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blade
Joined: 30 Jun 2007
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 Posted: Wed May 13, 2009 11:23 pm Post subject: Socialism works after all |
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Thriving Norway Provides an Economics Lesson
By LANDON THOMAS Jr.
OSLO � When capitalism seemed on the verge of collapse last fall, Kristin Halvorsen, Norway�s Socialist finance minister and a longtime free market skeptic, did more than crow.
As investors the world over sold in a panic, she bucked the tide, authorizing Norway�s $300 billion sovereign wealth fund to ramp up its stock buying program by $60 billion � or about 23 percent of Norway �s economic output.
�The timing was not that bad,� Ms. Halvorsen said, smiling with satisfaction over the broad worldwide market rally that began in early March.
The global financial crisis has brought low the economies of just about every country on earth. But not Norway.
With a quirky contrariness as deeply etched in the national character as the fjords carved into its rugged landscape, Norway has thrived by going its own way. When others splurged, it saved. When others sought to limit the role of government, Norway strengthened its cradle-to-grave welfare state.
And in the midst of the worst global downturn since the Depression, Norway�s economy grew last year by just under 3 percent. The government enjoys a budget surplus of 11 percent and its ledger is entirely free of debt.
By comparison, the United States is expected to chalk up a fiscal deficit this year equal to 12.9 percent of its gross domestic product and push its total debt to $11 trillion, or 65 percent of the size of its economy.
Norway is a relatively small country with a largely homogeneous population of 4.6 million and the advantages of being a major oil exporter. It counted $68 billion in oil revenue last year as prices soared to record levels. Even though prices have sharply declined, the government is not particularly worried. That is because Norway avoided the usual trap that plagues many energy-rich countries.
Instead of spending its riches lavishly, it passed legislation ensuring that oil revenue went straight into its sovereign wealth fund, state money that is used to make investments around the world. Now its sovereign wealth fund is close to being the largest in the world, despite losing 23 percent last year because of investments that declined.
http://www.nytimes.com/2009/05/14/business/global/14frugal.html?ref=global-home |
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Fox
Joined: 04 Mar 2009
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| Posted: Thu May 14, 2009 12:57 am Post subject: |
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Universal health care. Substantial government assistance in response to old age, disability, and unemployment. Free university education. Second highest GPD per capita in the world. Very high standard of living overall. Still prospering despite a world wide economic downturn. Ranked highest in the world on the human development index six years in a row between 1999 and 2004, and has maintained consistently high rankings since then. Ranked highest in the world on the global peace index in 2007 and third in the world in 2008.
The evils of Socialism lay bare before us. How I pity the people of Norway. |
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dmbfan
Joined: 09 Mar 2006
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| Posted: Thu May 14, 2009 1:22 am Post subject: |
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Oh and what is the population of Norway?
dmbfan |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Thu May 14, 2009 1:28 am Post subject: |
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Norway has large natural resource endowments and (more importantly) the institutions to exploit them. They also have very high taxes which are calculated by net worth. In the past this led to absurd situations where a persons yearly tax bill was larger than his income.
This may look like a victory for socialism, but really all it we see is a govt that taxes a huge proportion of its productive capacity then in its benvolence, deigns to distribute the loot in a fashion it deems appropriate. |
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Fox
Joined: 04 Mar 2009
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| Posted: Thu May 14, 2009 1:32 am Post subject: |
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| dmbfan wrote: |
Oh and what is the population of Norway?
dmbfan |
4.8 million, comparable to many states, which in turn destroys any rationale that we could not adopt a similar system. Ours would simply be guided at a national level and administered at a state level, instead of both guided and administered at a national level. If anything this would give us an advantage over Norway, as surpluses from one administrative district could be used to support others that ran into trouble, an assurance Norway lacks. States deemed too big to be manageable could easily be broken into smaller, manageable administrative districts.
Any other objections? |
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dmbfan
Joined: 09 Mar 2006
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| Posted: Thu May 14, 2009 1:37 am Post subject: |
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4.8 million, comparable to many states, which in turn destroys any rationale that we could not adopt a similar system. Ours would simply be guided at a national level and administered at a state level, instead of both guided and administered at a national level. If anything this would give us an advantage over Norway, as surpluses from one administrative district could be used to support others that ran into trouble, an assurance Norway lacks. States deemed too big to be manageable could easily be broken into smaller, manageable administrative districts.
Any other objections? |
Again trying to twist things.
No tool box, I was not objecting....just asking a question.
