[otalp]

I cannot see how someone can believe America is a meritocracy while at the same time pushing to almost completely remove estate taxes, as was done during the 2018 tax cuts.

You can either allow inter-generational wealth to build, or claim to be a meritocracy; not both.

The Wealthiest 1% Inherited An Average Of $4.8 Million:

https://www.peoplespolicyproject.org/2017/10/10/the-wealthie...

[bko]

Taking your question at face value.

Meritocracy: A system in which advancement is based on individual ability or achievement.

If you think the most able individuals are creating and running the largest organizations, and know whats best for those organizations, why would you want the state to allocate those resources upon death of the individual?

Also, most people have a time span much greater than their own life. I know I do. If I knew I wasn't able to leave a better life for my decedents, I wouldn't work as hard. If you have a wealth creation mindset (wealth is created) then this would be devastating to productive individuals

[lumost]

You may have a vision for your children, they may not follow-through. Most family businesses fail upon generational transfer. Most children I know who believe they are inheriting money don't bother to work, the children of wealthy children are usually far enough removed from wealth creation as to believe utterly irrational things about money.

If wealth is large enough, then useful incomes can be maintained in perpetuity - meaning the great, great grandchildren are still living off of the wealth created centuries ago.

The latter case was common in Europe, but relatively rare in the US due to the estate tax. Historically, landed gentry were rarely bastions of wealth creation and innovation - and are usually more focused on fending off threats to their inherited wealth than creating more wealth.

[bko]

Reminds me of the quote:

"My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel."

Wealth dissipates very quickly especially with the nature of dilution as a bloodline grows exponentially. If you notice most inherited wealth that's more than a few generations is in authoritative states. I don't think its due to the estate tax as there are always ways to get around it.

[lumost]

An alternate way of viewing this is that large productive resources are channeled into providing consumption for an exponentially growing bloodline rather than re-invested for general profit.

There was a general practice that samurai funded positions for the children of their servants. By the time of the meiji restoration the number of servants a Samurai supported had grown by nearly an order of magnitude. Meanwhile the productive land remained fixed.

Unfortunately this lead to the productive assets of Japan being directed to support an increasingly capital inefficient consumption system. There is no natural reason to assume that an estate would be obliterated with time.

[dsq]

Wouldn't the problem be self correcting, then? Incompetent inheritors waste their ancestors hard earned wealth on Lamborghinis, bad investments, casinos etc. The money returns to the wider economy (Lamborghini engineers, real estate taxes, tips for cocktail waitresses). After 3 generations the problem solves itself. Those families who remain rich may be the most intelligent ones.

[TheOtherHobbes]

Unless you're doing management-by-seance, dead people - no matter how exceptional - don't run organisations.

And besides, only private wealth is subject to inheritance tax. Public corporations don't die with their founders, and private businesses are assessed for value, usually with significant tax breaks.

None of this changes the fact that inheritance is the opposite of true meritocracy. It gives the mediocre an unearned safety net and starves, stresses, and distracts talent from a modest background.

[RhysU]

Why is meritocracy always viewed as a single generation concept? Memes, especially effective ones, transcend generations and are quite effectively passed down from parent to progeny. I certainly am more effective because of ideas my forefathers taught my father who, in turn, taught me.

[mattmanser]

Because while people may be rational about their business, they are not rational about their children.

As for not working as hard, plenty of rich people have recently declared the majority of their wealth won't go to their children. So certainly won't have a 'devastating' effect as you claim!

[RcouF1uZ4gsC]

> As for not working as hard, plenty of rich people have recently declared the majority of their wealth won't go to their children.

A lot of them are actually putting the wealth into foundations that their children will end up controlling. I believe Warren Buffet has done that.

So even though their children might not have all that wealth outright, they still have the influence and wealth that comes from control of that wealth through the foundations.

[bko]

Perhaps they know what's best for their companies which is why they're not giving their entire wealth to their children.

And if they do, if you believe in meritocracy, it won't matter as that wealth will be squandered away with each subsequent generational transfer, as is often the case.

[BobbyJo]

It's not about punishing the foolish, it's about maximizing the utilization of societies resources. If you hand ten million dollars to a fool and he squanders it, he's not the only one that loses.

The best reason for a meritocracy isn't fairness or justice, it's the benefits it creates for everyone. When someone smart is given control over resources, they create more resources, for themselves and others.

[sokoloff]

When that someone smart creates more resources, isn't is likely that they're in a better than average position to plan for its distribution, specifically including placing those resources under the control of smart people to utilize them?

I trust the creator of wealth (small, medium, or great) to allocate it intelligently far more than I trust a bureaucracy to do so.

[BobbyJo]

Hence the need for a meritocracy.

[hermitdev]

There is a huge difference between voluntarily giving one's wealth away to one's choice of entities than the government forcibly taking that wealth from one's estate. Giving one's wealth away is a choice. A freedom. So should be the option of leaving that wealth to one's descendants or successors (biological or otherwise).

