Bureaucracy and patrimonialism on Wall Street: How organizational forms contribute to elite reproduction

Abstract

Echoing the recent revival of elite studies, we ask how financialization shapes the composition of contemporary elites and how organizational mechanisms transform its characteristics in terms of class, gender and race. We ask whether the bureaucratization of finance contributed to a ‘purge’ of particularisms. Or to the contrary, whether class, race and gender have become more salient criteria of elite selection with the emergence of neo-patrimonial organizational forms? Using Orbis data on legal forms of financial firms, and original sociodemographic data on founders and managers in key firms, we show that neo-patrimonial organizational forms based on trust networks are spreading within finance. Moreover, we demonstrate the impact of organizational forms on elite reproduction along gender, race and class lines. White men with upper-class background are over-represented in neo-patrimonial firms – mostly found in the hedge fund and private equity industry − compared to bureaucratic firms mostly found in banking. We suggest that financialization is not a modernization process but a recombination of bureaucracy and neo-patrimonial logics.