Exits from the Firm

The founders of dynastic-to-be family firms wholeheartedly devoted themselves to their businesses, as did most of the second-generation heirs. In the third generation, however, exits from the firm became more common, not necessarily because they were given no job in the firm, but out of their own volition. They simply did not feel at home in business. Two examples suffice to illuminate how these sons resolved the dilemma between the sense of duty to the family firm and their own personal inclinations. Fritz Krupp (1854-1902), the third-generation prospective heir to the Krupp throne, took control of the Krupp fortune out of a sense of duty. This was his curse because he was the only son in the family; he had no other option than to surrender to the interests of the family firm. Otherwise he would have dedicated his life to art, literature and science (Manchester 2003, 190). Aby M. Warburg (1866-1929), on the other hand, took the opposite decision. He was a fourth-generation son in the Warburg entrepreneurial dynasty (Chernow 1994, 113-27) and also the eldest son in his family, and therefore the assumed heir, but he chose to leave the firm and began to do what he enjoyed most. He became a book collector and art historian with a doctoral degree, albeit without a professorship or any other academic appointment. He lived most of his life with his books, in separation from other Warburg families, but also in sanatoria where he received treatment for mental illness.

Both Fritz Krupp and Aby Warburg expressed an interest in science and art, which seemed to be quite a common reason for leaving the family firm, but not earlier than the late nineteenth century when science and the arts gained immense prestige. This is discussed in more depth in Chaps. 5 and 6. Suffice it here to say that, while they felt attracted to science and the arts as they continued to gather momentum, members of entrepreneurial dynasties showed growing acceptance of occupations in these fields. In the London branch of the Rothschild dynasty (Ferguson 2000), two small clusters of scientists and artists grew up, starting in the fourth generation with James Edouard (1844-81), who was not a scientist or artist, but a book collector. His son, Henry (1872-1947), went further: he remained a ‘sleeping partner’ in the family firm and devoted himself to medical science. In the other cluster, Henry’s second cousin, Walter Rothschild (1868-1937) in the fifth generation, was a zoologist, but also a Member of Parliament. He remained unmarried, but his brother’s daughter, Miriam (1908-2005) in the sixth generation, was an amateur entomologist and multiple honorary doctor. She also wrote a book on her family (Rothschild 1983). Her brother, Victor (1910-90), besides being dutifully engaged in the family firm as well as in politics, was also intellectually gifted and under the influence of the Apostles, a group of intellectuals at Cambridge University. His intellectual orientation and decision to eschew finance was apparently reflected in his children’s occupational choices. So, in the seventh generation, Emma Rothschild (b. 1948) was a professor of history. Emma married Professor Amartya Kumar Sen, who was awarded the Nobel Prize for Economics in 1998. Moreover, Emma’s sister, Victoria (b. 1953), was a university lecturer and her husband, Simon Gray, a writer.

In the second cluster of Rothschild scientists, then, the transition from business to science took place step by step from the fifth generation via the sixth generation to the seventh generation, that is, over three generations. Most other scientists and artists were individual cases in their respective families, sometimes clustering around the same branches, but not as conspicuously as in the Rothschilds’ London branch. Moreover, most of them lived in the twentieth century, when exits from the family firm became more common. Among these artists were a cellist, an opera singer, a film producer and director, painters, poets, architects, and a dancer, actor and theatre director. There were also directors of ballet and art museums, art historians and journalists, but most of them were enthusiastic art collectors, a traditional artistic interest among high- ranking people. The arts thus provided them a variety of opportunities to create art or otherwise to work for art. An interest in science and the arts seemed suitable for those who, instead of putting in long hours for the family firm, wanted to immerse themselves in creative work, which furthermore offered the prospect of winning fame, indeed fame comparable to that achieved by their family firms—although this did not happen in the case of these dynasties. In the twentieth century there were also some family members who were involved in up-to-date religious or other spiritual movements. Gianni Agnelli’s only son, Eduardo (1954-2000), was a student of Oriental religion and philosophies, a wandering man who had sought out gurus in India (Friedman 1989, 213-24, 313-14). Alfred Brush Ford (b. 1950), in turn, joined the Hare Krishna movement (Wikipedia.org). Lacking drive and enthusiasm for business, both of them were keen to discover the true meaning of life, and set out to search for it in the opposite direction. Raoul Wallenberg was another such person, helping thousands of Jews escape Nazi terror. He died in suspicious circumstances in Moscow (Jangfeldt 2012).