Although, I do have one objection. That is......being like Europe. You know, spinless and appeasing.
dmbfan |
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Fox
Joined: 04 Mar 2009
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| Posted: Thu May 14, 2009 1:45 am Post subject: |
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| Rusty Shackleford wrote: |
| Norway has large natural resource endowments and (more importantly) the institutions to exploit them. |
So does the United States. Instead of enriching our nation collectively, though, those natural resource endowments enrich only a tiny portion of our citizenry.
| Rusty Shackleford wrote: |
| They also have very high taxes which are calculated by net worth. |
Tax rate is irrelevent if you get proper value in return for those taxes. The people of Norway very clearly do. The idea that a high tax rate in and of itself is bad has no basis; I would gladly pay 100% taxes if in return I had everything I could possibly want or need, for instance. Obviously that's not a realistic model in the present, but it's a fairly simple thought experiment that demonstrates saying "But taxes are high!" isn't particularly compelling unless in addition to taxes being high, standard of living is not.
| Rusty Shackleford wrote: |
| In the past this led to absurd situations where a persons yearly tax bill was larger than his income. |
| Rusty Shackleford wrote: |
| This may look like a victory for socialism, but really all it we see is a govt that taxes a huge proportion of its productive capacity then in its benvolence, deigns to distribute the loot in a fashion it deems appropriate. |
And the result is one of the highest standards of living in the world and high resistance to economic problems that plague the rest of the globe. Saying "all we see is a govertment that taxes and redistributes," is silly; of course we see that, that's what Socialism entails. |
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Fox
Joined: 04 Mar 2009
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| Posted: Thu May 14, 2009 1:49 am Post subject: |
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| dmbfan wrote: |
Again trying to twist things.
No tool box, I was not objecting....just asking a question. |
Sorry, I assumed you were using it as an objection as to why Norway's system couldn't work in America, since if all you wanted was an answer to that very simple question, you could easily have checked on wikipedia in mere seconds instead of posting it here and waiting for an answer. |
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BS.Dos.
Joined: 29 Mar 2007
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| Posted: Thu May 14, 2009 1:50 am Post subject: |
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Sure, but let's not forget the fact that they're sat on substantial natural resources and are spatially very close to other energy hungry states. I can't help but think that the oil revenues are the true agency in the country's economic anchoring. I find myself wondering just how exposed their economy might have been had they not been so blessed and insulated by an abundance of natural capital. I think it's both just a bit too easy and flattering to ascribe Norwegian economic resilience down to socialism.
Skepticism aside, I do think it's very prudent that they're making provision for future generations by recycling those same oil revenues. A refreshing departure from the right here, right now, unigenerational social contract virtues of liberalism. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Thu May 14, 2009 1:57 am Post subject: |
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| Universal health care. |
I don't know your experience with socialised medicine, but here are mine. Rationing, long waiting lists, bureaucratic corruption and afore mentioned bureacrats determining appropriate treatment, not DRs (New Zealand).
Anybody with half a brain shuns the public system and buys private insurance. Ensuring they pay twice.
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| Substantial government assistance in response to old age, |
You have this is the States right? How did that turn out?
No real issue with this one. I'm not that much of a heartless bastard.
Again, in the NZ experience, the social system is failing the people it's meant to help. Lifers are a real problem and we are entering a situation where there are 18 year old kids entering the welfare system, whos neither parents or grandparent worked. The majority of long term recipients live a retched existence. However, I wouldn't abolish the system completely just put a finite amount you can receive in your life-time and how long the period is. That way it's possible to expand it in times like right now, when unemployment is rising.
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Free university education. |
This isn't a good thing. University education is not a birth right.
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| Second highest GPD per capita in the world. |
No proof that this is from socialist policy.
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| Very high standard of living overall. |
Ditto.
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| Still prospering despite a world wide economic downturn. Ranked highest in the world on the human development index six years in a row between 1999 and 2004, and has maintained consistently high rankings since then. |
Most countries are still prospering, except for the obvious ones. Again, no proof it's because of socialist policy.
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| Ranked highest in the world on the global peace index in 2007 and third in the world in 2008. |
Wanna know why? It's because 90% of Norwegians are ethnically Norwegian. They are a homogenous nation. Homogenous nations tend to be peaceful. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Thu May 14, 2009 2:13 am Post subject: |
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| I would gladly pay 100% taxes if in return I had everything I could possibly want or need, for instance. |
I think this point is where we fundamentally diverge.
How do you quantify "everything I could possibly want"? It's different for every person. Once my basic neccesities are covered I'm fairly content with my freedom and liberty. Personally, I value being able to do as I please with the fruits of my labor not have them confiscated for the "common good."
Additionally, thanks to the effiency of markets, the majority of lifes necesitties can be had for only a small fraction of my labors. Yet, back in the Socialist Republic of NZ, I have to toil till May every year to cover the added extras, of which I use almost none.
