The Rich Actually Are Different

Tyler Durden's picture

With the long-weekend rapidly approaching, ConvergEx's Nick Colas takes a trip to the Hamptons, but through a time warp back to the Great Depression.  Examining the social registers (colloquially called the “Blue Book”) from 1927 and 1940, he finds that “The great and the good” of the day had real trouble holding their status during the social upheavals of the late 1920s and 1930s.  Only 32% of the families appearing in the Blue Book in 1927 were still there in 1940.  The ratio was even worse, at 29%, for the ultra-elite who belonged to the Meadow Club in Southampton.  It’s too early to tell what the last few volatile years will do to the upper crust of East Coast society, of course.  Or what may still be in store.  But when the hedgie in the Bentley cuts you off on Route 27 this weekend, take some solace in knowing he may not be there in a few years.


Via ConvergEx's Nick Colas:

F.Scott Fitzgerald is known for the phrase “The rich are different from you and me.”  The full quote, from a 1925 short story, actually goes like this:

“Let me tell you about the very rich.  They are different from you and me.  They possess and enjoy early, and it does something to them, makes them soft when we are hard, and cynical when we are trustful, in a way that, unless you were born rich, it is very difficult to understand.  They think, deep in their hearts, that they are better than we are because we had to discover the compensations and refuges of life for ourselves.  Even when they enter deep into our world or sink below us, they still think that they are better than we are.  They are different.”

Ernest Hemingway had a famous retort to “The rich are different” in his story “The Snows of Kilimanjaro”: “Yes, they have more money.  But that was not humorous to Scott.  He thought they were a special and glamorous race and when he found they weren’t it wrecked him as much as any other thing that wrecked him.”  Yes, these two great American writers were friends.  Sort of.

I think about this exchange regularly, given the extremely high levels of personal wealth generation the world has seen over the last 30 years.  Hedge fund billionaires in the US.  Russian oligarchs in Moscow.  Super wealthy Indian businessmen snapping up nine figure houses in London.  And China…  Even Chairman Mao’s granddaughter, Kong Dongmei, is reportedly worth over $500 million.  And the list goes on…

Specifically, I wonder how long wealth actually stays with an individual and their descendants.  There’s an old saying which posits that three generations is pretty much the maximum: one to make it, one to start to spend it, and the third to finish it off.  There are obvious exceptions to this rule, of course, such as the in United Kingdom, where land ownership has kept the country’s titled elite deep in the money for hundreds of years.  But in economies where wealth is measured in financial assets rather than 100,000 acres of Scottish highlands or 50 blocks of London waterfront, how long does wealth concentrate before divorce, death, squabbling children and bad advice disperse it back into society?

Since we are hard on the Memorial Day weekend, let’s travel out to the Hamptons for a few answers to the Fitzgerald/Hemingway debate.  Don’t worry – you won’t get stuck in traffic or have to encounter the great unwashed on the train.  We’re doing this in style since we are hunting some big game here.  This is our approach:

  • I have on my desk two Hamptons “Blue Books” for the years 1927 and 1940.  These were the social registers of the day (and still in existence today), with inclusion on the list restricted to only the most well connected and affluent of the time.  They list the “Cottagers” for towns such as East Hampton, Southampton, Bridgehampton and nearby villagers.  The term is a bit of a conceit – some of these ‘Cottages’ still exist and run to 10,000 square feet and 5+ acres of land around them.
  • In addition, the Blue Books list the officers and members of some of the prominent clubs in the areas, including the Meadow Club (lawn tennis, with more grass courts than Wimbledon) and Maidstone (golf, famous for once not allowing then-President Bill Clinton to disrupt father-son day by playing a round).
  • The selection process for who made it into the Blue Book was – and continues to be – entirely arbitrary.  Between the wars – the first book was published in 1922 – the choices fell to a social secretary named Marta Linderskold who lived in Southampton and made her living arranging charity events and publishing the book.  The cost in 1927 was $2.50 (about $33 today) and local shops, orchestras, and other vendors to the affluent took out ads as well.
  • Keep in mind that spending the summer in the Hamptons in the 1920s and 1930s wasn’t the same program as today.  You had a “Cottage” because you didn’t need to work and could spend your entire summer there.  The Long Island Railroad took 2 ½ hours to get to Southampton from Penn Station and the Long Island Expressway through Suffolk County wouldn’t be completed until the 1960s.

