We Are Family

I’m sure you remember how we saw that the Baby Boomers generation hold a massive amount of wealth. Like all of us, they’re getting older everyday and they’re not going to be able to take that wealth with them.

We’ve not seen Generation Lucky before now, have we? They’re not one of the official generational bands. They’re the kids and sometimes grandkids of the Baby Boomers.

When those Boomers kick the bucket, their wealth has to go somewhere and it’s going to land in the laps of Generation Lucky.

If you’re one of those who’s going to receive some of this wealth, that sounds pretty sweet, but probably less so if your parents and grandparents have worked hard all their lives but never been able to accumulate much wealth.

Our focus for now is those who are going to be inheriting.

No-one likes taxes and the idea of being taxed on an inheritance, which we could argue is a gift, is unpopular with most people. But should it be?

In the UK, the richest 20% of people are twice as likely to receive an inheritance as the poorest 20% and while the value of inheritances is set to double over the next 20 years, only 32% expect to or have benefited from an inheritance.1

In the US, each household receives an average inheritance of $46,200. Except they don’t because inheritances aren’t spread equally, again less than a third of households actually receive any form of inheritance.2 The wealthiest 1% receive an inheritance on average of $719,000, while the average for the poorest 50% is just $9,700. The richest can expect to receive a life-changing amount, except it won’t be life-changing because they’re already loaded like Croesus. For the poorest 50%, they could buy a used car.

So, in reality, few people receive any form of inheritance in the US and those who receive the most are already disproportionately wealthy.

In the UK, if the current inheritance rules were changed, the richest 1% of inheritance recipients would receive half of the money no longer taxed.3

Considering that, what is the problem with inheritance tax? Most of us will never have to worry about paying it and those who pay the most are already loaded to the gills. Mostly. Yes, some people who aren’t so privileged also have to pay tax on inheritances, but remember it’s money for nothing. In most cases a freak arising from birth that didn’t even require buying a lottery ticket.

If I mention the British businessman Hugh Grosvenor, who made the 2023 Sunday Times Rich List with wealth of almost £9.878 billion, could you name the business he built to make all that money?

It might help if I mentioned he’s also known as the 7th Duke of Westminster4 who inherited about £9 billion, including 0.22% of Britain’s land, some 300 acres of which are prime real estate in central London, when his father died in 2016.5

Obviously, I don’t need to ask if you recognise the name Donald Trump. The businessman also benefited from an inheritance that the New York Times estimated to have been over $400 million at the time.6 According to a Forbes article, if the ex-President had invested that money in the stock market and done nothing else, he’d have been about half a billion dollars better off.7

I guess you also recognise the name Jeff Bezos, the founder of Amazon. In 1995 his parents loaned him $245,573 to launch Amazon8 as an online book shop. In May 2024, Amazon was valued at $1.922 trillion.9

That’s an increase of 777,773,000%.

A significantly better return than Grovsvenor and Trump, isn’t it? If Trump had increased his $416 million is a similar way, he’d be worth $3,235,536,096,000,000. When he was President, he could have personally paid off all of America’s debt and still had $3.2 quadrillion stashed under his mattress. I’m not even going to do the sums for the Duke of Westminster for fear of burning out my calculator and never being able to write boobless10 again, but no doubt he’d have been able to pay to make himself King of the World.

The wealthy often claim that high taxes lead to lower revenues for governments. In his Time To Get Tough book, Trump himself wrote “High tax rates don’t increase government revenues, all they do is take money out of the productive economy that creates jobs and lock it into less dynamic investments like bonds”.

How is that any different to locking up money with less dynamic children who don’t have the business brains of their parents?

If you and I both woke up tomorrow and found we’d each inherited a billion spondoolix, I bet we could both have a very pleasant and relaxed couple of decades and still have much the same equivalent wealth in 20 years time without having to try too hard.

However, if 1,000 Jeff Bezos’ woke up tomorrow and found they’d inherited just a million spondoolix each, try and wrap your head around the wealth they would have created and the growth they’d have generated in their economies.

Anyway, inheritances clearly only benefit a minority, but is the idea of handing wealth on to your children really wrong? Surely, almost everyone who has kids wants to give them all the security possible for as long as possible.

But how much money does someone need to be secure? For their whole lifetime.

If you lived for 100 years and had 25 million spondoolix deposited in a bank account at birth, that would be 250,000 spondoolix per year, every year of your life from the day you were born. You’d never have to work if you didn’t want to. You wouldn’t be flying on private jets, but you’d be in first class. You wouldn’t be driving a limited edition Rolls Royce, but you’d have a couple of nice motors in your garage which you’d be changing every year. You wouldn’t live in a mansion, though it might look like it to the rest of us.

