Swedish billionaires more likely to have inherited wealth than in the US

[NED funded]

Cutthroat capitalism prevails!!

For those that dont get the reference.

Matthew Yglesias recently pointed out that Sweden has more billionaires per capita than the United States on Forbes’ annual ranking of the world’s richest individuals. In 2013, Sweden had 1.47 billionaires per million inhabitants, compared with 1.41 for the United States. He goes on to argue that the high per capita number of Swedish billionaires demonstrates that a generous welfare state does not preclude entrepreneurship.

I find this topic interesting, since my doctoral thesis used two decades of Forbes data to estimate the number of billionaire entrepreneurs across countries. One problem with Yglesias’s argument is that not all billionaires on the Forbes list are entrepreneurs. The list also includes individuals who’ve largely inherited their wealth.

In the 2013 list, approximately 40 percent of Sweden’s billionaires are self-made while 60 percent inherited their wealth. In the United States, by contrast, 70 percent of billionaires are self-made while around 30 percent inherited their wealth. Once we exclude inherited wealth, the United States has around 1 self-made billionaire per million inhabitants compared to 0.6 for Sweden. Since we are discussing the ability of the welfare state to generate entrepreneurship, I would also exclude Swedes who left Sweden and became wealthy in the U.S.

Excluding inherited wealth and billionaires who earned their wealth in other countries, the U.S. has twice the rate of billionaire entrepreneurship compared to Sweden. This is similar to what I found in the analysis over a longer period. Sweden is above the European average, but below countries such as United States, Canada, Israel, Singapore and Hong Kong.

Matthew Yglesias is entirely correct when he points out that Sweden has a lot of rich people. Indeed, wealth inequality in Sweden is roughly as large as wealth inequality in the United States, in contrast to Sweden’s low income inequality. What Yglesias misses is that this is largely old, pre-welfare-state money. Up until the 1960s, the government share of the economy in Sweden did not differ much from the government´s share in the United States. Only a small numbers of Swedish billionaires became rich by founding companies during the welfare state period itself.

Yglesias mentions three Swedish companies: H&M, Ikea, and Tetra Pak. These firms were founded in 1943, 1947 and 1951 respectively, before the mature Swedish welfare state emerged.

There are more sides to Swedes than the egalitarian Social Democrats that have become so familiar. Swedes also have an often forgotten history as industrious Lutheran burghers. From the late 19th century up until the welfare state, the country was an entrepreneurial powerhouse. With the exception of Switzerland, no other country created as many multinational companies per capita as Sweden. Both sides of the Swedish national character have to be taken into account to fully understand its economic history.

During the welfare state period, entrepreneurship declined sharply. Only two out of the currently largest 100 Swedish companies were founded after 1970. In the United States, 28 out of your 100 largest companies were founded after 1970.

The welfare state was better adapted to large, export-oriented engineering companies than to entrepreneurship. The ruling Social Democrats were pragmatic and appreciated that their welfare state ambitions were impossible to fund without a profitable private sector. The compromise was to finance a large welfare state by taxing labor and capital heavily, but to preserve capitalism.

The existing capitalist dynasties were allowed to keep their assets, though the value of those assets was depressed through taxes. More than 90 percent of Swedish industry was privately owned throughout the welfare state era, in contrast to the situation in many other European countries. While the already rich were allowed to retain their control of their companies, prohibitively high taxes made new wealth creation rare.

An unintended effect of this might have been to freeze the wealth distribution in its place. Already existing wealth was not confiscated, but fewer new fortunes were created during this period. A recent Swedish study found that 80-90 percent of inequality of top wealth is transmitted to the next generation. This explains why the share of inherited wealth on the Forbes list is higher in Sweden than the United States.

As Yglesias points out, in recent years Sweden has lowered taxes and cut back the welfare state. Time will tell if this will ignite a new wave of firm creation. Given their past performance, I wouldn’t bet against the Swedes.

https://www.nationalreview.com/the-a...mpression=true

[Nellise]

In 2013, Sweden had 1.47 billionaires per million inhabitants, compared with 1.41 for the United States.