So how many families listed in the 1927 Blue Book for the Hamptons managed to hang on through the 1929 stock market crash, the Great Depression, and the 1937 downturn and still spend the summer “Out East” in 1940?  The answer here:

  • In 1927, Miss Linderskold saw fit to include a total of 459 families in the Blue Book for the towns of Southampton and East Hampton, the two largest “Summer Colony” communities.  In 1940, there were about the same number: 461 families between the two towns, although much more skewed to Southampton than in the earlier listing.  A tour through the list is essentially a “Who’s who” of the East Coast establishment.  Founders of major brokerage firms, titans of industry, noted artists and architects.
  • Looking at the listed names individually, there is significant turnover between the two summers of 1927 and 1940.  In Southampton, only 100 of the original 250 families listed in 1927 still had their names in the book in 1940.  In East Hampton, the numbers are even worse: only 47 of the 209 families included in 1927 were still listed in 1940.
  • If you are looking for the uber-elite of this already rarified circle, the Meadow Club in Southampton listed its members in the Blue Book in both years.  Of the 133 members listed on the rolls in 1927, only 39 remained in 1940 – about 29%.  And the total membership had declined to 100.

The upshot of all this is pretty straightforward: even with all the wealth and privilege afforded the New York elite during the Roaring 20s, it was not enough to ensure their continued social position during the Great Depression.  I doubt they were all paupers by the time 1940 rolled around, of course.  But the financial wealth they accumulated wasn’t enough to withstand the stock market crash and still maintain their social standing.  All the “Big’ names remained in good standing, of course – the Mellons, Carnegies, du Ponts, et al.  But the next rung down, who thought they had it made in 1927…  Their fall from grace must have seemed a long way indeed.

To put some perspective on the Depression and high society, let’s close out with Miss Linderskold, the loyal social secretary who assembled the Blue Books we’ve been reviewing.  A 1937 edition of Vogue magazine hailed her as “A right hand to some of America’s most famous hosts and hostesses” and mentioned that her family came from Swedish nobility.  In 1939, however, she lost her home in Southampton to foreclosure.  She died in 1956 at the age of 70.

I wonder what she would have said about the Fitzgerald/Hemingway debate.  She might have said “Yes, the wealthy are different. Every year there are different wealthy people.”

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Precious's picture

They have more of your money.

Cursive's picture


Too much money only brings problems and worry.  Earn enough to be happy; the rich never get to enjoy that peace of mind.

Precious's picture

Walk tall and carry a small stick. - Billy Jack

Richard Chesler's picture

They have Obozos in their pockets. - Aquilinot Blind


The Thunder Child's picture

I'll never forget Gina Rinehart AKA Mrs. Creosote's $2 a day speech, what a heartless cow and a prime example of the mentality of the rich.


James_Cole's picture

I'll never forget Gina Rinehart AKA Mrs. Creosote's $2 a day speech, what a heartless cow and a prime example of the mentality of the rich.

To be fair she earned every cent she inherited. 
The Juggernaut's picture

" There’s an old saying which posits that three generations is pretty much the maximum: one to make it, one to start to spend it, and the third to finish it off."


Unless you're in the Rothschild family.

jbvtme's picture

i once gave away $100,000 of my money over the course of ten years to fund a yoga program for inner city kids in nyc. i was never rich until i did that.

jbvtme's picture

relax krugman.  i know you're rich

I think I need to buy a gun's picture

how much money is considered rich in the united states of america and 2013? And how much money is considered rich in india 2013 and how much in brazil?

AldousHuxley's picture

1st gen - survival, entreprenurial save like it is depression everyday

2nd gen - progress, professionals, expand family business

3rd gen - hire someone else to do run the business/manage money, focus on non-monetary gains: power, fame, culture

4th gen - living on coat tails of ancestor's achievements


Let's say Bush Sr. died with $100M, wife donates $10M to charity, spends another $10M. $80M passed down to 3 heirs with $20 to uncle sam.

