The_Rich_Should_Leave_Their_Wealth_To_their_Children
00:00:00.000 | Who's your Realtor?
00:00:03.000 | Seriously, who is your Realtor?
00:00:06.000 | Lately, there's been a lot in the news about real estate and Realtors.
00:00:10.000 | So let us help clear the air.
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00:00:23.000 | on the biggest financial decision of your life.
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00:00:30.000 | than California Realtors.
00:00:32.000 | Because we know California real estate is not easy.
00:00:35.000 | That's an understatement.
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00:00:41.000 | And if you've been there, done that,
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00:00:58.000 | California Association of Realtors.
00:01:00.000 | The rich should leave their wealth to their children,
00:01:04.000 | not to charity.
00:01:07.000 | Mick Jagger's announcement that he would not leave his fortune to his children
00:01:10.000 | caused much controversy.
00:01:12.000 | A chorus of celebrities have announced the same.
00:01:15.000 | I've told the same thing my dad told me.
00:01:18.000 | My dad says, "When I die, you can expect that I'm going to die broke
00:01:21.000 | and you're going to be paying for the funeral."
00:01:24.000 | Guy Fieri, net worth about $100 million.
00:01:28.000 | "I just think all an inheritance does is breed laziness and entitlement.
00:01:32.000 | I worked hard and I'm going to spend it all and have fun with my husband."
00:01:36.000 | Marie Osmond, net worth perhaps $20 million.
00:01:41.000 | "There won't be much money left because we are spending it.
00:01:44.000 | We have a lot of commitments.
00:01:46.000 | What comes in, we spend, and there isn't much left.
00:01:48.000 | They have to work."
00:01:51.000 | Sting, net worth about $550 million.
00:01:55.000 | "I am determined that my children should have no financial security."
00:02:00.000 | Nigella Lawson, net worth about $20 million.
00:02:05.000 | My basic reaction to these statements is disgust.
00:02:09.000 | Many of these celebrities are keen to announce to the world
00:02:11.000 | that their wealth will go to charity.
00:02:14.000 | Left unsaid, however, is that they intend to spend the rest of their lives
00:02:18.000 | living as some of the wealthiest people on earth.
00:02:21.000 | They will not release their riches.
00:02:24.000 | Death will release their riches for them.
00:02:27.000 | Their children will experience the change.
00:02:30.000 | They will not.
00:02:32.000 | But it is, of course, the parents who secure the applause.
00:02:38.000 | These parents are keen to emphasize that they are giving their children the gift of work.
00:02:43.000 | It's for their own good.
00:02:45.000 | The parents are, of course, past the need to work.
00:02:48.000 | They have already morally ascended, leaving menial work far behind.
00:02:54.000 | No, they can relax.
00:02:57.000 | Other celebrity parents will tell you that they're actually continuing to work themselves,
00:03:02.000 | as stewards of their fame and fortunes, i.e., things that are enjoyable to work on.
00:03:07.000 | The suggestion that their children inherit this stewardship is, of course, ridiculous.
00:03:13.000 | Young adults must spend years working in meaningless, bottom-tier jobs,
00:03:17.000 | or else they will be morally ruined.
00:03:20.000 | Far better to disperse the estate and to leave the children to fend for themselves.
00:03:25.000 | This notion that everything must be broken apart every generation
00:03:29.000 | and thrown into the market to churn has a long history in the liberal tradition.
00:03:34.000 | Adam Smith, the so-called father of capitalism, railed against entails,
00:03:40.000 | legal structures designed to keep estates intact across generations.
00:03:45.000 | Entails are disadvantageous to the improvement of the country,
00:03:49.000 | and these lands where they have never taken place are always best cultivated.
00:03:54.000 | Heirs of entailed estates have it not in their view to cultivate lands,
00:03:58.000 | and often they are not able to do it.
00:04:01.000 | The man who buys land has this entirely in view,
00:04:04.000 | and in general the new purchasers are the best cultivators.
00:04:08.000 | Adam Smith, Lectures on Jurisprudence
00:04:12.000 | Like our celebrities, Smith's view was predicated on the notion of the importance of "the work."
00:04:19.000 | Continuously breaking intergenerational structures ensured maximum productivity
00:04:24.000 | as hungry new generations sought to secure a fortune for themselves.
00:04:30.000 | In Smith's view, nothing should be sacred or spared from this churn.
00:04:35.000 | The market should extend into all domains.
00:04:38.000 | Productivity is held in higher regard than absurd and outdated traditions.
00:04:44.000 | Royal forests, wild environments preserved for the excellence of hunting across generations,
00:04:50.000 | were a prime example of something that must be destroyed in order to unlock productivity.
00:04:56.000 | In all the great monarchies of Europe, there are still many large tracts of land which belong to the crown.
