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Summary: property relations and wealth distribution in The Netherlands. developments since the nineteenth century
The study purports to describe major developments in property relations and wealth distribution in Dutch society, in so far as statistical and other relevant data are available; and to interpret and explain these developments from a sociological perspective, i.e. by relating them to broader societal changes, particularly changes in class relations.
After the introduction and a chapter concerning conceptual and methodological problems (the concepts of property and wealth, the measurement of wealth and wealth inequality), chapter iii deals with property relations and wealth distribution in the Netherlands in the nineteenth century. Its main thesis concerns the interconnection of the property structure and class relations. In the first part of that century, like in the century before, most members of the wealthy classes were mainly rentier capitalists, who had invested large parts of their fortunes in government bonds and foreign property. Their wealth and income did not depend directly and visibly on the toiling of the masses, and could hardly be understood as the result of exploitation. In other words, the interdependence between the wealthy and powerful ‘notables’ and the ‘people’ or working classes in the broad sense (independent small farmers and artisans included), was relatively weak.
This structure changed slowly in the second half of the century with the advance of industrialisation, as private companies grew larger, more capital was invested in these companies, more entrepreneurs became wealthy men and more wealthy men entrepreneurs. The interdependence between capital owners and workers grew more intense, while simultaneously their conflicting class interests became sharper and clearer. These changes partly explain other, better known changes in this period, like the organisation of workers in un- | |
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ions and political parties, the growing recognition of workers' rights, the beginnings of social legislation and the extension of the franchise.
Chapter iv deals with major trends in the development of wealth distribution in the Netherlands from 1894, when a wealth tax was introduced and statistics based on that tax became available, until 1974. According to these statistics the wealth of the wealthy (i.e. the richest 3% of the adult population) grew much less than national income. This reflects three trends:
| 1. | total national wealth grew at a slower rate than national income; |
| 2. | large personal wealth-holdings grew more slowly than smaller ones; and |
| 3. | personal wealth grew more slowly than non-personal wealth. |
1. The unequal growth-rates of national wealth and national income can be related to the long-term decrease of net foreign property (colonial property included), particularly in and shortly after both world wars.
2. The distribution of personal wealth, while remaining very unequal, became somewhat less unequal in the course of this century (tables 2, 3, 5). This modest levelling process was most striking in periods of crisis: World War One, the Great Depression of the thirties, and World War Two and its aftermath. Contrary to the long-term trend, an increase of wealth inequality can be observed for the decades preceding the First World War (1894-1914) and the nineteen fifties.
3. Four types of non-personal wealth may be distinguished:
| a. | pension, life insurance and social welfare funds, which may be called ‘semi-personal wealth’; |
| b. | state property, or the net worth of the public sector; |
| c. | property of private non-profit organisations - various voluntary associations and foundations; |
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| d. | non-personal company capital, i.e. the difference between the total net value of company assets and the total stock market value of company shares. |
All these kinds of non-personal wealth, especially the first and the second one, grew at a more rapid rate than personal wealth in the course of this century. This partial collectivisation of wealth is part of a broader process of collectivisation of property, of which the concentration of growing proportions of personal wealth in large financial organisations - banks, saving societies, investment funds - is another aspect. The shift from personal to collective wealth, like the related shift from property income to wage income, may be interpreted as a development from capitalist to bureaucratic inequality, and social inequality in modern Dutch society may be regarded as a mixture of both.
In chapter v aspects of the position of different personal wealth-holders are described. Wealth statistics indicate that males and the elderly are overrepresented among the richest 5% of the adult population. Most of these well-to-do are either non-working or have an entrepreneurial function (at least in the years 1953-1974). During this century many of them migrated from the big cities in the Western provincies to certain suburbs.
The composition of personal wealth is related to its size. As may be inferred from wealth statistics for the years 1955-1963, income statistics for later years and estate duty statistics for earlier years, company shares and bonds are highly concentrated in the hands of a small and wealthy minority; undivided business capital is typically held by middle-large owners, belonging to the wealthiest quintile but not to the wealthiest 1% of the population; and real estate (esp. owner-occupied homes), savings deposits and consumer durables are spread more evenly. Among the changes to be noted in this century are the growth of home-ownership by residents and by housing societies and the concomitant diminution of personal ownership of rented houses, changes which reflect the more
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general tendencies of deconcentration and collectivisation of wealth. A similar development is the increasing ownership of farmland by farmers themselves and the decreasing importance of land-ownership as the basis of rent income and local power. A notable long-term change is also the spread of the ownership of various consumer goods, which has made material inequality less visible.
