I confess to joining in the condemnation of short-termism, of disapproving of corporate CEOs who seem mesmerized by the next quarter’s earnings. Whether or not institutional investors’ new enthusiasm for invoking “sustainability” like a talisman will change any hearts or minds in the C-suite, I am confident that longtermism — the inverse of short-termism — is beyond reproach.

Or at least I was. Leave it to the Nobelist and resident New York Times iconoclast Paul Krugman to be the exception to demur. “Maybe Washington is starting to get over its narrow-minded, irresponsible obsession with long-run problems and will finally take on the hard issue of short-run gratification instead,” he joked in his column back in 2015. But Krugman was making a serious point: Congress’s sometime-obsession with deficit spending was “a cop-out.” The real point of John Maynard Keynes’s quip about everybody being dead in the long run was to rebuke economists’ complacent attitude toward contemporary suffering.

If all this seems ripped from the pages of a 1990s copy of Newsweek, you’re not paying attention. Just think of Congressional opponents’ courageous defense of future generations, who under the wily liberals’ plan would be forced to shoulder the burden of debts accumulated to pay for universal preschool education, expanded Medicaid and other handouts to today’s unworthy masses.

Indeed, underlying this dance-of-time perspective are some weighty questions of economics, politics and philosophy. One that immediately springs to mind is just how much we owe to posterity to prevent the polar bears from dying or Miami being reclaimed by the Atlantic. But there are all sorts of puzzles lurking here. Another, oh-so-contemporary one that has caught my eye, not to mention the eyes of innumerable lawyers and financial advisors: how should the wealthy weigh the claims of their great-grandchildren — and how much should government policy facilitate transfer deep into the future?

To put such questions in perspective, we need a long-term history of long-term thinking — or so my graduate teacher William H. McNeill, one of the gurus of Big History, might have insisted. Channeling his spirit, a survey of time horizons is in order, from ancient Egypt through the European Middle Ages along with the way modern industrial societies tackle the questions. If the road sometimes meanders, it is because societies at different times, with different technologies and social structures, face similar challenges to centuries-long continuity.

Billions for Billionaires

Start with the present. Billionaires seem to grow on trees these days — or at least on IPOs. And Covid-19 just isn’t going to get in the way of anybody with an offer too good for Wall Street to refuse. In summer 2021, Forbes counted 2,755 billionaires worldwide, with 724 in the United States alone.

Great big fortunes in the hands of heirs do sometimes help create even deeper misfortunes. John du Pont’s murder of a wrestling coach inspired the film Foxcatcher. Meanwhile, the recently deceased New York real estate heir Robert Durst’s serial killings have provided the raw meat for both a feature film, All Good Things, and an HBO series, The Jinx (in which Durst inadvertently confessed on camera).

Of course, billionaires’ legacies rarely end with a bang. More typical is a whimper — as succeeding generations fritter away their fortunes on Gulfstreams, Aspen estates and divorce courts. Which raises the question troubling many founders: how can they transmit more wholesome values as well as money to generations yet unborn? Enter a relatively new, taboo-breaking American legal institution, the “perpetual” or “dynasty” trust, with no fixed term for distributing assets to beneficiaries.

Though familiar, perpetuity is a paradoxical concept. It is temporal, and not synonymous with eternity — a metaphysical or spiritual concept. Eternity has no beginning or end. Perpetuity is indefinite but will have an end, if only when the Earth does itself in, taking any surviving polar bears with it.

Rules, Rules, Rules

Under the radar of most policy debates on rising inequality, a quiet revolution has been transforming trusts and estates law. On the chopping block: the Rule Against Perpetuities. The Rule (we’ll leave it in capitals) is a common-law precedent, derived from a late 17th-century dispute among the heirs of the Duke of Norfolk. It holds that land (and today, other assets) cannot be held in trust for longer than the life of any person alive when the trust was created, plus 21 years. In practice, the Rule is one of the most complex to apply, but the purpose is clear: to limit the power of the dead over the living, and to ensure that property, especially land, is not removed from the marketplace for much more than a century.

