I ran into this link via Adam Tooze 's Chartbook #249. Some tantalizing selections: Interactive chart for the Thomson family holdings I'm not enough of a policy nerd to begin to propose...
To the average person, being rich means having lots of cash. (Think of Scrooge McDuck, swimming in a sea of money.) But this idea of wealth as cash is a misconception. Billionaires almost never hold their fortunes in cash. Nor do they hold their wealth in tangible (physical) assets. Instead, billionaires hold their wealth in the form of corporate control.
At first, it may sound odd to equate ‘wealth’ with ‘control’. But as Jonathan Nitzan and Shimshon Bichler note, control is the basis of wealth. You see, despite the widespread conception that ‘wealth’ refers to tangible things, it never does. Instead, ‘wealth’ is the market value of property rights — the legal control over property.5 Sure, this property can be physical, like a car or a house or a super-yacht. But it can also be intangible, like a patent or a corporation. What matters is that wealth is the quantification of the control, not the thing itself.
Back to billionaires. Thanks to the complexities of corporate law, billionaires shore up, manage, and expand their power by vesting their control through a complicated web of ownership. Take the Thomson family as an example. The Thomsons own majority shares in the news corporation Thomson Reuters. But they don’t own these shares directly — far from it. As you’ll see, we have to wade through many layers of holding companies before we get clarity about the Thomsons’ domination of this vital media asset.6
I'm not enough of a policy nerd to begin to propose legislative solutions for these networks of hidden control, and it's much murkier for U.S. corporations.
Anyone with knowledge or thoughts, please weigh in.
So the article numbers 3 reasons, the first two of which are vague and unsubstantiated accusations. Then a fourth is included, but unnumbered and unaddressed in the article even though it's one of...
Why the complexity? It’s a question we won’t answer here. But among the reasons for parsing ownership via holding companies are to (1) obscure responsibility, (2) deflect accountability, and (3) pay less tax. Holding companies are also used to distribute ownership among heirs while maintaining family consolidation. In other words, they are a tool for ensconcing power.
So the article numbers 3 reasons, the first two of which are vague and unsubstantiated accusations. Then a fourth is included, but unnumbered and unaddressed in the article even though it's one of the leading causes, and it's dismissed with a hand wave that this is about maintaining centralized family control even though in practice it's often about carving out fiefdoms. This is ignored even in cases such as the McCain family, where the article discusses an acrimonious family split. Never let facts ruin a good thesis.
And somehow, while throwing out vague reasons like obscuring responsibility and accountability — which of course qualify as two reasons to pad the list — the article ignores one of the chief reasons for ownership structures: acquisitions. Should Rogers have rolled SkyDome and the Blue Jays into Rogers Communications? Is Weston to blame for Shoppers Drug Mart's previous acquisitions adding 3 layers of subsidiaries? How exactly is McCain Capital supposed to hold 39% of Maple Leaf Foods without it existing as a separate company on the chart?
Which of course makes the incredibly obvious point that most of these businesses are partnerships with different people and have different ownership structures. But no, myriad nested companies exist to (1) obscure responsibility and (2) deflect accountability.
I ran into this link via Adam Tooze 's Chartbook #249.
Some tantalizing selections:
Interactive chart for the Thomson family holdings
I'm not enough of a policy nerd to begin to propose legislative solutions for these networks of hidden control, and it's much murkier for U.S. corporations.
Anyone with knowledge or thoughts, please weigh in.
So the article numbers 3 reasons, the first two of which are vague and unsubstantiated accusations. Then a fourth is included, but unnumbered and unaddressed in the article even though it's one of the leading causes, and it's dismissed with a hand wave that this is about maintaining centralized family control even though in practice it's often about carving out fiefdoms. This is ignored even in cases such as the McCain family, where the article discusses an acrimonious family split. Never let facts ruin a good thesis.
And somehow, while throwing out vague reasons like obscuring responsibility and accountability — which of course qualify as two reasons to pad the list — the article ignores one of the chief reasons for ownership structures: acquisitions. Should Rogers have rolled SkyDome and the Blue Jays into Rogers Communications? Is Weston to blame for Shoppers Drug Mart's previous acquisitions adding 3 layers of subsidiaries? How exactly is McCain Capital supposed to hold 39% of Maple Leaf Foods without it existing as a separate company on the chart?
Which of course makes the incredibly obvious point that most of these businesses are partnerships with different people and have different ownership structures. But no, myriad nested companies exist to (1) obscure responsibility and (2) deflect accountability.