
Hong Kong Property Tycoon Gave Away Children’s $400m Inheritance - pseudolus
https://www.bloomberg.com/news/articles/2019-04-22/hong-kong-property-scion-has-no-house-no-inheritance
======
wait_a_minute
I used to be vehemently opposed to anti-inheritance laws but I've recently
softened up a bit. Because the data shows that most wealthy people are first-
generation rich anyway. (See: The Millionaire Next Door and also The
Millionaire Mind for the data)

Someone who is really wealthy would've bestowed their children with immensely
valuable lessons and experiences while they were growing up. And most of those
children would already be on a path to their own success well before their
wealthy parents die. After all, you'd expect most of them to become successful
in their 30s and 40s while their parents are still alive. At which point any
inheritance is simply a cherry on top, even if it's just 5% of the estate with
the rest going back into charitable causes / society.

I understand the argument about how the wealthy who earned their wealth have
the right to do what they want with it, but we already know that a lot of
wealthy people end up adopting this mentality around giving away most of their
wealth anyway. Like Gates, Buffett, etc. It seems like once you get into the
real echelons of wealth you have a better understanding of why large public
works projects are more noble than simply giving the entire estate to your
offspring who are likely already going to be well-off by the time you keel
over and die.

~~~
n4r9
My attitude towards this is starkly different to yours. Suppose the data
showed the opposite - that most wealthy people had inherited the bulk of their
wealth. For me this would be an argument in _favour_ of anti-inheritance laws.
An entire class of society would have an inherent, non-meritocratic advantage
in life.

~~~
onion2k
The children of rich people go to the best schools, have tutors, can afford to
go to expensive universities without worrying about the cost, can afford to
take unpaid internships, and have access to the capital to start their own
ventures. All those things happen long before they inherit anything.

This is why I'm in favour of very high levels inheritance tax. It would
encourage rich people not to hoard their money and instead spend it on things
that keep the economy moving (people spending money is what creates jobs).
People being rich is great, but only if they actually spend their money.

The other way for economies to keep moving is for poor people to borrow more,
and we saw the long term effect of that in 2008.

~~~
n4r9
I very much agree with you, with the caveat that one replaces "keep the
economy moving" with "raise the quality of life for the worst-off in society".
I find these measures don't always coincide although the first is admittedly
easier to keep track of.

------
beart
The framing of this headline bothers me. It implies the money always belonged
to the children from the start. "Gave away" is also an interesting choice over
"donated". At least in my mind, they conjure different thoughts. Donated
implies a purpose, while "gave away" could mean that the money was lost
needlessly.

~~~
ksec
>It implies the money always belonged to the children from the start.

From a Chinese Culture perspective, that is exactly so.

~~~
xref
What about from a Chinese Law perspective?

~~~
robjan
Hong Kong law approximately gives all personal effects to the spouse plus 50%
of the cash, with the rest going to any children (unless there is a will that
says otherwise)

~~~
elelekus
Isn't this more or less the same in the rest of the world?

------
arcticbull
I'm very much on his side.

(1) Inherited dynastic wealth creates a plutocracy. I believe people of each
generation should rise to the level of their abilities and not to the level of
largesse of their families. Allowing people to hand down massive wealth is
like playing monopoly where every square already has a hotel on it.

(2) The children didn't earn it, so they deserve it as much as anyone else.
Inheriting it may adversely affect who they turn into as humans.

(3) I believe in a large social safety net so that those who cannot succeed
don't have to die, but rather can live out their lives comfortably. Basic
income, socialized medicine, education, etc.

This strikes a fair balance IMO. You earned the money, you created the value,
you have to spend it in your lifetime. If you can't, the state will decide
where it goes. The next generation will be looked after, and if they too are
successful they can also enjoy the spoils. If not, they can live out their
lives in comfort.

