Norway was recently voted the best country in the world for quality of life by the United Nations Human Development Index (HDI). While this is a somewhat subjective measure, here are a few facts that back up their case: Norway ranks in the top ten in income (8th) and educational achievement (9th). Its crime rate is among the lowest in the world, with only 4000 prisoners in the entire country. Its government run health system is rated in the top 15 in the world. The Economist has ranked Norway as the best democracy in the world six years in a row.
I’m not suggesting other countries should copy everything Norway does. But there are reasons that explain why Norway has done so well. Success leaves clues, and in this case, Norway has a lot to teach the rest of the world.
Education is the single most important social program, and its funding needs to be looked at as a non-discretionary investment.
It shouldn’t be a mystery why a highly educated population is a huge plus. An educated population is far less likely to do stupid things, like voting for this bubble-brain, and it won’t be so easily mislead by disinformation. Beyond this, education is the key to keeping up with an ever-changing world and thus paramount in maintaining a high standard of living. Norwegians don't just look at education as a way to get a job, they believe that it has value in of itself.
There are almost no private schools in Norway, and all post-secondary education is free. This doesn’t mean that everyone is driven to go to university. Like most European countries, there is a non-university track that guides kids into the important and well-paying trades. Norway spends more on education - 6.6 percent of its GDP - than any other country in the world. It doesn’t look at this huge amount as a discretionary expense, free to be slashed on the whims of some conservative government to fund a tax cut for the wealthy. Instead, education is seen by all parties as a crucial investment in the country and its future.
The economic and social benefits to having well-funded public education are immense. Affordable education reduces inequality because it gives people from poor backgrounds opportunity. Unlike here in Canada and (especially) the US, young people in Norway don’t start their careers with a mountain of student loan debt. This debt has all sorts of deleterious effects; it inhibits household formation, reduces consumption and decreases new business creation. The scramble for well-paying jobs needed to pay down the debt forces kids to get more education than they really need to or makes them pay up for the more prestigious universities. This ‘accreditation bubble’ has allowed companies to demand bachelor’s degrees for all sorts of jobs that don’t require a degree at all. It is yet another negative feedback loop created by greed and bad policies.
Tax and benefits policies are key tools to achieving the kind of society you want to live in.
Norway has fairly high taxes and a very good safety net and yet its unemployment rate pre-pandemic was 3.6 percent, roughly on par with the US rate of 3.5 percent. Of course, the Right have told us for decades that this scenario of generous benefits and low unemployment was completely impossible, so these stats must be causing their little heads to explode. It is possible because Norway has a truly progressive tax system, which helps lower inequality. Norway’s Gini coefficient, which is an advanced measure of inequality, is 26, among the lowest for developed countries (Canada’s is 30, while the US is at 40) As I’ve argued elsewhere, less inequality is great for the economy because it means that more wealth is in the hands of people who will actually spend it.
The Norwegian tax and welfare regime is tailored to incentivize behaviors and create conditions for outcomes that help create the values Norwegians want to live by. They want strong families, so they have parental leave and subsidized childcare. Compare this to the US, where the empty rhetoric of ‘family values’ is constantly undermined by failed tax policies and economic mythology. Norwegians believe in the dignity of work, so they have strong unions, gender pay equity laws and comprehensive unemployment insurance. Again, compare this to the right-wing agenda of ruthless capitalism for workers and pseudo-socialism for corporations.
It’s common to misrepresent Norway as socialist but this is another falsehood bellied by the facts on the ground. The conservative think tank Heritage Foundation’s Index of Economic Freedom, which measures how capitalist a country is by studying regulation and taxation (the Heritage Foundation has the usual conservative low tax biases), ranks Norway 28th in the entire world (the US is ranked 20th, while Canada is 9th). The mantra that low taxes on business are needed to encourage investment is again shown to be little more than a demented right-wing fantasy by what’s happening in Norway; the country has a fast growing start-up tech sector that has little problem attracting capital.
Managing natural resources properly requires a long-term mindset, which can’t be achieved unless the government plays a significant role.
One obvious explanation for Norway’s success is that it has benefitted immensely from oil production. Most production is in the hands of Equinor (better known by its former name, Statoil). The company was state owned for the first 29 years of its existence before being partially privatized in 2001. Equinor was a fully integrated company (production, refining and marketing) which allowed all Norwegians to benefit from its resource, keeping the jobs at home and not allowing multi-nationals like Exxon to waltz off with the lion’s share of the profits.
In comparison, Canada quickly ditched its national oil company, Petro-Canada and instead allowed private companies, many of them foreign, to reap most of the profits. Most Canadian oil is sold unrefined to the US, foregoing billions of dollars every year. To top it off, successive conservative provincial governments in Alberta continually dropped oil and gas royalties since the early 1980s, with rates now a tenth of what they used to be. Essentially, Canada has done the opposite of what Norway did and given away its energy resources for far less than it could have received. How much has Canada lost due to this policy failure? Despite producing less than half the energy that Canada does, Norway has accumulated a sovereign wealth fund from its oil production of 1.4 trillion USD, or a staggering $259,000 for every single Norwegian citizen. Compare that to the pittance of Alberta’s $12 billion USD Heritage Fund (more than cancelled by $100 billion CAD in Alberta government debt).
This money means that Norway already has a huge leg up in the move away from fossil fuels and into renewable energy. While conservatives in Canada and the US wail about the huge cost of this transition, Norway has already invested heavily in alternative energy; two-thirds of its energy consumption is currently from renewables. The oil money means it will be able to do a lot more; for instance, by 2025 all new vehicles sold in the country will be zero-emission, and the government will subsidize this transition. The oil wealth also allows Norway to invest in other high growth areas, like IT and biotech. In short, Norway is a textbook example of how to properly manage a depleting natural resource.
Norway has an economy that works for its citizens. They have created a fair society in which those whose talents and efforts allow them to contribute more can still reap the rewards, but not at the cost of rest of society. Norwegians don't look at the world as only an individual competition; they see the need for cooperation and community. It's a model other countries should try to emulate.
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