How to Be a Billionaire


Just because Sweden is a socialist country doesn't mean its citizens can't get rich. The way to make big money in Sweden is to make the most of government controls, as a survey of the country's richest families reveals.

Back in 1982, when the business weekly Affärsvärlden made its first study, it found only four billionaires (in Swedish kronor, corresponding to $160 million at today's exchange rates). Twenty-six families were worth more than 100 million kronor.

The Socialists returned to power that same year—and a lot of people have earned a lot of money since then. This year's study shows 23 billionaires (three of whom would be billionaires also in dollars) and 163 families who are worth more than 100 million kronor. A nice result of an egalitarian socialist policy!

Forty of the 100 wealthiest families are involved in housing and construction—an industry that is both heavily controlled by the government and heavily subsidized. The key to success is to get all the needed permits (it can take 100 permits to build an ordinary office building). Once you get them, however, you can sit back and just count the money.

Another 11 of the top 100 families are involved in banking and finance—where the government's deficit has combined with deregulation of capital markets to create new opportunities. One of the most successful entrepreneurs of the past decade, Claes Ivarsson, made his fortune by establishing a company dealing in government securities. By creating an efficient market where none had existed before, his company, Penningmark-nadsmäklarna, has substantially decreased the government's cost of financing its vast deficit—saving the taxpayers billions of kronor every year.

Recently, however, a turnover tax was introduced on trades involving government securities. The reason? Socialist egalitarians object to Ivarsson and his colleagues making too much money. As a result of the tax, the volume of trading in government securities has dropped to a third of what it used to be, and interest rates have increased.

Another man on the Affärsvärlden list, industrialist Erik Penser, used to be worth some 4–5 billion. But recently he substantially increased his net value—and let taxpayers foot the bill—by selling the second-largest stock brokerage in Sweden to the government for almost three times its value. The purchase price of 2.7 billion kronor (for a company worth maybe a billion, according to independent estimates) came in the form of a 20 percent stake in a government-owned bank. For those who know how to handle it, a socialist government certainly is a way to make big private money.