Better Than the Markets: Mutual Fund Managers’ Perceptions of the Rich

Abstract

This article investigates the cultural perceptions and the common sense held by Finnish mutual fund managers on the very wealthy and the rich in times of growing inequalities and increased wealth accumulation at the top. By studying the financial intermediaries on the shop-floor level, who embody the promises of popular finance, the article describes how fund managers working for the small investors make sense of the inequalities caused by financialization. In the research interviews analysed in the article, the mutual fund managers perceive the rich as a necessary and salutary part of the contemporary economy, whose function is to be and behave better than the financialized markets. This common sense concerning the rich helps to legitimize increasing wealth accumulation at the top, so that the fund managers’ perceptions of the rich embody an ideological coalition between the working financiers and the super-rich rentiers, a coalition that contrasts starkly with the promises of popular finance.

Introduction

The past decades have been characterized by a mass movement of middle-income households into investing. This intensification of access to the capital market – variously referred to as popular finance (Aitken, 2007), democratization of finance or financialization of the everyday (van der Zwan, 2014) – has been supported by both government projects and marketing schemes.

The shift turning the working and middle classes into consumers of mass-marketed financial products has also necessitated a new cultural outlook, laden with promises of personal financial security, affluence and shareholder democracy. One important instrument facilitating and embodying the trend has been mutual funds that pool the resources of small investors and deploy them in the capital markets. The worldwide net assets of such funds have seen significant growth over the past decade, as their assets more than doubled in less than 10 years (Investment Company Institute, 2021).

The broadening of access to the capital market and the promises it has carried for ordinary households, however, has not meant a reduction in wealth inequalities. On the contrary, many economists have described how simultaneously with the rise of popular finance, the levels of inordinate accumulation of wealth at the top have also been on the rise. The data available on fortunes of different sizes suggest that there are important economies of scale in the management of wealth (Chancel et al., 2022: 15; Piketty, 2014). In recent decades, the largest fortunes have grown at higher rates than wealth on average. More than other groups, the very wealthy profit from active wealth management, exclusive investment opportunities and offshore services (Harrington, 2016), making them the primary beneficiaries of the financialized economy. Consequently, even though asset ownership has become part of the middle-class lifestyle and class in general is increasingly determined by one’s relationship to assets, ‘[o]nly the top layer of population, holding diversified asset portfolios that benefit from various forms of preferential tax treatment, may be said to approximate an ideal of asset ownership’ (Adkins et al., 2020: 10), or its utopian promise. In short, there is a tragic cultural paradox in the contemporary financialized economy. Investor populism and optimistic belief in the democratization of finance have spread at the same time as wealth inequalities have grown with ever higher rates of return for the wealthiest.

Despite these trends that seem to connect the democratizing promises attached to financialization with economic inequalities, growing rent-seeking and the privileges of the top groups, we know only little of what those professionals working for the ordinary investors think of these paradoxical developments. How do financial professionals perceive the situation in which accumulation of wealth accelerates at the top while the lower-income groups are encouraged to participate in the financial markets? To shed light on this, the present article investigates the cultural assumptions of Finnish fund managers working for mutual funds about the very wealthy and their wealth accumulation.

By studying the financial intermediaries on the shop-floor level of the financial markets, namely mutual fund managers outside big financial centres, who in many ways embody the promises of popular finance, the article describes the common sense of those market actors who are supposed to work for the small investors. It analyses the cultural frames that mutual fund managers employ to make sense of the consequences of financialization, vis-a-vis growing wealth inequalities, in a country where mutual funds play a significant role in the popular legitimation of the financial markets, with around one-quarter of the adult population investing in such funds (Finance Finland, 2022). Finland offers an ideal context for a case study on the perceptions of ‘ordinary fund managers’ for two specific reasons. First, Finland is an example of a country in which the top groups have recently benefitted greatly from capital income derived from asset ownership. The top groups have strengthened their position significantly in recent decades thanks to their asset ownership. This has challenged the Nordic tradition of egalitarianism, putting cultural frames concerning economic inequalities and the rich in flux. Second, popular finance has simultaneously gained significant ground in the country, with mutual funds attracting large numbers of investors. This cultural conjuncture that combines growing wealth disparities with a rising interest among the population in investing creates an intriguing context for the possible emergence of a new common sense concerning wealth accumulation.

