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Comment by settrans | Hacker News Reader

That's obviously not how property rights work. Sam Walton was entitled to bequeath his wealth to his heirs however he saw fit, subject to any applicable estate and inheritance taxes.

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Yes but this is a discussion about ought, not is.

The claim is that in capitalism "you become rich by providing value to other people."

John T. Walton became rich through inheritance.

Ergo, there are ways of getting rich other than providing value.

Ergo, looking at someone who is rich doesn't tell you that they provided value.

The best way to get rich, and this is supported by evidence, is to have someone give you money. Usually it is one's parents.

Just the facts.

Can you show these evidence

Inheritance is incredibly over-represented as a source of wealth, among the wealthy. Even those who "earned" it rarely come from a poor background. If you don't see this yourself, reach out to a professor of sociology for a frank chat.

On death, what right do you retain to that property? Under a more capitalist system, your children could not inherit, and instead have to start from the bottom like everyone else.

That obviously doesn't make any sense.

Suppose you have more money than you need and want to be charitable, so you set up some terms under which you'll give some away. A scholarship fund, a shelter, whatever you like. You can set whatever criteria you want, because it's your money.

But then you could also use the criteria "the people who get this free tuition money and housing are your kids." Being able to do this, benefit their kids, is a primary motivator for parents to work to make more money.

And if you can give away the money to anyone you want three seconds before death, it makes no sense to say you can't sign a piece of paper to that effect at any point prior either.

That’s not capitalism. That’s some kind of meritocratic (anti?-)utopia. Capitalism is when you can do with your property whatever you want including giving it away to whomever you want.

If you’re dead you don’t get to make decisions anymore. These sorts of arguments would have more weight if the parents actually transferred the wealth earlier than their death or shortly before it, but they want to retain all the power that comes with that capital and then pick the winners in the next round of the economy by bequeathing it to their children.

If we want any sort of system even approaching a meritocracy then you should not be able to will away such vast estates that people can control entire companies or never work again a day in their life solely off the inherited assets

if the "after death" silliness is your main concern here, that seems easy to satisfy with the abstraction of a will or trust that is set up before death.

personally I find it pretty reasonable that I get to decide who gets the lion's share of assets I have worked for my whole life. at the same time, it seems bad when enormous amounts of wealth are passed down over generations (and having known a couple people in this situation, it seems bad for them too). the question is, where do we strike the balance?

You might find it reasonable, but it’s not meritocratic at all to will it away to someone else. You also are effecting society in a negative fashion after you are dead and gone and no longer have to deal with the consequences. Setting up a trust where the money removed before you’re at end of life seems far more acceptable because you are willingly giving up the power associated with the money, but deciding to maintain sole control over that power until you’re done with it and then passing it on to your chosen winner afterwards is antithetical to capitalism working correctly.

Capitalism ideally means ideal free markets, free of distortion. Starting with market distorting money from birth by definition... distorts markets.

That's not how that works. It's just the opposite.

If someone doesn't expect to live much longer but can still provide a significant amount of value to others, their incentive to do it is that they can decide how the money gets used, i.e. they can give it to their kids or otherwise choose who gets it after they're not around to use it anymore.

Take that away and you take away their incentive to earn money they soon won't be alive to use themselves, which is a huge distortion.

Meanwhile people starting off with money allows them to use it, but that doesn't imply inefficiency. They don't lack the incentive to use it for something productive.

A mere change in market equilibrium doesn’t constitute a market distortion.

You can label anything "a mere change in market equilibrium", apparently even someone inheriting more money than the GDP of an average sized country ...

The magnitude doesn't matter, it is a qualitatively different phenomenon.

This provides a definition of a market distortions:

https://en.wikipedia.org/wiki/Market_distortion

This may help understand why it is defined this particular way and why it excludes inheritance and other wealth transfers:

https://en.wikipedia.org/wiki/Fundamental_theorems_of_welfar...

https://en.wikipedia.org/wiki/Pareto_efficiency

I'd argue that any significant wealth inequality constitutes a market distortion. It undermines the "wisdom of the crowd" that underpins capitalism.

But it has nothing to do with inheritance as wealth inequality would exist even before inheritance.

It does have something to do with inheritance. Inheritance directly causes wealth inequality because some people inherit money while others don't (and the amounts inherited vary widely). It's not the only mechanisms which causes wealth inequality, but it is one of them.

Capitalism is the private ownership of the means of production vs collective ownership, which is communism. Everything else is a consequence. I can think of state owned companies competing on price or privately owned companies colluding in a cartel to keep prices up or down, basically with no market, or any other combination. Even China's market way to socialism.

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