats with decent wealth. Most are horrible at managing their money and they get screwed left and right by investment advisors.

Most just tend to be really frugal, meaning they don't spend a lot. Several of them work normal jobs. Their wealth isn't meant to be spent or enjoyed (only perhaps a little bit -- they tend to own a nice property), it needs to be invested and safeguarded for the next generation.

Some of these people are still enjoying the gains of land and capital they received or acquired in the 12th century.. most won't take crazy risk with that.

yorwba• 9 years ago

My mother used to have a colleague who was a prince of Saxe-Coburg and Gotha, so related to Queen Elizabeth through a few corners. They worked in a call center. The only thing his title bought him was the opportunity to mess with customers who asked for his full name (presumably to complain about him later).

rb808• 9 years ago

None of these points are specific to aristocrats. We all strive towards these goals -

When you say "we" you don't include a big chunk of Guardian readers who believe if you earn above average income you probably are stealing it from someone.

charlesdm3• 9 years ago

Given they define the use of trusts as tax evasion, I have to agree. A newspaper just loses all credibility if they get basic facts wrong.

danmaz74• 9 years ago

owning land is a great way to get rich

Not to get rich, but to keep your family rich.

SteveJones372• 9 years ago

The aristocracy run the army, get a veto on the government, own most of the land and are rich enough to bribe god. Those enough reasons for you?

keenerd• 9 years ago

The figures for Scotland are even more striking. Nearly half the land is in the hands of 432 private individuals and companies. More than a quarter of all Scottish estates of more than 5,000 acres are held by a list of aristocratic families. In total they hold some 2.24m acres, largely in the Lowlands.

This is balanced by their Right to Roam. For those in the US, this will sound completely insane: there is no concept of trespassing provided you act responsibly when on other's land. Access to the country is a common right, and the owners are stewards to it.

~~Arguably, the most practical way for such a law to come into existence is for the bulk of the land to be owned by a tiny minority, and for a democratic majority to create the law.~~ Strike that, didn't research. Sorry.

pjc506• 9 years ago

Edit: thankyou for amending your comment about this being a good way to achieve right to roam. It's a rare thing from anyone on the internet to admit any kind of inaccuracy.

This view ignores all the history and has it exactly backwards. A full description would require at least one book, although I'd suggest starting with http://www.andywightman.com/poor-had-no-lawyers

A few things which must be taken into account:

- pre-feudal common ownership

- confiscation of land during the 1700s Jacobite rebellions. "More than a quarter of all Scottish estates of more than 5,000 acres are held by a list of aristocratic families" is not at all surprising when you consider that those families were given the land from its original owners and occupants at gunpoint by the government.

- the Highland Clearances

In short, the right to roam pre-existed; it was only removed by extremely questionable action; and the minority who owned the land fought access to it.

(For the situation in England&Wales, start at the Kinder Scout mass trespass)

onetimeusename• 9 years ago

The Jacobites were themselves aristocrats and were violently rebelling against the monarchy. Also, the Highland Clearances were not acts of theft, the landowners already owned the land at that point.

edit: I should also state that the Highland Clearances were complex but get retold as: "rich people stole land from poor people" often.

jacobush2• 9 years ago

I don't know... democrat-ish ideals maybe. It's the same law in Sweden and arguably the Scots got it from when the Danes ruled the land. (In these matters, you can rather safely lump together Danes, Swedes etc into a generic "Norse" category.)

iiv• 9 years ago

And interestingly Denmark doesn't have this law. Sweden, Norway and Finland all have it, and they all have decently similar cultures. Denmark might be the outlier because of it's small size?

rsync• 9 years ago

"This is balanced by their Right to Roam. For those in the US, this will sound completely insane ..."

Actually it sounds very familiar as we have a (somewhat) similar tradition in the western US that continues to this day:

https://en.wikipedia.org/wiki/Open_range

tryingagainbro3• 9 years ago

Read the article, and unless I missed it, they didn't mention the real reason: Primogeniture, or one person keeps it all. So you have 100,000 acres from the 15th century and the oldest son gets to it all, intact. If it was split over the centuries, they'd have next to nothing. https://www.independent.co.uk/news/uk/this-britain/to-the-ma... https://www.theguardian.com/uk-news/2016/aug/10/new-duke-of-...

Quarrelsome• 9 years ago

bring back Gavelkind?

tryingagainbro3• 9 years ago

Why? I see nothing wrong with the this system, the original owner and the state agree to it.

Probably UK is better since a huge estate can make /generate much more income /employment than a 1000 plots of 1.2 acres each.

They have power because they have money. A window washer that is the second cousin of Queen Elizabeth and with a nobility title is just a window washer, barely making ends meet. Now Queen Elizabeth's second cousin with 50,000 acres, a nobility title and two castles is a different thing :)

zokier2• 9 years ago

This is actually something that I have sort of encountered/pondered in my own life; while my family has never been wealthy by any degree, they have held a bit of land. But in just couple generations the original "estate" has been splintered into huge amount of small pieces, especially with the bigger family sizes of past. Such small pieces are not really that valuable, and can get "lost" (sold more or less voluntarily, or reach a dead end in family tree) more easily. My father has been trying to counteract this arguably destructive force by offering to buy some lands to keep them in the family, but of course his resources are limited and not everyone sees the splintering or the damage caused by it the same way.

