Author: Ryan Richter

If progressivism fails, it seems to me it would be a good idea to have an idealogically independent replacement of some sort ready as a backup. Writing in 2024, I think of the present era in politics as the “old man in a hurry” age, in which everyone is fearful that their agenda is about to collapse, and so everyone has abandoned wisdom and decided they must get one cheap “win” – the details don’t matter – before everything goes south. I disagree with this. The ideas presented here are to be calmly contemplated for the future rather than urgently acted on in the present, and the form is strictly liberal ends by strictly liberal means. Here goes.

The idea is to start with a radical economic policy that tries to avoid the pitfalls of the tax-and-spend system that is the current basis of leftish policy, based on a remediation of an old idea by a 19th century american named Thomas Skidmore. The policy is a national inheritance, essentially a death-to-young-adulthood redistribution of private wealth which leaves the relative sizes of the public and private sectors unchanged, and which does not tax any company or living person, at least as far as domestic economic activity is concerned (a tariff is necessary, although not forever). It also comes with a way of gradually and reversibly transitioning our economy to that form, and can be implemented in any democracy by legislation and constitutional amendment. When the system is fully established, after a 60-70 year initiation, each citizen receives, on their 21st birthday, a sum of cash as near as practicable to their equal share of the national private sector (in reality probably 50-80% of this amount). It is to be paid for by basically confiscating private wealth at the moment of death of an individual, together with a rather complicated system of tracking obligation for paying what is called the “scot” (not a tax, as it doesn’t fund the public sector) so that the economic activities of firms are unaffected. The idea, very simply, is that this form of benefit does not create either the dependence on the state, or the political divisions and recriminations that are the hallmark of existing benefit systems.

The national inheritance demonstrates the nation’s trust in the citizen. The payment of the scot demonstrates the citizen’s trust in the nation and in their fellow citizens.

The political form is therefore a nationalism, but of a new mild and inclusive sort. Nobody is generically to blame. This proposal’s eventual success will depend critically on whether it’s as practicable as I say it is, so I want to get right to the details. But a few comments on ideology are appropriate here. I would like to suggest that there are in fact two incompatible forms of capitalism. The one we have I call wealth distribution capitalism, as it prioritizes the determination of a long-term highly-unequal distribution of wealth among families according, as is supposed, to pure economic competition based on their genetic identity. Prioritizes over what? My contention is that the determination of prices is compromised in wealth distribution capitalism, as a direct result of the highly unequal distribution of wealth. The national inheritance should bring about a different set of circumstances I call price determination capitalism. It will be objected that with so much state involvement as I require, I’m not describing any sort of capitalism. I have two responses. First, I declare that the eternity of propriety is conventional and not ideological, that inheritance is no market activity and therefore not subject to the ideology of free markets. Second, I object that in practice, wealth distribution capitalism does not lead to a small state as claimed, but to a large and corrupt state controlled by interests within the economy. Price determination capitalism ought to be more suitable to human habitaion and especially democracy.

OK, so how exactly do you pay for the inheritance? The basic idea is a multi-pronged sort of carrot and stick approach called modes of ownership. As I mentioned above, the tax is not really a tax in the usual sense because it doesn’t go into the fisc. A crucial point is that funds raised under what I’m calling the scot are never disposed by the whim of a bureaucrat or even an elected official. They go into a fund which may only be used to pay individual inheritances according to strict and dead-simple rules. There is only one stick, which is called money scot and which is like a flat annual money tax on all assets in the economy, equal to the rate at which the total population turns 21, called the asset scot rate. The imposition of money scot is made possible by a universal public registry of all assets and their ownership. Of course the idea is that the other forms of scot releive you of having to pay any money tax, and that in practice money scot should never be necessary. The primary alternatives to money scot are “no scot” for firms, “death scot” for the individual, and “un-scot” for ubiquitous things of small value that don’t belong on a universal public registry. The basic idea is that corporations can divide their ownership into listed shares, and designate the payment of all scot to fall on the shareholders avoiding the double-counting of ownership of assets universally, and allowing them to maximize their profit. Therefore properly organized companies are more or less unaffected, except in foreign operations. The unique part is death scot, which is a “personal corporation” which the owner has full managerial and proprietary rights, but to which at the same time the owner owes a fiduciary duty to profit on behalf of the nation’s interest in the scot, which is claimed by confiscating all death scot assets at the moment of death. A set of accounting rules determine the owner’s profit share which can be spent in any way. The death scot corporation is in some sense really a peculiar sort of retirement fund, although it can also function in a way very similar to the various devices in a large number of (not very convincing) old policy proposals for “individual retirement/medical/xyz accounts” all bundled into one. Of course I undersand that nobody wants this bizarre “death scot” thing for its own merits, but it’s the key to fitting these pieces together in a way that allows normal economic activity to take place while scrupulously tracking the scot obligation.

