Arnold Kling  

Class and Poverty

My Future Calhounian Class Aut... Feldstein vs. Nordhaus...

I put my views in an essay.

When people care about their own children, there is bound to be some inequality. A friend of ours has worked in his parents' store since his early teens, and he probably has averaged over 80 hours a week working in the store for the past 30 years. Now he stands to inherit the store. If you want to create a society where that store instead becomes the property of the state, perhaps your society would be more egalitarian. But it will also be very unfree and very, very poor. And in practice, societies where the state controls wealth tend to have plenty of inequality -- it's just that the winners have skill sets more suited to political maneuvering than business entrepreneurship.

The inheritance issue (which is not really the main issue in my essay) also gets discussed by Sebastian Mallaby and by Senator Jeff Sessions. Greg Mankiw examines comments by Edward Prescott and by Robert Reich. (UPDATE) more from Mankiw here.

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CATEGORIES: Income Distribution

COMMENTS (5 to date)
David writes:

The comment about the SF public schools leading your essay is interesting. I guess some people assume they should be able to enjoy the quality of the public schools in the middle and upper class suburban districts for their children while taking advantage themselves of the lifestyle options available within the city. And in SF no less, which is virtually kinder-frei.

Bill writes:

I just don't get this one. Why is it better to tax income than unearned wealth? I'll support ending the estate tax after there are no more income taxes (including SS and Medicare). People spend their actual lives earning income. Life is finite and precious to each individual.

Barkley Rosser writes:

It should be kept in mind also that the proponents of repeal have wildly exaggerated the numbers of businesses that have been sold to pay for these taxes, especially in more recent years as the exemptions have been sharply increased. Frankly, this whole argument smells like the worst sort of propaganda, with all kinds of sob stories and baloney being handed out that are simply not true.

Do we really want a spoiled brat, lazy feudal aristocracy in this country? There is a reason why repeal has been called the "Paris Hilton Preservation Act."

Robert Schwartz writes:

Liberalism fails when it enters time. Inheritance, like identity is an issue only for people who live in time.

Liberal theory is invariably based on the idea of equal competent adults bargaining out the social contract unconstrained by history or identity. Everyone in the liberal system is an identical atom devoid of any characteristic that is not mutable. This has been true from Hobbes and Locke through Kant to Rawls.

Liberalism was constructed to rationalize property as a basis for economic activity. But if each member of liberal society is allowed to property, he must be allowed to alienate it, otherwise holdings will never go to the highest valued use. If he can alienate property he can give it to his children and you have inheritance. Which is fine. But if you have inheritance, then the initial condition of autonomous agents without preexisting commitments will never be meet, and you cannot have liberalism.

How to escape the dilemma? I say drop the theory. Procrustians say kill the lab rats.

Philippa writes:

As the great economist adam smith once said;
“The real tragedy of the poor is the poverty of their aspirations” [See Note below. Smith did not say this.]

Of course adam smith wealth of nations is the book which made him well-known in his field.

[Note: Adam Smith did not say this or anything similar. The quote has been attributed recently to Smith and also to T.S. Eliot in various online sources, but without any documentation or references. If you know of the actual source, please provide. It is definitely not a quote from Smith's Wealth of Nations or his Theory of Moral Sentiments. Check it out: search both works.--Econlib Ed.]

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