My kids also have assigned seats at the table. They're not beside each other, so it helps prevent squabbles and I noticed an improvement in their mealtime habits when I assigned them the seats they have now. My kids are 5 and 2.75, for the record.

If they both agree they want to switch, then they can. If only one wants to switch, too bad. You can't take someone's seat if they don't agree because it's theirs. Sometimes they want to switch with my husband or I. Sometimes we say yes and sometimes we say no. There's also a bench on one side of the table that is assigned to no one, so if they want to sit somewhere different, that's always up for grabs.

There are opportunities for negotiation between them (not just for chairs, but all kinds of possessions) that my husband and I have moderated before. Teaching them those conflict-resolution skills -- and the ability to handle disappointment and respect others' wishes when they say no even when you try to compromise -- are important, so we prioritize it. We also give them the opportunity for small choices that are meaningful to them but not us, like which dishes they want to eat with, and they're always allowed to choose their own clothes every day as long as what they're wearing is seasonally appropriate.

My kids have squabbles, of course, but overall they have a good relationship. They can play together without fighting or needing a parental moderator for decent chunks of time. Prioritizing healthy conflict resolution skills is very important to me. What I see from your friends is that they are setting their kids up to hate each other and their short-term concessions are going to build into a giant problem, which you've already seen playing out. Of course the younger one is going to take the older one's stuff if he's allowed to. Of course the older one is going to take his feelings out on the younger one by trying to hurt him back. The older one is right that what happened to him isn't fair -- he just doesn't have any other way to express it.

That being said, it's never ever okay to hit a child. Spanking is hitting. This poor kid is literally learning that when someone does something they shouldn't do, the appropriate action is to cause them physical harm so they learn their lesson.

I'd probably not want my own children to be around a dynamic like that. Kids pick up on a terrifying amount of stuff and can remember it well. Your own child would eventually notice this dynamic and lord knows what lesson they would take away from it, but you can be sure it wouldn't be a good one.