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Comment: Balancing Frugality and Miserliness 

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May 03,2004-The current issue of Fortune Magazine has a feature on the founder of the Swedish furniture group IKEA Ingvar Kamprad. He is estimated to be worth $18.5m by Forbes, continues to fly economy, takes the metro to work, drives a ten-year-old Volvo, and avoids suits of any kind. The joke in Sweden is that  if Kamprad happens to drink an overpriced Coke out of a hotel minibar, he will go to a grocery store to buy a replacement. He is clearly a frugal man and when he spoke to Fortune Magazine in 1989, he made the case that he wasn't as tight as he had been. 

'I seldom wash disposable plastic glasses anymore,' Kamprad said.

The 78-year-old entrepreneur who lives in Holland, claims to have been preparing for his death for more than 20 years, and in 1982 he established an intricate system of foundations, trusts, and holding companies to avoid high taxes and ensure that IKEA could not be broken up by family infighting. Kamprad's three sons work for the company .  

Frugality or thriftiness is a good thing but when it becomes interchangeable with miserliness, it has morphed into a disease. One result of prosperity is the spread of miserliness. In the past in Ireland, when people had very little, generosity was not in short supply. In contrast in modern Ireland, it is not uncommon to find miserliness amidst plenty. It's propelled by the desire for more material goods and it can also result from a sense of past insecurity when money was less plentiful. Some years ago I saw a TV documentary on a wealthy American oil businessman Nelson Bunker Hunt who travelled to work each day in his chauffer driven Cadillac, complete with a sandwich in a brown paper bag. Following his death, two of his sons blew the family fortune by trying to corner the silver market and later declared themselves bankrupt. It is not uncommon for a miser's loot for the rainy day, to be speedily dissipated on his departure.

In the workplace, the mean company is not a pleasant work environment. In contrast, the frugal company can be a good place to be but the Kamprad example is rare. Frugality is positive where there is a common purpose that is shared throughout the organisation. However, whether it is in the public or private sector, it is common for the management to keep a tight rein on spending other than on for example on junkets for themselves. There is never a shortage of rationalisations but nobody in today's workplace can be deluded into believing that bullshit is anything other than what it is.

- Michael Hennigan

Our Comment feature has been incorporated in the:

The Finfacts Ireland News & Comment  Service from October 2004

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September 2004:

Ireland Tops Cash per Head Income Aid from European Union
Can Vincent Browne Shake Up a Cosy Irish Media?

Get an Education and Make Crime Pay

August 2004:

America: Celebrities, Politics and Money
Is Saudi Arabia on the Brink?
The Manchurian Candidate and the Evil Corporation
Darfur, the Media Loop and When News of Mass Killings is News

July 2004:

Incendiary Money Spinners: Fahrenheit 9/11 and President George W. Bush Assassination Novel Plot
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UN Human Development Report 2004 and Ireland
Should Bertie Ahern Sack Mary Harney from the Irish Cabinet

June 2004:

Senator Joseph McCarthy: The Implosion of an Irish American Demagogue
Irish Media-Caged or Paper Tigers?
The Celtic Tiger and Public Squalor in Modern Ireland
The Many Facets of Racism Part 1
The Many Facets of Racism Part 2

May 2004:

Balancing Frugality and Miserliness
The Gekko Doctrine-Fair Pay in an Age of Greed 
The Genesis of American Foreign Policy
In an Age of Cynicism: Trust me, I'm a Politician!

April 2004:

Dealing with Al Qaeda Terrorism
Employment Rights and Human Rights
The Opiate of the Masses
Prison of Culture-Japanese Hostages Get Icy Welcome Home 

March 2004:

The Irish Abuse of Power Tribunals
1989-A Year of Irish Corruption and Freedom
Iraq War and Embittered Tit-for-Tat
Irish Corruption and Morality: 'But sir, don't they all steal?'


US Corporate Scandals and the Laws of Unintended Consequences
Self Interest - Common Interest Imbalances

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