In the wider population, the response to inheritance ranges from fond recollection, to ambivalence to open hostility.
Fond recollection is piqued rarely in our lives, perhaps just once or twice. Our grandmother bequeaths a broach or family heirloom which has more emotional than market value. Our great-uncle passes on an old book. We are touched. Memories are perpetuated. It’s nice.
For most, in Western democratic countries in which middle-class meritocracy reigns and capital is democratised through progressive, re-distributive tax systems, inheritance is less possible. It’s leaked away from families in imperceptible little nibbles as tax is paid year after relentless year. For most, there’s an ambivalence about inheritance because there is no experience of it.
Sometimes the hostility to passing wealth onto our families is more open. Death duties and inheritance taxes are implemented and a lifetime of initiative ripped unceremoniously from a trust. If you observe closely, these ideas do not generally come from the WASP.
I have often puzzled at the idea that passing on wealth is bad. What is wealth if not a scorecard of how well we or someone in our family has served humanity? Product produced and services rendered for a mutually agreed price for the benefit of mankind. I see no problem with that.
And what of multi-generational inherited wealth and offspring squandering their lives. Well, that’s inheritance without responsibility. It is a trait of our people to be careful in the management of money, which means investing for a return and for the good of society. Some do it well. Others don’t and they eventually return to the ranks of the rest of us. It’s self-checking.
With the odds and attitudes so stacked against inheritance, it’s interesting that it’s alive and well in the Anglosphere.
Here’s an idea not in circulation in the general public. We think of the old aristocratic families of Britain now faded and grand estates lost. Yet, it’s a little known fact that modern Britain today is 33% owned by old aristocratic families. That’s one-third of UK land is still owned by those ancient and noble families. In the 21st Century. Being passed down from one generation to the next. Today. Imagine.
It is true that most of those who did have wealth to pass on left the land more than 120 years ago. Where are they now?
Is not News Corporation, and countless other family-controlled public companies, as feudal and sprawling an empire as the Duchy of Cornwall? The latter was founded in the 1200s. The former in the 1950s. Same application of the human condition.
And what is that human condition?
Why does it persist?
What is it about our culture which allows inheritance to exist and flourish, despite the apparent public policy against it.
First, it’s human nature. For all the talk about individuals versus society, the true driver of the world is that we yearn to leave our children in a better position than we found ourselves. We want to provide for them. We want to protect them.
Second, we don’t want to be beholden to others. We love our independence. Building a financial moat around ourselves and our children enables this. It’s a cornerstone of our culture. We want power off our backs. We want to pursue happiness. It’s Lock and Mill and Jefferson.
Third, to achieve that, we work hard. It’s the Protestant work ethic alive and well.
Fourth, with what we earn, we strive for frugality because we understand it’s not what we make, it’s what we keep that counts.
Fifth, what we keep, we pass to our children. We do this out of obligation, duty and deep, deep love. In this sense, I believe the Angosphere thinks of the long view. As a people, we are systematic, long-term planners. It’s part of our DNA culturally.
In short, we are culturally industrious, strategic, driven, self-reliant, long-range thinking and independent people.
Now the truth is that some of us are individually better at this game of wealth creation and passing it on than others. And that’s perfectly OK. I’m not very good at playing the cello but have come to terms with the inequality of musical talent. It’s the same with the practice of acquiring and passing-on wealth.
Regardless of our own personal scorecard, imagine we unceremoniously dropped this bombshell into our culture for a moment: no inheritance.
Think about how foreign this would be for us, just how profoundly it would cut across our culture, and the prolonged, lasting impact it would have on our flourishing societies.
The natural desire to protect and provide for children: stifled.
With the threat of inheritance tax, encouragement of selfish, wasteful spending least the taxman steal a life’s savings.
No provision for education of future generations when inevitably tuition rates become unattainable. No provision for a roof over their heads as future real estate prices soar.
Imagine no seed capital for fresh, entrepreneurial initiative, no investment. No new job growth.
Inheritance is a good thing. Despite all efforts to limit it, it’s flourishing in the culture which sustains it: care for family, long-range planning, hard work, frugality, care with the management of the surplus and the desire to protect the next generation.
If you you think you’re a most ardent opponent to inheritance, ask what you would do in one of those rare moments in life, if your grandmother bequeaths a broach or your great-uncle an old book. Would you really shun their legacy and desires by rejecting the gift of their life. Would you really say no?
I suggest your cultural DNA would compel you to accept with humility and gratitude.