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Comment by djrobstep | Hacker News Reader

Living in Australia it breaks your heart to see how much this country has squandered a similarly historic natural resources boom.

Instead of taxing it heavily and using it to build an enormous pool of money for the common good, we've simply handed it over to private interests.

Australia has also squandered opportunity in its retirement system: 2.6 trillion in high fee individual accounts (1% given away to the financial sector in fees every year!) instead of in a sovereign wealth fund like Norway's with a fraction of the admin costs.

Every country with an interest in a wealthy, fair society should be following in Norway's footsteps.

Fun fact: Norway is mostly socialist. The government owns the majority of the country's wealth.

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Someone replied to you but he deleted it. I meant to continue the conversation with:

If this article (referencing a 2008 paper) https://www.theguardian.com/commentisfree/2014/jan/13/north-... is to be believed, the UK had the same thing, but the money went to tax cuts for the rich. So it does smell like corruption to me.

[He talked about some conservative governments being corrupt, to which I think:] Conservatism is a con anyway, selling austerity as a pain that the citizenry needs to suffer to get a "healthy economy", which means cutting budgets where somehow the solution is to outsource things (e.g. with the NHS), meaning the private companies owned by the elites rake in the money. And then they sell the "it's the immigrants who are overtaxing our resources" to get the public to vote for Brexit. (Where less EU regulations mean the elite will have more power to influence the government to allow worker exploitation)

While this is true, proportionally the oil dividend is much smaller for the UK (60M population) than Norway (4M population.)

Using common goods to finance tax cuts is a conservative party policy and it has been mentioned in their manifestos, although not in bald terms.

They could therefore argue for a mandate for the policy.

With tongue-in-cheek apologies to Thatcher, the problem with capitalism in the UK is that you eventually run out of public assets to sell off :)

Education and the health service (think buildings and land as assets for the latter) are the two remaining ones apart from something like the road system. I'm sure they will try these soon.

Didn't they already have a shot at education? That whole Academies mess. Although the master plan to make every school an "academy" [0] was shot down days after it was announced.

[0] This is a weird, UK government definition of the word. Don't think Plato.

In Norway it’s EU regulations that makes it easier for the conservatives (and the last 20-30 years the social democrats) to privatize the economy and exploit workers. EU is a neoliberal project with some benefits for the common man.

Norway is not in the EU.

Nonetheless, plenty of EU driven rules apply in Norway. So gp’s statement could be true.

https://en.m.wikipedia.org/wiki/Norway–European_Union_relati...

Mostly around trade, so that Norwegian products can be sold in the EU and vice versa without secondary inspections. Only 21% of EU laws apply to Norway, and I don’t see any evidence that the EU could do anything like force Norway to privatize things.

How did you come to that conclusion? My complain with EU was it's driven too much by social(ist) policies at least compared with the US? At least the money that goes into small agriculture is upsetting.

The EU is quite neoliberal. Austerity was the policy there after the recession. It has also presided over a massive financialization of the European economy. The US is far out of the political mainstream with other wealthy countries. In comparison to where they were 20 years ago (as opposed to where the US is now), Europe has shifted markedly right economically.

The subsidies of agriculture are kind of ludicrous, I agree.

Yep. Try being a Norwegian living in Australia and seeing up close how they've done it all wrong. To explain it is like talking about the rainbow to someone born 100% blind; the corruption and ineptitude just stinks.

The same goes for their attitudes towards taxing pollution / promoting EVs, but that's a side story.

And apparently no effective oversight of their largest financial institutions: https://www.news.com.au/finance/business/breaking-news/chron...

The stories about Rosemary Rogers are bewildering.

Unfortunately it might be even more frustrating seeing the Nordic countries trying to dismantle any good idea and advantage they had. Hopefully Norway has enough inertia to not squander the fund.

I don’t know what your definition of socialism is which makes it difficult to respond to you. But in any historical manner, Norway is not a socialist society. We now have more freedom of choice in the market place than most countries and also compared to our own history. Norway was more socialist after the Second World War, where many industries was built up by the government. But since the 80s our government slowly divested from almost all these industries leading to much more affordable prices and greater competition. It’s a great country to start up companies and create wealth.

There are aspects of Norway that is socialist, but the country by historical standards and by the very definition is far far from being socialist.