The article argues that the mutual fund managers primarily see the wealthy as a necessary and salutary part of the economy rather than as a possible challenge to economic equality or financial democracy. They perceive them as rectifying many of the drawbacks of the (financial) markets, so that the function of the (ultra-)high-net-worth individuals is to be and behave better than the markets. The article describes how their common sense concerning the rich helps to legitimize increasing wealth accumulation at the top. In so doing, the article shows how financial intermediaries occupied with wealth creation for the so-called ordinary investors, legitimate extreme wealth accumulation in a country with relatively modest, but rising, wealth inequalities and a wide interest in investment funds. This constellation, in which those who allocate small investors’ assets perceive a need for the rich to supplement the markets, simultaneously affirms the current state of the markets, their drawbacks and what could be seen as their excesses. Out of the common sense of the fund managers emerges a view that can be seen as populism for the rich. The fund managers’ perceptions seem to embody – or at least pave the way to – an ideological coalition between the working financiers and the super-rich rentiers, a coalition that is in striking contradiction with the promises of popular finance.

Fund Managers and Cultures of Inequality

Fund managers working for mutual funds are financial professionals tasked with managing other people’s money. They are an increasingly important group of professional investors as the worldwide total net assets of regulated funds have grown significantly in the past decade. In 2020, such funds collectively managed around US$63 trillion globally, compared with US$28 trillion in 2011 (Investment Company Institute, 2021). Mutual funds pool the resources of small investors and as such form a key component of popular finance (Aitken, 2007; van der Zwan, 2014). Exploring and understanding the cultural perceptions of mutual fund managers is, thus, important not only for understanding the financial markets but also the hegemonic logic and the common sense of the contemporary financialized societies.

Such work has been done, in part, in the sociology of finance, a growing area of research in which scholars have offered sociological perspectives on financial markets and professionals (Boussard, 2019a; Knorr Cetina and Preda, 2012; MacKenzie, 2006). So far, the majority of such studies, however, have focused on the performative nature of the financial markets, their products or models rather than on the cultural perceptions or mindsets of the market actors (Boussard, 2019a). This also applies to fund managers; they have mostly been studied from the perspectives of their decision making, professional practices and working patterns (Boussard, 2019a; Porter and Trifts, 2014), with an emphasis on the role of story-telling and narratives in their work (Chong and Tuckett, 2015; Eshraghi and Taffler, 2015; Tuckett, 2011). The broader cultural perceptions of fund managers and their views regarding the consequences of financialization have hardly been examined. Consequently, little is known about the common sense that organizes the views of this profession in times of rising inequalities generated by asset ownership at the top.

This gap in the research is surprising, given the decisive role of fund managers in our highly financialized societies. As Boussard (2019b: 1) writes, ‘capital allocation mechanisms cannot operate without the people who plan, organize, select etc. these mechanisms’, making the cultural frames that these professionals hold an important aspect of the markets and our societies. Fund managers allocate capital in global markets continuously, essentially determining the direction of investment flows. They also connect households and financial markets, and the frames they set for these relationships (re-)organize the market itself and popular understandings of it, rather than merely enact them. Like other markets, ‘financial markets can be considered as an institution and its concomitant norms cannot be understood without focusing on those who embody the very dynamics of the institution’, as Boussard (2019b: 5) notes.

Consequently, this article aims at a better understanding of the ‘cultural ethos that sustains a dominant financial order’, a task set for research, for example, by Simpson (2019: 1063). Simpson (2019: 1063) argues that the recent focus on financial crises in cultural financial studies has overlooked ‘the everyday cultural practices and rule systems, enacted by individuals and groups’. Instead of focusing on crises, the field should ‘begin to establish a lens of analysis that foregrounds models of practice, socialisation and dimensions of power in the cultural reproduction of financial markets’ (Simpson, 2019: 1063). Thus, the approach to financial markets used in this article is interested in the structures of thought that support or reproduce certain social formations: in the case of this article, that of increasing wealth accumulation at the top.

In contributing to filling these gaps, the article draws on the recent theoretical work in sociology on how cultural processes contribute to the production of economic inequalities (Lamont et al., 2014) that has gained new momentum, also in elite studies (Hecht, 2022; Kantola and Kuusela, 2019; Kuusela 2022; McCall, 2014; Savage, 2015). Recent sociology of elites has often taken a culturally oriented approach, assessing how cultural mechanisms contribute to the reproduction of different elites (Adamson and Johansson, 2021; Khan, 2013; Sherman, 2017).