AtomicOrbital• 9 years ago

The exact opposite of the Islamic approach of selling off everything and giving equally to all children ... this concentration of wealth in the hands of non-royals parlayed into enabling risk taking which helped kick start the industrial revolution in the West

dalbasal2• 9 years ago

I think the short (or maybe trite) answer is land. The aristocratic "investment thesis" held true in the long term. The UK hasn't had land reform since the civil wars, so big landholdings didn't changed much except in Ireland.

To pick a sentence amlost at random:

"More than a quarter of all Scottish estates of more than 5,000 acres are held by a list of aristocratic families."

Today the dominant economic institution is companies. You could make statements like the one above and replace one with the other. Besides that, it's largely similar. The moral mythology is completely different, but the politics and economics largely hold true.

Tryagainbro brings up primogeniture, which is important. Companies have that built in.

eternalban• 9 years ago

They incorporated select technocratic subsets of the society into the ruling class (the embryonic "deep state"), engineered the 'personhood' of the corporation, and have errected the global framework (currently incubating until the demise of the "Last Empire") that will insure the continuity of their lording it over the rest of us.

Aloha• 9 years ago

This article presents the idea that aristocracy on whole in Britain is as powerful as it ever was - which is a fallacy - the aristocracy was devastated by the death of an entire generation of its best and brightest in World War I, it was bled deeply by taxes between 1918 and 1980, it was stripped largely of its political power (reduction of hereditary peers, removal of the veto power of the House of Lords, removal of the House of Lords as a court of appeal) - those who survived (with wealth) have survived because of either the specific assets they owned - or because of good business savvy, or a combination of both.

Consider that a majority of the peerage didn't come out still owning estates - most of them fell out into the middle class and 'work for a living' - even those with great wealth, now mostly act as businessmen rather than merely shepherds of that wealth.

gwern5• 9 years ago

Overall, this article is a tissue of misleading statistics, anecdotes, and lack of context. The largest figure mentioned is 4 billion pounds; which is about as much as you might earn by selling an odd video game about crude blocks to Microsoft. Wow, so impress, much 'preservation of power'. The House of Lords rhetoric is also odd - how do anecdotes about a largely inactive house they've been mostly expelled out of show that they "preserved their power"? Or take this one:

The figures for Scotland are even more striking. Nearly half the land is in the hands of 432 private individuals and companies. More than a quarter of all Scottish estates of more than 5,000 acres are held by a list of aristocratic families. In total they hold some 2.24m acres, largely in the Lowlands.

'private individuals and companies' != 'aristocracy', by any means. You could say something very similar about the USA, which has not had an aristocracy in 200+ years - because all countries have considerable wealth inequality. And, uh, what exactly are we supposed to take away from dicing Scottish landholdings into "estates of more than 5,000 acres"? Perhaps we are supposed to be astonished by the fact that rich people buy London real estate and "rent" it out? Or perhaps we are supposed to be impressed by

According to the 2016 Sunday Times Rich List, 30 peers are each worth £100m or more.

So in other words, they're collectively worth about as much as Magic Leap or Slack? Truly impressive, I see now that England is ruled as much as ever by the aristocracy, it is merely hidden better. Hang the bastards!

ZeroGravitas6• 9 years ago

I think you're trying too hard.

Minecraft is a phenomenon. Why would you feel the need to talk it down as an "odd video game" just so that its price doesn't seem so high.

You apparently also think that an individual being worth the same as 1/30th of a highly successful business even though their main claim to fame was being born to the right person isn't remarkable.

haspok• 9 years ago

I think the article implies - but does not state it explicitly, unfortunately - that the real problem is not that there are individuals with massive wealth or assets (that are almost impossible to get due to their limited availability, eg. land - google "leasehold" if you are not "astonished by the fact that rich people buy London real estate"), but rather that the source of their wealth is simply that they were born into it.

A successful startup or enterpreneur achieves wealth because they create something that people want and are willing to pay for, in most cases on a non-zero sum playing field. And also if company A does X, and company B also tries to do X, there is a healthy competition in which there is usually a winning strategy for both companies. If there isn't, it is usually called a monopoly which is at least attempted to be limited by the law.

In the case of nobility, the playing field is so much unlevel that this gives them "unjust" advantages from the start. Even worse, they did not "earn" their rights by creating something new that has value, for example. And nobody calls owning the bottom of a river a monopoly, not even when they get paid by simply allowing a bridge to be built over it (does this really not sound absurd to you?).