It is difficult to categorize countries as socialist or free markets, since all countries has a bit of a mix. However, it is easy to see what it is decidedly not. Compared to socialist countries like USSR, East Germany, North Korea, Venezuela, we can all agree that Norway is not like those, it is indeed far closer to free markets than compared to socialism.

Most people use the word socialism incorrectly.

They look at social democracy which is just markets with redistribution and safety nets, and they say “socialism”.

Any welfare programs that help the poor - they say “socialism”.

They look at cities and countries engaging in State Capitalism and call it socialism.

Socialism is collective ownership of the Means of Production.

Examples of textbook socialism include:

Communes and Kibbutzes

Co-operative housing

Credit Unions

Employee owned corporations

Open source projects

And you can have democratic governance of larger structures, which MAY be called socialism:

The public stock market (capitalism and socialism can coexist).

Most people also use the word capitalism incorrectly. The capitalism-socialism dichotomy is largely an invention of Marxists. Many who oppose socialism do so because they prefer a society where individual justice is not overshadowed by "collective justice".

The idea is that people are expected to work for their benefits, save up money to form capital and then invest that capital to create a safety net for themselves. Most people on the conservative side are not opposed to helping people who can't help themselves or giving people who did their best but fell on hard times, a break, through bankruptcy.

If a country has a large amount of natural resources like Norway, it can be somewhat successful in dispensing with individual excellence. For example, Qatar has the highest per capita income in the world. However, this may not be sustainable since natural resource eventually run out. For example : https://en.wikipedia.org/wiki/History_of_Nauru#Modern-day_Na...

Norway used its oil profits to create a sovereign wealth fund and invested it in stocks. What is the system called when dispensable income is used to form capital which is then invested in other ventures to create additional revenue streams ? I would call it capitalism.

If all countries where Norwegian money is invested decided to become socialist and seized their property, Norway will not be upheld as a socialist success, would it ?

> If a country has a large amount of natural resources like Norway, it can be somewhat successful in dispensing with individual excellence.

I'm not sure what is meant by this? I would assume that the more resources the government or the community has, the more they can support people's talents. You can invest more in education and arts.

> Norway used its oil profits to create a sovereign wealth fund and invested it in stocks. What is the system called when dispensable income is used to form capital which is then invested in other ventures to create additional revenue streams ? I would call it capitalism.

True, that's a good point, it's state level capitalism.

If instead the oil money went into tax cuts, what would one call that policy then? Antisocialism?

> I'm not sure what is meant by this? I would assume that the more resources the government or the community has, the more they can support people's talents. You can invest more in education and arts.

Just investing in arts and education is not enough to bring about people's talents : https://www.heritage.org/education/report/does-spending-more...

> True, that's a good point, it's state level capitalism.

> If instead the oil money went into tax cuts, what would one call that policy then? Antisocialism?

You have missed the point here : even by Marxist standards, Norway's success is due to capitalism. It is better to think about economies in terms of the amount of economic freedom each permits. Capitalism-Socialism dichotomy is largely just fiction.

The Heritage foundation wants a fully privatized school system:

> One promising way to improve resource allocation is to give parents the ability to use their children's share of public Education funding to choose the right school for their children. Children benefiting from school choice programs have higher test scores than their peers who do not benefit from school choice.

Or could it be that parents who would use vouchers are the same parents who are actively involved in their children’s education so those are the same kids who would do better anyway?

“It Turns Out Spending More Probably Does Improve Education”:

https://www.nytimes.com/2016/12/12/nyregion/it-turns-out-spe...

That said, my understand is that “it’s the teachers, stupid”. Systems that have better teachers, through a combination of means (better pay, better prestige, better training and continuity) have the best outcomes:

https://www.mckinsey.com/industries/social-sector/our-insigh...

So yes, pouring money into the system isn’t a magic fix, especially if none of it goes to teacher salaries.

>Norway's success is due to capitalism

Erm, the wealth comes from finding a valuable resource. The oil isn't there due to following a particular ideology.

A capitalist system would give that resource to private wealthy individuals as reward for being wealthy (eg owning the land where the well-heads are). The sovereign wealth fund is more like common ownership, socialist-communist.

The socialist-capitalist dichotomy is based on ownership and the profit (financial or otherwise) of that ownership. Capitalism means narrow private ownership, the profit going to those owners; socialism democratises the ownership and benefit -- they are contradictory.

Not necessarily, for instance several US states like Texas and Alaska have sovereign wealth funds. Their assets include land (that they sometimes sell) and royalties that they collect on from oil and gas production. So yes, you have the wealthy oil tycoons, but you also have the state benefiting as well.

