
The oil bust is exposing weaknesses in the Norwegian model - livatlantis
http://www.economist.com/news/business/21672206-now-easy-times-are-over-norway-must-rediscover-its-viking-spirit-norwegian-blues
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Gustomaximus
I found it interesting how they praise the privatisation route for schools and
hospitals etc. We clearly see this doesn't benifit the masses from the US
model.

And to criticise Norway for paying out more in benifit to the lower end of
society compared to other OECD, why is this bad? It simply means they are
paying out less in other areas but what are these and why is it a negative?

Personally I found this a weak article. I expect better fact driven discussion
from the economist rather than a piece that seems to want to find a reason to
bash a country for popular reading.

~~~
ende
School privatization (charter schools) has shown a lot of success over
traditional public schools. Im not really sure what hospital privatization
refers to. Now prison privatization has come under recent scrutiny but that's
more of a failure of oversight by the governing bodies employing private
administration than of the concept of privatization itself.

~~~
bandushrew
To me the only sensible way to judge privatization is to look at the
incentives that are created.

Prisons - If we assume the corporation profit comes from prisoner rent, the
private corporation is incentivized to encourage more prisoners and longer
sentences.

Im not convinced that is a healthy incentive, and the evidence seems to show
it is not.

School privatization - Where does the profit come? if it is based on
children/hour then the corporation is incentivized to have more people
attending school for longer periods.

that again sounds like a problem to me - you COULD achieve it in positive
ways, but you could also achieve it by not teaching anyone anything....or by
teaching at a slower rate...

Hospital privatization - This just sounds like a total cluster fuck to me,
assuming the corporation makes its profit from rent/medical treatment then the
incentives are there to keep patients as long as possible and undergoing as
much treatment as possible, while actually curing as few problem as
possible...

Some things, are just not meant to be privatized IMO.

~~~
refurb
The issue is that you assume that the payment models will also encourage the
behavior you pointed out.

For example, Medicare doesn't pay hospitals more money to treat patients
longer. They pay them a flat rate (based on what an average stay would cost)
and that's it. Patient gets better quicker? Great hospital made a big profit.
Patient gets more sick and stays in the hospital longer? Well I guess the
hospital takes a loss on that patient.

~~~
jpatokal
Or the hospitals kicks out patients who are still sick, so they either become
someone else's problem, or they make money when they're readmitted.

Aligning incentives is _hard_.

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dharma1
Agree with all the other comments, super light on facts and tried to apply an
ideological "solution" where there is no issue. Surprised The Economist
printed it.

The Norwegians are sitting pretty on top of world's largest sovereign wealth
fund, which holds 1.3% of the world's listed stocks. Their oil&gas tech
industry is taking a beating, yes, as are every nation and business who depend
on the oil&gas industry, but I don't think the Norwegians will starve any time
soon. If new revenue from their oil industry stoppe tomorrow they would still
be alright.

I don't see how there is a "weakness" in their model or how this calls for
privatisation of anything. If anything, their SWF's exposure to QE inflated
stock markets is a bigger risk.

~~~
junto
This also bugged me:

    
    
      The state is undermining the work ethic: most 
      people enjoy a 37-hour working week, and three-
      day weekends are common.
    

Sounds like a good idea to me. Why do people need to work 50 hours a week
exactly? I imagine there are long term health, social and psychological
benefits to a more restful and less stressful life?

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tormeh
While there's no doubt that there's a lot of fluff that has built up simply
because we can/could afford it, this article doesn't really touch on any of
them. Instead it seems to, among other things, bash state-owned corporations
that are doing very well and are in no need of reform.

In general, it's a very weak article. Someone opened Wikipedia and saw some
numbers that don't agree with how they think economies should be run, and then
wrote about that. It's hard to fire employees who are slacking off, especially
in government, but there's not a mention of it. But I guess that wasn't on
Wikipedia, but the work-week was.

The turn to the left is mostly aa swinging pendulum thing, but I don't dread
it, as the Labour party usually has a better grasp of economics than anyone
else.

What's happening is a restructuring born of the decline in one sector with a
time-delay until the others can absorb the sacked employees. It's not a crisis
in government.

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samfisher83
I think norway was super smart. They took their oil money and invested in non
oil things. Now when oil prices are low they can use the reserve to help pump
their economy. I think they are actually doing things right.

~~~
clarkm
A lot of the Gulf states took a similar route. Just look at the rise of the
region as an airline hub, location of many satellite campuses, etc.

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jdbernard
I stopped taking this article seriously when they cited a 37-hour work-week as
an indicator that the state is "undermining the work ethic." After finishing
the article, it really sounds more like the author is prescribing their
favourite solution for something that may not even be a problem. This is one
third party talking to another third party about someone else's "problem".
Basically gossip and just as useless.

~~~
mtgx
And didn't Sweden just adopt a 6h work-day recently? (30 a week, so even
fewer).

~~~
kryptiskt
Sweden isn't adopting a 6-hr workday. That was some bogus news item that went
viral. There are some small-scale experiments, but there is no prospect of it
becoming law, or even common.

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kristofferR
It's weird that the article didn't mention the large tax reforms and other
measures in the recently announced 2016 budget, seems like that would be
obvious to include in an article like this.

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littletimmy
What rubbish. The article talks about the welfare state as if it is inherently
bad. Their solutions? Surprise, surprise! Freer markets. Obvious bias here.

Unsurprising, of course. The Economist is owned wholly by a few billionaire
families.

~~~
daemin
Also referenced in the article is that despite boards needing to consist of
40% women, that all board members are still only from a single school. Like
that is any different to unbounded boards where the members are generally from
the same small set of schools.

Talk about the pot calling the kettle black...

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caminante
Weird article.

That said, the NOK, a petrocurrency, has been hit hard relative to other
petrocurrencies. Over the LTM, USD's up 24%, 18% and 15% v. NOK, AUD, and CAD,
respectively[1].

[1][https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...](https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=Linear&chdeh=0&chfdeh=0&chdet=1444603138934&chddm=357679&cmpto=CURRENCY:USDAUD;CURRENCY:USDCAD&cmptdms=0;0&q=CURRENCY:USDNOK&ntsp=1&ei=z-QaVtniG8GljAHRnZDYDw)

~~~
sjogress
I'm no economist, but from what I understand a lower valued NOK will over time
help Norway's export industries (who have been suffering the last years due to
high costs), which in turn will help the economy during a transition from oil
and gas.