~~~
Dig1t
I think this doesn't quite jive with human nature. People have a naturally
strong drive to build something and give to their kids. If there's no
legitimate way to do that, then people will find other ways (whether illegal
or just less honest means) to pass the things they've built to their children.

~~~
gnat
Sounds like you'd really enjoy reading Francis Fukuyama's "The Origins of
Political Order"
<[https://www.amazon.com/dp/B00457X7VI/>](https://www.amazon.com/dp/B00457X7VI/>).
He analyses how different cultures came to wrangle large states, showing how
they all had to deal with the same issues although they dealt with them in
different ways. The base issue is that the state has to replace the family as
the strongest allegiance: a person holding office can't use that office to
enrich their family, else eventually the state has nothing and warlord
dynastic families result. So you get Janissaries (kidnapped Christian boys) as
the elite fighting force in the Ottoman Empire, and the 11C (?) change in the
Church that prevented priests from marrying (because they'd been enriching
their families). Since I read the book, I can see that fundamental tension
between state and family playing out everywhere. Highly recommended!

------
pcurve
Sounds like he did a good job raising his kids from early age. Kudos. Yes, he
is still privileged, but it's not easy for parents to make this kind of choice
for their children.

Not only did he believe this is for the greater good, but he must've had a
strong conviction that his children would've been better off this way.

------
telesilla
Even given they are growing up with all the privileges he can give his kids
(and who wouldn't), what a great dad to say, and mean, that "it’s better not
to lead a life that’s too comfortable in one go. You’ll treasure more if you
gain things step by step.”

------
hprotagonist
Andrew Carnegie did much the same, and wrote this about it, after first
considering and dismissing passing your wealth on to your families or endowing
it at your death:

 _There remains, then, only one mode of using great fortunes; but in this we
have the true antidote for the temporary unequal distribution of wealth, the
reconciliation of the rich and the poor—a reign of harmony—another ideal,
differing, indeed, from that of the Communist in requiring only the further
evolution of existing conditions, not the total overthrow of our civilization.
It is founded upon the present most intense individualism, and the race is
projected to put it in practice by degree whenever it pleases. Under its sway
we shall have an ideal state, in which the surplus wealth of the few will
become, in the best sense the property of the many, because administered for
the common good, and this wealth, passing through the hands of the few, can be
made a much more potent force for the elevation of our race than if it had
been distributed in small sums to the people themselves. Even the poorest can
be made to see this, and to agree that great sums gathered by some of their
fellow-citizens and spent for public purposes, from which the masses reap the
principal benefit, are more valuable to them than if scattered among them
through the course of many years in trifling amounts through the course of
many years._

[0]: [https://www.carnegie.org/about/our-
history/gospelofwealth/](https://www.carnegie.org/about/our-
history/gospelofwealth/)

~~~
azinman2
I wish this type of thinking — caring about the development of the public and
republic - was more common these days. Common culture, from the Kardashians to
the “SV dream” and the President himself, sells the exact opposite.

~~~
HeyLaughingBoy
FWIW, Kim Kardashian is working on passing the bar. She says that it's because
she wants to continue to work on Criminal Justice reform.

~~~
massivecali
I'm sure a huge percentage of her fanbase has no idea who her father is or the
massive role he played in a significant televised court case. Makes sense for
her to follow in those footsteps if she's actually serious.

------
jellicle
> father puts him in charge of a company that does $2.4 billion in annual
> revenue

> self-made man!

~~~
masklinn
Also

> A graduate of the London School of Economics and Political Science, Shih
> said he considers himself an average Hong Kong citizen.

and

> Shih’s advice to his peers? Be realistic.

> He aims to buy a two-bedroom apartment in a middle-class neighborhood in
> West Kowloon

The interwebs tell me that a 2-bedroom flat in west kowloon starts around 2
million USD. I'm sure it's realistic for Shih, I doubt it's realistic for the
average HK citizen.

~~~
theowlrkk
As a Hong Kong citizen, I can tell you 2 mil is a realistic number. The prices
in this city is the top 3 in the world. More expensive than San Francisco.
There are no longer any housing available less than half a million except for
government housing which you have to wait over a decade. Half a million will
buy you an apartment the size of a normal bedroom in SF.

------
t0mbstone
If you aren't going to leave anything behind for your kids, why work so hard
to earn so much in the first place?

~~~
thefounder
A better question would be why would you leave anything material for your
kids? A good eduction and guidance through life should suffice. The rest
should be invested in good governance.

~~~
hsnewman
What if they can't take care of themselves? There are many reasons to provide
for your offspring.

~~~
arcticbull
For that we should invest in a social safety net, even basic income, so that
those who can't succeed don't have to go off and die.

------
minikites
Anyone who believes we should live in a meritocracy (or thinks we already do)
should support a 100% estate tax.