00:05:02.000 | They are generally forest, a mere waste and loss of country and respect both of produce and population.
00:05:10.000 | In every great monarchy of Europe, the sale of the crown lands would produce a very large sum of money.
00:05:15.000 | When the crown lands had become private property, they would, in the course of a few years,
00:05:20.000 | become well-improved and well-cultivated.
00:05:24.000 | Adam Smith, Wealth of Nations.
00:05:27.000 | Gone are the royal forests, but think of the agribusinesses that could replace them.
00:05:33.000 | I regard this view as entirely autistic.
00:05:37.000 | Hopefully this is self-evident, but to this I will return.
00:05:42.000 | Many celebrities reassure us that, although they are not giving their children their inheritance,
00:05:47.000 | they are giving them the gift of a first-class upbringing and education.
00:05:51.000 | Let's play out the consequences of this.
00:05:54.000 | Now, instead of a young adult with a first-class upbringing and education,
00:05:58.000 | gradually taking stewardship of the family estate,
00:06:01.000 | a position of influence from which they could positively affect the lives of many people,
00:06:06.000 | they will be forced to pursue a lucrative career in order to continue their family lifestyle.
00:06:13.000 | Fantastic! The world just gained another financier, lawyer, or management consultant.
00:06:20.000 | It is often asked, where are all the great academic geniuses,
00:06:24.000 | the philosophers and scientists whose names echo in history, have gone?
00:06:29.000 | Why are we no longer producing them?
00:06:32.000 | Part of the answer is surely that our generation's geniuses design algorithmic trading technologies
00:06:39.000 | and social media attention maximization tools.
00:06:42.000 | They have, logically, chosen to maximize the production of the wealth that they were not given.
00:06:50.000 | Gone are the gentleman polymaths.
00:06:53.000 | Instead, academia is a desperate, all-out war for funding,
00:06:57.000 | with dubious proposals and grant manipulation taking more time and energy
00:07:02.000 | than self-funded inquiry pursued for its own sake.
00:07:06.000 | The notion that the moral quality of our elites is improved by laundering them through the job market is absurd.
00:07:13.000 | A lifetime of spreadsheet work does not make you a better person,
00:07:17.000 | especially if you feel resentful at being robbed of your inheritance.
00:07:21.000 | In fact, what is often happening is that bad celebrity parents are attempting to outsource
00:07:27.000 | the cultivation of the virtues of discipline and ambition to the job market,
00:07:32.000 | rather than succeeding in inculcating these virtues as a parent.
00:07:37.000 | The false virtue of "work for work's sake" is an attempt at mitigating bad parenting.
00:07:43.000 | Deep down, celebrity parents realize their failure to raise children worthy of power,
00:07:49.000 | who can be trusted to be good stewards of their inheritance,
00:07:52.000 | and so the parents cut the children off in the bud.
00:07:56.000 | But society will always have elites. If one generation hamstrings their children from taking its place,
00:08:03.000 | someone else will fill the elite vacuum.
00:08:06.000 | The actual effect of this hamstringing is to ensure that our societal elites are perpetually first-generation wealth,
00:08:13.000 | i.e., the latest obsessive fund manager or entrepreneur to take his morally dubious tech product to IPO.
00:08:21.000 | The tyranny of the nouveau riche.
00:08:24.000 | Would Britain be a better place if the royal family sold everything they owned and gave the proceeds to a climate charity?
00:08:30.000 | Buckingham Palace could serve as a museum for hordes of half-interested Spanish schoolchildren to visit,
00:08:36.000 | or perhaps a nice second home for a Ukrainian oligarch who earned his wealth.
00:08:42.000 | Yes, the British people would lose one of the cornerstones of their culture, identity, history, and place in the world,
00:08:49.000 | but think of the solar panels we could build. Prince William could go and become an optician and become a better person.
00:08:56.000 | In fact, why stop there? Why should the British people benefit unjustly from their cultural inheritance
00:09:02.000 | and enjoy the sight of lavish, unnecessary palaces which occupy huge parts of valuable real estate in central London?
00:09:10.000 | If we level them, we could sell that land and build a second financial district,
00:09:14.000 | which could meritocratically employ the next generation of self-made men and give the proceeds to the Gates Foundation
00:09:21.000 | so they can do whatever it is that they're doing. I'm told it advances human flourishing.
00:09:27.000 | Unfortunately, this kind of faceless "charity" removes the donating celebrities from any kind of personal contact with the needy
00:09:36.000 | and any kind of personal responsibility, privation, or work.
00:09:42.000 | Wealth is just vaguely diffused after death, a last self-satisfied gasp.
00:09:50.000 | Ultimately, do you trust a faceless organization more than your child?
