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Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

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Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#231

Post by namlem »

lev99 wrote: post #197
akuji1993 wrote: post #191

Earlier quoted context omitted.

This sounds so obviously stupid I wonder why nobody stopped and said "You know, we might just make all these companies leave with stuff as ridiculous as this."

In many socialist points of view companies do not provide value, they are viewed as rent seekers. Value = {Raw Resources} + {Labor} + {Tools used by labor}. Companies own the tools, and take a margin of value. If labor owned the tools they could remove that margin. This sounds like the world view used to design that policy.

Yeah, that's Marx's Labor Theory of Value. The problem is that it doesn't account for the value of risk. It's easy to look at companies making money and assume they're extracting value if you ignore all the failed attempts that outnumber the successes 5 to 1. Now, rent-seeking is still a problem and corporations are often guilty of it, but the idea that all profit is rent is ridiculous. Some of it is compensation for risk.

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#232

Post by larkost »

JoeAltmaier wrote: post #213
vec wrote: post #210

Earlier quoted context omitted.

A someone who is broadly sympathetic to the idea of labor ownership of the means of production, could I trouble you to explain what's so obvious about the stupidity of this plan? Taxes on corporate profits are generally seen as reasonable in the abstract, and they're common all over the world. I could see setting an unusually high tax rate being problematic, but that doesn't appear to be what happened. And it doesn't…

Labor running the company? This fails more often than it succeeds. Bread and circuses are the result, then bankruptcy. Indeed obvious without the use of hindsight.

Do you have citations to back that up? A quick search turned up a couple of hits (one old, one relatively recent) that both said that Employee owned businesses performed reasonably well. Certainly not conclusive, but a first stab.

https://www.forbes.com/sites/darrendahl/2016/07/19/are-emplo... https://hbr.org/1987/09/how-well-is-employee-ownership-worki...

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#234

Post by namlem »

aomurphy wrote: post #224
fetbaffe wrote: post #188

One have to remember why this was setup in the way it is, to protect the company forever. In Sweden during the 70-ties 80-ties the Social democrats was pushing a radical socialist agenda ('löntagarfonder') to take over companies by taxing profits and then buying shares with it, all controlled by trade unions. Result of these policies was that many companies left Sweden to protect itself (of course). IKEA, Tetra Pak a…

I'm not Swedish, but I find this area relatively interesting. The idea is fairly straightforward: Sweden's model created low income inequality between the poor and the rich, but did not create low wealth inequality. A large proportion of Swedish capital was controlled by 15 families, and most wealth his still controlled by a small inherited class (many descended from the old Swedish nobility), and 80-90% of wealth is…

The efficient market hypothesis is not an example of good science. It's still only a hypothesis because there's so little evidence to support it. The market is rife with failures due to all the quirks of human psychology. Any realistic model for the future must be built on the framework of behavioral economics.

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#235

Post by dumbfounder »

vec wrote: post #210
akuji1993 wrote: post #191

Earlier quoted context omitted.

This sounds so obviously stupid I wonder why nobody stopped and said "You know, we might just make all these companies leave with stuff as ridiculous as this."

A someone who is broadly sympathetic to the idea of labor ownership of the means of production, could I trouble you to explain what's so obvious about the stupidity of this plan? Taxes on corporate profits are generally seen as reasonable in the abstract, and they're common all over the world. I could see setting an unusually high tax rate being problematic, but that doesn't appear to be what happened. And it doesn't…

It is not obviously stupid that labor running the company is a bad thing. I think it is a bad thing in most cases, but I can understand the debate.

What IS stupid is thinking that companies will stick around while their control gets transferred away (from those controlling it). If a company wants to transfer control to its employees, it will do that. If a company doesn't (almost all of them) it will leave. That seems pretty darn obvious to me.

