Let’s Pass On Capital as a Legacy

When people hear the word inheritance, they usually think of real estate and cash. When parents pass away, unless they leave specific instructions in a will, the children divide the real estate and cash according to the law. When that process does not go properly, siblings sometimes engage in bitter, bloody disputes that can even lead to actual bloodshed.

Receiving an inheritance such as money or buildings may bring immediate affluence, but it can also produce various harmful effects. There are countless cases in which people suddenly come into a large sum of money and begin collecting monthly rent, only to become idle or fall into moral ruin.

If what one inherits is not mere money but capital, then not only the individual but also the family, the nation, and even people around the world can become more prosperous. Rather than passing down material assets that are mechanically calculated and divided, we should bequeath inheritances that create genuine value and enable those who receive them to create even greater value.

The United States has long promoted a Heritage movement aimed at passing down the right kind of inheritance. The Heritage Foundation in the United States carries out a wide range of activities under the mission of “freedom, opportunity, prosperity, and flourishing civil society” in order to leave a good inheritance to future generations.

The Heritage movement in the United States is widespread not only among organizations but also among individuals. American parents’ intense passion for education is famous around the world. They do everything they can to help their children build the knowledge capital they will rely on throughout their lives, rather than simply leaving them money. Through high-quality education, they help their children grow into capable professionals who can weather the storms of life. This is possible because they embrace the spirit of passing down not mere material goods, but a capitalized inheritance.

American parents donate enormous sums to universities in order to send their children to good schools. Their purpose is to provide not money, but access to excellent educational opportunities. That is because they believe that helping their children receive an outstanding education and become capable individuals is the very essence of capitalizing an inheritance.

In Korea, strong egalitarian sentiment has prevented the adoption of donation-based admissions. As universities must operate solely on students’ tuition, their finances are so poor that some reportedly still use traditional pit latrines, which is deeply regrettable. In the United States, donation-based admissions became established long ago. This is thanks to the understanding that when wealthy students are admitted and university finances improve, countless students benefit. Americans feel little aversion to donation-based admissions because while getting in may be easy, graduating is extraordinarily difficult.

Capitalization does not apply only to university education. When the child of a singer learns to sing with rich expression and excellent technique, that too is clearly a form of capital. When a physician father talks with his son about medical skills and passes on medical knowledge, or when a practitioner of Korean medicine passes on acupuncture techniques, that too is undoubtedly the capitalization of inheritance. Likewise, learning business acumen from a father who runs a supermarket from an early age, or learning a trade from a boiler technician father and developing skills equal to his, can truly be called the capitalization of inheritance.

When knowledge, rather than money, is passed down to descendants and that knowledge generates value, it becomes social capital. It is only natural that a society rich in excellent capital will flourish.

The question is whether we will simply pass down money, or place a capitalized inheritance in our children’s hands. We should strive to leave a good inheritance not only to our children, but also to our society. If we pass down good, capitalized inheritances, their value will spread ever farther, and our children and our society will continue to develop.

Sung-no Choi, Director, Center for Free Enterprise (CFE)

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Original title: 자본을 유산으로 물려주자

Author: Sung-no Choi

Date: 2023-07-14

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=4&idx=25885