The next question one could ask is if there is a better solution to this injustice. At this point in time, we already know several attempts at the solution, most of which failed spectacularly.

zokier2• 9 years ago

Indeed. More intriguing is how the aristocracy has fallen. Naively it might seem that at the dawn of industrial revolution the aristocracy held most of the cards in their hand, but somehow fumbled massively and allowed industrial magnates to overtake them in wealth (and power). Now they are barely a shadow of their former selves. Interesting question is if aristocracy would even been able to utilize their massive capital (that was mostly bound to land ownership) to reap the benefits of all the new industry that popped up.

andrewjl• 9 years ago

It might be akin to why startups regularly supplant and defeat large incumbents, you need a certain level of ingenuity and perspective that those incumbents don't have. Traditional aristocracy had a very different view of the world compared to merchants and factory owners.

Boothroid2• 9 years ago

Reversion to the mean? Whatever exceptional attributes or good fortune led to wealth and power dissipated. Now the Rothschilds on the other hand seem to have managed to hold on pretty effectively.

throw2016• 9 years ago

These are sophisticated power and wealth structures that are adept at keeping and growing their wealth and power intact over tens of generations.

The more wealth you have the more potential impact you have whatever the system, and feudal power structures like the UK which were never broken unlike say China and Russia with land reform have strong historical and real world ties to power.

Beneficiaries will obviously justify or diminish its impact, and those not doing well in the current system will direct their anger and frustration here.

Land is the source of wealth and power and is finite. These are generational conflicts as societies figure out the best way to manage their assets and resources. The aristocracy is simply self interested like all of us in doing their best to retain what they have accumulated.

Capitalism has not solved or addressed inheritance, its a nod nod wink wink kind of thing, and claims of equality and the level playing field while loudly made do not hold up the slightest in the real world we live in.

maxxxxx• 9 years ago

In Germany nobility is not as much in the public eye as in Britain but when you read the news I am always surprised how many of them are still there with enormous wealth.

lvkleist• 9 years ago

Only the ones in the west. Most of the Prussian aristocrats who owned land in what became western Poland or the German Democratic Republic were disowned and fled/were killed.

zeveb• 9 years ago

Historically, the British aristocracy’s defining feature was not a noble aspiration to serve the common weal but a desperate desire for self-advancement. They stole land under the pretence of piety in the early middle ages, they seized it by conquest, they expropriated it from the monasteries and they enclosed it for their private use under the pretence of efficiency. They grasped wealth, corruptly carved out their niche at the pinnacle of society and held on to it with a vice-like grip. They endlessly reinforced their own status and enforced deference on others through ostentatiously exorbitant expenditure on palaces, clothing and jewellery. They laid down a strict set of rules for the rest of society, but lived by a different standard.

That sounds like a very good description of the Bolsheviks the Guardian supported so fervently.

lurcio• 9 years ago

As for the 'British' Crown, if my memory serves me right the Domesday book records that William the Conq. did a 50/40/10 land split with the Church and his nobles. (To this day a significant percentage of land is not even recorded in the land registry. We might assume this is held in perpetuity without falling under inheritance laws. Everyone else is to this day a tenant on the land).

It would have been more than prodigal to lose when the system is in your hands...

Daniel 4 is interesting in this regard: "This matter is by the decree of the watchers, and the demand by the word of the holy ones: to the intent that the living may know that the most High ruleth in the kingdom of men, and giveth it to whomsoever he will, and setteth up over it the basest of men."

Bless them!

pmyteh2• 9 years ago

That land is not registered in the Land Registry doesn't necessarily mean that it's held in some kind of perpetual corporation. Compulsory registration on sale was phased in after 1925 and, IIRC, you weren't obliged to register land if it passed by inheritance or gift until very recently. That doesn't mean that inheritance taxes weren't paid. It's not uncommon to come across unregistered parcels of land in conveyancing even now; they're simply registered when it becomes necessary.

tryingagainbro3• 9 years ago

they're simply registered when it becomes necessary.

How can you prove it's yours? or if someone challenges it, you register it?

This is weird, especially in a country with 1000+ years legal tradition. One would assume that everything is registered, with the state owning the rest that is not assigned to private parties.

In many third world countries it's common for people to work /live on the land that "everyone" knows it's theirs--via family line--but can't prove /register it legally (whatever the law is.)

gumby• 9 years ago

Even if the subject doesn't interest you: this is a masterfully written flame worthy of reading on that basis. Certainly much more enjoyable than the more typical polemics.

As for the article itself, I feel it sadly doesn't even make its own case particularly well, cherry picking statistics and aggregating dissimilar data (e.g. clumping aristos and private corporations together when looking at Scottish landholding)

As it happens I agree politically with the writer that aristocracy is not a good idea (though hard to eradicate in any society), not that I care much if Great Britain has problems.

mathattack• 9 years ago

I'm surprised the aristocracy survived the financial crisis. I would have thought popular discontent would have killed their tax breaks.

hithereagain• 9 years ago

Also interesting, this article about Venice, where (apparently) the wealthiest families in 1427 are still the wealthiest families

https://qz.com/694340/the-richest-families-in-florence-in-14...

http://voxeu.org/article/what-s-your-surname-intergeneration...

How the British aristocracy preserved their power

Related Stories