While its origins were in English common law, the Rule Against Perpetuities morphed neatly into a showpiece principle of American democracy incorporated into the constitutions of many states. Ray D. Madoff, a professor of law at Boston University (no relation to him), has traced the movement to modify or repeal the Rule to the demise of a dandy inheritance-tax avoidance device called the generation-skipping transfer. (There seems to be a Newtonian principle in tax law that closing one loophole opens an alternate but equally outrageous loophole somewhere else.)

Congress began taxing generation-skipping trusts but pulled its punches in allowing a generous exemption — which in turn was used by clever lawyers to continue to avoid taxes. Yet, the tangled web they rewove in the form of multi-generational trusts inadvertently violated the Rule. The solution in the American system of competing state governments’ race to the bottom was to repeal or modify the Rule. This would generate additional business (and, heaven forbid, political campaign contributions) for states that got there first.

Thus was born the American “perpetual” or “dynastic” trust. To Madoff, the trend is nothing less than a brazen bid to establish a hereditary American aristocracy against the traditional notion — not necessarily honored in practice, but still an ideal — that each generation should make its own way through life.

Dynastic trusts are also un-American, critics say, because they shield heirs from many of the consequences of their own actions. The trust rather than the individual may own the houses, automobiles and yachts used by the heirs, making compensation for motor accidents, malpractice, and claims by exspouses for child support more difficult to pursue. If Robert Durst had been convicted of killing his first wife in 1982, her family might have not been able to collect from his trust fund in a civil action. One person’s family values can be another’s travesty of justice.

What makes perpetual trusts an even weightier issue than they were when Madoff published Immortality and the Law in 2011 is the magnitude of the impending transfer of wealth between baby boom parents and their adult children. Last July, the Wall Street Journal reported that Americans 70 and older had assets of $35 trillion — over a quarter of American wealth. Dynastic trusts are of course only part of that, and much of the cash is already going to philanthropies. (Madoff, by the way, has also questioned the social value of allowing the accumulation of vast tax-free endowments by universities and other non-profits. En garde, Harvard.)

The Age of Empires

Given the uncertain future of the Democratic majority in Congress and the principle that big money carries a big stick, it is much more likely that perpetual trusts will multiply than that they will be curbed. And perhaps the interesting question now is how to define the long term in terms of dynastic wealth and influence. Will this trend end with what Madoff and others have warned will be a new American aristocracy? A look at past efforts to control the distant future suggests a conclusion that will surprise both defenders and critics.

Consider the burial practices of the ancient Egyptians, which at first glance seem to have little to do with the tax strategies of aging, high-net-worth Americans. But they do have two things in common. One is the quest for immortality through rituals. American trust and estate lawyers and investment advisors are like the scribes who prepared Books of the Dead, cheat sheets for answering the questions and passing the tests at the threshold of the next world. The risk of being devoured by a crocodile-headed monster is gone, but the penalties of the IRS and state tax authorities sometimes exact for improper wording of a property conveyance can seem almost as severe.

Egyptians who passed into the great beyond insisted on taking along their physical remains to serve as home for the part of their soul called the ka. And the reliably dry desert climate has allowed thousands of these mummies to survive bacterial attack. Yet the durability of a mummy still could be precarious.

The Great Pyramid of Giza, completed for Pharaoh Khufu in 2566 BCE, had some of the most elaborate security precautions of any ancient monument, including false passages and massive granite blocks sealing the burial chamber. It was nevertheless robbed, probably during Egypt’s Middle Kingdom, which began about 1055 BCE, about 500 years after the pyramid was sealed.

Clearly the monumental size of the building, the tallest in the world for 4,000 years, was an advertisement of riches within. But the tombs of the Valley of the Kings (300 miles up the Nile), which were hidden underground to defend against looters, were still attacked. The survival of Tutankhamun’s golden sarcophagus and most of his grave goods was a rare exception.

Royal tomb-robbing was one of the worst sacrileges in Egyptian society, punished ferociously — yet it was common. One reason was simple greed. But another factor is as apt to sabotage best-laid long-term plans today as in antiquity: all it really took to undermine perpetuity was a weak Nile flood and resultant famine, which created desperation even among guardians of the tombs. A permanent collapse of society is not needed to disrupt long-term plans — just the kind of crisis that appears every 300 to 500 years.

