Douglas Todd: Canada’s ‘bank of mom and dad’ returning us to 19th-century inheritance culture
Realtors often now suggest to first-time buyers that they may want to approach “the bank of mom and dad” about their down payment on a home.
It’s increasingly the mantra of one of Canada’s most powerful industries — and it has a folksy ring to it. “Bank of mom and dad” sounds harmless and all-in-the-family.
But there is a foreboding side to such transfers of money, called living inheritances. It might be contributing to Canada returning to the harsh 19th-century system that once dominated Britain, France and Russia, and which still holds back much of the world.
The advantage that comes from ancestral inheritance is making a roaring return, as the distribution of wealth becomes more drastically unequal. And much of it ties into the soaring riches embodied in housing, especially in Canada’s major cities.
With their bottomless intrigue, the books bring alive the dramas that unfold when one’s station in life is almost entirely determined by what one does or doesn’t inherit. The novels are full of strategic marriage, sibling rivalry, fake filial loyalty, disinheritance, constant scheming and (not to overstate it) murder.
All of the above ties into the work of Thomas Piketty, one of our most famous economists . The French thinker, author of Capital in the 21st Century (which sold a startling two million copies) specializes in ways to overcome the gap between those who have property and those who merely earn incomes.
One of Piketty’s many antidotes to the growing inequality crisis is an overhaul of tax laws, including a truly novel recommendation for distributing large inheritances.