INHERITANCE: ECONOMIC ASPECTS. There are no ideas of inheritance which can be shown to be "natural" or absolute, as may well be seen by comparing the ideas prevailing in different countries at the same time, or in the same country at different times. It has been well said "Most Englishmen who have not studied comparative law, will think it natural that the ownership of their property after their death should be governed by their last will and testament. Most Frenchmen, in like case, will think it natural that the operation of their will should be subject to the law of the legitime. But many Indians, far from thinking the disposition of property by will to be natural, will find great difficulty in understanding what the mere idea of a will signifies and implies. Indeed, Maine has pointed out that to the vast majority of mankind throughout recorded history the idea would be quite incomprehensible" (H. Dalton, Inequality of Incomes).
The rights of Inheritance and Bequest are commonly confused. In general, by an absolute right of bequest is meant the freedom to leave one's possessions exactly as one pleases, whereas an absolute right of inheritance is actually an inalienable right to possess what someone has left according to a rule that commends itself to our sense of natural fitness. An Englishman, finding that his parents have left their wealth to some stranger, may be par doned for emphasizing moral rights of inheritance. A French man, finding that a substantial part of his hardly accumulated for tune must go, whether he likes it or not, to a son who has, by his conduct, no moral claim upon it, may be excused for discussing the right of bequest. One in either nation who has neither wealth to leave nor to receive, may well be pardoned when he questions the social utility of any system which acts as a conduit pipe for much current production into areas where he has no claim.
Family Inheritance and Incentive to Work.—Much of the philosophy of bequest and inheritance is bound up in the philos ophy of private property, and in so far as individuality in the production, as well as the spending and direction of wealth, is for the social good, the right of bequest, it may be argued, is an important attribute of private ownership. But the right to make family bequest and the right to make bequest in any direction are very different in social importance. It is probable that the incen tive to work and to save would be very seriously impaired if fam ily inheritance were not allowable, whereas restrictions in the wider right of general bequest might well exist without untoward social effects.
"The permanence of the family has a social value which the right of inheritance helps to maintain." Similarly "the practice of charitable bequest led at an early date to the recognition by law that there are certain purposes which may well be made more permanent than the lives of the individuals who serve them." It is fairly generally agreed that some rights of inheritance, how ever limited and controlled, are essential to the full economic ad vantage of property as a social institution, and the precise de gree is a matter relative to the stage of social development.
The philosophical theory that the "mixing" of labour with material, in whatever proportions, constituted a natural right in the material, however valid for the lifetime of the worker, gave little guidance as to the rights of heirs who had not worked upon it, and failed to provide a self-evident principle. Locke thought that liberty of bequest was obvious or natural. The fact that three distinct systems prevailed, even in England, for intestacy, could only be accounted for by assuming that a law of nature had been modified by State-made law, based upon the social contract. But as Hastings Rashdall points out, the obligation to keep the con tract rests upon a principle of natural law, and these principles seem to be in conflict. Any system which supports the right of primogeniture must prove to be illogical on a Lockian basis.
Right of Bequest.—Some right of inheritance in practice, but never unconditional rights, are found in the earliest times. In England the laws of inheritance have tended to give way to the absolute right of bequest. The power to dispose of lands by will dates from Henry VIII., and there is now an unlimited power of disposition except for entailed estates, so that there are no rights of wife or children which cannot be set aside. Where the will of the owner has not been actually expressed by him, the rights have differed widely up to 5926 according to whether the property was real or personal estate. The widow had a life interest in one third, the husband, if there were children, had a life interest in the whole. But under Kentish gavelkind custom, their interests were one-half each, the wife's continuing until remarriage. Under "Borough English" the younger son took preference. The some what arbitrary character of succession to land illustrates the absence of "natural" law. Males are preferred to females. Where two or more males with equal relationship are in question, the eldest inherits, but if they are females they take equally. The father, his issue, and his ancestors, however distant, take priority over the mother and her ancestors. "A more remote male ances tor and his issue are excluded by a nearer male ancestor and his issue, but the mother of a more remote male ancestor and her issue are preferred to the mother of a nearer male ancestor and her issue. Thus land goes to remote relations on the father's side before it can go to even the mother on the mother's side. "It would be hard to justify the continuance of such rules in a modern civilized country, and it is only the complete freedom of will making which has prevented them from being found intol erable" (Geldart).
