Socio-Economic Review, 2018, Vol. 16, No. 2, 365–385 doi: 10.1093/ser/mwx058 Article Article Fit to be king: how patrimonialism on Wall Street leads to inequality Megan Tobias Neely* The Michelle R. Clayman Institute for Gender Research, Stanford University, 450 Serra Mall, Stanford, CA, 94025-2047, USA *Correspondence:
[email protected] Abstract The hedge fund industry is one of the most lucrative and powerful industries in the USA, yet it mostly comprises white men. To understand why, I turn to Weber’s theory of patrimonialism, which primarily has been applied to historical or non- Western societies. I argue that patrimonialism—activated through trust, loyalty and tradition—restricts access to financial rewards and facilitates the reproduction of the white male domination of this industry. Using data from 45 in-depth interviews com- bined with field observations at industry events over a 4-year period, I investigate how hiring, grooming and seeding practices within and among firms enable certain elites to maintain monopolies over financial resources. Applying the theory of patri- monialism to a context with few women and minority men in power-holding posi- tions demonstrates how practices that reproduce elite structures are directly connected to inequality in the workplace. Key words: patrimonialism, trust, loyalty, social capital, elites, gender, race and ethnicity, social class, work and occupations, finance JEL classification: G24, J44, J62, J70, J71 1. Introduction Inequality in the USA has returned to levels unprecedented since the years before World War II. The rising incomes of the top 10% of earners are driving this increasing inequality (Piketty, 2014).