The wealthy hate the idea of inheritance tax but I bet they’d come around to it if the alternative was they could only pass on a fixed maximum amount and the rest is returned to society as a whole.

I’ve no idea how it would be made to work, but is it unfair to ask why some members of the next generation or even all subsequent generations should enjoy a head start that the vast majority of people don’t? Particularly when it may be accompanied by a negative impact on a society’s economic strength.

And obviously, to almost every wealthy person with kids, it’s a crazy and obscene idea that wealth one generation has created can’t be given in whole to all subsequent generations.

I can feel that, but it does appear to prioritise the well-being of individuals ahead of society as a whole.

Reparations for Slavery

Staying on the matter of family and inheritances.

There’s a difference of opinion on whether nations that benefitted from the trade of African people as slaves centuries ago should pay reparations to their ancestors today.

The first slaves to be transported to the Americas from Africa probably travelled about 1526 and slavery was only finally abolished from the British Empire in 1834 with the enactment of the Slavery Abolition Act 1833.

That means the last slave owners were at least nine generations ago. Many countries, though notably not the UK, have statutes of limitations meaning that someone can’t be tried for an offence that was committed more than a set time period ago. In the US statutes of limitation vary across the different jurisdictions, but they largely exist.

Does a statute of limitation that effectively stretches across multiple generations and holds descendants responsible for their ancestors’ crimes seem fair to you? If granny farts at the dinner table and blames the dog, that’s not right, is it?

On the other hand though, countries like the UK have realised economic benefits from the slave trade and those benefits have seeped through to modern-day Britain.

A report from the Brattle Group has calculated that the UK should pay $24 trillion (£18.8 trillion) in reparations for acts of slavery involving 14 countries.11 Note that the figure is described as on the low side too.

How do you think a Briton living today should feel about that?

Do you think it’s reasonable to force a load of poor white people to pay compensation to a load of poor black people to atone for the evils perpetrated by a few wealthy white people on a load of poor black people 100s of years ago?

Particularly when the poor white people’s ancestors already paid compensation almost two centuries ago.

Though, sadly the compensation was paid to a few wealthy white people, the slave owners, in fact. How bat-ship crazy is that?

Cuck…koo.

Cuck…koo.

I imagine that during the 24-hour party people12 government of Boris Johnson, the cabinet office must have witnessed some truly mental stuff happening, but could any of it compare to 1833 when the British government decided to pay compensation to slave owners because they were banning slavery?

For ducks sack, how on earth did that play out?

“Good, so we’re all agreed that we’re going to abolish slavery in the British Empire. That just leaves one last little issue I thought we could toss about quickly and also reach an agreement on, the payment of £20 million13 compensation to the owners of slaves.”

“What? So the people who have committed a crime of evil in the first magnitude trafficking in the souls of men for three centuries are to be rewarded for being forced to end their ghastly practice by us paying them compensation. Are you mad?”

“No my good man, you misunderstand. We won’t be paying the compensation, the poor people will!”

“Oh, well in that case, that sounds like a capital idea. Bravo!”

“Um, sorry to interject. While I’m absolutely in favour of the idea…um…er…might the poor people not be a little upset about paying all that money to rich and evil slave owners? Perhaps?”

“Eeeeww, you know, I’d never even considered that. Well, why don’t we do a simple show of hands to see which of us are in favour of lavishing further riches upon our many loyal and wealthy friends and which of us gives two hoots about the poor people that we…oh dear, what’s that word…darn it’s on the tip of my tongue…sir…sur…”

“Serve?” suggests the matronly tea lady none of the secretaries of state had noticed waiting in the corner of the room with her trolley bearing a cauldron of piping hot tea and a large plate of scones.

“Yes, that’s it, which of us gives two hoots about the poor people that we serve, lolz? Come on then, a show of hands in favour.”

All those sitting around the table raise a hand.

“I just thought,” said a voice at that end of the table, “don’t they elect us? I mean, haven’t we just given a lot more people the right to vote in elections or have I completely misunderstood The Reform Act of 1832?”14

There’s an uneasy murmuring around the table.

Beads of sweat visibly form on a few foreheads, but the hands remain resolutely raised.

From the same end of the table as before, a long, drawn-out “pppaaaaaaaaaarrrrrrppppp” sound cuts through the murmuring, followed by audible inquisitive sniffing.

Who was that?

Sir James Graham, First Lord of the Admiralty, perhaps?

Or, sat next to him the Duke of Richmond, the Postmaster-General?