The ancient Romans, for their part, created roads and aqueducts that have endured for millennia. Yet Roman society, too, was less stable than it appears to us now. Their apartment buildings probably lasted no longer than today’s cheap housing. They often had to be shored up to prevent collapse — and regularly did so anyway, as spectacularly recreated in Fellini’s Satyricon.

A Cambridge sociologist and classicist, Keith Hopkins, showed how the world of elite Roman families was also surprisingly mutable. Rome was a notoriously unhealthy place even for the elite, despite grand public baths and running water. So, unsurprisingly, only half of senatorial families held office for more than two generations.

Senatorial ranks were constantly replenished by provincial families. But under five percent of the families held office for six generations (figure about 150 years). Even the Roman state seems constrained by a kind of 500-year barrier: the Republic lasted from 509 BCE to 27 BCE, and the Empire ended almost exactly 500 years later in 476 CE, after multiple changes of dynasty.

European royal history also suggests the limits of dynasties. The Romanovs ruled Russia for little more than 300 years; their lavish tercentenary of 1913 was the last hurrah before the First World War and the rise of the competing Bolshevik dynasty. The Hohenzollerns did not have the rank of kings in Prussia until 1701. The Tudors ruled England less than 120 years, the Stuarts little more than 110. The Hanoverians did a bit better, staying on top from 1714 until Queen Victoria’s death in 1901. (They were succeeded by the present House of Saxe-Coburg-Gotha, understandably anglicized during the First World War as Windsor.)

In the New World, the Inca Empire did not last a century and a half before the Spanish conquest in 1521. The Aztec Empire, founded in 1428, was defeated in the same year. Only the Japanese imperial dynasty has a continuous history of over 1,000 years.

The Tortuous Road to Immortality

Perpetuity had its limits, even in spiritual matters. Late-medieval Catholics worried about purgatory. The Church taught that only a few saintly individuals were admitted directly to heaven. For the rest who did not die in mortal sin, even confession and receipt of last rites did not entirely remove the consequences of venial sins.

Over the centuries theologians have agreed on Purgatory as a state of purifying fire, and in the 16th century many authorities taught that the torments could be, as Augustine put it, “more grievous than anything a man is capable of bearing in this life.” Happily for the Church authorities, prayers and alms of the living could ease the path of dead loved ones to heaven. Because the duration of a soul’s time in purgatory could not be estimated, priests and monks received endowments to pray for the dead indefinitely.

In England, income from donations to support the celebration of masses for souls in purgatory were called perpetual chantries. (There were fixed-term chantries for the less affluent, too.) But best-laid plans of mice and Englishmen oft-times go awry: King Henry VIII’s reformation not only closed the monasteries but dissolved all the chantries in 1548 — only about 350 years after the first chantry was established.

A 500-year barrier affected even rigidly devout Catholic countries. When Philip II of Spain built his monumental palace-monastery, the Escorial, he provided for an order of resident monks, the Hieronymites, to pray for his soul in perpetuity. His last days, as described by the Yale historian Carlos Eire in his book From Madrid to Purgatory, were a model of Christian fortitude and devotion through extreme pain. He must have taken comfort in the prospect of centuries of prayers to be said for his soul.

Luckily for him, Philip II didn’t know what was coming. The authoritative 11th edition of the Encyclopaedia Britannica declares that the Hieronymite order “decayed during the 18th century and was completely suppressed in 1835” by the Spanish government. Thus, what has been called the “factory for the salvation of the royal souls” went out of business less than 250 years after the founder’s last rites. (I have not been able to discover whether or not the Augustinian order, which took the place of the Hieronymites in the late 19th century, resumed the royal prayers.)

Back to the Future

The time horizons of Old Dynasty pharaohs and Counter-Reformation monarchs suggest there are limits to perpetuity that even the most powerful have not been able to overcome. Have the rich and powerful done any better since?

Cultural endowments perpetuating family names seem relatively secure. Two of the oldest Oxford colleges, Balliol and Merton, bear the family names of their founders from the 13th century. Wadham College, founded by Nicholas and Mary Wadham in 1510, recently broke the 500-year barrier.