Theoretically and methodologically, such empirical research aims at documenting either elite or everyday ‘frames’ and ‘schemas’ regarding the subjective and inter-subjective perceptions, meaning-making processes and cultural scripts through which different actors make sense of inequalities (Lamont et al., 2014). Like scholars of cultural economy, who have explored the ways in which culture is central to the making of economic spaces and objects (Aitken, 2007; Du Gay and Pryke, 2002), such research describes the constitution of cultural processes that may help to maintain and legitimize new levels of inequality at the top. Instead of viewing economic inequality as existing independently of descriptions and legitimations of it, the turn to culture means a theoretical reversal of this perception, by indicating the ways in which human practices are constituted through discourses used to describe them (Du Gay and Pryke, 2002). According to such a theoretical stance, processes of inequality are seen to operate not only through controlling material resources but also through shared cultural structures by which individuals make sense of their environment (Hecht, 2022; Lamont et al., 2014: 575). One may also refer to inequality regimes, which Piketty (2020: 2) defines as sets of ‘discourses and institutional arrangements intended to justify and structure the economic, social, and political inequalities of a given society’. Rather than simply providing a context, the cultural processes through which economic inequalities are made sense of are seen as constitutive of the economic regimes and actions that produce them.

One way to approach such cultural scripts or regimes is the concept of common sense (senso comune), as used by Antonio Gramsci and his followers in Cultural Studies. On a basic level, the term refers ‘simply to the beliefs and opinions supposedly shared by the mass of the population’, as Crehan (2011: 274) notes, but for Gramsci it is above all a term designated by contradictions. Common sense is ‘a chaotic aggregate of disparate conceptions’, an ambiguous, contradictory zone of experience (Gramsci, 1971: 422). Its ‘most fundamental characteristic is that it is a conception which, even in the brain of one individual, is fragmentary, incoherent and [inconsistent], in conformity with the social and cultural position of those masses whose philosophy it is’ (Gramsci, 1971: 419, translation modified by Crehan). The term can and has been used to analyse the various dimensions – rational and emotional, cognitive and practical, conscious and unconscious – in which both the mechanisms of domination and the elements that may resist them operate. The notion of common sense is, thus, particularly appropriate for analysing the (often) contradictory notions attached to the rich that help the financial intermediaries to affirm the status quo of the financial markets. This article argues that it is of paramount importance to understand how those working for the ordinary investors in mutual funds construct a common sense that helps to incorporate inordinate accumulation at the top into the system that draws its legitimation from the promises of popular finance.

The Case, Data and Methods

Despite financial markets being global in nature, research on them has surprisingly often concentrated on so-called financial centres. We know relatively well how financial intermediaries on Wall Street (Ho, 2009) or in London City (Hecht, 2022; Simpson, 2019) work and think, but very little of how ‘ordinary professionals’ make sense of their surroundings. Rather than focusing on the alpha-professionals of the financial centres, this article describes how the non-elite financial professionals in Finland perceive the tendency of the financial markets to accumulate wealth. Mutual fund managers can be seen as a prudent and conservative profession compared with hedge fund managers, for example. This way the article shares a starting point with those scholars who are more interested in ‘the law-abiding bankers and fund-managers’ than ‘the egos or testosterone levels’ of the very top practitioners (Lin and Neely, 2020: 4). As Lin and Neely (2020: 4) state, ‘the connection between finance and inequality runs wider and deeper than excessive greed and reckless behaviour’. With this in mind, the article analyses those professionals who see it as their main task to generate revenue for their middle-class customers and who do not necessarily identify themselves as the financial elite (or the rich), even if in the local context they often are.

By choosing Finland, a Nordic country with high levels of popular finance, a strong tradition of egalitarianism and small income but growing wealth disparities driven by the top groups, the article not only describes a less studied corner of the financial markets, but also investigates possible moments of rupture in perceptions concerning affluence and the rich.

As a Nordic welfare state, Finland has historically been characterized by a strong social pact between different income groups, and the income disparities in Finland largely diminished after the Second World War (Atkinson et al., 1995). However, after decades of decline, economic inequalities in Finland grew rapidly in the 1990s (Riihelä et al., 2010). With market liberalization, an economic crisis and tax reforms, new levels of economic inequalities and inequitable prosperity emerged. Along with other countries, Finland has witnessed an increase in top incomes and top wealth since the early 1990s. The top 1% saw their real incomes increase by 208.8% between 1990 and 2007, whereas the average income increased by only 40.7% (Riihelä et al., 2010).

When the composition of the top incomes is explored, Finland follows the development described by Piketty (2014) in the growing role of rent-seeking: a significant part of income in the top groups consists of low-taxed capital income, indicating that it is not primarily through wage labour – but the financial markets – that the top has increased its share. Our study on the top 0.1% of Finnish earners between 2007 and 2016 showed that this group received almost two-thirds (61.6%) of its income in capital income (Kuusela and Kantola, 2020) – a significant number compared with that of the population on average, which received only 10% of their income in capital income (Tuomala, 2019). Even the lowest quartile of the top 0.1% of earners received more capital income than an average Finn earned per year (Kuusela and Kantola, 2020). The development has also been fast; the 1% of the population with the highest capital income received about 14% of the total capital income in 1971, about 20% at the beginning of the 1990s and 35% in 2004 (Riihelä et al., 2010). In other words, Finland is a prime example of an economy in which the top groups have benefitted greatly from asset ownership and the financial markets. One reason for this is that share ownership is highly concentrated in Finland. In 2015, the richest 0.01% of the entire Finnish population (547 individuals) owned 24% and the richest 1% (54,717 individuals) 77% of the investment wealth of individuals (Keloharju and Lehtinen, 2015).