Or, ah, yes, Wacko the Clown, the newly installed Secretary of Giggles, Whoopee Cushions and Fart Spray.

Still, the hands remain raised, though some wilt a little and the tension is clear as others tremble involuntarily.

It’s the tea lady who bottles it first. Like the rank amateur she is in matters of State and so clearly out of her depth she punches a glass box on the wall before running from the room, blood dripping from her shredded knuckles, screaming “they’ve all completely lost it”, but no-one can hear her over the blaring klaxon and the mechanical steam-powered voice announcing “everybody to the bat-ship, everybody to the bat-ship, everybody to…”

Doesn’t it seem crazy that slave owners were compensated and slaves weren’t?

Let’s have a quick look at the Brattle report mentioned above. I’ve only skimmed the report myself, so perhaps don’t pay too much attention to my comments, you can always read it yourself as the link is in the footnotes.

Looking at table 15 that summarises the reparations for the period of slavery, using the higher figure and other data in the report, I believe that breaks down to $5,416,488.63 compensation in today’s money for each slave, both transported and born into slavery.

Does that seem unreasonable to you? Personally, if I spent my life working as a slave and at the end of it less than $5.5 million was the compensation I was offered, I wouldn’t burst into tears, but I don’t think I’d see that amount as overly generous either. How would you feel?

In case it’s of interest, I believe in the US, those wrongfully convicted of federal crimes receive a minimum of $50,000 per year of imprisonment.15 So for 55 years of slavery, the suggested figure above is about twice what would be paid to the exonerated federal prisoner. Unless they’d been on death row, in which case it jumps to $150,000 per year, equating to $8.25 million for 55 years. Would it be fair to consider those living in slavery would have suffered similar mental anguish to death row inmates?

In addition, the Brattle report also attempts to calculate compensation for the harms suffered in the period following the ending of slavery across the different territories. The authors recognise the difficulty in calculating this. I’m simplifying, but I think we can describe this as compensating for the benefits the descendants of slave owners and their peers have enjoyed that came at the expense of the descendants of slaves. So if there hadn’t been slavery, the descendants of slavers and their peers would be poorer today and the descendants of slaves would be richer, though what the actual levels would have been is impossible to know with any certainty.

Considering the second part of the compensation first, white people in societies that historically allowed slavery have directly benefited from the past acts of slavery. As this represents the benefit that the white people as a whole received, regardless of whether their ancestors directly profited from slaves, do you think the descendants of slaves have a reasonable argument for demanding this compensation?

Now let’s consider the first part of the compensation. This relates to the harms suffered by the slaves and that led to the benefits that slave owners alone enjoyed. This represents by far the greater part of the reparations estimates.

I asked you above if you think it’s reasonable that people today should pay the penalty for crimes committed by people centuries ago. Only the slave owners benefitted, so surely only they should be required to pay compensation and it’s a bit late for that now.

It’s not quite the case that only the slave owners benefitted though, is it?

The descendants of slave owners have also benefitted from the wealth generated as a result of the harms suffered by the slaves. The wealth has been passed on through inheritances.

I wouldn’t claim that every rich person believes there shouldn’t be inheritance tax, but if many believe that family wealth should be passed on untouched to subsequent generations, is it unfair to believe that family debt and liabilities should be passed on too?

Expecting someone to use the wealth they have personally generated to pay for the actions of an ancestor feels very wrong to me.

What about expecting them to use wealth that they’ve inherited to pay for the actions of an ancestor? Do you think that’s reasonable?

University College London has compiled a database of many of the slave owners16, including compensation they were paid and how some of the wealth generated from slavery was used. It’s a largely complete record of slave owners at the time slavery was abolished, though it only contains partial data for the period from 1763 till then and doesn’t record slave ownership in the centuries prior to that.

So at least some of the information exists for the concept of ancestors paying compensation to be a reality.

The recipient of some of the largest compensation payments made to any British slave owners was John Gladstone, the father of four-time British Prime Minister William Gladstone, who I’ve read used his first speech in the House of Commons to argue for compensation for slave owners. Do you think the younger Gladstone might have had a future inheritance on his mind as he made that first commons speech?

John Gladstone made total claims for over £120,000, but, if my sums are correct, appears to have been awarded £105,779 in total.17

If the payments were made in 1838 following the Slave Compensation Act of 1837, in 2024’s money that equates to more than £14.5 million. That would have been a pleasant top-up to a fortune that in 2028 was about the equivalent of more than £65 million in 2024.

