14A043 Inherited Wealth by Jim Davies, 9/23/2014    


Some people froth at the mouth about the idle rich.

For example there was this exchange recently in a certain on-line forum. Someone referred to "idle plutocrats" which prompted:

I've never met a plutocrat who is idle, or an idle person who is a plutocrat. I'm as idle as most, and as greedy as most, so if you have any suggestions about how to become one, please feel free to present them.

and which, in turn, drew:

That's easy. It requires no effort, work or skill... get born into a rich family.

The exchange continued, with questions about how to get born again in a non-religious sense, but there it is: many folk are angry, not against government which is causing most  of their actual problems, but against a small class of people who are, I'll show, causing none. It's a sad waste of indignation.

There are, it's true, some who have wealth they did nothing to earn. An unemployed lottery winner might be one example, and the inheritor of a vast fortune would be another. That seems wrong, when many folk are working two jobs to keep their families fed. Notice first of all that the labor-free acquisition of wealth does not necessarily make the lucky person idle; a lottery winner may use his new-found capital to start a business and work at growing it to great success. And those born with silver spoons in their mouths are not predestined to idleness; they too may take the enterprises they have inherited and work long hours to make them prosper even more mightily. One thinks of the Koch brothers in that context, for example; and on a smaller scale, Arthur T DeMoulas works very hard to make his inherited supermarket chain grow and prosper. He has regained control, by the way.

Next consider whether there is any moral obligation on the born-rich person to engage in work of any kind. Why should he not, if he so wishes, live a life of idle luxury? The answer will depend on what basis we assume for ethics. If it is the prevailing altruist basis, then yes of course, born-rich folk are obliged like everyone else to live for the benefit and sake of others - perhaps more than everyone else, since they have the means. "To each according to his need, from each according to his ability" is the altruist, Communist creed and it makes everyone a slave of everyone else (especially of government people) and so is utterly alien to self-owning human nature.

If an ethical basis of self ownership, self-reliance and responsibility is used instead, as it must in order to retain intellectual integrity, then no such obligation can exist. Like everyone else, born-rich people are responsible only for their own welfare - though, as shown below, it's very hard for them to avoid benefiting others. So it's not easy to find a truly parasitic rich person; and if there are some, even they must labor against the relentless principle that a fool and his money are soon parted.

There are two aspects of this more fundamental than all that, however; and the first is that for anyone with money it is impossible not to be productive. Suppose you inherit a billion bucks, and resolve never to do another stroke of work. So all the housework and cooking and gardening and driving and dressing etc has to be done by servants employed for the  purpose, as in the Downton Abbey household. In that case, your wealth will bring welcome employment to several people. Productive! Or maybe you choose to do most of those simple tasks yourself but to invest the billion somewhere, so that it turns into two billion. Your capital is then being employed, in some profitable way by others - who will in turn employ helpers and produce things or services others would like to buy. Productive! Even in the extreme case that you bury the fortune in the ground, by so doing you'll have removed money from circulation and thereby caused some deflation, and so helped everyone by reducing prices. Productive!

The second aspect is even more fundamental: if "unearned" wealth were in some way prohibited, it would be a major denial of freedom for the person making the bequest. It's his fortune, very likely he made it by applying his skills in the marketplace, and yet he is to be forbidden to give it to his children? No way. That would be massive theft, writ large. All tax is theft, and repulsive as such, but a death tax is the most savagely immoral of all.

Now contrast that with government. Massive amounts of money flow to it, not by the voluntary means of a bequest in somebody's will, or in exchange for services provided under contract, but by raw theft; it is stolen, ultimately at gunpoint. So government does not earn money by work, yet it is immensely rich, receiving about $6 trillion a year. That would seem to me a very good fit for the descriptor "idle rich."

Further, government contrives to violate the principle described two paragraphs above: when government handles the money, it is totally unproductive - for to be "productive" goods or services (or investment choices, for that matter) must be furnished in response to an actual demand; that is, a desire plus the money, owned by those buying and choosing. When government does the providing, no such choice can be made. Thus, nobody can know whether or not the product was in demand; it is never productive.

Therefore government fits perfectly the pattern of the "idle rich": it is a massive waste machine. Instead of contributing to society's prosperity, it destroys it. Those in search of a parasite class need look no further.

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