00:09:57.000 | If so, what does that say about the family you have built?
00:10:03.000 | One of the key drivers of this process is the modern capitalization of wealth.
00:10:09.000 | The very rich now hold the majority of their wealth in intangible financial assets rather than land.
00:10:16.000 | This has significantly warped how these families think about wealth,
00:10:21.000 | driving detachment from personal ties and responsibilities.
00:10:25.000 | If the end goal of wealth generation is to end up with liquid, fungible assets
00:10:32.000 | (stocks, shares, investment portfolios), then the nature of the business you build does not matter.
00:10:39.000 | It is just being built to be sold.
00:10:41.000 | It will not be a multigenerational family business determining the competencies and destinies of your descendants.
00:10:49.000 | It will be sold on the secondary markets within half a decade of being founded.
00:10:53.000 | Who cares if it's fundamentally meaningless or unhealthy?
00:10:57.000 | Conversely, if this wealth was held in land, and a single family was tethered to that land across generations,
00:11:04.000 | it becomes natural to consider definite, physical, local, personal projects
00:11:11.000 | to meaningfully improve the beauty and health of the society around oneself.
00:11:18.000 | A landed inheritance is not just wealth; it is history, responsibility, leadership, and the dependence of the surrounding community.
00:11:29.000 | Anything that requires multigenerational education to appreciate and support,
00:11:34.000 | like the fine arts, ballet, music, etc., wither and gradually disappear.
00:11:41.000 | Nurturing the heights of civilizational refinement is a non-trivial responsibility.
00:11:47.000 | What cannot wholly disappear, like the buildings of the great estates,
00:11:52.000 | becomes lifeless and ossified, becoming museum pieces rather than elements of a living culture.
00:11:59.000 | But no, our celebrities choose discontinuity between father and son,
00:12:06.000 | between one generation and the next.
00:12:08.000 | No shared responsibility and destiny, just a total reset to individualization.
00:12:16.000 | At the deepest level, the issue is that our society no longer has a conception
00:12:21.000 | of what an elite man or family is supposed to do,
00:12:25.000 | what their values, responsibilities, roles, and teleology are.
00:12:32.000 | What aging celebrities are really conceding is that they have built nothing of substance,
00:12:40.000 | nothing that is worth keeping together, nothing worth protecting.
00:12:46.000 | They have made no contribution to what Burke called the "ballast of the commonwealth."
00:12:53.000 | Burke's defense of the preservation of the estates of the great families of the 18th century
00:12:58.000 | illustrates how far we have fallen and how much we have lost.
00:13:03.000 | Contrast the following to today's elites. The power of perpetuating our property and our families
00:13:10.000 | is one of the most valuable and interesting circumstances belonging to it,
00:13:14.000 | and that which tends the most to the perpetuation of society itself.
00:13:19.000 | It makes our weakness subservient to our virtue. It grafts benevolence even upon avarice.
00:13:25.000 | The possessors of family wealth and of the distinction which attends hereditary possession,
00:13:30.000 | as most concerned in it, are the natural securities for this transmission.
00:13:36.000 | "Let those large proprietors be what they will, and they have their chance of being amongst the best.
00:13:42.000 | They are, at the very worst, the ballast in the vessel of the commonwealth."
00:13:48.000 | Edmund Burke, Reflections on the Revolution in France.
00:13:52.000 | Instead, we have abstracted all agency away from humans and into a depersonalized system,
00:14:00.000 | and that system is failing. Our society deserves a better class of elite.
00:14:08.000 | Society is indeed a contract. It is to be looked on with other reverence.
00:14:14.000 | As the ends of such a partnership cannot be obtained in many generations,
00:14:18.000 | it becomes a partnership not only between those who are living, but between those who are living,
00:14:23.000 | those who are dead, and those who are to be born.
00:14:27.000 | Each contract of each particular state is but a clause in the great primeval contract of eternal society,
00:14:33.000 | linking the lower with the higher natures, connecting the visible and invisible world,
00:14:38.000 | according to a fixed compact, sanctioned by the inviolable oath which holds all physical
00:14:45.000 | and all moral natures each in their appointed place.
00:14:49.000 | The municipal corporations of that universal kingdom are not morally at liberty at their pleasure
00:14:55.000 | and on their speculations of a contingent improvement,
00:14:59.000 | wholly to separate and tear asunder the bands of their subordinate community
00:15:03.000 | and to dissolve it into an unsocial, uncivil, unconnected chaos of elementary principles.
00:15:11.000 | Edmund Burke, Reflections on the Revolution in France.
00:15:17.000 | This essay was published by Johann Kurtz.
00:15:21.000 | You can find a link to the original in the description for today's podcast.
00:15:25.000 | He also blogs at becomingnoble.substack.com
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