Bush Jr. inherited $20M. Few divorces (wives know who they are marrying into so they are not saver types) and yachts, ski lodges, etc. down to $10M...dies....donates $2M to charity $2M to uncle sam, rest to 3 children equally divided.

Bush III inherited $2M. Bought a $1M house, paid off $0.5M law school debt...left with $500k.


After 3 generations, $100M gets split into 3 children + 9 grand children = 12 and each passing there are financial mistakes, taxes, upkeep of lifestyles....


Plus, once every century you have social reforms, foreign invasions, civil wars, etc.


Life IS fair after 100 years or so...

flapdoodle's picture

Another problem is genetics:

1st generation entrepreneur is real smart, makes a fortune, then marries gorgeous blonde model trophy wife who is about as clever as a bag of hammers. The fortune grows but slows as the gorgeous blonde hits Saks occasionally, kept in check by the entrepreneur who is sociopathic cheapskate personified.

2nd generation son of entrepreneur is more handsome than his father and smarter than average, plays alot of tennis and marries gorgeous blonde model "just like mom" who is about as clever as a bag of hammers. The fortune is shrinking as the gorgeous blonde hits Saks pretty regularly since the 2nd generation son has always lived a life of luxury and thinks cheapskate is for the great unwashed.

3rd generation son is very handsome and of average intelligence and marries a gorgeous blonde model about as clever as a bag of hammers. Determined to reverse the decline of the family fortune, he decides to join the family firm and turn things around, with disasterous results, news he keeps well hidden from the gorgeous blonde wife who now does the Saks bit three times a week. When she finds out the fortune is gone in speculation, she files for divorce and keeps the Bentley.

4th generation blonde son looks like a model but is about as smart as a bag of hammers, but finds a sympathetic but ugly smart girl who knows how to make ends meet, so they don't have to sell all the heirlooms and occasionally drag them out along with the old Palm Beach newspaper clippings of the family at backyard barbeques to show their friends...


Inspector Bird's picture

The fact you need to mention or discuss draws into question how rich you really are, both materially and spiritually. 

jbvtme's picture

i was anticipating that announcing the good deed would have inspired others to do the same.   you should know that the yoga program is a prototype for all of the new york schools.  tell me, what have you done for the good of mankind?

Kinskian's picture

How many have been pulled out of poverty and ignorance with yoga and meditation in India? I think they found a western styled economy providing jobs for the people to be more effective.

Kinskian's picture

If there is any justice in the world, one of those inner city kids will grow up and mug you.

jbvtme's picture

the 800 or so kids who learned to meditate on my watch will pardon your indiscretion.  you should try it yourself.  that is meditating and being kind to others.

Kinskian's picture

And the children I've seen in cancer hospitals would pardon you as well, for your vanity and conceitedness.


jbvtme's picture

i understand we will be evaluated after this go round. reincarnated to another physical realm where we will grow and evolve again spiritually. it is not vanity which compels me.   that's for hollywood and gatsby.  i'm in it for the enlightenment.  twenty years ago my family stopped exchanging xmas presents.  inspired by the spirit of christ, instead we now donate money to charities in one another's names.  today i am working on getting 30% of the cars off of the road in the name of killing the tar sands and fracking corporations.  stay positive, k.

RafterManFMJ's picture

There’s an old saying which posits that three generations is pretty much the maximum: one to make it, one to start to spend it, and the third to finish it off.

A better way of putting it, "From shirtsleeves to shirtsleeves in three generations."

NoDebt's picture

Back then the Federal Reserve was just a baby, and our government was not the bloated monstrosity it is today. 

Now the institutions carry on with rotating chairmanship but no change in the locus of power.  Has this not been discussed on here many times before?  Does it matter greatly who happens to hold an office or head a major bank when the intertwined system of institutions itself determines the outcome much more so that the individual heading it at any moment in time?

It's all about the government and your relationship to it right now.  If your relationship is strong (whether collecting food stamps or collecting corporate welfare), the system works just fine for you.  If your relationship is not strong (small businesses, for instance)...... well, tough titties.

Jekyll_n_Hyde_Island's picture

I would prefer that the ZH community doesn't turn into a mob of rich hating bitter pseudo-sophisticates.  Seriously.   It's like nobel savage shit in here sometimes.