> If instead the oil money went into tax cuts, what would one call that policy then? Antisocialism?

Perfect!

I'm Scottish and kind of feel the same way - Scotland has a similar population to Norway, but Scotland has little to show for decades of oil and gas extraction. I really wish we'd started a fund like Norway did :(

>> Fun fact: Norway is mostly socialist. The government owns the majority of the country's wealth.

This is not the definition of socialism.

"The Nordic model refers to the economic and social policies common to the Nordic countries (Denmark, Finland, Norway, Iceland, Greenland, the Faroe Islands, and Sweden). This includes a comprehensive welfare state and collective bargaining at the national level with a high percentage of the workforce unionised while being based on the economic foundations of free market capitalism."

It absolutely is the definition of socialism: socialism is common ownership of the means of production. Most of Norway's wealth is government-owned, thus it is mostly socialist.

I'm not sure why people get so vehement about denying this fact. Perhaps because it requires acknowledging that socialism actually works really well?

Most of Norway's wealth is definitely not owned by the government, where do you get this from? It's mostly owned by corporation's and the people. Statoil and some other large companies are partly owned by the government, but there are many wholly owned privat oil companies competing with them.

https://en.wikipedia.org/wiki/Social_democracy

I think social democracy is probably closer.

There's free enterprise and the government owns some part of some companies.

I am not sure why wikipedia disagrees with you. Probably because Norway is not a socialist country. Government is not equal to the workers. If workers owned means of production, it would have been a socialist country. This is simply not true. Most of companies in Norway are not owned by workers.

I gues this will help you to understand:

"Ownership: In a capitalist economy, property and businesses are owned and controlled by individuals. In a socialist economy, the state owns and controls the major means of production. In some socialist economic models, worker cooperatives have primacy over production"

Finally, no socialism never has been working very well. There is not a single example of it working well in all recorded human history.

If Capitalism is ownership and control by individuals, and socialism is ownership and control by workers (but not via their collective will as expressed through democratically-determiend state action), then what is Norway?

I guess if you define "socialism" in a sufficiently narrow way you can ensure that no existent successful country will meet the chosen definition, a clever rhetorical trick.

As it was pointed out several times, it is a capitalistic system where ___most___ of the companies are owned by individuals and ____some____ are owned by state while possibly ____none____ owned by workers. Hope this clarifies. I would suggest you to learn from history because this stance on socialism is very contraproductive and you are the most vulnerable of repeating the mistakes of the past. I think socialism is extremely dangerous. I have first hand experience living in souch a country where most of the people are poor while the memebers of the state are accumulating extreme wealth. The difference is comapring it to most capitalistist countries, in an average capitalist country the p50 user has a good life and your wealth does not depend on your party membership or being in the social circle of party members. People can succeed by putting in effort. I think many of the people in the US like AOC think that they can just tax the rich and live off those people, using the exactly same arguments that Marx. History shows that this reasoning is false and very dangerous. I would strongly suggest you to study Ayn Rand. She explains why capitalism is the natural state of mankind, always has been and probably always will be.

https://en.wikipedia.org/wiki/Ayn_Rand

I wouldn't call Norway socialist so much as credit them for having had excellent governance. They invested the taxes they collected very wisely for the long-term common good of their citizens. Any country with any system of governance would be capable of this, but it turns out most human beings when given sufficient political power tend towards corruption and waste. Alaska, in the US, has followed a similar model to Norway with the Alaska Permanent Fund. Alaska issues annual dividend checks to every resident which is, as far as I know, the closest thing to a working UBI model in the world.

So... sufficiently good governance pursuing the general welfare of citizens is indistinguishable from socialism? ;)

Because Socialism implies nationalizing private companies. Norway does not. In fact the last 50 years they've done nothing but privatization, while retaining stocks in certain key businesses - which is nothing like the traditional autocratic control known from Socialism.

Heavy taxation is also not Socialism. Otherwise the British taxation of their American colonies could be deemed to be the same, while they were clearly not. Instead (largely) American companies accept the heavy taxation of the oil industry in Norway for two reasons. First of all, it is on sovereign Norwegian territory. Second, they still go home with a cool profit at the end of the day.