You are willing to compromise everything it means to be a self determining person for a modicum of security. I would rather live with some uncertainty, knowing that there is always more I can can strive for and attain in life. What you advocate is slavery. |
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dmbfan
Joined: 09 Mar 2006
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| Posted: Thu May 14, 2009 2:19 am Post subject: |
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| Sorry, I assumed you were using it as an objection as to why Norway's system couldn't work in America, since if all you wanted was an answer to that very simple question, you could easily have checked on wikipedia in mere seconds instead of posting it here and waiting for an answer. |
Meh, fair enough. |
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dmbfan
Joined: 09 Mar 2006
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| Posted: Thu May 14, 2009 2:22 am Post subject: |
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| Quote: |
| Sorry, I assumed you were using it as an objection as to why Norway's system couldn't work in America, since if all you wanted was an answer to that very simple question, you could easily have checked on wikipedia in mere seconds instead of posting it here and waiting for an answer. |
Meh, fair enough. |
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Fox
Joined: 04 Mar 2009
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| Posted: Thu May 14, 2009 3:21 am Post subject: |
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| Rusty Shackleford wrote: |
| Quote: |
| Universal health care. |
I don't know your experience with socialised medicine, but here are mine. Rationing, long waiting lists, bureaucratic corruption and afore mentioned bureacrats determining appropriate treatment, not DRs (New Zealand).
Anybody with half a brain shuns the public system and buys private insurance. Ensuring they pay twice. |
If you wish to enumerate some specific complaints about the Norweigan health care system, I'd be very interested to discuss it. I know literally nothing about New Zealand, and this thread is about why Norway might be considered an example of successful Socialism rather than why New Zealand might be considered an example of failed Socialism, so honestly I'd prefer not to discuss New Zealand.
| Rusty Shackleford wrote: |
| Quote: |
| Substantial government assistance in response to old age, |
You have this is the States right? How did that turn out? |
Again, I'd prefer to keep on topic regarding Norway here, though I'll happily admit America has botched implementation of many of its social welfare programs, which demonstrates that government made up of representatives which profess to hate Socialism are quite bad at enacting it.
| Rusty Shackleford wrote: |
Again, in the NZ experience, the social system is failing the people it's meant to help. Lifers are a real problem and we are entering a situation where there are 18 year old kids entering the welfare system, whos neither parents or grandparent worked. The majority of long term recipients live a retched existence. However, I wouldn't abolish the system completely just put a finite amount you can receive in your life-time and how long the period is. That way it's possible to expand it in times like right now, when unemployment is rising.
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Again, interested in Norway, not New Zealand. I'll take your word for it that New Zealand's implementation of Socialism is a pathetic failure.
| Rusty Shackleford wrote: |
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Free university education. |
This isn't a good thing. University education is not a birth right. |
A more educated citizen base is of great value to a nation. Therefore, I think it's intelligent for a nation to take steps towards those ends. I don't understand why you feel reducing the education level within your country (and that's what forcing people to pay substantial fees to attend university does) is of benefit to a nation.
| Rusty Shackleford wrote: |
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| Second highest GPD per capita in the world. |
No proof that this is from socialist policy.
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| Very high standard of living overall. |
Ditto. |
You're right, there's no true proof of causation, just very, very strong correlation when you compare the standard of living of natural resource rich Socialist countries and natural resource rich countries which are not Socialist.
| Rusty Shackleford wrote: |
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| Still prospering despite a world wide economic downturn. Ranked highest in the world on the human development index six years in a row between 1999 and 2004, and has maintained consistently high rankings since then. |
Most countries are still prospering, except for the obvious ones. Again, no proof it's because of socialist policy. |
Unlike the above cases, where I was willing to concede that causation would be difficult to prove, I'd say there is substantial proof that the reason Norway is still prospering is directly related to it's Socialism. The various programs Norway has utilized to remain prosperous and economically growing are clearly Socialist in nature. I really don't want to write an essay on this topic for a mere internet forum discussion, but such essays undoubtedly exist on the internet if you care to peruse them. If you do not care to, I'm happy to just agree to disagree.
| Rusty Shackleford wrote: |
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| Ranked highest in the world on the global peace index in 2007 and third in the world in 2008. |
Wanna know why? It's because 90% of Norwegians are ethnically Norwegian. They are a homogenous nation. Homogenous nations tend to be peaceful. |
Yeah? It looks to me like the countries that are both fairly homogeneous and Socialist have the greatest likelihood of being at the top of the list (the only non-Socialist countries in the top 15 are Japan and Ireland). I certainly concede ethnic homogeneity is a factor, but only someone with an agenda would deny Socialism likely is as well. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu May 14, 2009 4:13 am Post subject: |
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Norway is able to fund a massive welfare state via oil exports. A better nation to examine for this thread would be Finland.
It is probably the case that these welfare states will only be sustained in the future by nations that won the commodity lottery. |
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