Families with large holdings of businesses do not seem to fit in with modern capitalism. Corporations, mutual funds, cryptocurrencies – yes. Powerful individuals like Elon Musk or Jeff Bezos too, but family dynasties that have been running the economy in the background for generations? Yes, they do exist, especially in Germany. They culminate in two trends: increasing wealth inequality and a resurgence of families in whose hands ownership of medium and large companies is concentrated.

As is well known, the top ten percent of Germans own about 60 percent of all private assets. And these assets essentially consist of shares in business assets. Roughly speaking, the ones at the bottom own nothing, those in the middle own real estate and those at the top own the companies. Socio-politically, this is a scandal for many. But why does sociology also have such a hard time with this stratification of German society?

Because, as Isabell Stamm writes, it seems anachronistic. Finally, social theory emphasizes that the family has gotten rid of its economic functions in the course of modernization and instead concentrates on the socialization of individuals. Dynastic families violate the modern norm of individualization if children were raised in them to maintain the family as a community of property. In addition, the dynastic attitude is opposed by the norm of equal treatment of all children, if, for example, only selected children receive shares in the family business.

Whoever has inherited the executive chair can hardly be fired

Against this background, wealthy entrepreneurial families are under increased pressure to legitimize, and the failure of professional succession in the company is becoming the norm. The fact that being born into an entrepreneurial family already enables the successful management of a business actually seems just as implausible as in the case of royal houses that are supposed to govern modern states. Incompetent managers, on the other hand, can be removed just as easily as incompetent politicians can be voted out of office. Conversely, it seems questionable why someone who might prefer to become a German scholar or musician should be forced to study business administration or law instead just because his father and grandfather were successful entrepreneurs.

At the Max Planck Institute for the Study of Societies in Cologne, where Stamm leads a research group on family wealth, interviews with members of such families were conducted in 2022 and 2023. Initial results indicated that active involvement in the operational business of the family-owned company has become optional. You don't have to, but you can, provided you have acquired the appropriate skills. Rather, one is prepared for the role of the shareholder, who looks after the interests of the family as the owner of a company from the outside and guided by the family-specific canon of values. This also implies an increasing equal treatment of all family members with regard to gift and inheritance law.

But the potential for conflict in these families remains high. If there are no longer such simple principles as the eldest son running the company, how do you regulate the questions of shares, influence and control of the company?

With the care of family ties. Common ancestry can also be a burden, as it unites individuals who derive claims from this affiliation that are not necessarily in the interests of the common good. Should every good-for-nothing in the family get the same shares, the same say? But who would be called upon to reject such claims? Precisely because you know each other particularly well in a family, you also know about the special weaknesses of your dear relatives.

From a sociological point of view, the response of families could be described as the incorporation of society into the family: the family is transformed, at least in part, into an organization. The crux of the matter is that the family and the group of shareholders do not have to be identical, and it is often better not to be. Instead, there are shareholder committees, advisory boards and commissions, advised by experts. In other words, everything that families are not. So you delegate power if it serves the family. And when it comes to preserving the family and its position in the social elite, they don't even shy away from the last taboo: sales.