The transmission of wealth is a matter that has long been central to the debate over inequality and its impact on society. Theoretical models of inequality predict the consolidation of wealth into an elite group, along with its persistence in the long-run, generation after generation (Bourguignon 1981). Several authors have ... (Show more)
The transmission of wealth is a matter that has long been central to the debate over inequality and its impact on society. Theoretical models of inequality predict the consolidation of wealth into an elite group, along with its persistence in the long-run, generation after generation (Bourguignon 1981). Several authors have shown how elite often introduce mechanisms reinforcing inequality all the while influencing, or holding, power (e.g., Acemoglu and Robinson 2006; Amsden, DiCaprio, and Robinson 2012; Lenski 2013; Ager 2013). Within this context, recent scholarship has demonstrated the key role that shocks of different sorts – wars, plagues, and institutional crisis – have in affecting elite persistence through slowing down, if not temporarily reversing, the process of wealth consolidation and its impact on power (e.g., Piketty 2014; Alfani 2015; Scheidel 2017; Atkinson 2018).
Albeit long-term evidence on elite persistence and intergenerational wealth transmission is growing for developed countries in the Western world (e.g., Clark and Cummins 2015; Atkinson 2018; Black et al. 2020), little is known for other territories. This is especially problematic when it comes to societies renowned for being highly unequal. One such case is that of former slave-based plantation societies in the Caribbean. These territories are deemed among the most unequal societies in the past, and remain among the most unequal in current days (Caribbean Development Bank 2016). However, aggregate inequality levels can hide patterns of wealth transmission and elite persistence, especially in the face of major shocks.
The present paper examines the research question ‘How did intergenerational wealth transmission and elite persistence develop in slave-based sugar plantation societies in the West Indies long-run?’ relying on the case study of the Danish West Indies – current-days American Virgin Islands. The study takes a long-term perspective, spanning the mid eighteenth century to the early twentieth century. This timeframe consents to study long-term developments in intergenerational wealth transmission and elite formation and the impact that major shocks and threats – Napoleonic Wars, slave trade abolition and emancipation, competition from sugar beet – had on wealth transmission and elite persistence.
The study relies on a novel dataset compiled from tax registers and census data for the whole population of the territory under examination. The dataset contains most, if not all, of the assets that made up wealth in slave-based plantation societies: real estate, agricultural land, slaves, and other buildings along with the prices they fetched on the market, upon which the study relies to estimate wealth at the household-head level. Information on demographics, along with names and geographic location, are employed to link individuals over time and to identify heirs across generations.
Based upon this information, the paper studies different aspects of intergenerational transmission of wealth and its persistence, including 1) the profile of individuals belonging within the top percentiles over time and their role within society; 2) the effect of shocks on intergenerational transmission of wealth and on elite persistence. Descriptive and inferential statistics, in the form of rank regression, are employed for the purpose of the paper. (Show less)