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Extreme wealth is not valued in Europe. To the contrary, income (even upper-middle class income) and consumption is incredibly highly taxed. Many small and mid

Extreme wealth is not valued in Europe. To the contrary, income (even upper-middle class income) and consumption is incredibly highly taxed. Many small and mid-sized business struggle or refuse to scale because it exposes them, their owners and management to taxes which cannot be escaped (by contrast small businesses can pay their staff in cash, and charge personal expenses to business accounts for VAT writeoffs). Alternatively many European businesses are optimised to receive Government and EU grants and subsidies, not to compete on the international market. Yes, the USA is unequal compared to Europe, but this might be the price worth paying for innovation and technological dominance: America's poorest are richer than the average Europeans: https://www.acton.org/publications/transatlantic/2019/08/27/americas-poorest-are-richer-most-average-europeans-study https://www.acton.org/publications/transatlantic/2019/08/27/... The solution is for Europe is to dramatically cut taxes (eliminating payroll taxes and reducing VAT to 16% across Europe should be a priority), increase the pension age to 70, and limit access to bachelor's degrees to the top 20% and Master's degrees to the top 10% (many Europeans spend their entire 20s at university, when they could be working instead). The alternative is basically slow Demographic decline and descent in complete central planning, which Europe seems to be pursuing.

tcldr 6y ago
This could be a factor but I'm not sure that this is the complete picture. Having lived on both sides of the Atlantic, I would say it felt much easier to start a business in the UK: Healthcare is covered, believe it or not there is less bureaucracy, there's great digital banking options that the US is only just getting its head around, etc. In Europe I always felt I had a safety net to fall back on if my business failed – not so in the US. My own hypothesis is that the European stock exchanges aren't a particularly attractive place for an IPO. London's AIM, isn't quite the NASDAQ. The US tech stocks are now worth more than the entire European stock market according to Bank of America Global Research. And so I think it's always in the back of a Founder's mind – not to mention their investors – that they'll have better liquidity if they're packaged as a US inc. to start with – and if not just sell to one. Hopefully with Sequoia opening an office in London though, this will begin to change.
AgloeDreams 6y ago
That article is incredibly insane and use of it clearly invalidates any other statement you made here. It even goes as far to basically blame the poor for their own poverty. It makes zero consideration for the higher health care costs or general cost of living differences between America and Europe (for example: The average European does not need to own a car, does not need expensive heating or extreme cooling, and their healthcare costs are far cheaper) The most notable bit is healthcare, as the hilarious math says 'well the CHIP benefits save them X thousands of $ vs out of pocket costs!' (Because healthcare costs WAY more in the US) but the purchasing power index is not biased in that category so it accounts the same. Might I add that the author's main book is about proving the bible is true and that the earth is 7000 years old from a 'I think it is true so here are my mental gymnastics ' perspective.
- ArkVark 6y ago
  The poor outcomes for healthcare in the USA can be mostly attributed to obesity and the poorer diets and habits of the population. The USA's privatised healthcare system would operate a lot more efficiently if sugar was heavily taxed, fresh fruit and vegetables consistently available (no 'food deserts'), and coal and oil burning for transport and energy minimised.
adventured 6y ago
> Extreme wealth is not valued in Europe. I think that's too much of a blanket statement. France (the second or third largest economy in Europe depending on the year) is a potent counter argument to that premise. Bernard Arnault, $89 billion. Francoise Bettencourt Meyers, $66 billion. Francois Pinault, $42 billion. Alain Wertheimer, $32 billion. Gerard Wertheimer, $32 billion. Those are immense dynastic fortunes and there's no indication those people plan to give it all away in the style of Gates, Buffett, Zuckerberg, Scott, Carnegie, Rockefeller. The US economy is about eight times larger than the French economy. If you expect that an economy eight times larger might produce something in the ballpark of fortunes eight times larger (one can apply a discount and it'll still be extreme), that wealth scale & concentration is mind-boggling large even by Bezos standards. Arnault's wealth might be like someone in the US being worth $712 billion in terms of how it towers over the economy and other wealth in the nation. Germany has 34 of the top 500 fortunes in the world. 6.8% of the 500 richest, and Germany is slightly over 1% of the world's population, and about 4% of the global economy. Clearly they like their giant fortunes as much as the next affluent nation. And the Germans are notorious for their dynastic wealth as well, they have no problem passing down immense fortunes to the next generations. (I'd do national share of global wealth for Germany, however that's a super messy batch of numbers, especially settling on even semi-accurate estimates for global wealth; it's still fairly interesting to see how their economy represents itself as part of the global share, and then how many top 500 fortunes that has produced.) Sweden, with just ten million people, has 12 of the top 500 fortunes. Russia - now infamous for their billionaire oligarchs - has 24 of the top 500 fortunes, while simultaneously having tens of millions of the poorest people in Europe.
- deepnotderp 6y ago
  Well, taxes hurt new money the most, which is why so many of those people on your list are inherited money and very few of them got rich from tech. It turns out that extreme taxation helps aristocrats...
  - johnday 6y ago
    Taxes on income do as you say. There are other forms of taxation which are gaining political ground over time, including a land value tax and (to a lesser extent) a wealth tax.

