For the perfect, and perhaps the only, example of true dynastic entrepreneurship and capitalist grandeur, look no further than the Rothschilds. There isn’t a real contemporary comparison – the Saatchis are too cavalier, the Bush family too…well, brash. Masters of high finance and global culture, the various strands of Rothschild descendants became experts in their fields, icons of their interests, and made a whole lot of money on the side. Considered to have amassed the greatest private fortune in modern history, the Prussian family worked alongside the most important people in 19th Century Europe, spreading their intellectual, economic and political curiosity throughout the continent and deep into the global economy. Their success, and in fact the family’s relative decline, is a fascinating story, and whilst its detail is of too great a magnitude to document – by anybody, there is no definitive history of the Rothschild dynasty although several attempts have been made – there are snippets and themes that deserve some scholarship. Historian Niall Ferguson suggests that a contemporary equivalent to the Rothschild financial empire would comprise a merger between Merrill Lynch, Morgan Stanley, JP Morgan, probably Goldman Sachs, and most likely the International Monetary Fund, due to the family’s contribution to not just private equity but public reserves.
An Imperial Success
The story starts in Frankfurt, which until the German unification of 1871 was a ‘free city’ within two larger states – the decaying Holy Roman Empire until the early 19th Century, and then a confederacy of German regions. Frankfurt, incidentally, remains the financial capital of modern-day Germany. There, in the mid-late 18th Century, a Jewish financier named Mayer Amschel Rothschild, the son of a small-time currency trader, began to build a finance house, and upon amassing a good deal of spare capital, sent his five sons to various corners of Europe to expand business opportunity and develop the family’s reputation. The second generation of Rothschilds moved to Vienna, London, Naples and Paris (one remained in Frankfurt), creating five of the biggest global financial centres, and becoming famous for their successful ventures, which mainly involved the financing of large projects such as infrastructural developments, precious stone exploration and raw material sourcing. Clients included public and private figures and institutions; for instance, the British government, which relied on advanced loans from Rothschild coffers to fund much of the Victorian imperial project, including the building of the Suez Canal; and the Japanese, who paid for their 1905 war against Russia with Rothschild money. Family success led the sons to be elevated to positions of social and political power in their respective countries, including to the House of Lords in the UK and circles of nobility in the Austrian and Holy Roman Empires.
The family continued to hold distinct power in Europe into the early 20th Century, using the capital accumulated from banking and finance to build a reputation for luxury and grandeur. The Rothschild family boasts a huge number of palaces and mansions across the continent, many filled with wondrous art pieces and memorabilia from the family’s travels. Five generations on from Mayer Amschel R., the Rothschild’s commercial presence has shrunk significantly, but the personal wealth amassed still exists on a personal level. A probable cause of this decline is the fluctuation in the nature of marriage within the dynasty – Mayer Amschel R. worked hard to keep his descendants ‘in-house’, carefully arranging marriages to maintain high volumes of wealth, whilst keeping precise public knowledge of such wealth low. By the time the five strands of Rothschilds had born multiple generations, however, tight control of the family fortune was impossible to maintain.
The 21st Century Rothschilds are not public figures, but their financial heritage lives on in the world of banking. The Rothschild Group owns what is left of the investment house; its London branch remains on the same plot of land that Nathan R., second son of Mayer Amschel R. and London ‘ambassador’, bought up in 1811. The company now focuses more on investment advisory rather than banking and funding, although it does manage a few billion sterling worth of assets.
Other subsidiaries include Edmond de Rothschild, a private banking and wealth management firm, Swiss registered, but descended from the Parisian branch of the family. The bank provides financial advisory and management services to high net worth individuals and institutions. Its founder, after whom the company is named, was incidentally a prominent Zionist, and who pledged much capital to the promotion of the movement in its early days. Therefore, one could argue by extension that the family played an important role in the creation of the modern state of Israel. There isn’t a lot in world affairs that they haven’t been involved in.
For a local manifestation of Rothschild wealth and influence, the Natural History Museum at Tring in Hertfordshire won’t disappoint. Originally owned, developed and curated by Lionel Walter R., grandson of Mayer Amschel R. and son of British financier Nathan R., it is a personal museum of stuffed animals. The specimens were brought back to the UK by Lionel Walter R. and his immediate family; the grounds surrounding the house became famous for their exotic inhabitants, which included zebras (known to draw Baron Lionel’s carriage around the town). The museum was donated to the British state in the 1930s – any family that claim to have amassed such a fantastic collection and then donate it to the nation is probably worth some attention.