Quote:
Originally Posted by knowledgeiskey
He's referring to Norway's oil. Even when you take that into consideration, only 4% of Norwegian oi securities finance domestic programs. The rest are invested internationally.
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There is no reason to downplay the influence from Norwegian oil. When people make arguments like yours, they seem to only see "net profits" instead of looking at "gross revenue". Net profits are the excess profits after all expenses are paid. Gross revenue is the total value of all sales.
The reason this difference is important, is because salaries in oil production tend to be very high. Those salaries are then taxed at high rates. If for instance the tax rate was 50% for all oil-related workers(since they have high incomes). Then for every dollar they are paid, the government gets back 50 cents.
There are about 2.6 million workers in Norway. Of that 2.6 million, about 40,000 are employed directly in oil extraction. Another 250,000 are employed in petroleum-related activities. These activities will be in things such as refining, manufacture of a variety of petroleum products, transportation, shipbuilding, etc. That number wouldn't include the variety of "support" occupations such as hospitality, food service, construction, etc. In total, half the Norwegian economy can probably be traced back in some way to natural-resource exploitation.
http://www.goinglobal.com/articles/1079/
The best way to look at the scenario would be in asking, what would happen to Norway's GDP and standard-of-living if it was the only country on Earth? Further, does Norway's oil wealth create a spillover effect to the surrounding countries? Especially a country like Denmark who relies heavily on shipping/trade from its advantageous location.
Yes, Norway's economy was growing before it found oil, but it is much easier to grow an economy when it is playing "catch-up" to the rest of the world. Many developing countries are having double-digit economic growth. That isn't possible in an already developed economy.
As for Norway's "system". We need to keep in mind that Norway isn't really socialist. A socialist government controls all means of production. Norway has "nationalized" a few industries, but none of those industries are in retail or manufacturing. Norway has mainly nationalized its natural resources and medicine, and provided a strong social-safety net/welfare system for the needy.
While everyone recognizes that nationalized medicine "isn't as good" and that oil extraction technology would be slowed by a government takeover of the industry. Norway gets around those shortcomings by simply taking the oil revenue and buying American medical and oil extraction technology.
Basically, Norway's isn't a system that America could "adopt". That isn't to say that there isn't anything good about Norway.
Norway's primary virtue is its "stability". Stability is actually the one necessary ingredient for economic growth. It doesn't matter how liberal an economy is, if you are fighting a Civil War, you will not have economic growth.
The truth is, any national program, redistributive or not, is always designed for the purpose of increasing stability and social cohesion. In many ways, the welfare programs of 20th century America actually protected the rich more than they did the poor. You don't want a bunch of jobless, starving poor people running around Manhattan angry. That is a recipe for a lot rich people's heads rolling down fifth avenue.
The rich mans mantra should really be "Keep them working, keep them fed, keep them healthy, and you probably won't get shot."(Got French Revolution?).
With that said, America is slightly more complicated because America isn't a "unified nation". In America, we might all secretly hate the rich, but social programs affect the middle-class as well. And America's middle class tend to think of the poor not such much as "Americans", but rather as "others". This is why "welfare queens" are usually depicted as blacks or Hispanics.
In Norway, at least until the recent influx of Middle-Eastern immigrants, it wasn't nearly as easy to attack the poor, because the poor were Norwegians just like everyone else. On top of that, in a "nationalist" society, there are a lot of social/civic obligations for helping the people around you. The influx of "foreigners" tends to erode this "civic virtue".
This is something that has been documented, not only by conservatives but also by liberals. The more diversity, the less people care about the people around them.
The downside of diversity - The Boston Globe
Schumpeter's notebook: The downside of diversity | The Economist
Which is why I always find it ironic that the liberals who want to expand the social-safety net, are creating the conditions through immigration and racial/ethnic policy that makes that difficult if not impossible. They do it because immigrants tend to vote for handouts. The problem is, they are creating the divisiveness in society that could eventually rupture the entire country.
We can see that in Europe as well. The "Nordic model" is collapsing and will collapse from the weight of immigration/diversity. As much as I hate nationalism, you cannot have any sense of national identity in a multicultural society. The natural way of humanity is tribalism. You are working against human nature and you will lose, eventually.
America has become nothing more than a union of convenience. The fault lines are going in all directions, it is only a matter of time before America is no more.
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