[mattmanser]

When you say forcibly, they've been protected by the government their whole lives. They're protected from crime, protected from armies, protected from assassins, thugs, and warlords.

They've taken advantage of the schools, infrastructure, courts, laws, etc.

It's a social contract, it's two ways, and part of the price of all that stuff they've been using is to pay inheritance tax.

If they don't want to pay, they could go to a country without all those benefits. But they shouldn't expect to be able to take everything with them, it's not just theirs.

[eevilspock]

> why would you want the state to allocate those resources

You're making this about "big government". A red herring straw man.

That's not the point. The point is that it does not go to your children or whomever you choose as inheritors (aka your dynasty). There are many ways this could be handled. For example, when you die, the resources/wealth reverts back to the commons. A simple way to do that would be to it distribute equally over the whole population.

Or perhaps distribute it equally to everyone under the age of, say, 30.

Regardless, that's a whole other topic. It's separate from the point being made.

[cageface]

Even with an estate tax of 50% you'd still be able to bequeath massive wealth to your children.

[nicoffeine]

> If you think the most able individuals are creating and running the largest organizations, and know whats best for those organizations, why would you want the state to allocate those resources upon death of the individual?

To prevent the formation of feudalistic aristocracies. There's no difference between empowering bloodlines drawn from wealth or monarchy. You're still going to end up with incredibly corrupt and incompetent people running the show because they didn't earn their position -- they were born into it.

If you actually believe in meritocracy, why do you want to pass on your wealth to your children? If you do that, they won't be able to demonstrate their "individual ability or achievement."

[bko]

> There's no difference between empowering bloodlines drawn from wealth or monarchy

The Walton family can't throw my in prison. In fact, they can't do much of anything to me besides perhaps denying me a Sam's Club membership.

Monarchy and wealthy families are not the same. Hyperboles like this don't serve your case.

If you believe in meritocracy and you pass your company on to your children who are not suited for the role, then they'll fail and lose it all, as is often the case.

[lumost]

I think you need to put a yet on the Walton's throwing you in prison. Extreme wealth inequality tends to distort surrounding institutions as all individuals paychecks become beholden to the wealthy individual.

In company towns the boss could absolutely have you thrown in jail if they felt like it. If Carnegie didn't like someone then the Pinkerton's would happily take care of them.

The only reason we haven't seen modern equivalents to the above scenarios is that the information age has increased competition. But if you already don't feel like you could sue any of the Walton's for any reason and win... then just wait for when their wealth is 10x larger.

[kahmeal]

> The Walton family can't throw my in prison. In fact, they can't do much of anything to me besides perhaps denying me a Sam's Club membership.

They most certainly can. They simply have no reason or motivation to.

[pjmorris]

> The Walton family can't throw my in prison.

The Disney family can. [0]

‘What one fool can do, another can.’

https://unclewalts.com/wwwd/hey-walt-does-disney-world-have-...

[kiba]

Meritocracy leads to inequality without effort to counter it, because people who accumulates advantages tend to accumulates even more, allowing them to access resources, experience, and wisdom that poorer people simply cannot access.

[bko]

I don't know a single parent that doesn't want to have their children accumulate advantages, giving them access to resources experience and wisdom. I think this is very natural and desire to pass on a better life to children is what keeps society functioning.

[sudosysgen]

That's not an argument for what is better or worse for us as a whole. I don't know a single person who wouldn't want to instantly receive a billion dollars in exchange for nothing, doesn't mean we should make that happen.

[bko]

Society ceases to function if you cannot convey any advantage to your children. My parents sacrificed a lot for their children. They moved to a far away land, worked a lot of hours so that we can live in a neighborhood with a decent school. They saved a lot to try to send me to a decent school. They always obeyed laws and were model citizens. If there were no way to transfer such advantages, they wouldn't have bothered doing any of this stuff. I think society was served by their sacrifices.

I can't quote a study, but I think crime rates go down considerably when married and with children. You have a lot more to lose. You want to make sure you're their for your children and they have the advantage of being in a stable loving home

[sudosysgen]

You can convey many advantages to children in the way you raise them. Million dollar + inheritances are not needed.

As far as being there for your children, again, I don't see the connection with estate taxes, your children will definitely need you even if you can't pass down 5 million dollars worth of assets to them.

[bko]

The original post I commented to said nothing about million dollar inheritances. It only spoke about inequality. If you accept the premise that we must make everything as equitable as possible, you don't clearly stop and million dollar + inheritances. You eventually lead to banning gifted classes in public high schools.

[0] https://www.nytimes.com/2019/09/05/learning/should-gifted-an...

[bumby]

>Society ceases to function if you cannot convey any advantage to your children.

This is stated as fact, but what exactly is the assumption based upon? If it were true, wouldn’t you expect people without children to stop being contributors to society?