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#236

Post by coderholic »

fetbaffe wrote: post #188

One have to remember why this was setup in the way it is, to protect the company forever. In Sweden during the 70-ties 80-ties the Social democrats was pushing a radical socialist agenda ('löntagarfonder') to take over companies by taxing profits and then buying shares with it, all controlled by trade unions. Result of these policies was that many companies left Sweden to protect itself (of course). IKEA, Tetra Pak a…

Not to take away from your interesting comment, but it's not written "70-ties", just "70s" - the first one reads as "seventy-ties", which is odd :)

EDIT: Updated "70's" to "70s" because of the great child comment that links to an article showing that while 70's is technically correct it's much more usual to exclude the apostrophe.

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#237

Post by bomb199 »

JoeAltmaier wrote: post #226
vanderZwan wrote: post #222

Earlier quoted context omitted.

> Bread and circuses are the result I'm not interested in debating the merits or lack thereof of socialism as a system of government, but the "bread and circuses" thing applied to Roman citizens . Unless I was misinformed, the overlap between the people in the Roman empire who were citizens and the people in the Roman empire who were the labour force was very, very small.

You get it; pedantry is pointless here. The folks benefitting from a thing will vote themselves money and perks until the place is bankrupt. It takes a different mindset to sign the front of the check, than to sign the back of the check.

>The folks benefitting from a thing will vote themselves money and perks until the place is bankrupt

So, executive boards of companies?

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#238

Post by goty2 »

vec wrote: post #210
akuji1993 wrote: post #191

Earlier quoted context omitted.

This sounds so obviously stupid I wonder why nobody stopped and said "You know, we might just make all these companies leave with stuff as ridiculous as this."

A someone who is broadly sympathetic to the idea of labor ownership of the means of production, could I trouble you to explain what's so obvious about the stupidity of this plan? Taxes on corporate profits are generally seen as reasonable in the abstract, and they're common all over the world. I could see setting an unusually high tax rate being problematic, but that doesn't appear to be what happened. And it doesn't…

It wasn't necessarily stupid. But probably ahead of its time. Today, when it is probably too late to do anything, a lot of people are talking about the risks with automation and need for basic income. And that is essentially what it was, to take the increased profits of automation and put them in a sovereign wealth fund for wider distribution without creating inflation.

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#239

Post by jgalt212 »

namlem wrote: post #234
aomurphy wrote: post #224

Earlier quoted context omitted.

I'm not Swedish, but I find this area relatively interesting. The idea is fairly straightforward: Sweden's model created low income inequality between the poor and the rich, but did not create low wealth inequality. A large proportion of Swedish capital was controlled by 15 families, and most wealth his still controlled by a small inherited class (many descended from the old Swedish nobility), and 80-90% of wealth is…

The efficient market hypothesis is not an example of good science. It's still only a hypothesis because there's so little evidence to support it. The market is rife with failures due to all the quirks of human psychology. Any realistic model for the future must be built on the framework of behavioral economics.

I think you're trying to ascribe too much to the efficient market hypothesis. It's not the rational market hypothesis.

Re: Ikea founder leaves fortune to no one, structures it to ensure it lasts forever

#240

Post by gaius »

bmelton wrote: post #143
gaius wrote: post #134

Earlier quoted context omitted.

If you aren't seeking out the loopholes that apply to you, then you are paying more in taxes than you are legally required to. Complete nonsense. Finding a loophole in the tax code is no different to finding a flaw in some computer code that gives you some access you were never intended to have. Should we all hire professional hackers too?

Except that the laws are the rules, the rules are publicly published, and everyone has access to them. If McDonald's is selling a 10 piece McNuggets for $1.49, and a 20 piece for $4.99, then buying 2 x 10 piece McNuggets for $2.98 is a loophole around paying $4.99. If you find it immoral, so be it, but it doesn't change that you're paying more for McNuggets than McDonald's requires you to pay.

and everyone has access to them

The ordinary taxpayer isn’t in a position to exploit interactions between n jurisdictions tax codes, are they?

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