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Often the dispersion of a fortune starts already in the lifetime of the businessman when his buoyancy, energy, and resourcefulness become weakened. FULL ARTICLE by Ludwig von Mises
I have never in fact read Mises’ “Anti-Capitalistic Mentality.” However, I do recall hearing its discussion by the late Larry Sechrest in his Mises Memorial Lecture from the 2008 Austrian Scholar’s Conference, titled “The Anti-Capitalists: Barbarians at the Gate.” See the recording at http://mises.org/media/author/259/Larry-J-Sechrest. I do recommend listening to this lecture, although I cannot recall much of its contents.
Ivory Towers in the Sky are built by men who pillage on the ground below.
Another common occurrence not referenced in this passage is the attitude of shame and guilt held by heirs to enormous fortunes. Sometimes that guilt is over the wealth itself, on the supposition that the benefactor who made it surely must have done so corruptly or by taking some unfair advantage. On other occasions (more common I think), is shame and guilt over the nature of the product or service provided. The advantage of this is that the heirs get to keep their money, while using some of it in a seemingly humanitarian discrediting of the very product that produced it. An example that comes to mind is John Robbins, son of the founder of the Baskin-Robbins ice cream company. Robbins has spent his adult life as an outspoken critic of conventional farming methods and, of course, conventional foods (like ice cream). He is now in his 60′s, and so we can only hope that his lifelong burden of guilt over the money his parents left him is beginning to ease.
This is a very complicated issue.
Family businesses often started with a patriarch, one person that had the energy, vision and skills to start a successful business. Charismatics loath to think they are replaceable. They can be boorish and domineering so their children often rebel or believe they can never measure up. If there are offspring that appear willing and able to carry on, often times the founder is unwilling to relinquish control, even if his skills have diminished. Business is a jealous mistress so often times the relationships between business owners and their children have been compromised. The higher education levels available to the more affluent offspring inevitably results in more exposure to the class of people that hates business more than any other; professional educators. Business people often feel their careers limited their growth in other areas so they encourage their children to broaden their interests. The street smarts necessary to barter are rarely honed at the country club. The toughness required to negotiate the playground of a city school is not required at the local Country Day School.
Even if a business owner is interested in succession planning, designating an appropriate successor is also problematic; birth order and the sexes of the offspring create challenges. If the founder decides to provide for his children equally, often there are then equal partners with equal say over management, the need for collective decision making makes management difficult. Brothers have a hard enough time working together; “cousins” is not a strong enough bond to get you threw the tough spots. The ability of a business to support ever increasing offspring becomes problematic. Throw some spouses in the mix and you have a toxic brew.
The Scottish saying is “shirt sleeves to shirt sleeves in 3 generations”. This is not a bad thing. It’s a condition of the markets that you can’t stay on top, that profits go to zero and that the world is and should be dynamic.
I like my cousin more than I like my brother. I like my brother more than I like my mother. We don’t own a business, though. Good thing.
Do girls own businesses?
I heard that wealthy Romans used to pick any young person they felt would be worthy of succession and begin to groom them. In other words, the children of the rich would grow up knowing they’d wouldn’t get anything at all just from the luck of birth. (Though I don’t know if that’s actually true or not.)
Happened all the time, granted it wasn’t usually just some random kid (in most cases it was a releative and of the patrician class).
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