In the midst of such figures showing wealth concentration at the top, from the perspective of the popular legitimation of the financial markets, mutual funds play an increasingly important role in Finland. At the same time as the top groups have increased their shares, the number of individual investors has been steadily on the rise. This is largely due to mutual investments funds. When this study was conducted in spring 2022, around 1.2 million Finns were investing in such funds, that is, about one-quarter of the adult population. At the time of the study, the fund capital of the investment funds registered in Finland totalled approximately 160 billion euros, in a country with some five million people (Finance Finland, 2022).

For this study, altogether 25 mutual fund managers were interviewed. The interviewees worked for UCITS (Undertakings for the Collective Investment in Transferable Securities) or special investment funds. Originally 29 interviews were conducted, but as four interviewees worked for private-equity instead of mutual funds, they were not included in the analysis. The interviewees mostly dealt in equities and bonds, but some also bought and sold real estate or forest, for example. They used a combination of active and qualitatively based strategies and invested in every major world market, often with an emphasis on the Nordic markets. They worked for 19 different companies. All participants were white. Twenty-three of them were male and two were female, reflecting the male dominance of the occupation, but perhaps also women’s more hesitant approach to such interviews. The respondents had worked between six and 40 years in the field, the average work experience being 20 years. Most of the interviewees had an annual gross income between 100,000 and 150,000 euros, while seven of them had incomes of over 200,000 euros. This means that most of them belong to the top 2% of earners in Finland (and part of them even to the top 0.5%), but their incomes are nowhere near to those of the people working in the top positions in the financial centres (see, for example, Hecht, 2022). Their reported wealth ranged from 180,000 euros to over six million euros. Eight respondents reported having over one million euros, which puts them among the high-net-worth individuals (HNWI) discussed in the interview frame. The interviews were followed by a short online questionnaire, where information on income, wealth and the number of work years in the sector was obtained. To protect the interviewees’ personal data, and to comply with the GDPR regulations, these data were collected anonymously, so that the information provided in the questionnaire could not be linked to individual respondents. Allowing the respondents to provide the information anonymously was also considered sensible, as for example wealth and income are often considered sensitive topics. This choice limited the possibility to analyse the interviews against social variables, but it was considered the most fruitful and ethical decision.

The interviews were semi-structured interviews, in which the participants were asked about their work, decision making, investment strategies and how they understood the basic functions of the financial markets. The research complied with all relevant ethical guidelines of The Finnish National Board on Research Integrity TENK and GDPR regulations. Data were collected after participants gave informed consent to participate. To comply with the promises regarding anonymity, in this article pseudonyms are used.

In the interview frame, the rich were referred to as affluent or as high-net-worth individuals (HNWI) and ultra-high-net-worth individuals (UHNWI), defined as people having at least US$1 million or US$30 million (excluding their primary residence) in investable assets. The words rich or super-rich were not used. The tone of the interviews was neutral. The interviewees were, for example, asked how they perceived the role of the HNWIs and UHNWIs in the economy and whether they could be said to influence the allocation of investments.

Data analysis adopted a hybrid approach to thematic analysis (Fereday and Muir-Cochrane, 2006). This means the data were coded according to themes identified as important a priori, but also in compliance with the principles of grounded theory according to themes that emerged while coding. This article focuses on those coded passages that included discussion on the wealthy. After the first round of coding (open coding), passages concerning the wealthy were re-read and the main frames concerning inequality were identified (axial coding). To identify patterns of variation, a spreadsheet was used to generate a data matrix (Crabtree and Miller, 1999; Miles et al., 2013).

By choosing Finnish mutual fund managers as the object of study, the aim of the research was to approach the common sense of the financial markets at the shop-floor level. As professionals, fund managers are supposed to increase the wealth of their clients, but they are not dedicated to serving specifically the rich. In this they differ from wealth managers and private bankers, who have recently attracted scholarly attention (Beaverstock et al., 2013; Harrington, 2016; Higgins, 2021). Unlike wealth managers, the interviewees in this study do not have a direct professional interest, nor specific bonds of loyalty, to the wealthy, but they are nevertheless an important part of the institutions that create revenue for asset owners in general. They are, thus, supposed to deliver on the promises of investor populism, according to which everyone has an equal opportunity to benefit from the markets, but they do this inside an industry that undermines such promises.

