Inheritance is essentially a grant from the dead to the living. Making a will has some of the characteristics of establishing a foundation. A legacy, however, is a somewhat particular form of grant. It certainly represents a grant for the recipient, since it increases their net worth. It can hardly be said to reduce the value of the donor after death, except in the sense that death eliminates all net worth, at least in the form of earthly goods.
From the recipient’s point of view, inheritance, even in the strict sense of a legacy, is an important part of the grants economy. In a society where life expectancy is, for example, seventy years, and where wealth is equally distributed among age groups, approximately 1/70 of the total wealth of society will be transmitted each year through death and inheritance. Since the old are richer than the young, the proportion must be higher, perhaps as much as 8 to 10 percent.
We know very little about the distribution of inheritance income, although this is something that should be addressed by statistical research. A very important question for the dynamics of society is whether inheritance concentrates or distributes wealth. It can easily do both, depending on will-making habits and on the legal and tax structure.
The decision-making processes involved in legacies have received surprisingly little attention from economists and other social scientists. There is a certain amount of practical legal knowledge, and there are even training schools that teach fundraisers from universities and other institutions how to advise potential testators on how to avoid taxes, perhaps in the hope that part of the taxes avoided will reach the advising institution in the form of a legacy.
The theory of legacy should not, in principle, be very different from the theory of grants in general, with the sole exception that a will concerns a situation in which the grant is mandatory and its total amount is determined simply by the testator’s total net assets. The decision-making process only concerns the distribution of this total among various possible recipients.
This will depend mainly on the system of benevolence and malevolence; that is, on the nature of the integrative structure and on the testator’s identification with others. The frequency with which legacies pass to children and other relatives is testimony to the powerful integrative structure represented by the family.
On the other hand, there may also be malevolence, as when a wayward child is “disinherited,” or when the threat of disinheritance is used as a motivation to extract “tribute” from a practically lost child. There are some very interesting behavioral problems here that have been studied very little.
I have no data on the total proportion of inheritances that passes each year to family members, but it must be very large. In fact, Professor James Morgan has concluded that the family is by far the largest component of the grants economy.
A useful indicator of the integrative norms of society is that all societies have laws on how to dispose of fortunes left intestate, and these almost universally pass to blood relatives. Inheritance taxation may be considered an expression of these norms, representing the rights of the state against those of the family, or of private charitable institutions, over the total amount of inheritance grants.
Inheritance has another aspect broader than the mere legacy of “earthly goods.” Each of us inherits from our parents language, culture, class, as well as the genetic attributes of race, defects such as leukemia and, more doubtfully, genetic excellences.
We also inherit from the society around us cathedrals, literature, painting, music and the great achievements of the past that form part of our heritage. The principle of serial reciprocity comes into play here, since those who are aware of this inheritance acquire a sense of community with the past and, therefore, also with the future. They are concerned not only with preserving but also with increasing the inheritance passed on to the next generation.
There may be very sharp personal psychological differences among individuals and societies according to the degree of this sense of inheritance and obligation toward the past. If childrearing and educational processes are traumatic, the debt to the past may not be felt at all except as a burden, and there will be no interest in preserving or transmitting it.
Just as there is the problem of the impact of inheritance on the distribution of wealth, inheritance in its broader sense may also perpetuate, increase or reduce existing inequalities. The fact that I inherited the English language from my parents, teachers and friends is an asset to me, in the sense that English is a universal language that someone who has inherited Welsh or Basque will have to acquire.
Knowledge of the English language probably has a monetary value for the individual that could be estimated. Similarly, I may inherit a religion, a nationality and a culture that may be of greater or lesser value to me, and the differential inheritance of these things may easily lead to an increase or decrease in inequality, depending on the nature of the process itself.
If inheritance leads to inequality, it may be necessary to intervene where greater equality is a social goal. We may consider Head Start and other similar reform measures as almost equivalent to a negative inheritance tax; that is, a kind of subsidy formed by negative taxes for those whose cultural or genetic inheritance is deficient in some respect.
It is evident that one-way transfer, far from being something strange or extraordinary in the general organization of social life, is an integral and essential part of the system, without which not only community but organization and society itself would be virtually impossible. The concentration of economists on exchange as a social organizer, important as it is, has frequently blinded them to this essential fact.