>I think crime rates go down when married and with children. You have a lot more to lose

Even if this correlation is true, it doesn’t mean the correct choice is to turn into that. Immigrants also commit less crime because they have much more to lose, it doesn’t imply citizenship should be on the chopping block

[PaulDavisThe1st]

Do whatever you want while you're alive. Give them all the bitcoins, if that floats your boat.

We're talking about one single type of inter-generational transfer, the one that happens at your death. America has historically been against inter-generational transfer at this point, because it helps to create an oligarchy.

[eevilspock]

Culture can evolve. We have a very selfist culture. It is possible to evolve a culture that values the common good for more than our society does.

There are many parents who don't pass on anything to their children beyond what they did to get them to adulthood, believing the best thing to bequeath your child is a solid upbringing and strong sense of responsibility, independence rather than entitlement and dependence. And there are many children, like myself, who want no inheritance, who even think it immoral to take any.

[username90]

If they help their kids become great doctors or engineers why is that a problem? The problem isn't meritocracy but nepotism, when rich kids gets jobs or positions they wouldn't normally get with their merits.

[mc32]

There is the bell-curve problem to take into account as well. For any sizable population, some percentage will have aptitudes and abilities which prevent them from becoming a member of some of the wealth accumulating professions.

[eevilspock]

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

[Trias11]

If they accumulate too much at the expense of other - eventually they'll self destruct.

I honestly think that natural evolution of this process is better than government-managed.

Because the smart people who accumulate more advantages tends to share it with other more and this helps them to maintain wealth. Dumb wealthy - will self-destruct faster via natual evolution of events.

Whenever government decides that they can do it better - disaster results typically follow for all.

[engineer_22]

Is this a philosophical question? I'm sure we can imagine a scenario that a son's contribution to family wealth is greater than his father's. We can also imagine a scenario that the son squanders the whole lot.

Capital management is not a trivial task. Successful management of great sums requires great skill and attention. The world is fraught with dangers when handling a fortune.

As an aside: America is not a meritocracy. It's a dynamic, imperfect system, often described as a presidential republic, and we're constantly rewriting the rules of the game.

What a great person should yearn for is opportunity - access to capital need not be inherited. I think we should strive to empower our best people with capital resources appropriate to their level of skill and experience. I don't think the government is the best mechanism for choosing who those managers should be, but I think it should definitely have a role in making sure the game is fair.

[closeparen]

What about stay at home parents? If the right to enjoy the fruit of your labor only extends as far as the individual, then we should be equally worried about the spouse who gets to live in a nice house, eat nice meals, buy nice things, etc. while doing no more work (possibly less, with staff) than her lower class counterpart.

I’m in favor of inheritance tax. But I can see an argument that things just stop making sense when you start slicing into smaller units than the family. I think we’d have to say it’s a meritocracy of families. If families want to support some of the individuals within them out of proportion to their economic contribution, maybe that’s their business.

While it rubs me the wrong way to know that people are out there coasting on the backs of more productive family members, I think the bigger story is some people are out there equipped to be knowledge workers in superstar cities, and others aren’t. This advantage is definitely related to family but isn’t literally inheritance. High earners become high earners well before their parents die. That’s just extra.

[mumblemumble]

I think that you've got to take American culture's Calvinist roots into account. In many pockets of American culture, especially historically but even now, the distinction between wealth and merit is fuzzy at best.

[spiralx]

Calvinist influence has been on the rise again in the US for decades, you can see it in the rise of the "prosperity gospel" in churches.

https://www.reformation21.org/mos/1517/creeping-calvinism

[wdr1]

> while at the same time pushing to almost completely remove estate taxes, as was done during the 2018 tax cuts

Just to stop fake news: The tax cuts increased the exception for estate tax from $5.6M to $11.2M ($22.4M for married couples.) After that amount, the estate is taxed at 40%.

OP may feel that's the same as removing it. Or they may have been misinformed & actually thought it was removed. Either way it's incorrect.

(And this is not to defend or condemn the tax bill. I just think it's important to get accurate facts on the table. I have my own opinions on how we should reform estate taxes, but my focus would be on cost basis, not exemptions.)

[dzink]

Ambition is a river everyone wants to swim in. Some go to prestigious schools that tell them precisely where the fastest currents and bridges are, while others have to fight tooth and nail to figure it out. Meritocracy comes from strong education for everyone about the flow points and quick feedback on what is well paid and well needed for society, with instant access to that data. What you’re asking for instead is for government to fence in the and deciding how much you can pull out when you’re done swimming, piping whatever government wants to its own politically favored pet projects that create a political aristocracy instead. I grew up in Eastern Europe - even to this day politics is about channeling projects and money to your buddies, and restrictions to your competitors. Jibing on the wealthiest is envy - you assume and enforce wealth as a zero sum game. It’s not. When those spoiled rich kids blow 6 digits on a purse, that 6 digits goes into a company owned by many retirees via stocks. You want the rich to be spending. Wealth is created with ambition, which you want more of. If you choke people’s ability to pass their earnings to loved ones, they will leave this country and build their life elsewhere. Making information about where wealth is to be made more public and available is meritocracy. Ivy league schools teach the personal preferences of supreme court judges and the pathways to success in Private Equity and other fields - make that public!