There was yet another way in which opulent entrepreneurial dynasties could expand their activities beyond business affairs, namely, through foundations. As well as providing a good way of controlling their money, foundations allowed them to do what they wanted to. Foundations were like independent realms within their empires, separate from the business concern. The pioneers here were John D. Rockefeller together with his son, who founded the Rockefeller Foundation for charity purposes in 1913. They made their funds available first to medicine and then to the humanities and social sciences. Knut Wallenberg (Olsson 2006, 352-87) followed the Rockefellers in 1917 when he set up the Knut and Alice Wallenberg Foundation (KAW). Knut was keen to ensure he could independently decide on the causes for which his money was used, a very imperial wish shared by all dynastic foundations. KAW funded many cultural and scientific institutes, a school, library, museum, science and so on. The Kone Foundation in Finland was founded by Heikki and Pekka Herlin—father and son—in 1956 (Michelsen 2013, 324). Today it is independent from the Kone Corporation and one of the largest sources of science and culture funding in the country. The Agnelli Foundation was established in 1966 for philanthropic purposes (Friedman 1989, 60); and so on. The range of causes funded is quite extensive, including universities, research and other institutes, museums, opera, theatre, ballet, as well as scientific, artistic and cultural projects. All this is made possible by the huge riches amassed by the entrepreneurial dynasties, but also by the allocation of financial resources according to their wishes. Among the dynasties studied so far, entrepreneurial dynasties handed out much more money than royal and noble dynasties; in fact they are unrivalled in this respect.

Finally, there were also socialites who belonged to the realm of freedom, whose indulgence in the pleasures of life was made possible by their inherited money. These life orientations were also about the pursuit of happiness and satisfaction outside business. Gianni Agnelli (Friedman 1989, 41) was a well-known socialite and playboy, although he did eventually return to take the reins of the firm. Another playboy was Louis

Rothschild (1882-1955) in the fifth generation (Ferguson 2000, 445). Later on there were also numerous marriages to celebrities. In the seventh generation Anthony Rothschild (b. 1977) married a Danish model and TV presenter. James Rothschild (b. 1985) married a socialite, Nicky Hilton, from a rich hotelier dynasty. And his cousin Nathaniel (b. 1971) married another socialite, a model and celebrity, who was also a fashion designer. Charlotte Ford (b. 1941) was a glamorous jet-setter in her youth (fordforums.com). It was in these circles that she met her first husband, Stavros Niarchos, an opulent Greek shipping tycoon. Charlotte later married twice more, but these marriages also ended in divorce. These and other socialites, heavy drinkers and pleasure seekers were part of high society, forming social enclaves of people with plenty of money, as well as actors and actresses, politicians, artists and writers, in other words, representatives of the fields discussed above. These social enclaves thus also came to define the range of occupations that were acceptable to magnates, although the dividing line between acceptable and unacceptable was never entirely watertight.

In the end, scientists and artists and other related occupations remained a minority in the top ten entrepreneurial dynasties in the nineteenth and even the twentieth century. In fact the occupational choices of the family members who left the family firm into which they were born showed great variation. The Rothschilds in England in particular chose politics: while ennobled and therefore entitled to membership of the House of Lords, they mostly became part-time politicians, but they were also elected to the House of Commons. Susanna Agnelli (1922-2009) carved out a long career as a politician. She was elected to the Italian Parliament in 1976 and to the European Parliament in 1979, and became foreign minister in 1995 (Friedman 1989, 32, 313; Wikipedia.org). Most other occupations were professionals. It is impossible to give exact breakdowns and percentages due to lacking information. For the same reason it is difficult to identify social decline, but something of that sort happened in the Wallenberg dynasty, for example. Victor Wallenberg (1875-1970), the founder’s youngest son who was an engineer, tried to run a small factory but plunged it into debt, making him unsuitable for business in his brothers’ eyes (Olsson 2006, 126). His eldest son became a Monegasque general consul, an honorary assignment rather than a demanding occupation, but no knowledge is available about his sons’ occupations. Victor’s youngest son, Knut (1910-79), was a tradesman and his only son a ship mechanic, and his daughter was a secretary.

As for marriages contracted in the twentieth century, it is again difficult to calculate percentages: we do not have enough information about spouses’ occupations and backgrounds. The only trend that can be determined with certainty is that the occupations pursued in the twentieth century covered a wider range than the occupations chosen by the sons earlier. Daughters married artists, scientists, professionals, politicians and businessmen, who were still the biggest single group, though smaller than it used to be in the nineteenth century. The social backgrounds of wives are mentioned less and less often, a general tendency in the twentieth century. Another apparent tendency is that information on occupations is given mostly for those who headed the family firm, whereas those who remained in the margins or outside the firm are left alone in their privacy.