In personalty, the husband took all his intestate wife's property, but the wife could take only one-third (or one-half if there were no issue). Even if he had no ascertainable relatives the wife was restricted to half, the rest went to the Crown. By a recent legis lation (1926) the old rules of intestate succession are repealed, and the principle has been to distribute property much more in accord with what most deceased persons would have adopted if they had made a will. Now the husband (or wife) takes all per sonal chattels absolutely, f 1,000 free of death duty, the whole residue if there are no children, or one-half if there are. The degree of relationship entitled to benefit now goes no further than first cousins and their issue, and the residue goes to the Crown.
There are general restrictions on the power to will property in England, for property may not be left to waste, or accumulate per petually; nor can a succession of owners be prescribed beyond a period of 21 years after the death of persons alive at his own death. But otherwise the claims of the nearest kin can be almost ignored. The British ideas extend to the dominions and most of the United States, though in the United States a widow is gen erally entitled to one-third of the personalty, and a life interest in one-third of her realty. But on the continent of Europe the legitime prevails, when near relatives are secured by definite rights. In France, the right of free bequest extends only to a frac tion. In Italy, one-half of the property has followed a settled rule. The French form has narrowed, through the Napoleonic regime, from an earlier form (to which Quebec is still attached) whereas England (as distinct from Scotland) broadened from narrower ideas.
J. S. Mill thought the right to make bequest was inherent in the idea of property, but the right to inherit was not. His pleas for limitation of bequest were mostly on ethical grounds, but he was not blind to economic considerations, for he recognized: (a) an economic disadvantage in the past, in letting family property be broken up, and a little commonwealth dispersed, and this created an inherent right in children to the possessions of their ancestors; (b) that the advantages of the incentive to be found in family fortunes were outweighed by the mischiefs to society of perpetuities ; (c) the value of the French system in breaking down the tendency of primogeniture to aggregate property in masses; (d) the economic value of having a section of society relieved from immediate pressure.
Heavy taxation of bequest through death duties has been advo cated on lines which are intended : (a) to produce a maximum revenue without hurting the subject of assessment; (b) to correct the natural anomalies of the bequest system; (c) to redistribute wealth; (d) to socialize or nationalize wealth.
The most modern and most considered scheme for virtual aboli tion of continuous inheritance is the Rignano proposal for death duties of a special type, progressive in point of time by the number of successions. When a man dies, under this system a large tax would be laid upon all wealth acquired by him through inheritance, and only a small one upon wealth saved by him in his own life time. As a result a certain corpus of wealth passes to his heir, and to that heir it is all inherited wealth, so that on his death in turn it would be very heavily taxed. It is claimed that every one would have to work and save hard, for it would only be from such self made wealth that the children could benefit. There are several Rignano schemes, varying in severity, from a mere modi fication of existing death duties, to the maximum profit which passes any given block of property into the hands of the State in two generations. The Colwyn Committee on Taxation and the National Debt reported against the Rignano plan as a scheme of taxation.
With the invention of modern finance and joint stock enter prise, large aggregations of wealth can be secured for production in a way that was formerly only possible with inherited aggrega tions. To this extent we are less dependent upon concentration of wealth through inheritance. Moreover, the importance of con tinuity of family management in private business is becoming rapidly less with the growth of a salaried managing class. It may be said, therefore, that the advantages of a system of inheritance from the point of view of national production rest almost entirely in its psychological influence upon saving, and not upon objective forms of production made possible only by the system.