Inheritance and meritocracy

09 Mar, 2025

What is the ideal society? While this question probably has no universal answer, it seems feasible to reach an agreement on some of its necessary core values. In particular, the concept of merit as a fundamental value seems widely accepted. In contrast to older forms of societies now considered archaic, we would typically want to see success as the direct consequence of an individual's efforts, rather than external circumstances over which said individual has little or no control. We feel far more inspired by stories of self-made men than by the anonymous dynasties of rentiers¹ of the 19th century.

If individual merit is a necessary foundation for the ideal society, what can we say about our modern societies? Do their institutions adhere to this principle of merit? These questions being very broad, let's focus on a single institution here: inheritance.

The merit to inherit

What is inheritance? Inheritance, as defined and guaranteed by the State, is the transfer, at the time of death, of all of the deceased's estate² to a number of persons or entities defined by them, known as heirs.

Where does merit fit in such a definition? First of all, notice that the condition for receiving an inheritance is not directly linked to the individual merit of the heirs. Inheritance is almost exclusively linked to a family bond or emotional connection. Also note that the amount received by the heir is not directly linked to their personal merit. The distribution of the inheritance being the deceased's prerogative, help and services provided to the deceased over their lifetime can have an impact on the distribution among the heirs. However, for various reasons³, this effect is very limited in practice. In the vast majority of cases, each member of the deceased's direct family receives an equal share of the inheritance.

In this light, an inheritance can be seen as a transfer of wealth from a person A to another person B, with no direct impact from B in the process. The amount transferred is not a direct consequence of B's efforts, but rather the outcome of A's successes and failures. In a purely meritocratic system, the wealth transferred this way would be exactly equivalent to what A has earned through their life's work.

Inheritance therefore means transferring the result of one person's work to another, with no relation to the efforts of the recipient. It is a transaction in which neither the amount nor the prerequisites depend on the recipient's merit. This description is totally opposed to the concept of meritocracy, which posits that changes to one's situation should be the direct consequence of one's own actions. Individuals benefiting from an inheritance are not receiving it as the just reward of their work.

Inequality dynasties

Beyond these purely ideological considerations, does the modern inheritance system have any real negative effects in practice? The problem here lies in the reproduction of inequalities. Through inheritance, inequalities can be perpetuated almost indefinitely. Wealthy families pass on large amounts of wealth to their descendants, creating new generations of well-off families. Poor families, leaving nothing if not debts to their descendants, will often give rise to new generations of poor families. Generation after generation, this system tends to a fixed social stratification, where one's social status is determined by that of their ancestors. This situation is the exact opposite of the fluid social mobility promised by meritocratic systems.

Surely, we must have institutional guardrails that protect us from such long term drifts. After all, isn't it the State's duty to guarantee equal opportunity to all? Even if these systems do exist, we have to face the facts: today's wealthy families are the same as yesterday's. Recently, the technology and IT boom created a wealth of opportunities, leading many traditionally unfavored from rags to riches. These inspiring examples evoke a satisfying feeling of fair social mobility. But they also eclipse the fact that, among the richest, wealth is still largely rooted in the past. For example, of the 20 richest American families in 2020 according to Forbes ⁴, 11 owe this wealth to ancestors who started accumulating it more than a century ago. This list still includes the Rockefeller family, more than 200 years after the first members of this dynasty rose to success.

Recent research suggests that this effect extends well beyond two or three generations. Nearly 600 years of fiscal data in Florence show a positive correlation between the wealth of today's families and that of their ancestors from the 16th century ⁵. These are families who lived in Florence before Christopher Columbus set foot in America, more than 20 generations ago. Yet their influence on the distribution of wealth is still felt today. Similar studies in France ⁶ and Switzerland ⁷ point to the same effect.

Here too, inheritance contradicts the meritocratic ideal, by tying social rank to blood rather than individual ability. The risk of placing such hurdles on social mobility is to create an aristocratic society, where a fraction of the population, always the same, remains at the top of the social ladder. This totally breaks the promises of equal opportunity and success based on merit that our modern democracies gloat about upholding. Do we really want to live in a society where our social status is determined by that of our parents? Is this fair?

Solutions?

So far, we've seen that the very definition of inheritance is in contradiction with the idea of meritocracy, and that in practice it hinders social mobility, leading to the formation of long-lasting dynasties. Can we do better?

Let's start by noting that inheritance is not the only effect impacting social mobility. Even if reducing its impact can improve the situation, the absence of inheritance does not guarantee a purely meritocratic society. There are many other types of transfers than the one we focused on here, and many other social reproduction effects that tend to favor a rigid social stratification ⁸.

Let's also note that it would be quite difficult to abolish this institution altogether. Poll after poll, the people of the developed world express a strong attachment to inheritance ^{9 10}. To the question "Should inheritance tax be raised to limit inequality, or lowered to enable parents to pass on as much wealth as possible to their children?", more than 80% of the French people surveyed answer the latter every year. Not only do these poll show how unpopular the current inheritance tax is, but the answers to the various other questions they contain also show how misunderstood and largely overestimated it is. Education about these matters appears like a natural and necessary first step here.

Keeping these difficulties in mind, there are still avenues for improvement, some of them with the potential to garner widespread support. For example, it would be conceivable to impose a maximum amount that can be passed on to the next generation. In France in 2018, 87% of inheritances received were below 100 000  €¹¹. Imposing a maximum on received inheritance around such a value should logically unite a very large portion of the population. Such a measure would have no negative effect on almost 9 out of 10 people, but would be an effective tool to slow down the rate of expansion of inequalities. This is just one proposal among many. The literature is full of ideas to rein in the harmful potential of inheritance.

Whichever solution we choose, we must act. We cannot keep proclaiming our love and devotion for individual merit on the one hand, and endorse a system that perpetuates inequalities on the other. Rather than looking the other way and refusing to see these links, let us face our contradictions. Let's give ourselves the means to build a real compromise between our meritocratic ideals and our penchant for family legacy. A compromise fully aware of the consequences of our choices. The Rockefeller family is there to remind us that the impact of these decisions extends far beyond our own generation. The children of the next 200 years are watching.

Notes & Bibliography