There are some other possibilities mentioned in the table below, but those are the big idea except the one gaping hole which is foreign trade. This is definitely the most difficult part of the proposal. The necessity of foreign scot – of tariffs and foreign financial transaction taxes paid to the inheritance fund – is based on the need to prevent evasion of the scot, in particular considering that other countries don’t have public asset registries. But this economic isolationism isn’t supposed to be permanent. After all, if it makes sense for one country to have this system, then it makes sense for others also. The idea is to encourage the spread of the system by negociating softer trade agreements with countries that also have asset registries, and in fact there is a roadmap to a new type of equitable and democratic globalization in the very long term – maybe 150 years or so. The sequence goes as follows: first, you negociate reductions in foreign scot rates in exchange for asset-registry sharing agreements – to shine the light on as the first advance aginst long-term organized evasion. Of course a foundational principle of these negociations is that democracies be rewarded ahead of authoritarian states. These reductions will be modest, but much greater reductions will follow with scot-sharing agreements, i.e. payments from the richer (in terms of per capita private sector wealth) country’s inheritance fund to the poorer country’s. Once the amount of the inheritance is equalized between the two countries, not only can the foreign scot be reduced to near zero, but immigration can be opened up as well, even allowing immigrants to inherit (at first, only the children of naturalized immigrants will be allowed to inherit). In this way Eurozone-like blocs can develop, although still with national governments and currencies, and the legal environment of the economy can be internationalized to a greater degree than today without the inequities that arise today when this occurs.

Modes of ownership (or the Mob o’ Scots):

• Money scot: annual (or other period e.g. decadal) money payment at asset scot rate (default for all asset types) Asset registry serves as the tax form.
• Time scot: agreement to forfeit asset in future (length of the life expectancy at 21) in exchange for non-payment in present. Establishes a rent rate by which the forfeiture date may be extended by payment at any time. Asset remains in time scot until forfeited, or until all “back scot” is paid, even when sold. Buyers can see time scot status and expiration on the public asset registry. (optional for real estate only)
• Death scot: the personal corporation or asset shelter scot-free until forfeited at death. Profits are yielded outside the shelter. Assets in the shelter may be freely bought and sold, but cash inside the shelter must only be used for profit-making expenditures, like corporate due diligence. Sheltered assets may be withdrawn only under certain circumstances, but may always be bought out to maintain the shelter’s value. Essentially a retirement plan. Profit is defined as capital gains plus income minus expenses, all deflated. Sheltered assets may be withdrawn for:
  • personal emergencies (food, shelter, medical)
  • tuition
  • a wage for up to ~10yrs total for job search and personal development
  • retirement, a modest wage (proportional to endowment) after age 65
  • a continuous wage (proportional to endowment) as portfolio manger (trivial in amount for beginning endowment, based on pros)

  The personal corporation is not allowed to take outside investment as such. If a business owned under death scot wants to take funding, it must be spun off and reorganized although an ownership share is retained under death scot. The original death scot was to give the dead man’s second-best suit of clothes to the local church or abbey. (optional for all asset types)

• Un-scot: lower-price movable assets are scot-free. There will still be poverty (hopefully greatly reduced), but poor people hold most of their assets in movable form. Bank accounts are on the registry but not physical currency. The total amount of movable assets excluded from the registry must be closely estimated and kept below a threshold. Occasionally narrow categories of movable assets must be registered to prevent scot-avoidance on a large scale.
• No scot: any share corporation with all shares appearing on the registry (domestic or foreign via registry sharing) has permanent scot-free posession of all assets. No double counting – the scot is paid by the shareholders via above methods. Taxed foreign investment can be accepted via a scot-paying domestic intermediary.
• Pre-scot: agreement to transfer asset into death scot later, with no payment Available only during the initiation period – see below. All assets eligible.
• Share scot: a share corporation periodically issues shares to the inheritance fund diluting existing shareholders, making share ownership scot-free for those shareholders. (theoretically possible – not clear anyone would buy these)
• Foreign scot: tax on foreign assets and investment (mandatory for these assets) Must be targeted to discourage scot-avoidance while allowing legit flows.

