Inheritance, Capitalism, Freedom & Responsibility

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Few
things invigorate critics of free market capitalism as much as inherited
wealth. Quite a few defenders of this system tend to stress its
supposed reward of hard work, ingenuity, industriousness, thrift
and diligence – all virtues one can hardly argue with and which,
if one practices them, seem to justify holding on to the often resulting
wealth. So, critics focus on inheritance, a species of good luck,
which those who benefit from it cannot easily be said to deserve.

And
it is true enough – notoriously many beneficiaries of inherited
wealth seem to be quite undeserving. They often waste their inheritance
away rather rapidly; if not, they do nothing much creative or productive
with it; often they spend it on projects that actually turn out
to be out and out hostile to the very system that made making the
wealth possible in the first place (just take notice of the many
rich kids of industrialists who decided to fund collectivist think
tanks, magazines, and activism). So, if this result can be associated
with free market capitalism, how could any right-minded person defend
the system?

The
guilt by association ploy does seem to work because even among the
most sophisticated critics of capitalism (say, the late Harvard
political philosopher John Rawls) the ultimate ammunition is the
view that even those who practice diligence, thrift, industry and
other virtues merely inherited their traits of character and thus
do not deserve the rewards, after all, contrary to what common sense
would suggest.

Now
there is a very serious confusion afoot in all this and once noted
it should disabuse critics of the idea that inherited wealth and
its misuses amount to any liability for freedom and capitalism.

To
begin with, we do in fact inherit many of our assets and do not
earn them – our good looks and health, if we have them; our talents;
even much of what constitutes our personality, something that often
helps us make our way to a certain measure of success in our lives.
Our initial opportunities, too, are undeserved – thus the chimera
of equal opportunity. And in each of these cases we can both build
on what we have inherited or waste it away good and hard. However,
none of that makes these assets anyone else's to take away from
one! That would be a kind of enslavement, actually, or at least
expropriation.

The
point is that we all come into life with some assets and some liabilities.
Whether we do or do not have these is something over which we have
no control. However, once we find ourselves with them, they are
up to us to deal with, and deal with responsibly.

Inherited
wealth is among such assets, yes, and how we make use of it will
be our test of character (which, contrary to what some claim, is
not inherited but the result of cultivation, attention, self-discipline
and thus very much the source of just deserts). So are innate talent,
and beauty and good health, as well as their opposites.

Now,
where the free society, with its corresponding legal order of private
property rights and free market economy, comes into the picture
is in enabling us to handle these to the best of our ability and
willingness. It is only in a free society that the moral fiber of
human beings can be effectuated, made to count for something. It
is only those who aren't subject to the will of others except as
they choose to be who can be moral agents.

So,
yes, your parents left you with something very valuable – an
estate, a farm or firm, or a bunch of stocks and bonds, or cash.
But whether you do right or wrong by these is in your hands in a
bona fide free society. And that is true even if you were just born
pretty or witty or otherwise appealing to the rest of us so we will
throw money at you to gain your services on magazine covers or in
comedy clubs. There is, in other words, no end of uneven starts
in life – that's why it is utterly silly to complain that life's
unfair. That is just the way it is, much like the weather.

Luck,
in the way of good looks, talents, inheritance and the rest, or
misfortune, for that matter, is a factor with which life confronts
us and we then are tested by how we handle it all. One may hope
that those who botch up their good fortune will learn and, if not,
will suffer properly. Or those who weather their misfortune and
prevail will have their deserved pride. It would be wrong, however,
to sic the government on those who were chosen either by their ancestors
or genes or some other factors not under their control to benefit
at the starting point.

One
more point about inheritance. Unlike good looks and health, inheritance
often comes with conditions. You get to enjoy your parents' or benefactors'
estate or bequeathal, provided you carry out some of their wishes
– support wild life preservation, a zoo, the local little league
or a political cause. One sign of lack of good grace is when those
who inherit wealth with such initial strings accept them only to
renounce them later, when the benefactor is no longer alive, if
these do not suit them well. The beneficiaries, however, who try
to weasel out of the commitment and try to treat the inheritance
as if they had earned it on their own, free and clear, are acting
shamefully. That again is a character tester – and again one
can only hope that others will make careful note of it and the deed
will go un-rewarded in the end, and that the legal system gives
full protection to the initial conditions agreed upon.

Actually,
to some extent all unearned assets come with certain provisos. Someone
with a great voice might like to have inherited the physique of
an athlete, instead. Alas, they must contend with a chance at a
singing career not at running track or playing tennis. And those
with such a fate may wish to fight it, too. Alas, they will usually
fail – had they only been content with what they were born
with, their happiness, besides their good fortune, might also have
been enhanced.

March
1, 2004

Tibor
Machan [send
him mail
] holds
the Freedom Communications Professorship of Free Enterprise and
Business Ethics at the Argyros School of Business & Economics, Chapman
University, CA. A Research Fellow at the Hoover Institution, Stanford
University, he is author of 20+ books, most recently, Putting
Humans First: Why We Are Nature's Favorite
.

Tibor
Machan Archives


        
        

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