tcldr 6y ago

This could be a factor but I'm not sure that this is the complete picture. Having lived on both sides of the Atlantic, I would say it felt much easier to start a business in the UK: Healthcare is covered, believe it or not there is less bureaucracy, there's great digital banking options that the US is only just getting its head around, etc. In Europe I always felt I had a safety net to fall back on if my business failed – not so in the US. My own hypothesis is that the European stock exchanges aren't a particularly attractive place for an IPO. London's AIM, isn't quite the NASDAQ. The US tech stocks are now worth more than the entire European stock market according to Bank of America Global Research. And so I think it's always in the back of a Founder's mind – not to mention their investors – that they'll have better liquidity if they're packaged as a US inc. to start with – and if not just sell to one. Hopefully with Sequoia opening an office in London though, this will begin to change.

AgloeDreams 6y ago

That article is incredibly insane and use of it clearly invalidates any other statement you made here. It even goes as far to basically blame the poor for their own poverty. It makes zero consideration for the higher health care costs or general cost of living differences between America and Europe (for example: The average European does not need to own a car, does not need expensive heating or extreme cooling, and their healthcare costs are far cheaper) The most notable bit is healthcare, as the hilarious math says 'well the CHIP benefits save them X thousands of $ vs out of pocket costs!' (Because healthcare costs WAY more in the US) but the purchasing power index is not biased in that category so it accounts the same. Might I add that the author's main book is about proving the bible is true and that the earth is 7000 years old from a 'I think it is true so here are my mental gymnastics ' perspective.

ArkVark 6y ago
The poor outcomes for healthcare in the USA can be mostly attributed to obesity and the poorer diets and habits of the population. The USA's privatised healthcare system would operate a lot more efficiently if sugar was heavily taxed, fresh fruit and vegetables consistently available (no 'food deserts'), and coal and oil burning for transport and energy minimised.

adventured 6y ago

> Extreme wealth is not valued in Europe. I think that's too much of a blanket statement. France (the second or third largest economy in Europe depending on the year) is a potent counter argument to that premise. Bernard Arnault, $89 billion. Francoise Bettencourt Meyers, $66 billion. Francois Pinault, $42 billion. Alain Wertheimer, $32 billion. Gerard Wertheimer, $32 billion. Those are immense dynastic fortunes and there's no indication those people plan to give it all away in the style of Gates, Buffett, Zuckerberg, Scott, Carnegie, Rockefeller. The US economy is about eight times larger than the French economy. If you expect that an economy eight times larger might produce something in the ballpark of fortunes eight times larger (one can apply a discount and it'll still be extreme), that wealth scale & concentration is mind-boggling large even by Bezos standards. Arnault's wealth might be like someone in the US being worth $712 billion in terms of how it towers over the economy and other wealth in the nation. Germany has 34 of the top 500 fortunes in the world. 6.8% of the 500 richest, and Germany is slightly over 1% of the world's population, and about 4% of the global economy. Clearly they like their giant fortunes as much as the next affluent nation. And the Germans are notorious for their dynastic wealth as well, they have no problem passing down immense fortunes to the next generations. (I'd do national share of global wealth for Germany, however that's a super messy batch of numbers, especially settling on even semi-accurate estimates for global wealth; it's still fairly interesting to see how their economy represents itself as part of the global share, and then how many top 500 fortunes that has produced.) Sweden, with just ten million people, has 12 of the top 500 fortunes. Russia - now infamous for their billionaire oligarchs - has 24 of the top 500 fortunes, while simultaneously having tens of millions of the poorest people in Europe.

deepnotderp 6y ago
Well, taxes hurt new money the most, which is why so many of those people on your list are inherited money and very few of them got rich from tech. It turns out that extreme taxation helps aristocrats...
- johnday 6y ago
  Taxes on income do as you say. There are other forms of taxation which are gaining political ground over time, including a land value tax and (to a lesser extent) a wealth tax.