[novok]

Meh, +%80 of the wealthy are first generation people who made it themselves. In the recent past it was a lower number. I would say it's getting better in that one aspect.

Inequality has more causes than inter-generational wealth and a lack of an estate tax. Canada for example is a more economically equal society and does not have an estate tax AFAIK.

[michael1999]

Honestly, I would expect the average to be higher, but maybe the truly large inheritances are shielded as trusts or hidden off-shore.

But now I'm curious what the median inheritance is for the 1%? Lower than that (mathematically) but is it $0? I might take that bet. But the SCF doesn't seem to go finer than the 1% bucket. Anyone know?

https://www.federalreserve.gov/econres/notes/feds-notes/weal...

[cataphract]

People mostly inherit when their parents die. By that time, they are probably themselves retired or near retirement, so it won't really be a factor for how well they do during most of their lives.

[sjtgraham]

Of the top 10 wealthiest people in the world this year, all 8 Americans are completely self-made. Outstanding evidence of America being a meritocracy if you ask me.

[lotsofpulp]

How do you define self made? Is having parents and friends/family with sufficient resources such that you can experiment and try and fail and fail and fail until you succeed without worrying about ending up homeless "self made"? Or even parents who are fluent in the happenings of the world and can direct you to the right direction to minimize the chances you are wasting your time?

[SubiculumCode]

U.S. Centric Comment: I like to think about a system where major monetary and land inheritances are taxed 100%, put into a fund that is given out equally to all citizens, i.e. The American Inheritance.

Pros: Meritocracy which emphasizes personal responsibility and makes it clear that the whole ship rises or sinks together. Would diminish disparities.

Cons: Lot's of nitty gritty complications, loopholes, etc. attachment to places and things. Longevity, medicine, and wealth.

[iammisc]

Anyone with sense knows what will happen. Parents will pay exorbitant amounts for their children to receive accolades, and use up the inheritance before they die. The accolades will serve as signals to other rich as to whom to hire, put in charge, shower with large salaries funded by the sale of said accolades, etc.

[SubiculumCode]

Your argument falls into the typical "We might as well do nothing because the rich will just game the X" category, which is not only defeatist, but lacks nuance. When you tighten rules, there will be more effort to circumvent them, but that does not mean it would be nearly as ineffective as maintaining the status quo.

[iammisc]

If you want to decrease economic inequality, this is not the way to do that. That's even assuming it's worthwhile.

[SubiculumCode]

That is not an argument, that is a statement of belief.

[iammisc]

I'm sorry, we weren't having an argument. Every comment you've made is also a statement of belief.

I'm not interested in having a deep argument on this one (since it's all hypothetical). I was just replying to your feelings.

[BobbyJo]

Ok, but what was the median? It's a way better indicator for this type of analysis.

[andi999]

Intergenerational meritocracy.

[iammisc]

> You can either allow inter-generational wealth to build, or claim to be a meritocracy; not both.

What has happened in America is a major (and I mean major) shift towards individualism. The 'pull yourself up by the bootstraps' mentality was never applied to people independent of their family. For most history, people were indivisible from their family, except perhaps in law.

If dad rises through the ranks, people would have viewed that as dad pulling his family up in status. The meritocracy would have been applied to what was then seen as the fundamental building block of society -- the family.

Today, we view individuals as the fundamental building block of society.

The two views are incompatible, IMO.

[PaulDavisThe1st]

I don't recall the objections to inherited wealth as being about "they kept it all in the family" as opposed to "it was only the first born son".

The US has long had profound objections to inter-generational wealth transfer, entirely independent of our conceptions of the relative importance of family vs. individual.

[iammisc]

> The US has long had profound objections to inter-generational wealth transfer, entirely independent of our conceptions of the relative importance of family vs. individual.

No it hasn't. If that were true, we would expect strict inheritance laws discouraging wealth transfer. But we've never seen that in the United States.

By and large, people saw individuals as inseparable from their family. Even the most individualistic thinkers of the 18th century would be considered practically Confucians today.

The United States has long embraced the inheritance of wealth. What we reject is the inheritance of title that gives some man authority or primacy over another independent of his own contribution to society as measured by his wealth. In the UK that we left, a commoner could have been richer than an old-money aristocrat, but not be considered his equal due to nepotistic aristocracies.

[PaulDavisThe1st]

> If that were true, we would expect strict inheritance laws discouraging wealth transfer. But we've never seen that in the United States.