In American institutions, on the other hand, the term may be shorter than expected. In the 1990s, Leon Levy and Shelby White, a notably philanthropic couple, negotiated with Philippe de Montebello, patrician director of the Metropolitan Museum of Art, on terms of their gift of $20 million dollars for the creation of a new wing for Greek and Roman art. Before signing the gift “in perpetuity,” they asked de Montebello what that term meant to the museum, should a future director have other plans. “For you, 50 years,” was the reply. The parties settled on 75 years so that the couple’s daughter would not see it renamed in her lifetime.

Other donors have specified 50 years while keeping the right to pay again for renaming. At Princeton when an 1890s auditorium was remodeled for concerts, descendants of the original donor, Harriet Crocker Alexander, approved the formula, “Richardson Auditorium in Alexander Hall.”

In public buildings the tradition of perpetual naming rights has run up against the evolution of technical systems and standards (access, sustainability, period style and others), plus the ravages of inflation, so that naming rights will be coming up more often. When the New York Philharmonic Society determined that Avery Fisher Hall in Lincoln Center needed renovations that would cost $100 million, tenfold the original gift from the mogul of hi-fi home audio, it was necessary to rename the building after a more recent entertainment industry prince, David Geffen, who could absorb such a staggering construction bill. Avery Fisher’s three children agreed to the change in return for a $15 million quasi-refund.

The energy industrialist David Koch was more understanding in giving $100 million in 2008 to renovate the New York State Theatre. It was renamed in his honor, but only for 50 years. As Koch explained: “A naming opportunity should be a defined length of time to allow the institution to regenerate itself with another round of major fundraising.” (Too bad 50 years may be too long for the climate to await a savior from the Kochs.)

The human side of perpetuity is challenging in a very different way. Buildings slowly deteriorate and eventually need reconstruction, but descendants tend to multiply. There are two interpretations of the time horizons of dynastic wealth that should interest anyone planning to establish a dynasty — or to enact legislation to discourage the practice. They are less contradictory than complementary. They might be called Persistence and Dilution.

Power and Perpetuity

Would-be founders of perpetuities should take heart from recent polemics and scholarship. Start with the reality that the death of the aristocracy has been exaggerated. The British peerage has taken more than a few hits in its time. But far from withering under the pressure of war, taxation and public disapprobation, Labor MP Chris Bryant has pointed out that a third of all land in Britain still belongs to the aristocracy, and that the lists of major landowners in 1872 and 2001 were “remarkably similar.” Adam Smith, who wrote The Wealth of Nations under the financial patronage of the Duke of Buccleuch, would no doubt have been gratified to read in Bryant’s polemic “How the Aristocracy Preserved Their Power,” that, while Buccleuch Estates Ltd. has a token capital of £4, the trusts benefiting the present duke and his family have an estimated value of £200 million.

Bryant is biased, of course, regarding the hereditary lords’ ancestors as rapacious robber barons and believing that the 92 of them who remain in the House of Lords are 92 too many. A more balanced view of dynastic prospects has been offered recently by Gregory Clark, an economic historian at the University of California (Davis).

Clark concludes that the advantages of the upper class and inherited wealth have persisted far longer than anyone had realized, even in welfare states like Sweden. Families could retain their standing for centuries, not just in assets but in educational qualifications. Today’s wealthy will also be happy to learn that the British primacy in the industrial revolution owed much to the spread of upper-class ways of thinking as aristocratic bloodlines and habits spread within the larger population.

But the good news comes with some bad. Eventually descendants of the wealthy and intelligent merged into the population, so despite the impression of changeless classes, elites and masses were always in flux in both directions. Clark extends the influence of wealth on descendants well beyond the conventional point to the range of 300 to 450 years. If he is right, the famous phrase might be revised to read “Shirtsleeves to shirtsleeves in 15 generations.”

