Hoard Instinct

Szpylbert’s favourite lefty rag, the Guardian, today featured an older article (“Blame the ‘bank of mum and dad’ for Britain’s growing inequality“) on their website. In the article, the columnist complains about the supposed unfairness of parents supporting their children financially.

To get things started, the columnist suggests we should get rid of terms such as “bank of mum and dad”. Instead, we are to acknowledge that this money really is unearned wealth and that passing it on is an act of rentier capitalism. Ugh! Szpylbert is allergic to being told what to say, so here’s a little comment.

First, this wealth will be quite the opposite of “unearned” in the majority of cases – it’s been earned by parents who choose to save it for their kids. Supposedly, this wealth has been built up from taxed income, so some redistribution has also taken place. Unequal? Tick. Immoral per se? Certainly not.

Second, to the ridiculous claim that giving money to children equates to rentier capitalism: here we have the usual objection from the hardcore left that having money allows people to make more money through “rental income”, supposedly without hard work – however that is defined.

The classic all-investment-is-evil argument ignores a key point, though. Since most people have access to funds through the financial markets, i.e. borrowing in one way or another, most people can also, if they have the skill (… and with hard work, perhaps?), generate returns from money. So really the criticism is that mum and dad put their kids in a better position to invest. Also no screaming injustice here, so Szpylbert’s opinion is: of course giving money to the kids perpetuates inequality. But lamenting it on moral grounds is misguided.

 

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