The legal mechanism for this has been the inheritance tax, which has existed more or less since the founding of the republic. Historically, it served as a substantial reducer of inter-generational wealth transfer. However, over the last 5 or 6 decades, objections by the rich to moving the thresholds to keep up with inflation and/or typical wealth levels among the top quintile etc. and/or rates for this tax have made it much less effective in this role.

[iammisc]

But inheritance taxes have existed pretty much everywhere, so that's hardly some unique characteristic that can be used to indicate a supposed American disdain for intergenerational wealth.

[PaulDavisThe1st]

The 2nd half of this link has some fairly extensive quotes from Madison, Jefferson and Washington on the idea of inherited wealth.

https://andrewtobias.com/jefferson-madison-and-washington-on...

I think you'll find that this was a very different take on it than the one held by those in power back in England at the time.

[closeparen]

Toqueville considered America fundamentally structured to prevent the emergence of aristocratic families, not because of anything to do with taxes, but because fortunes are distributed among all the children and thus naturally dissipate. As opposed to old world system of giving all to the first-born son.

[iammisc]

And he's mostly right. Americans are uniquely unable to stay rich for many generations. Most generational wealth in america disappears after a few generations.

In my comment history, you'll find a few comments about the issue of couples having fewer and fewer children.

Toqueville's points work so long as people have on average, more than two kids. With the decline in birth rate, we risk descending into primogeniture by attrition, which is terrible.

[cmcmcmcm]

Where does this end? What if someone is born with good looks and thin genes and becomes a supermodel, or someone that has genes that makes then 7 feet tall and becomes a successful basketball player? Is that less meritocratic because of god-given talents? What about people that are naturally good at math and have an economic advantage as a result? If you keep moving the line further and further over, eventually you will hit communism.

[plantain]

The problem is the strong desire (requirement?) to accrue wealth is the foundation stone of all capitalism - if you remove reasons to pursue wealth such as desire to support your offspring, you undermine the incentive to build bigger and better things.

It seems to me that inheritance should be taxed at a rate that it dwindles to zero after a few generations to balance equal opportunity and distribution of wealth with the incentive to build things to provide a better existence for our offspring.

[mcguire]

No estate tax system that I'm aware of confiscates all of the deceased's assets. They may take enough to be problematic for people in high-capital, low-cash flow businesses like farming, but that is not worth long-term inequality.

I'm not sure about the numbers, but many of the great, inter-generational fortunes may have been built on businesses (consider the oil business) that are problematic for future generations (although great for the inheriting offspring).

[sokoloff]

The "shirtsleeves to shirtsleeves in three generations"-* is already a well-established pattern (if it was newer, we'd call it a meme, but this concept is older than that word).

* - The general inability of grandchildren to effectively manage the wealth passed down to them from their grandparents and parents. This is made even worse when it's an operating business.

[mcguire]

Old money (https://en.wikipedia.org/wiki/Old_money):

The Du Pont family https://en.wikipedia.org/wiki/Du_Pont_family#Family_tree

The Vanderbilt family https://en.wikipedia.org/wiki/Vanderbilt_family#Vanderbilt_f...

The Rockefeller family https://en.wikipedia.org/wiki/Rockefeller_family#Members

The Astor family https://en.wikipedia.org/wiki/Astor_family#Astor_family_tree

The Ford family https://en.wikipedia.org/wiki/Henry_Ford_family_tree

The Mars family https://en.wikipedia.org/wiki/Mars_family

S.C. Johnson & Sons https://en.wikipedia.org/wiki/S._C._Johnson_%26_Son

We'll have to wait and see for the Kochs and Hunts.

[runako]

Along these lines, what's fun is to look at property sale records.

A shocking number of large properties in the US have not been sold in multiple generations. A lot of old money "just" owns land and extracts rents for that ownership. Many of those people have jobs, so they do not necessarily look like the idle rich. But they have a somewhat easier time because they receive some portion of the ongoing value of land (this could be rents, timber sales, mining rights, etc.).

[AlexGood]

This cannot be allowed to happen - take away the money RIGHT NOW

[JMTQp8lwXL]

If you can take a relatively small amount of money (e.g, $40,000-- the price of a new car, which is something the middle class does buy), and invest it for say, 70 years, earning a 7% annual return, you could leave your heirs $4.5 million:

40000 * (1.07 ^ 70) = $4,559,575

If you can buy a car, you can make your beneficiaries multi-millionaires, if you want to.

[jedberg]

The chance that you live for 70 years after you have an extra $40,000 to invest is highly unlikely unless you started out wealthy. Also, you will not get 7% annual interest on $40K.

Edit: Let me expand. You won't get 7% real returns on $40K. Yes, the S&P500 can return that much, but that's before inflation.

OP was comparing the cost of a car now to the average wealthy person's inheritance now, which isn't a fair comparison. You have to account for inflation over 70 years.

[JMTQp8lwXL]

The S&P 500, over its history, has returned north of 9% per year.

https://www.investopedia.com/ask/answers/042415/what-average...