Clark thus presents a new version of the now-infamous work, Hereditary Genius (1864), of the pioneering evolutionary psychologist Francis Galton. Galton was appalled by the disappearance of exceptional talent in later generations of descendants of great thinkers and artists. (He ignored the much more interesting appearance of stealth genius, musical virtuosi and rocket scientists from generations of unremarkable peasants and artisans.) IQ testing did not yet exist, but he thought that intelligence was like height — that given intermarriage, the extremes would ultimately converge on the average in what statisticians refer to as regression to the mean.

Alarmed by this inexorable slide, Galton proposed eugenics, the planned marriage of outstanding individuals to create permanent elites. (In another paper, Clark has suggested that so-called assortative mating — more marriages within elites, fewer across class lines — may be creating a more rigid class structure without any help from eugenics, but it is probably too soon to say.)

Despite Bryant’s polemic, the economic mediocrity of a surprising number of British peers (titled nobility with a seat in the House of Lords) was indisputable. Indeed, before limits on the number of peers was imposed in the late 1990s, the Wall Street Journal pointed out that the institution was far more socially diverse than the U.S. Senate. It included a police constable, a former horse-racing journalist, a fish farmer and a fortune teller whose real title was Lady Strange.

To most founders of trusts, 300 to 450 years would be more than enough, which was exactly my point a dozen paragraphs ago. Perpetuity, unlike eternity, is finite. How many people buying cemetery plots reflect on how long “perpetual care” will continue after the last plots and mausoleum niches have been sold? In New York State, for example, payments for perpetual care typically are put into a trust fund, but cemeteries may ask families for further contributions if the fund’s income is inadequate for maintaining graves.

Trusts for descendants, if they do not follow the un-American British practice of primogeniture (inheritance by the first-born) face another challenge: the exponential growth of the number of descendants. Over two centuries ago, Benjamin Franklin wrote a letter, ostensibly to his daughter, exposing the challenges of founding an aristocratic line. The starting point was controversy over a new hereditary association of former American officers of the War of Independence, the Society of the Cincinnati, named in honor of a celebrated Roman citizen- general.

While Franklin probably did not share the anxiety of others that the Cincinnati were conspiring to make their descendants a hereditary nobility, he still felt strongly enough to weigh in. After multiple generations, Franklin argued, the connection to an individual ancestor is so attenuated that nobody has a right to claim a connection: “[I]n nine generations which will not require more than 300 years … our present Chevalier of the Order of Cincinnatus’s share in the then-existing knight will be but a 512th part.” Franklin was writing about honor rather than trust funds, but the same dilution would apply unless the family had generation after generation of brilliant managers who could avoid every calamity over centuries.

In a devastating working paper written in 2014, Lawrence W. Waggoner of the University of Michigan Law School listed this and other risks of perpetual trusts. Noting that the American Trust Law Institute had declared perpetual trusts “ill-advised,” Waggoner summarized: “The farther a perpetual trust moves in time beyond the traditional perpetuity boundary of about a century, the more the trust will become little more than one for thousands upon thousands of strangers, not only to the long-deceased settlor but also mostly to each other.”

Time horizons of 500 years, I surmise, are pretty much the practical and psychological limit. But special circumstances can sometimes help break the barrier. In 2020 the Fuggerei, a walled charitable housing complex in Augsburg, Germany, for pious and deserving Catholics founded by the local banking magnate Jakob Fugger the Elder, celebrated its 500th anniversary — and a Fugger heir (still in banking and head of the original foundation) was present. Behind this exception were at least two fortunate exceptions. The family has survived into the 19th generation after the founder with its original values. And the postwar boom of the Federal Republic of Germany provided enough wealth to finance rebuilding the complex after three-quarters was destroyed in the Second World War. (East Germany’s communist rulers probably would have torn the remainder down as a vestige of “feudal” noblesse oblige, as they did other monuments of the bad old days.) The residents are lucky, too, and probably say their contractual prayers for the founder’s soul enthusiastically. The annual rent, now less than a euro, has not changed since 1520.

* * *

Despite the mesmerizing power of tax lobbyists in the halls of Congress and of so many state legislatures, it is likely that over 300 to 500 years, even today’s billionaire families will lose their specialness. In the long run not only will we all be dead, but our descendants will at last be equal. Regression may be the new word for progress — and entropy may be the last best friend of equity.