The resources of our planet are limited. There is only a limited amount of raw materials, fresh water, sea, air, soil, ecosystems and biodiversity. There is only a limited amount of energy available at each time.
We have created an economy that requires growth in order to function well. Obviously, a limted base of resources cannot sustain further growth forever. At some point, such an economy will inevitably run against the limits of the planet’s resource base. Beyond that point, it becomes destructive to the planet and finally to itself.
So in order to avoid a disaster, we must change the way our economy works. We have to make it sustainable and in order to do so, we must stop economic growth.
Changing the economy to a steady state economy without any net growth requires rethinking of many institutions we are used to. One of them is our system of inheritance.
When somebody dies, all of her or his wealth is usually passed on to the next generation. As a result, over several generations, a family can accumulate a tremendous amount of wealth. As long as the economy was in a phase of exponential growth and as long as people could pretend that this would go on forever, this accumulation of wealth did not look problematic. But in a steady-state economy the total size of the cake is limited. Here, an inheritance law that allows for the unrestricted accumulation of wealth over the generations would lead to a situation in which finally a small group of people will possess nearly all of the resources while the rest of the people will be very poor. The rich people will then use their wealth to increase their power.
Something like this has happened in history before. Our hunter-gatherer ancestors probably did not have much of a concept of inheritance. With the invention of farming, however, it became important to decide who should be using a plot of land and a house after the previous owner died. A common solution was to give it to one of the sons, whereas the others had to go on into the wilderness, clear a new plot of land and start their own farm. As a result, some system of inheritance became part of the legal system of Neolithic societies.
This system ran into trouble when people ran out of wilderness. In some areas, people started dividing up the land into smaller and smaller plots, but this inevitably lead into poverty. Some people now hat do sell their land, while others began to own more and more and finally monopolized most of the land. The result where societies with a class of land-owning rich people controlling most of the land and ruling and exploiting other people.
The result was a long history of violence with hundreds of years of wars and occasional revolutions. You can observe this, for example, in the history of Europe as well as the history of Japan.
Only when, during Industrialization, people learned to tap into new resources, like fossil fuels, did this phase of our history come to an end. However, we are now approaching the limits again, and although we can expect that innovation will open up new possibilities, the laws of physics tell us that there are actual limits.
If our economies stop growing, and there are indications that they are doing so, one of the adjustments we should make is to change the inheritance laws. We must not allow wealth to be accumulated indefinitely over the generations. This would again lead to a situation where nearly everything is owned by a small group of families. This would result in a society based on exploitation. Such a society is unstable and would sooner or later end up in revolutions. Moreover, the competing oligarchs would start fighting among each other.
If we want, instead, a stable society in which many people can prosper, we must limit the amount of wealth that a single person can receive through gifts or inheritance during their lifetime. There is nothing wrong with inheriting personal things or a limited amount of wealth, like a house, for example. But a legal system in which it is possible to inherit multi-million- or even multi-billion-assets would lead into trouble. Instead, when people owning large assets die, the amount single people, like their children, can inherit, should be limited. Everything above that would have to be given to organizations that benefit everybody and redistribute the wealth again. The type of inheritance laws that we currently have are not compatible with the needs of a zero-growth economy.
Changing these laws would also be a good first step towards the switch to a steady-state economy. It would lead to a situation that benefits more people and at the same time reduce the already considerably strong power of the rich. We must understand that the rules of inheritance are not laws of nature but constructed parts of our culture that can be changed and adapted if conditions require such change.
We need mechanisms to redistribute wealth more evenly and one point of change would have to be the rules of inheritance. What made sense for Neolithic farmers no longer makes sense for us. We could still allow people to try to become richer, but when they die their control over “their property” resources would end. In this respect, we need a system that has more resemblance again to that of our earlier, hunter-gatherer ancestors who were living in a world of limited resources.
(The picture, showing a reconstruction of a Neolithic house, is from http://commons.wikimedia.org/wiki/File:Neolithic_house.JPG.)