[jedberg]

See my edit, I was talking about real returns including inflation.

[JMTQp8lwXL]

The nominal return (9%) is:

40000 * (1.09 ^ 70) = $16,669,203.

The first calculation uses 7%. It is the real return. You'll actually have $16m, but the purchasing power would be $4.5m in 2021 dollars.

[slownews45]

If you just did the S&P 500 you'd have an average return of between 8% - 10%.

[jedberg]

See my edit, I was talking about real returns including inflation.

[thebricksta]

If I'm old enough to buy a car, then I likely am having kids soon - so a 70 year time horizon means that my kids will be multi-millionaires when they are around 70, which doesn't do much for them. Maybe it'll do something for their children, who probably are in their 40's with kids of their own, but by then you are splitting things maybe three to six ways, so it's just a nice inheritance, not quick riches.

[tstrimple]

The average life expectancy in the US is 78 years, so this plan is fantastic for all the 8 year olds with $40k just sitting around waiting to be invested.

[AutumnCurtain]

The middle class in America is largely buying $40,000 vehicles with debt and in middle age, not in cash at 18 (and a very long life ahead of them).

[MisterBastahrd]

How in the hell is $40K a relatively small amount of money?

[JMTQp8lwXL]

It's less than the median household income. If you save 15% of the median income for a few years, you could come up with $40k. It's also small relative to $4.5m (0.88%).

[MisterBastahrd]

How many people making $50K a year can afford to save $15K of after-tax income? Single people living with their parents?

[jandrese]

In 70 years that 4.5 million won't be nearly as impressive. If you had $40,000 in 1951 that was a pretty serious chunk of change. For reference, that new car in 1951 was around $1,500.

[acomjean]

This is true. If you have some extra money, its a lot easier to make more money.

Though I would be most people just don't have 40,000 lying around, they usually have to get a car loan and borrow that.

[seneca]

Are you saying that someone being given an economic advantage by their parents means that their accomplishments have less merit? I'm not trying to straw man you, I'm just having trouble parsing your argument.

[JoeNr76]

Of course. Becoming a milionaire because your dad gave you a million is not what people understand as being meritocratic.

They already get a lot of advantages during their life because of the position and wealth of their parents.

Is it bad to leave things for your kids? Nope, it's completelhy natural. But you can't claim that the society where that happens is a meritocracy.

[sokoloff]

I think there's clearly a spectrum. Giving your kid $100K while my kid gets only $25K doesn't make the society not a meritocracy, even though your kid got 4x as much. If your kids gets $100K and mine gets $100M and then we see what happens, I agree that that's not a meritocracy with respect to those two families.

Personally, I came from a family of public schoolteachers. Even though many families had many millions more than we did, I think our society, as experienced by the median and mode citizens, is far more a meritocracy than a plutocracy.

Does everyone get a full reset and the exact same starting point as everyone else, as if life were a board game? No, of course not. Would the world be better if it worked that way? It would undeniably be more "fair", but I think less desirable.

[dragonwriter]

> Are you saying that someone being given an economic advantage by their parents means that their accomplishments have less merit?

The fact that accomplishments are contributed to by material advantages supplied by parents (and more generally the network people are born and raised into and in) means that those accomplishments are less due to individual merit. The total contribution is 100%, so more of one contribution is less of the other.

[tmp_anon_22]

Some definitely are.

Consider someone being gifted $999,999 and earning $1, then bragging about being a millionaire.

Or more realistically someone bragging about coming from an Ivy League when their parents are alumni and big donators.

Plenty of accomplishments become lesser when more context is revealed.

[fullstop]

I've seen this here before and made a mental note since it was such a good equation: success = hard work * opportunity^2

If you have less opportunity you must work much harder to be successful than a person who has more opportunity.

[ruined]

merit is not compatible with advantage

[ramesh31]

>Are you saying that someone being given an economic advantage by their parents means that their accomplishments have less merit?

Yes. Being raised in a world where your physical needs are never even remotely considered is without question the single most important factor that leads to radically different outcomes in life.

[mmcdermott]

As I sit here reading this, I'm trying to fill out the two sides of the argument in my head and I find the pro-estate tax position is a little less than clear to me. Estate tax goes to various levels of government. What about governmental tax revenue is meritocratic? Surely it's the same thing? And what makes its expenditures meritocratic?

[dantheman]

Intergenerational wealth and meritocracy are not incompatible. People can spend thier money how they want, if they want to give it to thier kids they still earned it.

[timkam]

Then the kids did not "earn" it, though; they got it because of their parents' merit, which means it is not meritocratic.

[mc32]

That's like saying a welfare recipient didn't "earn it" so it's not meritocratic.

