It seems as if hardly a week goes by that we don’t hear about some celebrity or industrialist saying that he doesn’t intend to leave his fortune to his children. There is a widespread belief in the Anglophone world that inheriting money will make children lazy and useless, and further that they don’t deserve the “unfair advantage” it would give them.
Many claim to not believe in the premise of passing on wealth, the foundation of social stability since time immemorial. Part of what is going on is that the Baby Boomers, who grew up in a post-war economic boom, believe they earned everything for themselves and that their offspring should be able to too. Perhaps more importantly, inherited wealth is viewed as something to burn through, not as something to be held as an income-producing asset.
The reality is that increased concentration of wealth is bad for any society and disinheriting your children only increases wealth concentration among those who aren’t stupid enough to disinherit their children. It is a good thing personally, socially, and economically for a lot of people to inherit wealth, both modest amounts and fortunes. The reduction of generational wealth destabilizes society and the economy and gives all of the power to bankers and the government who then leverage this to oppress the public and attack human liberty.
The first thing which needs to be dismissed is the idea that inherited wealth will ruin a child. The actor Jeff Goldblum, who recently said his kids will not be inheriting, had kids as an old man—which makes it all the more cruel to not prepare for their future—but with modern lifespans, quite a lot of people will not inherit their parent’s until they are near retirement age. Further, long lifespans and end of life care costs go a long way in draining any money saved for retirement. It is also strange that they want to imagine no poor person ever fell into alcoholism or drug addiction, or that no person who inherited wealth ever had a good work ethic.
Despite the public fascination when some ultra-wealthy heir shows up at a left wing protest or donates to radical causes, this is not the norm. It is a weird admission of your failings as a parent that you don’t think your child would be responsible to go through life knowing he will inherit your estate. The actress Julia Louis-Dreyfus is from a cadet branch of the Dreyfus family (as in the notorious Dreyfus Affair in France) and is an heiress to a fortune estimated at $4 billion but has still had enormous success based on her own merit. It’s especially strange that opposing inheritance is most popular among artists and entertainers such as Mick Jagger and Simon Cowell; one would imagine they would want their children to be able to pursue arts without being constrained by the constant need to make money.
The biggest mistake that modern Americans make regarding inheritance is that they only view it as something that will be spent, not preserved. Conservatively invested capital can easily produce 4% returns, to use a simple but realistic number. It is better to teach a child to view a million dollar inheritance as producing $40,000 annual income, not as having a million dollars to spend. Further, inheritances split rapidly as descendants increase so a child should be trained to improve upon the fortune he inherits. Ideally, a person would try to continue to increase inherited capital so all of his children can inherit the same amount. Or if your child wants to homestead cheaply in the woods on a $40,000 annual income without having another job, that is also a fine way to live.
The idea that your child will be useless instead of pursuing an important passion is a concern, but most of the world’s greatest intellectual and artistic works were either done or commissioned by someone receiving an inherited passive income and thus was not required to pander to the general public. It’s bizarre to imagine that a parent who had the ability to leave $10 million to each child would not do so on the grounds that the child may happen to become lazy, especially given that you can put an age requirement on controlling the fund. Even if the child becomes a member of the “leisure class” that benefits society in many ways, that doesn’t justify leaving your child financially insecure. Is a person’s life really more likely to be ruined by expected wealth they are trained to manage properly than if misfortune throws them into poverty after being raised in affluence?
The big question is how anyone got the idea that inheritance was bad. This has something to do with our American national character and perhaps Britain’s advanced national decay. I would propose at least one more nefarious cause. People often wonder what is behind “Woke Capital,” such as the way the big banks support every Pride parade and seem to take a far-left, anti-family view on most social issues. There is a long standing belief that wealth is conservative, but this is only true of old wealth based on holding property. The reality is that financial interests believe in nothing and always benefit from instability. If you undermine families, religion, traditions, and even inheritance itself what do people do if they run into trouble? They become wholly reliant on banks and the government. Our society has been sold on a fear of being dependent on an inheritance but the alternative gives the government and oligarchs all the power. If a solid percentage of society has at least several hundreds of thousands of dollars in responsible investments, the capital which supports capitalism is much more stable and less subject to the whims of traders rapidly exchanging stocks. Further, the government is less liable to be influenced by specific business interests if economic power is shared by a broad swath of society. A well-to-do gentry is naturally conservative—not in the sense of right wing, but in the sense of being cautious and responsible; they have a lot to lose and don’t expect to be able to conjure up a new fortune if ruined.
It has been observed by many—especially in the wake of the COVID debacle where children were victimized in a futile attempt to protect the elderly—that the Boomers are the most selfish generation and have no interest in leaving anything for the future. There is an Ancient Greek proverb which says, “A civilization grows when old men plant trees in whose shade they will never sit.” It often seems as if the Boomers are intent on doing the exact opposite of this, and would prefer to cut down trees their descendants would rely on because it satisfies their own delusions.
But this problem is much bigger than the Boomers, and many younger people also hold to the idea that inheriting wealth is shameful. “Pulling yourself up by your bootstraps” is deep in the American psyche, but the point of raising your station is to give your kids a better life, not to arbitrarily make them do the same thing. There is no inherent value in being forced to make your own money from nothing but education (paying for nothing beyond an elite college education is the common refrain of such people). Many who might have accomplished great things have instead spent their lives in dreary servitude due to financial constraints or had their lives prematurely ended as a result of deprivation.
It is glorious, and good for society, to pass down a large and income-generating estate to your children. It is rarely mentioned, but this is one area in which Donald Trump sets a good personal example: instead of burning his childrens’ patrimony in pursuit of an absurd point about self-reliance, he has turned a fortune into a much larger fortune and clearly takes pride in what he has built for his children.
