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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

#241
post #210

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…

Version that was introduced in 1982 was a water downed version of the original plan, the Social democrats lost an election because of the original plan in 1976 against the popular opposition leader and farmer Thorbjörn Fälldin. Fälldin broke a 40 year long social democratic rule. Fälldin described the plan as DDR style economics with the subsequent removing of personal freedoms.

Original plan was to create funds to would buy up more than the majority of the stock of all major companies in Sweden, all controlled by the labour unions. That would have been de facto socialism. Why? Because the labour unions was married with the political power, the Social democrats. Biggest labour union of them all, LO, controlled Social democrats with funding and forced memberships.

All political power and economic power in one entity would have been very dangerous.

After controlling the major companies in Sweden, they would have of course continued with the non-public companies, because the main goal of Löntagarfonder was to create equal salaries between high profit companies and low profit companies.

Taxing profits in moderation is not breach against democratic principles, but using the companies own money to take ownership over it is.

Right to run your own company was established already in 1864 in Sweden. Löntagarfonder was a direct opposition to that.

https://en.wikipedia.org/wiki/Decree_of_Extended_Freedom_of_...

There is nothing wrong with worker ownership if the workers create it by themselves, taking other peoples work is not okay.

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

#242

Earlier quoted context omitted.

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...

Employee-owned is very different from employee-managed.

I recall VW put a single member of labor on their board; it broke the company as other members courted the vote of the uninformed labor rep, giving up perks until labor costs were bankrupting the place.

Companies operating in a competitive environment have to be pretty efficient. Optimizing a company for employee benefits is pretty much at odds with that. I know, they will all be more loyal etc. But that's different from lowering product cost and controlling profit margins. You fail to make payroll even one week, the game's over.

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

#243
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.

This doesn't seem like an accurate assessment:

"He finds that codetermination laws are negatively associated with productivity, but profit sharing, worker ownership, and worker participation in decision making are all positively associated with productivity." ---http://library.uniteddiversity.coop/Money_and_Economics/Coop...

"The positive effects are found most uniformly with respect to profit sharing and, to a slightly lesser extent, individual capital (share) ownership and participation in decision-making by workers." ---https://www.sciencedirect.com/science/article/pii/0147596787...

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

#244
post #210

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…

OK, it "doesn't seem more objectionable than any other hostile takeover". Fine, but why put up with any hostile takeover at all if you can just leave?

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

#245

> Kamprad’s heirs now won’t have direct control of the firm. They will have a more meager fortune derived from family-owned Ikano Group, a collection of finance, real estate, manufacturing and retail businesses which had total assets of about $10 billion in 2016. I do not think the word "meager" is really appropriate when we are talking about $10 billion in assets.

"More meager" meaning "lesser" and the word-choice was almost surely intentionally facetious.

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

#246

The development of no small part of English common law was the result of a multi-century cat and mouse game between wealthy landowners that wanted to keep their property in the family "forever" and everyone else that didn't want to have the dead hand of the past control substantial portions of the country's productive assets. Two groups in particular that didn't like to see assets locked away were dissolute heirs and…

See: https://wikipedia.org/wiki/Rule_against_perpetuities

Patent attorney? Me too. Have you read the malpractice case in California that basically says that you can't be found to have practiced malpractice for violating the RAP because its too convoluted?

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

#247
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…

Version that was introduced in 1982 was a water downed version of the original plan, the Social democrats lost an election because of the original plan in 1976 against the popular opposition leader and farmer Thorbjörn Fälldin. Fälldin broke a 40 year long social democratic rule. Fälldin described the plan as DDR style economics with the subsequent removing of personal freedoms. Original plan was to create funds to w…

> After controlling the major companies in Sweden, they would have of course continued with the non-public companies, because the main goal of Löntagarfonder was to create equal salaries between high profit companies and low profit companies.

No, that was the "solidarity in wages" policy which was already implemented. It was this policy that made successful companies make excess profits. Those profits were supposed to go to "Löntagarfonderna".

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

#248

> The foundation owns itself, so no Kamprad family members hold shares. Late stage capitalism... Anyway, I don't really get why the article claims he didn't care about money. It's known for a while that IKEA avoids taxes in many dodgy ways. If he really didn't care, the connected companies could pay a reasonable amount.

Not caring about money doesn't necessarily mean you are willing to pay more taxes than you are legally required to, especially a subjective amount that others deem 'reasonable'.

As a friend accountant/layer said: there will always be people coming to us, spending 51k to avoid paying 50k of taxes, and we'll help them arrange that. Legal isn't the same as moral, so sometimes the legal limit becomes meaningless.

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

#249
post #210

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…

The problem with socialists policies like this is not necessarily the high taxes or the hostile takeover aspect of it.

The issue is the intent.

When socialists start doing stuff like this, it is clear what the long term goal is. The long term goal is to take the means of production from those who have it, though whatever politically palpable means necessary.

Sure, they start off doing a voluntary stock buyout program, but what happens when that program inevitably fails? (perhaps because it takes way to long to takeover a company, or merely that the company owners refuse to sell)

Will the socialists come to the conclusion that their socialist policy didn't work and reverse it?

No. What happens when socialism fails is that the socialists conclude that they didn't go far ENOUGH and then they double down on their mistakes.

In this situation, "doubling down" would be increasing the tax, forcing the owners to sell at a given price, and eventually straight up confiscation of the business.

When people in the government start yelling about how they want to take the means of production, even voluntarily, the proper response is to run away as fast as possible, and take your means of production with you, before they make it illegal to do so.

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

#250

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.

As long as we're exploring punctuation, the apostrophe in that case is valid and correct, but it's growing obsolete as it becomes more normal to write "70s".

https://ell.stackexchange.com/questions/9199/do-decades-ever...

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