24 ms·

The oil bust is exposing weaknesses in the Norwegian model

46 points by livatlantis 11y ago

deleted 11y ago
[deleted]
- dools 11y ago
  Yeah I didn't really see much in this article but neo-liberal dogma. Shit article.
  - kylebgorman 11y ago
    The Economist has been open about their neoliberal beliefs since the magazine's inception.
    - tormeh 11y ago
      Yes, but they are opinionated, not biased. It sometimes result in weird articles where the conclusion is in disagreement with the facts stated in the article. This one's just poorly researched, however.
jdbernard 11y ago
I stopped taking this article seriously when they cited a 37-hour work-week as an indicator that the state is "undermining the work ethic." After finishing the article, it really sounds more like the author is prescribing their favourite solution for something that may not even be a problem. This is one third party talking to another third party about someone else's "problem". Basically gossip and just as useless.
- acdha 11y ago
  I particularly liked the way it just breezes over the better part of a trillion dollars in reserves. If they can't adjust to a crisis starting with that many advantages, working an extra few hours a week isn't even going to register.
- mtgx 11y ago
  And didn't Sweden just adopt a 6h work-day recently? (30 a week, so even fewer).
  - raziel2701 11y ago
    I think it was some companies in Sweden that had done that, not the whole country.
  - kryptiskt 11y ago
    Sweden isn't adopting a 6-hr workday. That was some bogus news item that went viral. There are some small-scale experiments, but there is no prospect of it becoming law, or even common.
- parennoob 11y ago
  > I stopped taking this article seriously when they cited a 37-hour work-week as an indicator that the state is "undermining the work ethic. Yeah absolutely, wtf? Sounds like someone who is trying to apply Industrial Revolution-era economics to today's world and pissed that it isn't quite working out.
- TazeTSchnitzel 11y ago
  They also complain about how much Norway spends on welfare, without explaining why this would be a bad thing. Okay, their neighbours spend less. So? Maybe their neighbours' welfare systems are inadequate.
  - jpatokal 11y ago
    Norway's neighbors are Sweden, Finland, and Denmark, whose welfare systems are generally not characterized as "inadequate".
kristofferR 11y ago
It's weird that the article didn't mention the large tax reforms and other measures in the recently announced 2016 budget, seems like that would be obvious to include in an article like this.
Gustomaximus 11y ago
I found it interesting how they praise the privatisation route for schools and hospitals etc. We clearly see this doesn't benifit the masses from the US model. And to criticise Norway for paying out more in benifit to the lower end of society compared to other OECD, why is this bad? It simply means they are paying out less in other areas but what are these and why is it a negative? Personally I found this a weak article. I expect better fact driven discussion from the economist rather than a piece that seems to want to find a reason to bash a country for popular reading.
- tormeh 11y ago
  Private school choice fails because most parents are not rational agents on their children's behalf, but rather on their own behalf - parents prefer convenient logistics to quality education. The end result is that bad schools have no pressure to perform, neither from the government nor from parents.
  - brc 11y ago
    I don't think that is true at all. Many parents undertake difficult logistics to ensure good education. Those parents who choose convenience over education quality are not interested in education quality - therefore no change in the school apart from location will matter to them.
    - tormeh 11y ago
      Some parentes care about education, but a surprising share of parents don't. School privatization experiments show that good schools become a little bit better, but the bad ones become a lot worse because the parents that choose bad schools just don't care.
      - acdha 11y ago
        “don't care” is a value judgement for which you lack evidence. I'm sure there are a few who truly don't but you're also lumping in e.g. the parent working 3 jobs who cannot entertain the possibility of taking their kids to a school which is further away, not close to the grandparents who will be watching the kid until a parent finishes work, etc. Study after study has shown that most of the differences in student performance are caused by poverty. Some of that manifests in e.g. challenges having clean clothing, sufficient food, etc. but many of the effects aren't as obvious – high levels of stress, very limited amounts of time, difficulty having things like Internet access to even review the options, etc. If you look at the causes of poverty, those also tend to be related: e.g. a recent immigrant with very limited English proficiency is likely to be working crazy hours and poorly equipped to read the forms the school district is sending, much less spend time talking with other parents about how the local charter schools are working.