So this "study" is comparing a sample of 15 versus 460 and trying to draw conclusions off that?

[Derpling]

Ah, yes, the National Review. Now there's an unbiased and completely fact-based website, right there.

[NED funded]

So this "study" is comparing a sample of 15 versus 460 and trying to draw conclusions off that?

His study is about billionaires across countries in general. And he is using that experience to explain what is happening in Sweden, compared to other countries.

https://ideas.repec.org/a/eee/pubeco...5p474-484.html

The study quoted. You can dig more if you want, but you will find pretty much the same thing. The US has more self made millionaires and people at the top than Sweden where the situation has largely stagnated. Social democracy cemented a nobility in Sweden.

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Ah, yes, the National Review. Now there's an unbiased and completely fact-based website, right there.

If you think something is false here or whatever, feel free to point it out.

[Nellise]

The study quoted. You can dig more if you want, but you will find pretty much the same thing. The US has more self made millionaires and people at the top than Sweden where the situation has largely stagnated. Social democracy cemented a nobility in Sweden.

But it's kind of silly to draw such conclusions when the sample is 14 people. Like "In the 2013 list, approximately 40 percent of Sweden’s billionaires are self-made while 60 percent inherited their wealth" is a really dumb use of percentages to draw a conclusion. 1 billionaire in Sweden is almost 7% of the total, so the difference in percentages between Sweden and the US is all of 4 people.

[Thirza]

Quality of life and culture are way better on average in Sweden.

Less homeless, less gangs, less homicide, less rape, less destitute, less hours worked for same luxuries, good educational systems, could go on.

[szechuan]

Quality of life and culture are way better on average in Sweden.

Less homeless, less gangs, less homicide, less rape, less destitute, less hours worked for same luxuries, good educational systems, could go on.

"Socialism"

[NED funded]

But it's kind of silly to draw such conclusions when the sample is 14 people. Like "In the 2013 list, approximately 40 percent of Sweden’s billionaires are self-made while 60 percent inherited their wealth" is a really dumb use of percentages to draw a conclusion. 1 billionaire in Sweden is almost 7% of the total, so the difference in percentages between Sweden and the US is all of 4 people.

You can extend it to millionaires if you want. Same pattern.

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"Socialism"

Socialism is when there is a permanent nobility in your country and the more permanent it is, the better.

This is your brain on leftism.

[LaserSharkDFB]

You can extend it to millionaires if you want. Same pattern.

Is it? Do you have proof? Nothing about millionaires in your text block.

Socialism is when there is a permanent nobility in your country and the more permanent it is, the better.

This is your brain on leftism.

That's not what socialism is. That's nothing like what socialism is. You don't even know what socialism is. Why are you like this?

[Daelak]

You can extend it to millionaires if you want. Same pattern.

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Socialism is when there is a permanent nobility in your country and the more permanent it is, the better.

This is your brain on leftism.

That's called a monarchy. Keep trying though, conservative pieces of shit will keep deflecting and projecting no matter how dysfunctional their ideology and party is governing.

[chooi]

This entire study is fucked if just one Swedish billionaire decides to move to the USA.

[Daelak]

This entire study is fucked if just one Swedish billionaire decides to move to the USA.

But but but but but I thought these socialist communities hellholes tax everyone to oblivion so no one has the ambition or drive to become successful.

[chooi]

But but but but but I thought these socialist communities hellholes tax everyone to oblivion so no one has the ambition or drive to become successful.

Sweden is not a socialist country.

However, my point was merely about what Nellise already mentioned: the sample size is questionable from an empiric standpoint.

[Nellise]

This entire study is fucked if just one Swedish billionaire decides to move to the USA.

To clarify, the article included in the OP is not one by the authors of the study. The article by Yglesias referencing the study comes to different conclusions (which is what the OP's article is arguing against). But I'm not sure why these articles only focused on the billionaire part. The study focused on all levels of income.

