NationStates Jolt Archive

If businesses don't thrive in socialist countries, how do you explain Ikea?

This was mentioned in another thread and I'm curious. Ikea is one of the more successful companies out there, I mean, when the american dollar dropped, its owner became the richest man on earth (Bill Gates was until the aforementioned drop in the american dollar) yet it's from Sweden, a country that's pretty socialist.

International companies generally rise on their own merit when they do business in other countries. Basically, it's affordable swedish crap. It's cheap and looks like crap, but it holds together well enough that people buy it.

It's not a hard-and-fast rule that businesses don't survive and flourish in socialist nations, but it's far from commonplace. Can you name much aside from Ikea? There will always be exceptions to a rule, but then look at the US and Japan, highly capitalist, and people will mention McDonald's, Coca-Cola, and Sony more often than Ikea and Volkswagen when thinking about multinational corporations.

*Shrugs* Looks to me like the free market does a better job than socialism of encouraging business.

It's not a hard-and-fast rule that businesses don't survive and flourish in socialist nations, but it's far from commonplace. Can you name much aside from Ikea?

Nokia, Ericsson, ABB, Saab and Volvo spring to mind. I'm sure there are more though. (Is Philips from there?)

There will always be exceptions to a rule, but then look at the US and Japan, highly capitalist, and people will mention McDonald's, Coca-Cola, and Sony more often than Ikea and Volkswagen when thinking about multinational corporations.

*Shrugs* Looks to me like the free market does a better job than socialism of encouraging business.

(Volkswagen is German I think and the free market and capitalism aren't the same).

But anyway I don't think the point was which system is better at promoting business.

International companies generally rise on their own merit when they do business in other countries. Basically, it's affordable swedish crap. It's cheap and looks like crap, but it holds together well enough that people buy it.
Actually Ikea does have higher end stuff, and their sofas and couches appear very comfortable.

I have a very cheap Ikea shelf that my parents gave me (it's easy to take apart and put back together and I could end up moving a fair bit over the next couple years depending on what I do with my life after my bachelor's and all..) but they do have some nice furniture and their storage stuff is rather innovative and often neat. I would hardly call it crap. Wal-mart produces crap, at least Ikea uses real wood instead of plywood.

Yes, I am aware that plywood is made from real wood, but hey, I've got carpentry in my blood, plywood is ugly, real wood is beautiful.

At any rate, if I can name more american peoducts than swedish/european ones then it's probably more likely that it's because I live right next to america and accross the world from europe... Plus I'm broke and with the exception of Ikea, it tends to cost a hell of a lot more for things that have to come all the way from europe and I'm a broke-ass student.

Actually Ikea does have higher end stuff, and their sofas and couches appear very comfortable.

I have a very cheap Ikea shelf that my parents gave me (it's easy to take apart and put back together and I could end up moving a fair bit over the next couple years depending on what I do with my life after my bachelor's and all..) but they do have some nice furniture and their storage stuff is rather innovative and often neat. I would hardly call it crap. Wal-mart produces crap, at least Ikea uses real wood instead of plywood.

Yes, I am aware that plywood is made from real wood, but hey, I've got carpentry in my blood, plywood is ugly, real wood is beautiful.
They aren't known for their higher end stuff though. And I never said it was uncomfortable, I just said it looked like crap. Which compared to well-made wood furniture it does.

Nokia, Ericsson, ABB, Saab and Volvo spring to mind. I'm sure there are more though. (Is Philips from there?).
Philips is Dutch.

If businesses don't thrive in socialist countries, how do you explain Ikea?

This was mentioned in another thread and I'm curious. Ikea is one of the more successful companies out there, I mean, when the american dollar dropped, its owner became the richest man on earth (Bill Gates was until the aforementioned drop in the american dollar) yet it's from Sweden, a country that's pretty socialist.

Well:

1. It's actually a danish company, not swedish. (Tho' it was started by swedes).

2. Just because, swedes 'own' it, does not mean it is owned by socialists. I think you'll find it operates under fairly capitalists lines.

3. It's privately owned.

4. It thrives in the US and UK et al. Not so much under socialist systems.

I would hasten to point out that most "capitalistic" nations have subsidies and incentives in their economies. Rather than stating that one nation is free market, and another is socialist, look instead at the specifics of each case. I have no knowledge of Ikea's business model; do they have significant government incentives? Are they subsidized heavily? Or are they left to rise and fall on their own buisness merit?

Same with Coca-cola, GM and all the US businesses; how heavily subsidized are they? How many hidden but lucrative incentives keep them artificially more profitable?

Tax breaks, tax write offs, cheap loans, grants, exemptions, infrastructure creation, tarriff wavers; government at ALL levels can help or hurt businesses. It can come down to something as simple as a rainfall tax.

The amount of rainfall that lands on your house is rather small, but if you had a penny per square foot tax on property for the purpose of helping the city pay for rainfall removal (sewers, drains, reseviors, etc), how much would a Boeing plant have to pay? How much would a mall, a factory, a small business?

Thats just one tax; but you could see how it could hurt a business's bottom line right? Such considerations exists no matter which nation you are in; from the US to Europe, from India to New Zealand.

Philips is Dutch.
Ahh thought so.

Couldn't remember for sure though. Thanks.

Nokia, Ericsson, ABB, Saab and Volvo spring to mind. I'm sure there are more though. (Is Philips from there?)

I shan't get into a contest of 'Who can name more corporations', as that would just get silly, but my point was that the US and Japan have got both more and richer versions than the large majority of their European couterparts. When was the last time you remember a huge business world event of the kind that takes place daily, hourly even, of Japanese and American megacorps?

(Volkswagen is German I think and the free market and capitalism aren't the same).

But anyway I don't think the point was which system is better at promoting business.

Actually, I had to use one from another European company because I couldn't think of any others for Sweden. *shrugs* And Saab and Volvo don't exactly match Ford and Mitsubishi, now do there?

However, you're right about the free market not being capitalism, I've got a bad and inexplicable habit of using them interchangably. My bad, apologies. Nonetheless, mercantilism hardly works terribly well any more, because precious metals still equal wealth, but so do a million other things, many of which are rather less tangible than a lump of platinum. We need a complete revision of our economic models. *Shrugs* But America is closest to how it should be, and socialism is furthest.

Are they subsidized heavily? Or are they left to rise and fall on their own buisness merit?

Neither. In fact the opposite of the former if anything.

Which is why they moved to Germany last year, since it was more pro-business.

When was the last time you remember a huge business world event of the kind that takes place daily, hourly even, of Japanese and American megacorps?

I think I am missing something here? (Although I agree a naming watch is silly).

Actually, I had to use one from another European company because I couldn't think of any others for Sweden. *shrugs* And Saab and Volvo don't exactly match Ford and Mitsubishi, now do there?

Don't sk me about cars. I'm a devoted pedestrian, and know fuck all about cars.

Meh, but Saab and Volvo are successful.

at least Ikea uses real wood instead of plywood.

Yes, I am aware that plywood is made from real wood, but hey, I've got carpentry in my blood, plywood is ugly, real wood is beautiful.


Virtually nowhere, including Ikea, uses "real wood". (Except from their lowest end modular made from structural pine offcuts).

Almost all furniture is composite with veneer. Ikea is no exception. If you want "real wood" you have to go to a little carpenter in New England or something.

Actually, I had to use one from another European company because I couldn't think of any others for Sweden. *shrugs* And Saab and Volvo don't exactly match Ford and Mitsubishi, now do there?

look at how well Ford and Mitsubishi are going finanically...