Constructing Wealth Architectures By Means of Formal Organizations

Recent research on wealth inequality shows that the wealth portfolios of top wealth owners are composed of complex legal structures that connect various owned assets, partition the liabilities of ownership, and safeguard the family as beneficiary (Beckert, 2022; Pfeffer & Waitkus, 2021; Piketty, 2019). The legal vehicles used to create such wealth architectures are mostly corporations and foundations (Bessière & Gollac, 2023; Pistor, 2019; Tait, 2019), e.g. institutionalized blueprints for formal organizations. Remarkably, by defining rules, criteria, and contractual relations these blueprints formally define the ownership structure and control functions of organizations, but can also be used as tools through which wealth can be organized. This adds a level to “formal organization” that exceeds its common use in organizational sociology and needs further scrutiny by organizational sociologists (Du Gay, 2020; Du Gay & Vikkelsø, 2016). Drawing from more then 30 cases of the wealth architectures of the German wealth elite, I elaborate upon the differences of formal organizations and formally organized wealth architectures as well as on the emergence of the latter from the former. I agree with Brunson that we need to revisit the idea of the legal person in order to better capture formal organization (Brunsson, 2024), but I argue that we should use the legal person not only as definitional criteria to define formal organizations, but also to describe a mechanism in creating organized wealth architectures.