Here's a link to the actual paper: (the one the OP posted is paywalled, but they have a link to this free version): http://www.ifn.se/wfiles/wp/wp775.pdf.

But the whole paper is flawed since they admit: "First, our earnings measure never includes capital incomes even though items such as bonuses and realized stock options can be a relatively important form of compensation to top earners." That's missing a huge chunk of income/wealth for people at the top end these days. They handwave that off as not being important, but ignoring large portions of income when you're studying income seems foolhardy if you want any sort of rigorous analysis.


Question about billionaires: In most lists, the Walton Family is usually listed as a single entity, but there are at least 10 of them involved with the family business (7 main heirs and spouses/grandchildren) and they could all be considered billionaires individually. How are they treated when talking about this stuff? And are they considered inheritance based, or entrepreneurs since they're still involved with an active company, even though their positions are because they're family?

[chooi]

To clarify, the article included in the OP is not one by the authors of the study. The article by Yglesias referencing the study comes to different conclusions (which is what the OP's article is arguing against). But I'm not sure why these articles only focused on the billionaire part. The study focused on all levels of income.

Here's a link to the actual paper: (the one the OP posted is paywalled, but they have a link to this free version): http://www.ifn.se/wfiles/wp/wp775.pdf.

But the whole paper is flawed since they admit: "First, our earnings measure never includes capital incomes even though items such as bonuses and realized stock options can be a relatively important form of compensation to top earners." That's missing a huge chunk of income/wealth for people at the top end these days. They handwave that off as not being important, but ignoring large portions of income when you're studying income seems foolhardy if you want any sort of rigorous analysis.


Question about billionaires: In most lists, the Walton Family is usually listed as a single entity, but there are at least 10 of them involved with the family business (7 main heirs and spouses/grandchildren) and they could all be considered billionaires individually. How are they treated when talking about this stuff? And are they considered inheritance based, or entrepreneurs since they're still involved with an active company, even though their positions are because they're family?

Thanks for your input. I'm not going to read through the whole thing as I'm not that interested in Sweden's income inequality and reading your lines seems to confirm my assumption that this could be a waste of time anyway.

[NED funded]

But the whole paper is flawed since they admit: "First, our earnings measure never includes capital incomes even though items such as bonuses and realized stock options can be a relatively important form of compensation to top earners." That's missing a huge chunk of income/wealth for people at the top end these days. They handwave that off as not being important, but ignoring large portions of income when you're studying income seems foolhardy if you want any sort of rigorous analysis.

I actually will answer this because its offensive af that people consider this serious commentary.

They are counting incomes, that part is for earnings mostly to see if capital or other shit (like connections) plays an important role.

But I'm not sure why these articles only focused on the billionaire part. The study focused on all levels of income.

The focus is on the top incomes to see if people can reach the top if they don't come from the top. The study puts a lot of emphasis in that, (literally on the title).

[Theodarzna]

That's called a monarchy. Keep trying though, conservative pieces of shit will keep deflecting and projecting no matter how dysfunctional their ideology and party is governing.

.... I still await you describing non-violent colonialism.

[Daelak]

.... I still await you describing non-violent colonialism.

I dont have to describe it. It's happening in real time, cultures, memes, common understanding and heritage is being sent across the globe at the speed of light. The message of freedom and unending pursuit of human rights and protections is being spread everywhere.

[Theodarzna]

I dont have to describe it. It's happening in real time, cultures, memes, common understanding and heritage is being sent across the globe at the speed of light. The message of freedom and unending pursuit of human rights and protections is being spread everywhere.

Like in Iraq, and Libya or Yemen. :3

Doesn't exactly answer the historic examples though.

[Nellise]

The focus is on the top incomes to see if people can reach the top if they don't come from the top. The study puts a lot of emphasis in that, (literally on the title).

I asked about why these other articles focusing on the billionaire part. The title of the paper is "Intergenerational Top Income Mobility in Sweden – Capitalist Dynasties in the Land of Equal Opportunity?" with top being defined as the top .1%, which in Sweden is about 10,000 people, not the 14 billionaires.