Findings

Wealth Is Good as It Trickles Down

The mutual fund managers interviewed in the study explain and legitimize wealth accumulation at the top, with the help of various cultural frames. Their common sense is constructed from different, often mutually contradictory, fragments of arguments that portray the wealthy as different from others.

Research so far on the legitimization of wealth has focused on three sets of argumentation, concerning whether or not someone is seen as deserving their riches (Kendall, 2005; Rowlingson and Connor, 2011). Wealth is typically seen as deserved depending on the uses to which it is put, on its origins and on the behaviour of the wealthy. The fund managers interviewed follow these patterns, but they also connect the wealthy to the operations of the markets in ways that help to further legitimize them as market actors. The common sense of the fund managers is often constructed around an idea that the wealthy are somehow better than the markets and other people.

In the interviews, accumulated private wealth is translated into various socially and morally valued processes deemed to benefit society at large and helping to avoid the pitfalls of the financial markets. The majority of the respondents take the view that the rich are beneficial to societies and their productive sectors. Many share some sort of a trickledown ideology, according to which wealth is essentially a good thing, no matter how it is distributed, because it is believed to trickle down.

It is ‘nobody’s loss’ if some have accumulated wealth, as one interviewee, Matti, states (the Finnish names used are pseudonyms). Similarly, Olli says that ‘of course it is on average nicer that the more wealth you have in a society, the better it is for everyone’. ‘The entire society benefits if people succeed. It is important’, says Esa, a third interviewee. Yet another fund manager thinks ‘that if wealth grows – whether it is thanks to one person or five million people – it boosts economic activity and improves everyone’s well-being, for sure’ (Ville).

These views are often not explained in more detail, but when explanations are given, the rich are presented as important investors, job creators, taxpayers or philanthropists who help to ‘grow the pie’ (Mika). Such reliance on a vague idea that wealth will ultimately trickle down is a good example of the Gramscian common sense, as something that gets constructed somewhere between folklore and science. For Gramsci, common sense derives from the sedimentation left behind by previous philosophical currents (Liguori, 2021) and is, thus, ‘enriched by scientific notions and philosophical opinions which have entered into common usage’ (Gramsci, 1992: 173). The trickledown mantra can be perceived as such common sense that for Gramsci (1992: 173) ‘stands midway between real “folklore” (that is, as it is understood) and the philosophy, the science, the economics of the scholars’.

In the following, the different attributes ascribed to the wealthy are discussed in more detail as three different frames that help to explain why – in the views of the fund managers – the wealthy are needed. In all the frames, the wealthy are portrayed as being and behaving better than the markets or other economic actors, which confirms their entitlement to large fortunes. All the frames analysed appear in more than half of the interviews, without them having been introduced through the interview plan. They are, in other words, frames emerging from the interviews and identified during coding.

Use of Wealth: The Wealthy as Long-Term Risk-Takers

Many fund managers seem to think that accumulated private capital is greatly needed for the corporate sector to prosper. This view is common among the interviewees even if many of them invest in corporate and government bonds, thus pooling and allocating capital to the productive sectors. Accumulated private wealth is needed, many argue, because the investment patterns of the rich are more beneficial to society than those of the financial markets in general, including the funds the interviewees manage.

With their supposedly long-term approach to investing, the rich are seen as having a balancing function in the economy. ‘Maybe they have a somewhat balancing role’, says Juha, referring to HNWIs and UHNWIs. Another manager, Risto, presents the wealthy as ‘proponents of long-term, traditional investing’, instead of ‘running after and fortifying the hottest investment trends’. The rich ‘can be more patient . . . and their horizon is kind of long, so that they hustle little less [than others]’, says Sami.

Because of their long-term horizon, many perceive the rich as an important component of, or supplement to, the financial markets. ‘I think their role is quite important as on average they invest shrewdly and make long-term investments’, says Pekka, who focuses on stocks and real estate. He takes the view that the rich are more balanced in their judgements, ‘more skilful’ and ‘more informed’ than small investors ‘who only understand profits, as big profits as possible’.

This long-term-oriented and prudent approach, somewhat paradoxically, is often linked to an idea that as investors the rich are ready to take bigger risks than others. One fund manager, Ville, explains:

Some [of these] people have a very committed role in the development of society and also in the development of businesses. They also have the opportunity to take risks that perhaps normal investors don’t have, because they have so much money. They are able to make large allocations, even to slightly larger projects, where the risk prospects are high, without compromising their own standard of living.

Unlike the financial markets and ordinary investors, the rich are committed to society. ‘Maybe [they have] a desire to build long-term businesses, so that [new] finance is given to risk-ridden long-term projects’, says Juha.