Keeping the tax profits from that venture, and investing it in order to make it grow, is not Socialist either. In fact that could be seen as directly contrary to Socialist doctrines. In fact it can be viewed as a completely Capitalist doctrine! But one where the people benefits from those invesments, since the Sovereign Wealth Fund is designed to work for the benefit of its owners, who just happens to be the Norwegian people.

The fun fact is incorrect: Not correct. Norway's form or government is Social Democratic. A progressive form of modern democracy. Mind you; Our government is this season run by a coalition of a center right and a right wing party.

It is a complete myth that Norway is "mostly socialist". Norway is a market economy with a strong focus on regulation and welfare for its people. If it was Socialist, it would have nationalized all private property by now - which it haven't, and in fact it is in the process of privatizing even more previously state-owned products and services. Heavy taxation does not imply Socialism, although the Sovereign Wealth Fund can certainly be attributed to the Labour movement of Norway.

I believe “Democratic Socialist” would be the correct term for their market arrangement: free market with a strong government backdrop against poverty or illness.

Socialism does not mean government ownership of the means of production: Remember, anarchism (think Proudhon, Bakunin) is also part of the socialist movement...

Russia squanders it all the time

I had a Norwegian girlfriend for a time and I can tell you they just think differently to us (British) people. While in Britain, and by extension the US, people just want more, more, more and constantly thin they are being ripped off, in Norway they feel happy with what they already have and think in very modest terms. She was one of the few women I've dated who didn't go shopping for fun every week. Very refreshing for me as a frugal person aiming to retire early. I miss her actually.

I think an important point to make is that it isn't that people in the Nordic countries are happier with less as such. It is that they already have, or have access to, the things they need to be relatively happy. If you don't then of course it is a constant struggle to compensate. Unfortunately I think this is rapidly changing.

I would be curious what the advertising landscape is like in Norway vs (for instance) the US. Clearly many Americans have their essential needs covered, and yet there seems to be a constant advertising driven pull for more and more to achieve ‘real’ happiness.

> Clearly many Americans have their essential needs covered [...]

Not in the same way. You can even be quite wealthy and still have very negative consequences from getting fired, evicted or having the housing market crash. Not only as result of the direct or financial consequences, but also to your sense of freedom and self-image. I guess you could say that the Nordics at their best isn't so much about being happy, as in the pursuit of happiness, but about being trouble free.

I have recently learned about Janteloven, and it was a revelation when trying to understand the people in the Nordic countries: https://en.wikipedia.org/wiki/Law_of_Jante

Ah yes. Forgot to mention this. When English people hear it they think it's bad, but it actually seems to make them happy.

>>Australia has also squandered opportunity in its retirement system: 2.6 trillion in high fee individual accounts (1% given away to the financial sector in fees every year!) instead of in a sovereign wealth fund like Norway's with a fraction of the admin costs.

There are advantages to having hundreds of thousands of individual accounts over one sovereign wealth fund. The latter is a case of putting all your eggs in one basket. Centralization poses enormous risks.

Reducing fees by having a smaller number of fund managers managing a larger amount of capital can also reduce the ROI, as a result of fund managers having to limit their objects of investment to very large companies/projects that can efficiently utilize large capital infusions.

Why is this getting downvoted? This is factual information. Large funds cannot invest the same way that smaller ones can.

Also, NOBODY pays 1% for investment management anymore. You can open a brokerage account in the US and pay .08%(yes, from private investment companies) and get a very diversified portfolio using standardized funds.

I really don't see the benefits of a centralized pension...other than being able to offload payments to future generations, ofcourse.

> Also, NOBODY pays 1% for investment management anymore.

LOL, look it up. This is the average annual fee for super funds in Australia

Seems to me it's the opposite. The holdings of the Norway fund are more diversified than any given Australian fund, simply because a larger pie can be sliced up into more slices.

You can view the Norway fund's holdings on their website: https://www.nbim.no/en/the-fund/holdings/holdings-as-at-31.1...

It seems pretty diversified to me!

A larger fund also has advantages for ROI (even putting aside the much lower fees) because you can be a more activist shareholder and invest in more sophisticated ways.

Of course a gigantic fund will be more diversified than any single small fund. But the aggregate diversity of all of the funds that all of the individual accounts invest in will be greater than that of any single fund.

>>A larger fund also has advantages for ROI (even putting aside the much lower fees) because you can be a more activist shareholder and invest in more sophisticated ways.

Small fund managers are free to invest in large funds to gain these advantages. They have the added advantage of being able to select from smaller cap investment options as well.

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