A comparison of estate duty statistics with national accounts data indicates that the importance of inheritance relative to saving as the basis of personal wealth formation has diminished after the Second World War. This is not to say, however, that wealth inheritance has become insignificant as a means of continuation of privileges from generation to generation. Wealth inheritance is related to status group formation. Membership of a high status group like the nobility or the ‘patriciate’, inherited wealth, and economic power are positively correlated. With increasing mobility in this century, however, these connections have probably become weaker.
In chapter vi an attempt is made to place Dutch developments in a wider international perspective. Collectivisation of wealth is also observable in other Western societies at least from the thirties, particularly the relative growth of semi-personal wealth (pension funds etc.) and the expansion of state ownership.
Likewise, the estimates of personal wealth inequality in Dutch society and changes in that type of inequality are similar to those in other Western societies. Data on personal wealth inequality for Great Britain, Sweden, (Western) Germany, the United States, Belgium, France, Denmark, Ireland (Republic), Canada and Australia, as measured by the proportion of total personal wealth owned by the richest 1% and/or 5% of the adult population, indicate that wealth inequality throughout the Western world in the twentieth century has remained high, even though it has somewhat decreased. In many countries inequality decreased most rapidly in the first half of the thirties (economic depression) and in the fourties (the war and its
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aftermath). One conspicuous international difference is that between Western Europe and the immigration societies of the United States, Canada and Australia: these latter societies experienced a relatively low degree of wealth inequality in the first decades of this century.
Data on the social characteristics of large wealth-holders in various countries confirm the main findings for the Netherlands. Thus, among occupational groups, big entrepreneurs everywhere possess the largest average wealth, followed by the free professions, small independent entrepreneurs and the salaried professions.
Studies in different countries (Great Britain, the United States, France) show that the inheritance of wealth has remained highly significant in determining the chances of wealth acquisition, particularly in the upper strata, although its significance decreased at least in Great Britain between the twenties and the sixties. In the United States, Great Britain and other Western societies wealth inheritance relates to the formation and continuity of a dominant status group, or national upper class. Within the Western world as a whole, American private fortunes have become the largest in this century.
The concluding chapter provides tentative interpretations and explanations of the observed trends. Some implications of these trends for capitalism and its class relations are suggested. Although modern Western societies still may be called ‘capitalist’, they are much less dominated by a stratum of large wealth-holders today than in the nineteenth century; the partial collectivisation of wealth, the equalisation of personal wealth (if only to a limited degree) and the loss of functions of personal wealth as the basis of income, material security and power have undermined the position of this stratum to some extent. Contrary to Marxist predictions, class divisions became blurred through the spread of semi-personal and personal wealth and the growing significance of social security rights as a functional alternative to personal property. Still, three property classes in contemporary capitalist society may
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be distinguished: 1. a large majority for whom personal property has mainly consumptive value; 2. small independent entrepreneurs for whom property is closely tied to their work; and 3. a tiny minority of large wealth-holders, for whom personal property is still an important source of unearned income and a basis of extraordinary privileges, of power, prestige and freedom.
Theories concerning the accumulation, collectivisation and equalisation of property suggest that these three trends are interconnected; more specifically, that capital accumulation through industrialisation was basic to the other trends. However, it was only after a certain phase that industrial growth led to collectivisation and equalisation of wealth, - when capital was accumulated more and more by means other than personal wealth formation (savings by corporations, state bureaucracies, pension funds etc.) - and wages as well as pension, life insurance and social security rights rose to a level sufficiently high to become an important source of personal and semi-personal wealth. This development was not merely economic; changes in the whole power structure were necessary to modify property relations and the wealth distribution. Generally speaking, different groups within the national society - entrepreneurs, politicians and government officials, manual workers and white collar employees - became more interdependent in the course of this development.
As far as changes in the distribution of personal wealth are concerned, one tendency seems to be crucial in explaining the long-term decline of inequality: the decreasing significance of property income relative to wage income which, in turn, is related to changes in the power relations between different groups. Increasing openness of marriage patterns and diminution of birthrate differences between socio-economic classes may also have contributed to this decline of inequality. The most important changes in the development of the wealth distribution and other aspects of the property structure in the Netherlands in this century took place in the fourties; it was
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particularly in this decade of war, occupation and recovery that national and international interdependencies underwent a transformation.
The last three sections of the last chapter explore questions concerning the relations between property structure, politics and ideology. From a sketchy overview of government policies in the Netherlands in this century it is concluded that the government has played an important role in conditioning, maintaining and changing property relations and wealth distribution, but that, on the other hand, government-induced changes in this field were largely unintended. No administration carried out a conscious and consistent policy aimed at the transformation of property relations and wealth distribution. Rather, political ideas concerning property relations (like those of socialist and christian-democratic parties) were adjusted to a changing reality.
The concluding chapter is followed by four appendices dealing with the adequacy of wealth statistics, calculations based on these statistics, comparisons with other data, and earlier descriptions of changes in the distribution of personal wealth. |
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