  Most of the people in here are so bitter they've forgotten what a blessing that mere existence is -- and that oftentimes, as it has been pointed out in this forum before, the poorest people in the world are the most happy.


  Yes.  I'm someone who has spent time with the uber-wealthy.  They aren't all a bunch of solipsistic, narcissistic, evil bastards.  Many of them have taken their wealth and the subsequent opportunity that comes with it and chosen to learn and improve themselves through continued education and charity.


  You know who I have a problem with?  The poor, angry, resource leaching animals that drain our system with crime and self-serving behavior and no accountability as a human beings.  And liberals.

James_Cole's picture

Yes.  I'm someone who has spent time with the uber-wealthy.  They aren't all a bunch of solipsistic, narcissistic, evil bastards.  Many of them have taken their wealth and the subsequent opportunity that comes with it and chosen to learn and improve themselves through continued education and charity.

The problem with the very wealthy isn't that they're wealthy, it's that they're still human beings. The problem specifically being that huge wealth gives them a lot of power - unafforded to the average ape - to pursue whatever whims they'd like.

Get a decent human being and combine them with power and things can go ok, get a shitty one and things can go very wrong. 

But overall, what was that they said about power corrupting?

wisefool's picture

Even if you go beyond particular personalities, and the whole good vs. evil debate, cronyism leads to guilds. Guilds had a signifigant hand in repressing technology during the dark ages.

Depsite the one invention of the transistor, historians are going to look at the last 100 years as a mini dark age. Nuclear power has been a net negative. But that explains why a tax accountant working at G.E. Corp makes more after tax compensation than the Nuke Es. T. Boone Pickens wanted to build a LNG infra for vehicles, but would not put his own money into it, unless he got AAPL type taxation. So we are stuck with the 110 year old internal combustion engine.

prains's picture


you're assuming that the wealth was earned within the parameters of a fair playing field for all otherwise known as a meritocracy, and we are all fully aware that this isn't the case. The George Bushes of the world are the norm not the exception and this is fairly obvious so why do you just skip over this fact in your defence of the wealthy?? You have given no thought to "how" the wealth was garnered in the first place.

Inspector Bird's picture

Most of her speech was repulsive.  But I'm all about balance and fairness.  I agree with her basic premise that if you're jealous of the very wealthy, it would behoove you to get off your butt and do something with your life to try and be more like them.

Not that I want to be more like HER.  But we all have gifts, and we all have the opportunity and capability of becoming wealthy with some luck and some pluck (well not all - in some economies the government has rigged it to prevent certain people from improving themselves, and it looks like the US is working hard to mimic those economies).

Beyond that very basic premise, I'd say she's a nasty hoe who lacks the talent and intellect to understand the nature of wealth and what it can and should be used for.

AldousHuxley's picture

that's bad advice....


you know how poor become rich? by stealing from them.

i-dog's picture

Money isn't everything...but it buys whatever is in second place.

BLOTTO's picture

Most of those ultra elite rich are soulless...


Therefore, we are way more 'rich' then they are and ever could be.



Precious's picture

The main reason to get rich is so you can finally get rid of all your shit.

BLOTTO's picture


Trying to 'get rich' - in order to acquire something that should already be offered to us for free - 'freedom.'



Raymond K Hessel's picture



Freedom is permission from the Authority to do something without suffering the consequences.

Liberty is an attribute of humanity, like health, which can be given away through a lifetime of bad choices.

AldousHuxley's picture

Money buys power over others.

In order for you to be "free", you need to control others to leave you alone.



Inspector Bird's picture

To quote "The Jerk"
Marie: I don't care about losing all the money. It's losing all the stuff.

MeelionDollerBogus's picture

Most of the rich elite are bastards with no souls?

Most of the poorest around the world are sheeple without a clue who rules what, how or why, and can't rise up or even care?

Fine world we live in

sgt_doom's picture

To segue on your excellent comments, MDB, this bullcrap blog posting wants us to accept some unknown person who compiled this Blue Book, much the same way the sheeple today blindly and robotically accept whatever a frigging Forbes vomits up!