The rich are presented as making ‘direct private equity investments in start-ups’ (Pekka), or working as business angels creating knowledge clusters (Pasi). They ‘have the ability to understand the business and their own field of knowledge particularly well and an ability to be innovative’, so that ‘they often have an important role in supporting new companies and new capital formation’. As such they have ‘a very significant role in creating incremental value’ (Lauri). According to yet another interviewee, they can ‘more easily take start-ups and unlisted companies [into their portfolios] and start to build them as investors’ (Kimmo).

More than half of the respondents refer to the rich as important funders of start-up companies. On some occasions this is used to legitimate calls for further wealth accumulation at the top. Veikko, specializing in corporate bonds, thinks that ‘in Finland we kind of lack rich people and this hinders capital formation and economic development’. He makes a comparison with Sweden and Norway where there are ‘rich people who have the opportunity to make investments and buy companies and develop them, but in Finland we don’t quite have that’. According to him, ‘reining in the options of the super-rich constrains the economy and I think that one of the problems in Finland is that we do not have enough ownership’.

In a similar vein, Erkki refers to an American commentator, who had argued against taxing the wealthy:

because these UHNWIs are the only ones who can take so much risk that they are extremely important for the start-up entrepreneurs and others, as they can invest in operations in which an average person does not dare to. It might sound far-fetched, but on average it is true that the wealthy can more courageously participate in all kinds of things.

In the fund managers’ argumentation, the rich are simultaneously presented as more risk-taking and as people with a more long-term horizon than the financial markets or investors in general. This confusing, even partly contradictory, combination of views demonstrates how common sense gets constructed. For Gramsci the messy conglomerate that is common sense – precisely because it is not any kind of systematic whole – must be teased apart and its separate elements analysed (Crehan, 2011: 283). The elements of common sense of a specific social stratum (Gramsci, 1992: 173), can only be discovered through careful empirical analysis; they cannot be assumed to exist a priori. This radically open way of approaching lived reality reveals how even those fund managers who specialize in corporate bonds – and are thus occupied in their daily work with providing capital for the productive sectors – suggest that the rich are needed to provide fledgling companies with opportunities.

Their wealth is perceived as capital that is more effectively and more intelligently cared for than the dispersed capital of the financial markets, for which the fund managers themselves are responsible. Some present the rich as morally and intellectually superior, while others simply think that they are in a better position to take risks. Irrespective of whether it is their personal qualities or their relational position that is stressed, the result is the same: accumulated private wealth in the hands of the few is needed because it rectifies the drawbacks of the markets.

Origins of Wealth: The Wealthy as Engines of Economy

The image of the wealthy as risk-taking and committed investors whose investments benefit everyone reflects the more general perception that the fund managers have of the rich. Despite the growing role of rent-seeking and the significance of inherited wealth among the super-rich (see, for example, Beckert, 2022; Piketty, 2014), in effect, most respondents equate HNWIs and UHNWIs with (what they see as) innovative entrepreneurship. Images of the rich are dominated by a handful of charismatic entrepreneurs, whereas references to dynastic wealth are rare in the interviews.

More than half of the interviewees mention (without prompting), in the context of HNWIs and UHNWIs, either Elon Musk, Bill Gates, Mark Zuckerberg or Jeff Bezos. In addition to these four names, only Warren Buffet, four Finnish billionaires and one family are mentioned by name – these being Pekka Herlin, Antti Herlin and Ilkka Herlin (owners of the Kone and Cargotec companies), a figurehead of the financial sector, Björn Wahlroos, and the Laakkonen family.

Of the world’s more than 20 million HNWIs and the approximately 200,000 UHNWIs (Capgemini, 2021), the interviewees associate the top groups almost exclusively with a few US-based tech-entrepreneurs who enjoy enormous publicity. In contrast, the owners of family fortunes (with the exception of the Herlins), retail or consumer goods magnates, such as Jack Ma, Dieter Schwarz and Jim Walton, or financiers, are not mentioned in any of the interviews. Discussion on accumulated wealth is dominated by a few white men who have made their wealth in the past few decades in the USA. They are used as examples of people who have greatly benefitted societies and ‘changed humankind’ (Mikko).

This way private wealth accumulation is primarily understood as a consequence of individual giftedness and perceived through the meritocratic lens of hard work, typical for American-born and Schumpeter-inspired cultural narratives, in which ideals of individuality and the enterprising self foster entrepreneurialism (Gill, 2013). In Europe, the entrepreneur has historically been a more controversial figure, but in the second half of the 20th century, entrepreneurialism became a more prominent political aim, first in the United Kingdom and later across the Continent. Thatcher’s ‘enterprise culture’ had strong moral overtones valorizing the autonomous self in the economy (Heelas and Morris, 1992: 1–3), something that is strongly reflected in the common sense of the mutual fund managers. Such meritocratic interpretations of deservingness are also common findings in the sociology of elites (Kantola and Kuusela, 2019; Khan, 2013; Sherman, 2017).

