148 SECTIONAL ADDRESSES. 



special case of that incentive.^^ But I am equally convinced that the 

 mental horizon, which is so powerful an agent in business calculations 

 during life, which reduces the present value of a reversion over fifty years 

 hence to a negligible figure, is even more restricted for events after death. 

 The fate of one's savings, with the special case of landed estates ruled out, 

 after, say, thirty or forty years, has but a negligible influence on present 

 eft'ort or production. I therefore accept the popular estimate of this 

 incentive, but I emphasise it much more in its immediate effects and 

 belittle it much more in its final effects. This distinction is of great 

 importance in the theory of taxation. 



As regards incentive to the recipients, it is possible to exaggerate its 

 influence in making idle men, who would otherwise add more to the mass 

 of production. This effect really exists, but it is a very slight percentage 

 of potential production, however glaring individual cases may be. A man 

 who has great capacity to add to production and raise the general standard, 

 has enough character not to be idle and unproductive simply because he 

 has other means ; indeed, he may play less for safety and be a risk- taker 

 and pioneer, and so add to economic welfare. The gilded idlers would 

 not, in any case, have made much greater economic additions than their 

 own subsistence. I am not referring to moral or ethical aspects, of course. 



But the effect upon subsequent saving and accumulation is most 

 important. A man with an inherited fortune of £20,000 who works hard 

 and makes, say, £1,500 a year, has no strong incentive to do any more 

 saving out of his combined income of £2,500, and may be content to pass 

 on the £20,000 intact. But for this fortune he might have been a new 

 saver. I think there is singularly little statistical evidence of accumulative 

 saving, and while inheritance sustains inequality, it does not greatly 

 increase it ; the old inequalities of fortune are fed from new inequalities in 

 earning and the immediate bequests made from that source. I doubt, 

 therefore, if the deterrents to saving which high death duties create are 

 so important in their final effects when one considers the increased 

 incentive to new saving (and perhaps effort) which the lesser fortune to 

 the recipient brings about. 



IX. Special Cases o£ Inheritance. 



(fl) Land. — One of the most obvious ways in which the laws or practice 

 of inheritance move to a direct economic result is in the sphere of land 

 tenure. Clearly, there will be a prima facie difference between the 

 agricultural conditions that would exist after a long period of compulsory 

 division of property on Continental lines as compared with centuries of 

 primogeniture and the desire to maintain large land-units intact. There 

 have been certain important changes lately in the law of property which 



^1 For estates over £1,000, 80 per cent, of the married men and 90 per cent, of 

 widowers have children living at the time of their death, while married women and 

 widows have children in 68 to 70 per cent, of the cases. There is no weakening of 

 these figures — if anythmg, the reverse — m the higher sections. In 10 per cent, of the 

 cases of single men there are parents living at the time of death. Intestacy, of course, 

 decreases with the size of theestate, and in the case of single men,for estates exceeding 

 £1,000, over 21 per cent, die intestate; but in the case of married men it is under 

 10 per cent., and even less for widowers. 