Some of the modern-day descendants of John Gladstone have apologised to the people of Guyana where many of John Gladstone’s slaves were kept and made a donation of £100,000 to the University of Guyana’s International Institute for Migration and Diaspora Studies. Some of the family have also called upon the British Government to begin “reparative justice” and apologise for the practice of slavery in the British Empire.18

What do you think about that?

On the surface, publicly apologising for an ancestor’s actions looks positive, as does calling on the British government to similarly apologise, doesn’t it?

What about the £100,000 donation and the call for “reparative justice”?

Generations of Gladstones have enjoyed the benefit of the wealth that slaves generated for them. We know the compensation alone equals almost £15 million, so how much more wealth was generated by the slaves for the family before the compensation was paid? One of the current generation humbly says on their website that their businesses are centred around property and agriculture that they inherited.19

Does a donation that totals less than 1% of the slave compensation figure alone, without even considering the wealth generated by the slaves’ work, feel like a fulsome apology?

And does the call for “reparative justice” sound like support for the government paying reparations? Maybe that’s not what was meant, but let’s assume for a moment that it was.

Imagine you’re the descendent of a Briton who had no links to the slave trade and had to pay compensation (maybe that is you). Unlike the descendants of families that benefited from the wealth generated by slaves and from slave compensation for many generations, multiple generations of your ancestors also had to pay towards covering the cost of that compensation. Then, almost two centuries later, the descendants of a slave owner pay a tiny fraction of the compensation to the descendants of slaves and then effectively call on the government to use your money and the money of your descendants to make up the difference.

How would you feel?

Let’s note one thing before moving on though. The Gladstone family didn’t need to put their heads above the parapets as they did. In late 2023, it was reported that an ex-MP had threatened legal action to remove a reference to them being descended from a slave owner. So the Gladstone family could easily have followed the example of multiple generations of the descendants of slave owners and quietly enjoyed their wealth.

It’s impossible to say how we would react when put into someone else’s situation, but I’m positive that I wouldn’t have taken the action they did.

And so I think we should salute it. Though I really don’t know if we’re saluting courage or a lack of emotional intelligence.

  1. https://www.resolutionfoundation.org/press-releases/fewer-than-one-in-three-people-expect-to-benefit-from-britains-big-inheritance-windfall/ ↩︎
  2. https://finance.yahoo.com/news/average-american-inheritance-wealth-level-130120356.html ↩︎
  3. https://ifs.org.uk/news/wealthiest-1-would-get-half-benefit-scrapping-inheritance-tax-average-tax-cut-ps1-million ↩︎
  4. https://en.wikipedia.org/wiki/Hugh_Grosvenor,_7th_Duke_of_Westminster ↩︎
  5. https://www.itv.com/news/granada/2016-08-10/duke-of-westminsters-extensive-property-portfolio ↩︎
  6. https://www.nytimes.com/interactive/2018/10/02/us/politics/donald-trump-tax-schemes-fred-trump.html ↩︎
  7. https://www.forbes.com/sites/danalexander/2021/10/11/its-official-trump-would-be-richer-if-he-had-just-invested-his-inheritance-into-the-sp500/ ↩︎
  8. https://www.blinkist.com/magazine/posts/jeff-bezos-parents ↩︎
  9. https://companiesmarketcap.com/amazon/marketcap/ ↩︎
  10. Oh my word, how did I never see that? I just googled “boobless calculator” and discovered for all these years I could have been writing “boobies” as well ↩︎
  11. https://www.bbc.com/news/uk-politics-66596790 – the Brattle report actually names 10 modern nations that should pay reparations and the suggested US figure is even higher. Above I focus on the UK, but you can see the full report for yourself at https://www.brattle.com/wp-content/uploads/2023/07/Quantification-of-Reparations-for-Transatlantic-Chattel-Slavery.pdf ↩︎
  12. https://www.youtube.com/watch?v=0zWpHxfQvtk ↩︎
  13. For context, £20 million in 1833 equates to just a gnat’s chuff short of £3 billion in 2024 ↩︎
  14. As I’m the one writing this dialogue, it didn’t actually happen, it’s more than likely I have misunderstood the 1832 Reform Act’s implications, but hey-ho, onwards and upwards ↩︎
  15. https://www.law.umich.edu/special/exoneration/Documents/Key-Provisions-in-Wrongful-Conviction-Compensation-Laws.pdf ↩︎
  16. https://www.ucl.ac.uk/lbs/project/context ↩︎
  17. https://www.ucl.ac.uk/lbs/search/ – just search for John Gladstone to see the details ↩︎
  18. https://www.bbc.com/news/uk-wales-66558156 ↩︎
  19. https://web.archive.org/web/20230204064250/https://charliegladstone.com/pages/about ↩︎