Equitable inheritances level the playing field by rewarding talent, not status

Very interesting. From Do Inheritance Customs Affect Political and Social Inequality? by Anselm Hager and Hanno Hilbig. From the Abstract:

Why are some societies more unequal than others? The French revolutionaries believed unequal inheritances among siblings to be responsible for the strict hierarchies of the ancien régime. To achieve equality, the revolutionaries therefore enforced equal inheritance rights. Their goal was to empower women and to disenfranchise the noble class. But do equal inheritances succeed in leveling the societal playing field? We study Germany—a country with pronounced local‐level variation in inheritance customs—and find that municipalities that historically equally apportioned wealth, to this day, elect more women into political councils and have fewer aristocrats in the social elite. Using historic data, we point to two mechanisms: wealth equality and pro‐egalitarian preferences. In a final step, we also show that, counterintuitively, equitable inheritance customs positively predict income inequality. We interpret this finding to mean that equitable inheritances level the playing field by rewarding talent, not status.

Part of what makes this so interesting is that they see a paradox which isn't necessarily real and it arises because of the distinction between wealth and income.

Equal inheritance laws and traditions address the devision of a static wealth pie at a given point in time, i.e. when someone dies. It is clever to use local-level variance as a means of studying effect, though it would be interesting to know whether religion was controlled for. Religion being, potentially, a significant confounder.

Electing more women into political councils is nice but could simply be a product of modern norms. I find it interesting that, as one would expect, getting rid of primogeniture decreases the number of aristocrats. It seems that so long as families are able to concentrate accumulated wealth based on heritage, that can serve as a powerful retardant to social change. On the other hand, it creates a genetic crapshoot. If the eldest heir happens to be the most competent, it is negative force on societal progress. I.e. the wealth is protected and expanded and social privileges expand. If, on the other hand, the eldest is randomly likely to inherit bad capabilities and/or behaviors, primogeniture works only so long as the die roll right. At some point the wealth goes to a dullard and risks dissipation.

On the other hand, when the wealth is equally distributed each generation, that serves as a form of covering a larger number of bets over longer periods of time. The wealth is likely to be eroded but it will go to a larger pool of ready talent and have a greater probability of being regenerated.

In other words, if the most talented and productive child in the family is number three, under primogeniture, that talent will not get fully developed owing to inability to access capital. The talent is unexploited and that fortune is eroded (it is in the hands of a less capable child).

If the same fortune is distributed across three children, it is quite probable that talented child number three will better generate excess income from the smaller inheritance.

By abolishing primogeniture, you do get rid of static class divisions based on protected wealth. However, the financial well-being of that wealth is at greater risk from the genetic luck of the draw.

On the other hand, if the capital is equally divided among the children, there is a greater probability that the smaller amount of wealth will more likely be matched with the better talented child.

You lose wealth concentration but you increase income earning inequality owing to differences in talent. And income which is earned (as opposed to inherited) generates increased productivity. It is notable that the nations with the greatest acceptance of capitalism also have the highest recorded income growth but also the highest level of income inequality.

Absent wars, famine, disease, and societal collapse, income equality is always getting worse in free and productive societies. And no one wants to obtain income equality through wars, famine, disease, and societal collapse.

The Mandarin Class is always trying to protects its generational privileges through concentrated wealth and yet everyone is most benefited by free talent accessing capital to drive higher income.