~~~
mises
I believe we live in a meritocracy, but don't think we should do that. I see
no moral reason to do this. Inheriting money doesn't make any one else poorer.

If I'm wrong, why?

All this aside, I think it's great that this gentleman made this choice. I
think it will do a lot more good this way, and might even make his son more
successful (by avoiding trust-fund syndrome).

~~~
danans
The process of acquiring a massive fortune does make some poorer (definitely
in the relative sense), even as it makes some better off, that is, it drives
inequality. Technology picks up some of the slack by raising the floor
standard of living, but only if doing so is also profitable for the financier
or seller of the technology, and never anything beyond that.

While that process may be necessary to incentivize innovation, it has societal
costs, and it's not unreasonable to consider offsetting those costs by
confronting the wealth gap directly.

But I would argue the concentration of extreme wealth in few hands actually
hinders innovation, and therefore makes society poorer overall, because a
great number of people who might otherwise contribute creatively to major
societal problems instead must focus their efforts on daily survival.

~~~
mises
> The process of acquiring a massive fortune does make some poorer (definitely
> in the relative sense)

This is my issue with the whole "wealth inequality" concept. It's just that:
you have more money than I do. So what? Sure, I'd _like_ more money, but I
don't think it's the government's job to take your money and give it to me. I
have never seen the issue with CEOs making tens of millions of dollars; they
do a very singular job (in a well-run company).

> Technology picks up some of the slack by raising the floor standard of
> living, but only if doing so is also profitable for the financier or seller
> of the technology, and never anything beyond that.

You think the Gates Foundation operates on a for-profit basis? I think you are
correct with respect to businesses, but would prefer non-profits pick up the
slack for the very bottom of society, rather than the government.

> While that process may be necessary to incentivize innovation, it has
> societal costs, and it's not unreasonable to consider offsetting those costs
> by confronting the wealth gap directly.

I agree it has societal costs. How do you propose to directly address it? I
don't think giving the government the power to take and distribute how it
deems best is a good solution.

> the concentration of extreme wealth in few hands actually hinders
> innovation, and therefore makes society poorer overall, because a great
> number of people who might otherwise contribute creatively to major societal
> problems instead must focus their efforts on daily survival.

Though it does have problems, I think it also makes it easier in some ways.
Angel investors can make it much easier to start a business, and certainly
easier than if you had to pitch the middle class for two thousand dollars a
piece.

I guess my overall issue is that I don't know of a better way. The best
solution I can come up with to help is to stop the crony capitalist element,
subsidies, etc.; where government picks winners and hands out contracts. I
don't trust the government (particularly not the federal) to do most anything
right, and I think if they are given more money (via, say, increased taxes),
they will just waste it, likely signing more large, crony-ist government
contracts in the process.

If there's a better solution, what might it be? I think if one is proposed,
maybe it's best to test it on a state or local level first. I tend to start
from a moral perspective: how can we morally justify taking money from others
at gunpoint to make things "fairer"?

~~~
EliRivers
_how can we morally justify taking money from others at gunpoint to make
things "fairer"?_

Perhaps it depends how they got it. If they got it by "unfairly" taking it
from their neighbour at gunpoint, can we morally justify taking it from them
at gunpoint - perhaps in order to return it to that neighbour? If that seems
like a fair action, if we can justify that, then the principle is established
that sometimes it is morally justified, and we then need "only" identify those
qualifying situations.

~~~
mises
> If the got it by "unfairly" taking it from their neighbor at gunpoint, can
> we morally justify taking it from them at gunpoint - perhaps in order to
> return it to that neighbor?

We call those people robbers and do just that. Any one who takes money at
gunpoint is such. I'm not sure if you were trying to make a different point,
but we're pretty good at arresting violent criminals and punishing them.

~~~
EliRivers
The point I made is that sometimes it is morally correct to take things from a
person at gunpoint, in the name of fairness. You suggested that it was morally
unjustifiable to ever do so ("how can we morally justify taking money from
others at gunpoint to make things "fairer"?")

I suggest, and you appear to agree, that sometimes it IS morally justifed to
do so. The principle established, with both of us agreeing that sometimes it
is morally justified to forcefully redistribute wealth, now it only falls to
us to decide when we should do this forceful redistribution of wealth.

