In recent years, the annual amount of inherited wealth has steadily increased in most Western democratic states, with economists predicting that this trend, and the amount of money inherited, will only continue to grow in the future. While economists have used these trends to make future predictions, Ronny Grundig explores the history of hereditary practices between 1945 and 1990 to understand how wealth is inherited and the intrinsic inequalities it both creates and reflects within a society. Utilizing a comparative approach between the Federal Republic of Germany and Great Britain, Grundig asserts that, at its core, inheritance practices in these nations operate under the formula of “those who have will continue to receive” (22). By exploring the historical inheritance structures and practices in Germany and Great Britain, it is evident that inheritances tend to preserve and perpetuate existing social inequalities. For example, high-income earners or those with higher educational degrees tend to inherent significantly more than people with low incomes or lower education levels. Families with single children inherit more than larger families. In the German case specifically, trends demonstrate that since reunification, West Germans inherit far more than East Germans. While these tendencies seem to be self-evident, the greater cause for concern is the increasing levels of inherited wealth that fundamentally threaten how modern capitalistic democracies see themselves: as meritocracies. According to Grundig, the fear is that society will transform from a meritocracy to a “society of heirs” (Erbengesellschaft) (8).
Grundig's comparative approach strengthens his argument as Germany and Great Britain represent differing political and legal traditions while also having the two dominant inheritance regimes in the West. Germany represents continental Europe, and Great Britain represents the Anglo-American tradition. These two nations also hold contrasting views of ownership, which lead to differing priorities within inheritance law and tax structures. However, Grundig also seeks out areas of overlap and the transfer of ideas between the two nations, particularly through the framing of his work around two important political turning points: 1945 and 1990. Grundig emphasizes that the years following World War II and the Allied occupation were crucial in producing a political reorganization that was more open to taxing wealth and changing inheritance practices due to wartime devastation. Most importantly, the Allied occupation of defeated Germany enabled a reshaping of inheritance practices into the Anglo-American tradition. This included overhauling the Nazi Reichserbhofgesetz inheritance policy and increasing the inheritance tax. Grundig argues that “Britons and Germans were never more alike” in terms of inheritance policy than during these few years (29). This similarity, however, was short-lived as many Germans resisted the significant tax increase and returned to a Weimar law after the first Bundestag election in the FRG, placing the two nations back on differing paths. Grundig proves that, despite some of the inherent differences between Germany and Great Britain, they experienced a similar trajectory in inheritance practices over the second half of the twentieth century.
In order to explore historical inheritance practices and their relationship to structural inequality, Grundig utilizes sources such as inheritance files and German and British records from various ministries to focus on three areas: tax policy, the transformation of family and social relationships within the inheriting process, and the work produced as a main characteristic of inheriting. In the arena of tax policy, Grundig finds that there was little change between the policies established in the early 1950s through the 1970s in both the FRG and Great Britain. After the Bundestag revived the 1925 tax law, little was done during the years of the economic miracle. In the 1970s, calls for a fairer distribution of profits and a just tax system encouraged the FRG to pursue adjustments to tax policy but did so only moderately. For Great Britain, the postwar Labour government instituted a sharp increase in estate taxes, but this encouraged wealthy individuals to play a “cat and mouse” game with the government to avoid paying taxes (178). For Britain, the later 1970s signaled the triumph of neoliberal ideals bringing about more radical changes in tax policy that undid the stronger inheritance taxes and instead favored the wealthy. The moderate changes in the FRG and neoliberal ideals only led to greater wealth inequality in these two nations.
The change in familial social relationships demonstrates an intriguing element of Grundig's work. Traditionally, most inheritance schemes concentrated on undergirding a dynastic view of the family, with sons being the primary heirs. However, Grundig finds a shift towards the spouse being the primary heir due to a recognition that wealth accumulation in the latter half of the twentieth century was more of a joint effort than solely the result of a male-breadwinner model. Furthermore, daughters tended to receive the same amount as sons. Other factors included the expansion of welfare state provisions and greater access to educational opportunities making children less reliant on their parent's assets. The final element of Grundig's investigation centers on the issue of how inheriting wealth was work for heirs and created new work. He details the complex and fragmented nature of processing an estate from material dissolution, the taking over of a company or managing funds, to the bureaucratic tasks of settling debts, contracts, and filing legal paperwork. All of these have made inheriting a lucrative business for banks, lawyers, and investors and have contributed to the inequality of inheritance practices, since it is the wealthy who take advantage of these resources in order to find tax loopholes.
Ultimately, Grundig work is a stimulating and impressive analysis expanding our understanding of what factors shape inequality within a society. This work breaks new ground in a field virtually untouched by historians, with most related work done by economists and legal studies related to tax policy. While some historiographical research exists on the creation of inheritance laws in the nineteenth century, as a feature of modernization efforts, very little exists on these practices in the twentieth century. Grundig's comparative approach enables this work to speak to scholars across a variety of fields, such as economic and legal historians but also social historians interested in the changing dynamics of family and gender or those concerned with inequality and poverty. It is said that there are only two certainties in life, death and taxes. As Ronny Grundig illustrates in his insightful work, while you cannot escape the former, it might just be possible, if you are wealthy enough, to circumvent the latter when you die.