More needs to be said about all of that, but that’s the nub. Now for the gradual initiation process. First the idea is to order the population by birth date and start with the oldest person alive and go down the list one name at a time, paying a reduced inheritance of this value
(estimated age 21 inheritance amount)
x (remaining life expectancy at your age) / (rem. life exp. at 21)

Inheritances are paid only as funds become available at first, with the revenue sources started up gradually. The goal is to eventually proceed down the list at a steady clip, winding up reducing the age of inheritance all the way down to 21 within 60-70 years. There are two main parts to the gradual initiation of scot revenue. First the universal asset registry will not appear overnight, unfortunately. It will probably be best to add assets by some sort of categorization so as to avoid having one person or firm’s assets listed before another’s creating prejudice. Money scot, time scot, and others will only apply as assets are added to the registry. The second part is the creation of millions of death scot corporations, for which pre-scot is used. Simply, pre-scot is a rate which is ramped from 100% down to 0% throughout the entire initiation period, and is calculated for an individual as (total pre-scot asset value) / (total pre-scot + death scot value). On day 0 an empty shell of a death scot corporation is created for each individual, and as individuals’ assets are added to the registry they are first classified as pre-scot, for which no money scot payment is due and for which there are no restrictions on either posession or transaction. Assets under pre-scot in particular are still subject to old-fashioned inheritance. But as the pre-scot rate is gradually reduced over decades the individual must either transfer assets into death scot to meet the pre-scot requirement or else pay the asset scot rate on the excess.

It will likely be argued that the fiduciary duty entailed in death scot is contrary to the liberty of true capitalism. What does death scot give you? You have the ownership of the assets and the authority that ownership confers in managing as well as in buying and selling – note that selling itself is unrestricted. You also have the profit you can earn from the asset and its management, entire and unimpeded. The argument is that these features define what capitalism really requires – that the true essence of capitalism is the squeezing of incremental profits from the long-term stewardship of assets. The further right to sell everything and spend the proceeds in an entirely selfish way, including gifts to your children and the like, is not in fact necessary or even desirable from the democratic perspective, and it is this that death scot prohibits. I believe this is the first proposal to target that specific aspect of political economy while leaving the rest of the system in working order. By the way, the requirement to profit isn’t necessarily so restrictive as it may at first seem. Part of the idea is to encourage risk taking of a vaguely entreprenurial sort beyond the level we typically see it today. You are allowed to take any level of risk you desire in your death scot investments, you just have to live with the results.

Some miscellaneous remarks that didn’t fit elsewhere will follow. First, there is to be a constitutional guarantee that the value of an individual’s inheritance can depend on no personal data except citizenship and birthdate. This is the new and stronger form of political equality. Among the infinite list of details I’m intolerably papering over in this ultra-brief description, assets confiscated from death scot would have to be auctioned off somehow to raise cash for inheritances. There also need to be constitutional guarantees regarding the disposition of such assets and the conduct of the scot collection generally to ensure the separation between public and private sector. There are an enoumous number of economic research questions that this idea brings up. How much is the inheritance? How do you manage the tariff? How do you manage the macroeconomy? Then there’s the question of why age 21? Skidmore wanted 18 (he also wanted a universal income on top of the inheritance, which I would quite do without). The curious answer has to do with the possibility that the wage for unskilled labor could get too high. By the way I don’t believe in “AI”. So the idea is that you work a low skill job for a few years, and only go to college after you inherit, paying out of pocket. For any number of reasons I think this would be a better way of doing things. There’s the fraught question of immigration policy, although I outlined what I think is the basic solution above, that the children of naturalized immigrants inherit but not their parents. I should say something about avoiding global warming, but instead I’ll mention that this might be a way to pick up the pieces. There are some cultural questions about the formation of the universal ruling class. What is the future of the following institutions: the nation, existing political parties, labor unions, the public sector, corporate management, the non-profit, and many more? For a glimpse into the post-inheritance world of policy options, consider this idea: a universal scale of attourney’s fees. Isn’t economically rewarded meritocracy in the legal profession fundamentally antidemocratic? Finally, I can’t resist making the following argument for a universal early-adulthood equal inheritance: what’s the fair way to start a chess game?

There is a hell of a lot more to say, but I believe I have outlined basically how the thing is supposed to work. I can’t really write, so instead of boring you further I’ll provide a potent bibliography:

Thomas Skidmore, The Rights of Man to Property
The Mozi
Thomas Piketty, Capital in the 21st Century
Veronica Wedgwood, William the Silent (and others)
Bertrand Russell, A History of Western Philosophy
John Stuart Mill, Utilitarianism (and others)
John Kenneth Galbraith, The Affluent Society (and others)
Marc Reisner, Cadillac Desert
John Rawls, A Theory of Justice
Frank Stenton, Anglo-Saxon England
John McPhee, The Ransom of Russian Art
Thorstein Veblen, The Theory of the Leisure Class
Alex Haley, The Autobiography of Malcolm X
Michelle Alexander, The New Jim Crow
Jane Austen, Mansfield Park
Noel Coward, The Vortex