

Thriving Norway provides an Economics Lesson - raheemm
http://www.nytimes.com/2009/05/14/business/global/14frugal.html?_r=1&em

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ilitirit
> Norway is a relatively small country with a largely homogeneous population
> of 4.6 million and the advantages of being a major oil exporter.

This probably has more to do with their successes as a country than anything
else. Smaller populations are easier to govern (New York's population is
around 20mil), and being an energy exporter ensures that there's enough wealth
to go around to provide it's citizens with a large social safety net.

~~~
pierrefar
Agreed. And some people are already saying that. From the article itself:

“We have become complacent,” Mr. Mork added. “More and more vacation houses
are being built. We have more holidays than most countries and extremely
generous benefits and sick leave policies. Some day the dream will end.”

~~~
Retric
_The government enjoys a budget surplus of 11 percent and its ledger is
entirely free of debt._

The have a huge surplus and are saving 11% of their governmnets bugdet. At
some point their savings could probably fund all government spending at which
point running out of oil would not be the end of the world. Granted government
spending is only 40% of GDP but 30 years from now they could have 40%
unemployment and still have a stable functioning society.

~~~
coryrc
But how safe is their investment? What can they own to keep themselves in a
comfortable lifestyle (nearly) forever? Stocks and currency won't do it.

It's probably part of the reason for the push to renewable energy and energy
efficiency. And also services/IP?

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Dauntless
Ok, Norway is a net oil exporter and has huge benefits because of that... But
can you please stop mentioning that every time you read Norway, completely
ignoring everything else they managed to do right? USA had much more natural
resources than Europe, that doesn't mean you should ignore everything else
they did well over time to get where they are now.

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byrneseyeview
So the secret is to be a country full of dour, responsible people who discover
fabulously valuable natural resources, and can thus afford to subsidize even
the most degenerate kinds of behavior?

~~~
ulvund
Degenerate behavior like old age, education and accidents?

~~~
smanek
Did you read the article?

"Just around the corner from Norway’s central bank, for instance, Paul Bruum
takes a needle full of amphetamines and jabs it into his muscular arm. His
scabs and sores betray many years as a heroin addict. He says that the $1,500
he gets from the government each month is enough to keep him well-fed and
supplied with drugs.

Mr. Bruum, 32, says he has never had a job, and he admits he is no position to
find one. I don’t blame anyone, he said. The Norwegian government has provided
for me the best they can."

Why should other people be forced to subsidize that kind of lifestyle?

~~~
bayareaguy
The people subsidize it because they believe doing so makes everyone
(including themselves) better off that way.

~~~
smanek
See <http://news.ycombinator.com/item?id=609997>

The salient point is that even if I'm happy to subsidize that sort of
lifestyle, I don't think the government should make the decision for me
(especially not at the point of a gun).

~~~
bayareaguy
smanek, putting aside moral considerations I think you are discounting the
actual cost of leaving people like Mr. Bruum to fend for themselves and
ultimately end up being incarcerated. Suppose you live in California where
incarceration costs upwards of $3,500 a month. Cutting him off would end up
costing you twice as much.

------
ph0rque
In some ways, Norway is approaching a post-scarcity economy mentioned in an
article that was posted here recently
(<http://news.ycombinator.com/item?id=607540>).

------
tallanvor
This article doesn't tell the whole story. On the whole, the Norwegian economy
is strong - probably stronger than most other nations, but that doesn't mean
there aren't problems here. I have several friends who have been laid off this
year, and even the company I worked for laid off a number of employees earlier
this month.

That said, I'm still happier to be working here as opposed to being back home
in the States. And, while Norwegians do work fewer hours, most of them are
more productive during the hours they do work.

------
raheemm
If you compare Norway to the UAE (which includes Dubai, Abu Dhabi, etc) while
Norway is investing its oil wealth in a sovereign fund, UAE is investing in
real estate, tourism and other sectors. Both have rich social safety nets. In
this way, both these energy exporting nations are smart in reinvesting/saving
today's surplus. One interesting difference is that UAE is a federation of
fairly autonomous states or emirates. So some states are already in the post-
scarcity era (Dubai) while other states are still in the surplus era (Abu
Dhabi, Ras Al Khiamah, etc). It makes for an interesting economic development
scenario.

~~~
aaronblohowiak
Yes, but wheras Dubai employs slave labor to build ecological atrocities,
Norway is investing the money in the future of its people. It is also quite
interesting that dealing with middle-eastern immigrants is a controversial
issue in Norway (especially because they largely refuse to assimilate.)

~~~
raheemm
Slave labor is wrong. Dubai is wrong for using it. So is anyone else who does.
Norway rightly deserves credit in this regard. My initial comment is from a
macro-economic point of view of how countries use/abuse their natural
resources.

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Element2
This rebuttal on Forbes helps put Norway's oil wealth into perspective.

[http://clipmarks.forbes.com/2009/05/14/the-real-norway-
lesso...](http://clipmarks.forbes.com/2009/05/14/the-real-norway-lesson/)

~~~
discojesus
"Norway has 20 times as much oil production per capita as the UK. That's the
real Norway lesson. Sit on tons of oil."

Haha, brilliant. Sounds a little like a lottery winner offering financial
advice.

------
Tichy
"Oslo retains a feeling of modesty reminiscent of a fishing village rather
than a Western capital, with the recently opened $800 million Opera House one
of the few signs of opulence."

What a bullshit article. Sorry...

Lessons learned: it's good to have a lot of oil.

Did they invest so wisely? Maybe, maybe not - even if they did, who says they
were not just the lucky ones that are bound to exist (just as with fund
managers)?

~~~
dpapathanasiou
_Did they invest so wisely?_

Here's one case (and I'm sure there are others) which is a resounding no:
<http://www.nytimes.com/2007/12/02/world/europe/02norway.html>

~~~
Xichekolas
Well that's not quite the same, since that story is about municipalities
investing poorly. Hopefully Norway's sovereign wealth fund didn't do likewise.

(as an aside: I've been to Narvik, in the summer, and the scenery is
absolutely stunning. The 2am sunshine is also amusing to behold.)

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CaptainCrap
As others have pointed out, if you take away the oil, Norway's economy is
crap. The infrastructure sucks, there aren't really any other industries to
speak of, taxes are very high and the incentives for someone to start a
business there are appallingly low.

------
known
Isn't Japan with zero natural resources as better case study?