[timkam]

What we consider "welfare" is typically not handed out based on merit, but based on need (and, from a global perspective, also based on privilege). The idea of a welfare state is not meritocratic. Many societies strive to be meritocratic with egalitarian constraints: anyone should be able to have a decent life (egalitarian), but to have a great life, one needs to contribute (meritocratic). Interestingly, inheritance neither fits the egalitarian nor the meritocratic perspective.

[mcguire]

Yes?

[TuringNYC]

I think there are two problems --

1. Good education hard to come by in the US, and immense wealth allows some people almost automatic access to the best education while others are outbid (either via property/school districts or via private school "donations" for entrance or via access to best prep services or via influence which is used to navigate "leadership" based entrance applications for k-12 schooling )

2. See item 1 -- this should not happen in the US, but it does. Our population has grown, but we've underinvested in schooling and all the foundational systems. The number of great schools has not necessarily grown with population. I see it myself in my hometown as skyscrapers rise, but schools are not built in proportion.

Allowing intergenerational wealth to bypass Problem 2 allows the plutocracy to avoid the problem with money (Problem 2) since it isnt their own problem anymore.

[elefanten]

You're arguing against the American system as it is. Proponents of meritocracy wouldn't say that America has achieved it.

I agree with the other comments that meritocracy and inheritance are not at odds, especially if the meritocracy component is referring to positions of power & responsibility.

But your point is valid wrt America as it is. Education is a lynchpin of meritocracy. So, America's solution may need to include some reshaping of inheritance as a means to reshape the mechanisms of meritocracy. But the facile leftist take of (more or less) "ban inheritance" would be an overstep and create far more problems than its simplicity solves.

[erwald]

i think the idea is that the kids did not earn their inheritances.

[kiba]

Nobody earns their inheritances, parents, or upbringings.

[moate]

Right. So then how do you justify intergenerational wealth if you also support the idea that a meritocracy is the "most fair" system?

OP's point was that you can't, you either support the meritocracy or you support inheritance providing some people an unjust advantage.

[kiba]

It is incorrect to think of meritocracy as necessarily egalitarian. If all we care about is merit, then the rich are going to be selected more often than the poor, simply on the basis of ability alone.

[moate]

How do you define "merit"?

[moate]

Okay, now keep going. How did the kids "earn" their money?

The general understanding of a meritocracy is that merit is rewarded. "Having wealthy parents" isn't usually considered a merit...

[iammisc]

Sure they are. Individualistic meritocracy and intergenerational wealth are not compatible. But familial meritocracy and intergenerational wealth are self-requiring.

[KittenInABox]

The kids didn't earn it though ;)

[elefanten]

Yeah and? In a meritocracy, they wouldn't be given positions of responsibility and power without earning them. So the unearned economic advantage will dwindle within a couple generations unless they can produce something of value.

In no scheme can you regulate away all forms of unearned advantage. The skills, capacities and potential we are born with vary.

People are tremendously motivated by providing for their children. Taking that motivation off the table will drive people to places where they can achieve it.

The long-term, highest-net-value producing system of distributing power / responsibility will be a meritocracy.

[geofft]

First off, merely having money is a position of responsibility and power.

Second, money doesn't "dwindle" on its own. Unless you are actively gambling it away (literally or metaphorically), a large amount of money by itself produces more money of value at a certain baseline rate (by the ability to make broader and individually-riskier investments while managing aggregate risk - tl;dr, "why banks are profitable"), entirely independent of the merit of the person with the money. And even if you were to bury it in the ground like the dude in the parable of the talents, it would only lose out on inflation. It wouldn't rot or evaporate.

Finally, a couple of generations is a long time! Nations rise and fall in less time than that. My grandparents grew up under the British Raj. The whole of the Soviet Union lasted a couple of generations. If your "meritocracy" recognizes merit with latency on the order of a couple of generations, I'm not sure it's an effective meritocracy. If the US Senate had free and fair elections once every generation, replacing one-third of the participants each generation and allowing senators to hand-pick their successors whenever they wanted to retire, would you call that government a democracy?

[elefanten]

My comment followed from the claim about whether meritocracy and inheritance are compatible. I'm addressing the notions in theory rather than in present situational terms in any given country. From that perspective:

1. Disagree. Yes, money can be used to buy power. But it's not power in itself. A strong meritocracy would focus on giving positions of responsibility (auditing/regulating/decision-making type powers) to people who show the merit to perform them well. Money is an advantage, but it is not the power to shape social systems.

2. Rich heirs who put all their wealth into safe investments and sit on it also aren't really getting much out of it. And that money isn't sitting away in a vault, it's a part of the economy. Rich heirs who buy yachts and mansions and hang with celebrities, but lack the merit to contribute anything useful, will burn through (most of) the wealth. It's not just common... it's the default outcome within a few generations.

3. Yes, generations are a long time. But that latency would apply to personal/family wealth rather than decision-making authority.

I'm not a pro-inheritance maximalist. I agree with various forms of taxation on inheritance. But there is value is allowing people to be motivated by their family's future. Inheritance is not inherently at odds with meritocratic assignment of political power.

