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Inheritance rights: are they a problem?

Updated on August 14, 2010
Paris Hilton between a Ferrari Modena Spider and a McLaren Marcedes
Paris Hilton between a Ferrari Modena Spider and a McLaren Marcedes

Karl Marx in the Communist Manifesto proposes to eliminate inheritance rights. This will look completely unpalatable to many. Yet here I wish to suggest that it is not so far-fetched as it may seem at first, even if we maintain a capitalist standpoint.

Labour in the cotton fields
Labour in the cotton fields

Ways of acquiring property: labour and inheritance

So, let's start with a preliminary question. How is it that the people own things? How is it that people have properties rights over houses, cars, pieces of land, books, Google adsense earnings, designer clothes, shares, iphones, etc.? As far as I can tell, there are two ways for acquiring property.

The first way is through one's own labour. You work hard and you own the fruits of your labour. You earn money, you get paid and you can buy whatever you wish to buy, as long as you have money for it. This seems a very legitimate way for acquiring property. Since you worked hard for it, you deserve it. A similar but more sophisticated argument is given by the British philosopher John Locke in his Second Treatise on Government.

(It's true -- there is already room for injustices here. For instance, some people work less and get more, while some people work much more or are even exploited and get very little. But let's bracket those issues, no matter how important and pressing they may be.)

The upshot is that the first way of acquiring property looks perfectly acceptable. Now, the second way is by means of inheritance rights. Others own property, and when they die, they can pass it on to you. The lucky beneficiaries are typically relatives, though they need not be. This means that many people find themselves quite rich without having done any work -- without deserving to be rich.

The ambiguity of Justice: Gives to each of us what one deserves yet Justice is blind and punishes using a sword.
The ambiguity of Justice: Gives to each of us what one deserves yet Justice is blind and punishes using a sword.

Inheritance: can we do away with it?

Is it acceptable that people acquire substantial chunks of property and wealth by sole inheritance, without having put any effort into acquiring it?

One of the arguments I find somewhat compelling is this. Many things are a matter of luck in life, and this is one of them. But it's not only a matter of luck. It's also a matter of being realistic and pragmatic. Eliminating inheritance rights would be too complicated and ultimately thing would become much more chaotic than they are today. Inheritance rights are a way to distribute property, a way that works fairly well, because it keeps social order and stability. Abolishing inheritance rights would generate chaos and -- overall -- more losses than gains.

This pragmatic argument looks compelling. Suppose for once that we eliminate inheritance rights. What would we do? When an owner dies, his or her property would go to the state. And what would the state do with it? Would it distribute it equally among its citizens? Would it sell it?...It looks like a very cumbersome and difficult system.

Combining meritocracy and justice

These difficulties notwithstanding, I want to insist that the abolition of inheritance rights can be a good step forward in our society. It would keep in place the logic of capitalism and economic development -- which is, after all, the only one that has been working on a large scale. But abolishing inheritance rights would limit the great concentrations of wealth and power which comes from various forms of "inherited wealth." And limiting great concentrations of wealth would be a way to provide equal and fair opportunity to all for expressing their talents in a truly meritocratic and capitalistic society.

Does it make sense to eliminate inheritance rights?

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