Simon Johnson, presently an MIT prof in (ahem), economics, and senior fellow at the Peterson Institute (founded by David Rockefeller and his stooge, Peter G. Peterson), and former stooge at the IMF, claims that the Rockefellers gave all their money away? in 1960 the Rockefellers were worth an estimated $30 billion, and then moved all their money and ownership to those offshore finance centers and offshore trusts and offshore unregistered trusts, which connect to their hidden wealth and ownership at the North American foundations and trusts, and suddenly as their money doesn't appear in the public records, obviously, they aren't super-rich anymore?

In 1970, the Mellon family was estimated to be the third richest family on the planet and, (ditto for them as with the Rockefellers) today they are paupers?

The Mortimer family (a ka the Harriman family) the same!

When Rockefeller was "ordered" by the court to sell off his Standard Oil monopoly, his shysters simply created holding companies, moved the blocks of stock there, then moved the ownership of those holding companies to various foundations and trusts.  (Thomas Scott, the mentor of Andrew Carnegie, another death merchant like the Morgans, was the creator of the holding company and it has since been used by the super-rich quite ingeniously, etc.)

Rockefeller could do this (hiding ownership, etc.) because back then there was the NY stock exchange, and the curb market, or street market, where Standard Oil was traded on, which was relatively opaque when it came to the true assets and valuation of those companies. 

Sometimes one has to go waaaay back, and read books and legislation, circa the early 1900s (and especially read the legislation passed by congress in 1913 and 1914).

John Moody (the original founder of Moody's) loved the robber barons of his time, and wrote some very, very enlightening books, The Masters of Capital (1919) and The Truth About The Trusts (1904).

Likewise, read William C. Moore's Wall Street (1921).  These three, and many of the others back then are required reading to understand what is occurring today --- as the revisionism over the past thirty-some years has created a national amnesia of sorts!

And be sure to familiarize yourself with that classic by Louis Brandeis, Other People's Money.

MeelionDollerBogus's picture

The information is much appreciated.

They trynna catch me ridin dirty's picture

Exactly. There are families who basically invented the modern banking system, yet we're supposed to believe that some Mexican cell phone guy is the richest person in the world.

If you own your own banks, you report what you want. Not to mention the name of the elites' game is "own nothing; control everything."

I'll tell you who the richest people in the world are: the ones who can print their own money.

AldousHuxley's picture

no. Rich are not the ones with ferraris. Rich are the ones who get government issued airplane to take you to your vacation spots.


The really rich have no money of their own, but in organizations where people willingly contribute.


Hedge fund managers got nothing on the POPE

Diogenes's picture

Breaking up Standard Oil doubled Rockefeller's fortune. He continued to own as big a share in the new companies as in the old, and the value of the shares doubled. This drove some liberals crazy.

tip e. canoe's picture

curb market, or street market, where Standard Oil was traded on, which was relatively opaque when it came to the true assets and valuation of those companies. 

sounds like dark pools

Shigure's picture

Lee, in "East of Eden":

"He thought of Sam Hamilton. He had knocked on so many doors.  He had the most schemes and plans, and no one would give him any money.  But of course - he had so much, he was so rich. You couldn't give him any more.  Riches seem to come to the poor in spirit, the poor in interest and joy.  To put it straight - the very rich are a poor bunch of bastards.  He wondered if that were true.  They acted that way sometimes."

John Steinbeck, East of Eden

Prometheus418's picture
+1 for the Steinbeck.   Careful who you associate with, though- or you may get yerself labled as part of the Joad clan.
James_Cole's picture

Money isn't everything...but it buys whatever is in second place.

Money isn't everything but it sure keeps you in touch with your children. – Getty

WmMcK's picture

Money won't solve all your problems, but it will solve your money problems which gives you more time to concentrate on the other ones.

NoDebt's picture

Money will not buy hapiness, that's true.  But the lack of money can certainly make your miserable.


e-recep's picture

who says the poor has peace of mind?

Momauguin Joe's picture

"But when the hedgie in the Bentley cuts you off on Route 27 this weekend, take some solace in knowing he may not be there in a few years."

Poor Man's Peace of Mind: Putting a bullet or three in that fucker's head.