Robert Nozick Agrees With Thomas Piketty

In his reactions to Thomas Piketty's book, Greg Mankiw has been fond of name-dropping libertarian philosopher Robert Nozick. Most recently, in a joint interview with Piketty on NPR, Mankiw brought up Nozick when the two were discussing the topic of inheritance and intergenerational wealth concentration. In his remarks, Mankiw claims that Robert Nozick would not come to the same normative conclusions Piketty has about the problems of inherited wealth. Like all of his prior forays into the realm of philosophy, Mankiw has this one entirely wrong.

Here is Nozick on the subject of inheritance inThe Examined Life:

Bequeathing something to others is an expression of caring about them, and it intensifies those bonds. It also marks, and perhaps sometimes creates, an extended identity. The receivers--children, grandchildren, friends, or whoever--need not have earned what they receive. Although to some extent they may have earned the continuing affection of the bequeather, it is the donor who has earned the right to mark and serve her relational bonds by bequeathal.

Yet bequests that are received sometimes then are passed on for generations to persons unknown to the original earner and donor, producing continuing inequalities of wealth and position. Their receiving is no expression or outgrowth of her intimate bonds. If it seems appropriate for her to pass on what she has earned to those she cherishes and chooses, we are far less certain it is appropriate when these others do the same. The resulting inequalities seem unfair.

Nozick goes on to propose a system of third-generation inheritance taxes that would require a kid's inheritance to have subtracted from it any inheritance their parents received from their grandparents. So if A gave $200k to B, and B gave $300k to C, then C would only clear $100k of it. The other $200k would be paid in taxes. Under this system, then, inheritance would be allowed to travel down one generation, but not two.

Whatever you think of his proposed inheritance tax system is not terribly relevant for our purposes here. What matters is that Nozick has clearly concerned himself with exactly the problem that Piketty has concerned himself with, and taken exactly Piketty's view on it. He recognizes that wealth bequests can pile up over generations so as to create "continuing inequalities of wealth and position." His third-generation tax is specifically targeting the dynastic wealth concentrations that "seem unfair."

As diehard a libertarian as Nozick was, even he found himself bothered by the prospect of "patrimonial capitalism" to borrow Piketty's phrase, despite what Mankiw seems to think.