Towards a Discipline of Cultural Asset Economics

A Structural Framework for Capital Durability

Modern finance is extraordinarily precise about pricing.

It is far less precise about durability.

We can model volatility, discount cash flows, measure correlation, optimize liquidity, and structure allocation with mathematical sophistication. Yet when confronted with a more fundamental question: why some capital structures endure across generations while others fragment within decades, our analytical vocabulary thins rapidly.

Why did the Grosvenor Estate preserve prime London land for centuries while countless landed fortunes dissolved under estate taxation and fragmentation?

Why did the Rockefeller fortune institutionalize after Standard Oil’s breakup, while other industrial dynasties dissipated?

Why does Hermès maintain scarcity and governance control in a global luxury market that absorbed many historic maisons?

Why do some family conglomerates survive succession events, while others fracture by the second or third generation?

These are not performance questions.

They are structural questions.

And modern capital theory does not explicitly address them.

🧭 Cultural Assets Are Structurally Different

A cultural asset is not simply a property, brand, enterprise, or infrastructure platform.

It is an asset whose value is embedded in:

• Cultural continuity

• Institutional alignment

• Governance architecture

• Intergenerational compatibility

• Ownership durability

These assets are not designed primarily for quarterly liquidity.

They are designed, implicitly or explicitly, for permanence.

Luxury maisons. Landed estates. Foundation-controlled enterprises. Multi-generational family conglomerates. Long-duration infrastructure platforms. Strategic real estate portfolios embedded within political regimes and civic identity.

They function as capital anchored to culture.

Yet the financial system that evaluates them remains structurally optimized for exit, liquidity, and short-duration comparability.

That mismatch is structural.

📉 The Structural Blind Spot

Traditional asset analysis focuses on:

• Return

• Risk

• Liquidity

• Valuation

• Allocation efficiency

These dimensions are necessary.

They are not sufficient.

Durability across generations introduces additional structural forces:

• Ownership friction

• Succession fragility

• Governance design

• Estate taxation exposure

• Cultural decay risk

• Political regime shifts

• Exit optionality under stress

These variables rarely appear in discounted cash flow models.

Yet they frequently determine whether capital maintains continuity.

Markets price volatility.

They do not price generational discontinuity until it is irreversible.

In practice, a tightly governed luxury house may exhibit greater structural durability than a widely held infrastructure vehicle exposed to redemption pressure, even if short-term returns suggest otherwise.

A landed estate embedded in legal continuity may outlast higher-yielding real estate platforms that lack coherent transfer architecture.

Valuation captures price.

It does not capture structural compatibility with generational time horizons.

Markets are efficient at repricing volatility. They are inefficient at anticipating succession.

In a century defined by demographic transition, regulatory recalibration, geopolitical fragmentation, and the largest intergenerational wealth transfer in modern history, durability is not philosophical.

It is structural.

🔎 The Five Structural Lenses

In Cultural Asset Economics: A Structural Framework for Durability, Ownership, and Intergenerational Risk (SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5939095), I introduce five diagnostic lenses.

They are not predictive signals.

They are structural diagnostics.

Cultural Asset Durability (CADI)

Can the asset remain culturally and institutionally embedded across time?

Ownership Friction (OFI)

How much coordination cost or governance burden is embedded in ownership?

Generational Transfer Risk (GTRI)

What is the probability that succession events destabilize or fragment the asset?

Exit Optionality (EOI)

Does the asset maintain viable liquidity pathways under stress?

Cultural Yield (CYI)

Does the asset generate intangible reinforcement that strengthens continuity?

Together, these lenses create a comparative language for capital durability across:

• Landed estates and family conglomerates

• Luxury brands and infrastructure platforms

• Foundation-controlled enterprises and publicly diluted corporations

• Sovereign capital and private dynastic wealth

This framework does not attempt to predict returns.

It introduces a prior question:

Is this asset structurally compatible with the ownership horizon it claims to serve?

🧠 Towards a Discipline

Modern finance was built to price markets.

It was not designed to evaluate capital intended to outlive its founders.

Discount rates do not model inheritance disputes. Liquidity does not guarantee continuity. IRR does not capture cultural decay.

Not all capital should be optimized for exit.

Some capital is designed for durability.

In the United States alone, an estimated $68–84 trillion is projected to transfer across generations over the next two decades. Globally, estimates exceed $100 trillion in intergenerational wealth movement. At the same time, roughly 70% of family enterprises fail to transition successfully to the second generation, and nearly 90% do not survive to the third.

These failures are rarely valuation failures.

They are structural failures.

Cultural Asset Economics distinguishes capital built to trade from capital built to endure.

As generational transfer accelerates, estate regimes tighten, and governance complexity compounds, that distinction will no longer be theoretical.

It will determine which capital structures persist and which quietly fragment.

Capital that must endure deserves to be analyzed differently.

Chen, Mitt (2025). Cultural Asset Economics: A Structural Framework for Durability, Ownership, and Intergenerational Risk.