One fund manager, Pekka, refers to the super-rich entrepreneurs as the engines of the economy:

There are those who have made it all themselves, built something great and glorious that everyone wants to buy. We can talk, for example, of Bill Gates or Pekka Herlin [the late father of the now richest siblings in Finland] – of course it was his father who probably founded [the company] Kone, but he nevertheless built it into a gigantic corporation. Antti Herlin [his heir and the richest person in Finland] continued to do an excellent job. Such people are the basis of capitalism who build the economy – you may notice that I admire [those] who really put themselves out there and develop something new. No doubt they are still the engine.

Similarly, Lauri equates wealth accumulation with entrepreneurial activity:

If someone is an UHNWI, that tells us that wealth has been accumulated from somewhere. And where is this somewhere? Well, we can perhaps generalize like this: there is a company and an entrepreneur who has, for example, managed to list his company or managed to sell it and the capital has been accumulated through that. When it is accumulated like this, well, it tells already that we are talking about a very important thing from the perspective of the national economy.

In addition to such entrepreneurs, some interviewees also mention inheritors and lottery winners – who are curiously enough mentioned several times as interchangeable categories – as other types of rich, but they are always represented as marginal categories compared with the entrepreneurs.

The focus on entrepreneurship and the accompanying arguments can be interpreted in the context of entrepreneurial or enterprise culture (Heelas and Morris, 1992), but also of extreme meritocracy, as discussed by Piketty (2014). In the frame of extreme meritocracy, fortunes of any size are legitimized and perceived as beneficial because they are seen as deriving from entrepreneurial activity. In referring to the charismatic exceptionality of contemporary entrepreneurs – or the wealthy – the interviewees seem to share the belief ‘that extreme wealth inevitably signifies personal “giftedness”’ and is therefore vital for economic dynamism, as McGoey and Thiel (2018: 119) note in relation to charismatic leadership, ‘rather than reflecting structural advantages afforded by family connections, cultural and symbolic capital and extensive government welfare in support of corporations and “high-worth” individuals’.

For the fund managers, the rich are not only better than the markets, but also more generally better – in their entrepreneurial spirit – than people on average, a view that gains strength when the fund managers discuss the philanthropic activities of the rich.

Behaviour of the Wealthy: The Wealthy as Philanthropists

In addition to the laudable and committed investment patterns and entrepreneurialism, philanthropy also figures widely in the common sense of the fund managers, constituting yet another frame through which the wealthy are morally elevated. The interview frame included no references to philanthropy, but more than half of the interviewees refer to it in the context of the wealthy. Such focus is somewhat surprising given the Finnish context in which philanthropic giving has traditionally played only a modest role compared with welfare state mechanisms. Hence, the discussion on philanthropy can be interpreted as another sign of the symbolic power of the charismatic entrepreneurs and their prominent role in the imaginaries surrounding the rich.

Pekka explains how:

globally, it seems to be fairly normal that people who have billions or tens of billions also do quite a lot of philanthropy. . . . There are people like Bill Gates and Jeff Bezos, who have tens or hundreds of billions and who also give away several billions a year to philanthropic objectives.

Philanthropy is thus presented as one more beneficial consequence of accumulated private wealth, even though references to the extent and impact of such activities are often vague. As Mikko says: ‘One part of the rich are engaged in operations that are beneficial more broadly. They support the arts and science, or found a nature reserve.’

Mika takes the example of the USA, noting that:

the ultra-wealthy clearly have, how would I say, a philanthropic role . . . Quite often part of their wealth [is used to] found a foundation that can support some cancer things or famine in Africa (sic). . . . They take their social responsibility very differently from what most people can.

His main references are in the USA, but he continues by referring to the second richest person in Finland, Ilkka Herlin:

who gives quite a lot of money to projects in the Gulf of Finland, Baltic Sea projects and others. He, for example, buys an island in the Turku archipelago where sailors can come and where the environment is taken care of.

Another interviewee, Esa, mentions how those ‘rich we have [in Finland] have taken part, with high stakes, in many philanthropic activities and in activities that in general benefit society as a whole’.