[geofft]

1. I'm not sure I follow your distinction between "can be used to buy power" and "power in itself." Does a general who can order a thousand fighter jets to bomb a target, but who does not fly any planes himself, have no power? Does a high court justice who can order that people be imprisoned or freed, but who does not have any handcuffs or jail keys herself, have no power? Why do you count auditing and regulating (telling people what to do, but not doing it) as power, but not buying and contracting? And why is the ability to decide what the market wants (e.g., whether the market prefers goods "Made in the USA" or "Made in China," or whether the market wants to boycott and divest from Israel, or whether the market wants to open business and have sporting events in North Carolina) not a form of decision-making authority?

2. When you put your money in safe investments and sit on it, you get the interest out of it, which is hardly "not really getting much out of it!" Let's say you can get a 2% annual return by just not being actively bad with your money. If you have, say, a million dollars, then you can get $20K/year, forever, doing nothing - which is higher than the US minimum wage. It's not a lot of money to a rich person, but it's the difference between working and not working. And a net worth of a million dollars is hardly yachts-and-mansions levels of rich - it appears to be roughly the 90th percentile for net worth in the US, i.e,. one in ten people have access to this level of wealth. (Yes, I'm looking at real data from a real country, because if your system only works in theory, it doesn't work.)

And, of course, it's the difference between being motivated to work and not being motivated to work. You are correct that there's value in allowing people to be motivated to work - inheritance destroys that!

[mcguire]

"Yes, money can be used to buy power. But it's not power in itself."

Try convincing someone who has to work multiple jobs to support themselves and their family of that.

"A strong meritocracy would focus on giving positions of responsibility (auditing/regulating/decision-making type powers) to people who show the merit to perform them well. Money is an advantage, but it is not the power to shape social systems."

A "strong meritocracy" has about as much chance of existing as a non-corrupt totalitarian or communist system.

[MisterBastahrd]

The motivations of the average person are not aligned with efficiency.

[elefanten]

But the motivations of those shaping the structure and systems of civilization should be.

[MisterBastahrd]

Efficiency for efficiency's sake isn't congruent with a free society.

[seibelj]

This argument ultimately goes down to a belief that all children should be owned and raised by the state - parents should not have any involvement, as that gives their children an unfair advantage.

Let's pretend money had nothing to do with it. Simply by virtue of being my child, I am able to train them and pass knowledge in such a way that they have an inherent advantage to other children. Would this be unfair? Ultimately, it's the same thing! They now have an advantage over others.

Now, should we seize 100% of all wealth upon death? Otherwise, my children will get something more than others, and over time this compounds to be a significant advantage.

The average person does not want zero control over raising their children. This comes from a belief in the family unit - a private, self-organized entity that is separate from the state. Families are biologically predisposed to help their own members and exclude outsiders. This manifests itself in innumerable ways such as gifting money to family members, taking vacations with family, investing in each other's businesses, and on and on.

You will never be able to prevent people from giving their children wealth. It is biologically predisposed. Also, no one likes paying taxes - nobody! When given the opportunity, even middle class people alter their behavior to avoid even small taxes, like when people drive from one state with sales taxes over the border to another (Massachusetts residents driving to New Hampshire - extremely common) to avoid a 6.25% sales tax.

What you have is incentives - we all want to help our children, and pay the fewest taxes. The state can pass whatever laws they want, but everyone is incentivized to avoid them, and will find new and clever ways to do so.

[briantakita]

Meritocracy is a myth. The government cannot create meritocracy. The government can only steal resources from some people & give back less resources to other people. This process of wealth redistribution is not 100% efficient. There is significant waste. The government will have to take away public freedom by increasing regulations to enforce this redistribution of wealth. The people bear the brunt of compliance in time, freedom, wealth, etc.

We are allowing the government to build inter-generational wealth by reducing the inter-generational wealth of the citizens & their families via taxes & printing fiat. The tax revenue & money printing benefits the people who control the aspects of the economy (aka the wealthy). Estate taxes only gives more power the largest, most entrenched power, which is the government, corporations, & it's beneficiaries. The ultra-rich families who would have to pay these taxes also benefit from the consolidation of wealth via government & corporate control even more aspects of life. This leaves out middle-class families, where parents can longer pass along a house & land to their children/grandchildren without being heavily taxed. Instead, the house & land go to "the people", aka under the control of the government, corporations, politically powerful, & the ultra-wealthy. Independent families lose, the well-connected utra-wealthy win.

[aaron-santos]

In agreement. Meritocracy seeks to purposefully confuse the idea that anyone can succeed with the idea that everyone can succeed. It's an individualizing ideology which short-circuits systems-level thinking. I'm immediately suspicious of ideas which entangle concepts and shut down systems-level thinking. I expect that anyone who calls themselves a critical thinker to do the same.