25 June 2007

Inheritance (2)

Is it fair for a person’s chances in life to be affected by the receipt of a capital sum from another individual? We could ask the same question about innate ability: is it fair for a person to have a better chance of a high income because of genetic characteristic they did nothing to deserve? It has been argued that it is not. Of course, it is harder to stop people benefiting from their abilities than to stop them benefiting from inheritance.

This raises the question of what exactly is fair, and what is deserved. The philosopher John Rawls thought that, given a choice of different possible reward systems behind a ‘veil of ignorance’, people would opt for a system which permitted rewards to ability and effort only to the extent that the position of the worst off would be maximised. Rawls proposed that this hypothetical choice should be used to define what is ‘fair’. This is usually taken to mean, permitting a certain amount of competition, with higher ability and/or greater effort tending to yield higher rewards, but also a good deal of redistribution back down towards the poorest.

It has been pointed out that Rawls’s solution depends on assuming a particular attitude to risk: that of not being willing to gamble to any extent on a high variance of possible outcomes. If correct, what does it tell us about inheritance? Assuming a Rawlsian system allows for savings, it is not clear that an individual behind the veil of ignorance would necessarily insist on capital gifts being taxed, since such gifts do not themselves result in greater divergence of outcomes between individuals in the way that free market competition does.

If we say inheritance or ability are not morally deserved, then that leaves the question of what is. Although we might want to say that effort is more deserving of reward than ability, because it is more under the control of the individual, we could make similar objections as with ability. If A makes more effort than B, is it not because A benefits from conditions which make it easier for him to try harder, e.g. a more supportive upbringing, a higher level of self-confidence, or a greater innate capacity for making efforts?

Other articles
Stanford Encyclopedia of Philosophy on egalitarianism
Wikipedia on John Rawls


Steve_Roberts said...

It's about property rights. I can give my money away, gamble it away, buy worthless things, but if I want to give it to my family when I die, the government takes a big slice. It's mine, I should be able to dispose of it however I wish.

Heraklites said...

Someone might counter: if we need to raise a certain amount of government revenue, we should start by confiscating all property left at death before we apply any tax to income or expenditure, because (a) a deceased person has no rights, (b) unlike income which is "earned" through market transactions, capital receipts are not.

A possible response to (a) would be for people to bequeathe their property before death. Objections to (b) were mentioned in the preceding post.