The rich are presented not only as important market actors but as people who accomplish

big projects that benefit humankind. Bill Gates is a very big philanthropist. So that I do believe that responsible thinking has a very big role there. They are not necessarily profit-driven, but they may have different thoughts in the background. (Risto)

Such views, with their references to humankind, strongly echo the philanthrocapitalist discourses that ‘have embraced the idea that large-scale private wealth-creation is inevitably beneficial for humankind’ (McGoey and Thiel, 2018: 115–116). As McGoey and Thiel (2018: 117), writing on the topic, note, ‘today’s philanthrocapitalists defend private wealth augmentation as “naturally” beneficent in a manner that dispenses with even the need for obfuscation’. Whether it is the fight against cancer or African famine, or support for the arts and the Baltic Sea – all objects mentioned in the interviews – philanthrocapitalist mega-gifts inspire awe not simply on the part of the recipients of the gifts but also from those watching, like the fund managers in a distant country. The power of today’s mega-giving is thus much broader than enrolling the recipients of gifts into a moral relationship. Mega-giving produces symbolic power, as McGoey and Thiel (2018) note, that turns into the legitimation of great wealth.

The fund managers present philanthropy as one significant role of the super-wealthy – and even a reason to embrace their fortunes. This way today’s philanthrocapitalism produces a form of charismatic authority for the wealthy, echoing 18th-century political economy, according to which ‘enlightened’ self-interest helps to fuel an economic dynamism that inevitably improves living standards for all (McGoey, 2012).

Emphasis on philanthropy is another example of the tendency of the fund managers to legitimate wealth accumulation through the behaviour of the rich. This way private wealth accumulation is not primarily perceived as a structural issue – or a consequence of the financial markets – that has implications for the coherence of the societies, sense of equality or plutocratic politics, but rather as a question of moral worth and behaviour.

The same attitude is also reflected in the few critical remarks that the interviewees make on the wealthy, as such criticism primarily focuses on consumption behaviour. Direct criticism is seldom – if ever – levelled at the market behaviour of the rich, but rather at their consumption habits. When asked if some people may be considered to have too much money, Risto mentions excessive consumption as a negative phenomenon:

It is perhaps more a question of how it is used. If we think that Jeff Bezos bought a ship so big that in Rotterdam they have to remove a bridge to get it out to sea, well, I think a smaller one would have been enough.

Only few see the rich as a challenge for society, because of their potentially vast political power (Teemu) or because ‘they intensify wealth inequalities’ (Saara). However, these are usually sidenotes to more favourable arguments, not representing part of the common sense, which is rather a mixture of admiration and respect for the rich, who are mostly described in terms of charisma, intelligence, courage and commitment.

Conclusions

The Finnish mutual fund managers mainly describe the HNWIs and UHNWIs and their significance to the economy and society in positive terms. Their views echo Piketty’s (2020: 1) descriptions of the contemporary justificatory narratives for inequalities, according to which:

modern inequality is said to be just because it is a result of a freely chosen process in which everyone enjoys equal access to the market and to property and automatically benefits from the wealth accumulated by the wealthiest individuals, who are also the most enterprising, deserving and useful.

However, the fund managers add something to this narrative, thus demonstrating their own specific common sense, as according to Gramsci (1992: 173), every social stratum has a common sense of its own. From the data emerge views presenting the rich as actors better than the rest of us and – most notably – better than the financial markets for which the interviewees work. In the common sense of the fund managers, the markets are less innovative, entrepreneurial, risk-taking and future oriented than the rich, who can counter-balance detrimental trends and efficiently provide capital for those in need. The financial markets may cause inequalities, but the rich can also redress these with their philanthropy. The rich are also more long-term oriented and more patient than the markets or investors in general. Simply put, these frames can be interpreted as ways of legitimizing the side effects of the financial markets, but equally well they bear witness to a certain mistrust of the abilities of the markets to finance entrepreneurial, innovative activity. This creates a strong legitimation narrative for private accumulation, while leaving the logic of the financial markets unchallenged.

For Gramsci (1971: 423) common sense is ‘crudely neophobe and conservative’. It clings defensively to the comfortable and familiar. The common sense of the fund managers is constructed around such conservativeness, according to which even extreme accumulation (that from a critical perspective could be seen as a negative side effect of the financial markets) is in fact needed for the financialized economy to function in full. In the interviews, the rich are not presented as an externality to the functioning markets, but instead as an essential and necessary part of the financialized economy. These implicit and taken for granted assumptions that the fund managers at the grassroots level seem to hold regarding the rich are in a curious, if not contradictory, relation to their own work as professionals supposed to benefit the ordinary, small investors. Their common sense is, thus, constructed midway between the everyday belief in the beneficiary of the financial markets and an admiration of charismatic richness.

The common sense of the Finnish fund managers suggests that we all need the rich. This way their cultural perceptions of the rich seem to embody an ideological coalition between the working financiers and the super-rich rentiers, a coalition hardly beneficial for those believing in the democratization of the financial markets.