Does inherited wealth give some individuals an unfair advantage in a competitive economy?

In considering the issue of inherited wealth, one must begin by recognizing that the crucial right involved is not that of the heir but of the original producer of the wealth. The right of property is the right of use and disposal; just as the man who produces wealth has the right to use it and dispose of it in his lifetime, so he has the right to choose who shall be its recipient after his death. No one else is entitled to make that choice. It is irrelevant, therefore, in this context, to consider the worthiness or unworthiness of any particular heir; his is not the basic right at stake; when people denounce inherited wealth, it is the right of the producer that they, in fact, are attacking.

It has been argued that, since the heir did not work to produce the wealth, he has no inherent right to it; that is true: the heir’s is a derived right; the only primary right is the producer’s. But if the future heir has no moral claim to the wealth, except by the producer’s choice, neither has anyone else—certainly not the government or “the public.”

If the heir is not worthy of his money, the only person threatened by it is himself. A free, competitive economy is a constant process of improvement, innovation, progress; it does not tolerate stagnation. If an heir who lacks ability acquires a fortune and a great industrial establishment from his successful father, he will not be able to maintain it for long; he will not be equal to the competition. In a free economy, where bureaucrats and legislators would not have the power to sell or grant economic favors, all of the heir’s money would not be able to buy him protection for his incompetence; he would have to be good at his work or lose his customers to companies run by men of superior ability. There is nothing as vulnerable as a large, mismanaged company that competes with small, efficient ones.

- Nathaniel Branden. Capitalism: The Unknown Ideal (1966).