[ExI] Inheritance

[Dan TheBookMan]

On Saturday, September 9, 2017, 5:38:31 AM PDT, Stuart LaForge <avant at sollegro.com> wrote:
> Actually, a libertarian argument could be made for
> inheritance tax or other forms, preferably free market,
> of redistribution of the wealth of the deceased.

Oh?

> First off, inheritance is a form of economic rent which
> is a technical term for unearned wealth gained in the
> absense of production value, risk, or opportunity cost.
> All forms of economic rent are market inefficiencies and
> are considered to be factors in the unprecedented
> inequality we see today.

That presumes inheritance is economic rent and that the concept of "economic rent" is sound. Georgists and geoists often use economic rent arguments, and most libertarians I know of don't accept their views on this.

Further, libertarianism shouldn't be reduced to market efficiencies or even economics. What's efficient really depends on one's ends and means and it's hard to apply this beyond inidividuals -- say, to whole communities. (That is, unless you don't mind casting certain folks out of the community. For instance, it might seem economically efficient for the ruling class to tax this or that because it wants some projects done -- meddling in foreign lands, keeping undesirables out of nice neighborhoods, indoctrinating youths so they don't get uppity when they become adults), but those forced to pay the tax obviously might not agree.

That said, libertarians should be against wealth that stolen from others or otherwise unjustly gotten, but this doesn't apply to inheritance per se. With inheritance, it would depend on how the estate were gained. For instance, if a person justly obtains their estate (using this to mean whatever wealth they have to pass on), then there's nothing as such with that person passing it on -- in a sense, gifting it -- to someone else upon their death. That even goes if this person worked hard and saved merely to give their estate to a wastrel/spendthrift. In fact, the knee jerk libertarian position should be that this estate is not really anyone else's to determine how it gets used. (If not, then why even wait for death and inheritance? Why not look at people now who, say, work hard, and spend their wealth on things you don't approve of or think are "inefficient" and compell them not to spend it that way? Would that be at all libertarian?)

If the estate is unjustly gotten, that's another matter, but then that's not a problem with inheritance, but with unjust acquisition of property -- usually getting something via theft or fraud.

> Second, the USian founding fathers thought that inheritance
> was part of the trappings of European aristocracy. They
> abolished the English laws of primogeniture in the colonies
> because they felt it wrong for the dead to enforce their will
> upon the living in perpetuity and they were worried it
> would give rise to an American nobility.

The Founding Fathers are not the touchstone of what's libertarian. In fact, at best, some of them were proto-libertarians, and many of them held openly anti-libertarian views. Heck, being for any taxation at all is anti-libertarian. But it's more than just that. Some were for slavery, conscription, a state church, restrictions on trade and immigration, and state enforcement of sexual mores (well beyond, say, laws against assault and rape).

I'm not trying here to make some ahistorical argument, but even if we accept that many of the Founders were in, say, the classical liberal tradition from which libertarianism springs, their particular arguments back then aren't essential to libertarianism today. (And the argument that libertarianism is part of the classical liberal tradition doesn't equate it with all forms of classical liberalism. Obviously, libertarianism is far more radical than most forms of classical libertarianism, including the forms expoused in the Founding Era.)

> Ur economist Adam Smith had this to say on the subject:

Nor is libertarianism merely a confluence with Adam Smith's views.

> "A power to dispose of estates forever is manifestly absurd.
> The earth and the fulness of it belongs to every generation,
> and the preceding one can have no right to bind it up from
> posterity. Such extension of property is quite unnatural.
> There is no point more difficult to account for than the
> right we conceive men to have to dispose of their goods after
> death."- Adam Smith

Libertarians actually vary on how long property can be owned, specifically with regard to whether any property can be owned in perpetuity. There's some idea of what constitutes abandonment, but then there's no essentially libertarian view that death of the owner means the owner's wishes for how their property should be handled are of no account.

> As someone with libertarian leanings myself, I feel that inheritance
> brings into conflict my values of freedom and meritocracy. Whereas
> a part of me wants the ability to distribute my estate as I see fit,
> another part of me realizes that I will have no way of knowing whether
> I would approve of how that wealth was used by my heirs. Were I to
> know, I might want to change my mind.

Well, this is a problem with giving wealth to anyone. Once its theirs, they get to use it as they please (for libertarians, within the constraint of not harming anyone else with it). Yes, death introduces a special limit on this: you're no longer around to guide heirs or control your wealth. But this is an agent problem that applies to gifting in general. And since other people might not have the same fears as you, why not let them determine where their estates go rather than give the tax authority -- i.e., the state -- determining that?

> So I might be in favor of some free market method of redistributing
> wealth above and beyond whatever would be adequate to comfortably
> support ones heirs. Although I am loathe to let government do it.

The libertarian way would be to let each person determine this for themselves. I really don't see the social problem here -- other than that some folks won't approve of someone they don't like inheriting a fortune.

Regards,

Dan
   Sample my latest Kindle book "Sand Trap":
http://mybook.to/SandTrap
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