caminante 11y ago
Weird article. That said, the NOK, a petrocurrency, has been hit hard relative to other petrocurrencies. Over the LTM, USD's up 24%, 18% and 15% v. NOK, AUD, and CAD, respectively[1]. [1]https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=Linear&chdeh=0&chfdeh=0&chdet=1444603138934&chddm=357679&cmpto=CURRENCY:USDAUD;CURRENCY:USDCAD&cmptdms=0;0&q=CURRENCY:USDNOK&ntsp=1&ei=z-QaVtniG8GljAHRnZDYDw https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...
- sjogress 11y ago
  I'm no economist, but from what I understand a lower valued NOK will over time help Norway's export industries (who have been suffering the last years due to high costs), which in turn will help the economy during a transition from oil and gas.
samfisher83 11y ago
I think norway was super smart. They took their oil money and invested in non oil things. Now when oil prices are low they can use the reserve to help pump their economy. I think they are actually doing things right.
- clarkm 11y ago
  A lot of the Gulf states took a similar route. Just look at the rise of the region as an airline hub, location of many satellite campuses, etc.
- refurb 11y ago
  The issue is that Norway created a social services network that was dependent on the oil money coming in. Will they starve if the oil runs out? No. Will they have to cut back on social services? Yes.
dharma1 11y ago
Agree with all the other comments, super light on facts and tried to apply an ideological "solution" where there is no issue. Surprised The Economist printed it. The Norwegians are sitting pretty on top of world's largest sovereign wealth fund, which holds 1.3% of the world's listed stocks. Their oil&gas tech industry is taking a beating, yes, as are every nation and business who depend on the oil&gas industry, but I don't think the Norwegians will starve any time soon. If new revenue from their oil industry stoppe tomorrow they would still be alright. I don't see how there is a "weakness" in their model or how this calls for privatisation of anything. If anything, their SWF's exposure to QE inflated stock markets is a bigger risk.
- junto 11y ago
  This also bugged me: The state is undermining the work ethic: most people enjoy a 37-hour working week, and three- day weekends are common. Sounds like a good idea to me. Why do people need to work 50 hours a week exactly? I imagine there are long term health, social and psychological benefits to a more restful and less stressful life?
tormeh 11y ago
While there's no doubt that there's a lot of fluff that has built up simply because we can/could afford it, this article doesn't really touch on any of them. Instead it seems to, among other things, bash state-owned corporations that are doing very well and are in no need of reform. In general, it's a very weak article. Someone opened Wikipedia and saw some numbers that don't agree with how they think economies should be run, and then wrote about that. It's hard to fire employees who are slacking off, especially in government, but there's not a mention of it. But I guess that wasn't on Wikipedia, but the work-week was. The turn to the left is mostly aa swinging pendulum thing, but I don't dread it, as the Labour party usually has a better grasp of economics than anyone else. What's happening is a restructuring born of the decline in one sector with a time-delay until the others can absorb the sacked employees. It's not a crisis in government.
littletimmy 11y ago
What rubbish. The article talks about the welfare state as if it is inherently bad. Their solutions? Surprise, surprise! Freer markets. Obvious bias here. Unsurprising, of course. The Economist is owned wholly by a few billionaire families.
- daemin 11y ago
  Also referenced in the article is that despite boards needing to consist of 40% women, that all board members are still only from a single school. Like that is any different to unbounded boards where the members are generally from the same small set of schools. Talk about the pot calling the kettle black...

46 points by livatlantis 11y ago

deleted 11y ago

[deleted]

dools 11y ago
Yeah I didn't really see much in this article but neo-liberal dogma. Shit article.
- kylebgorman 11y ago
  The Economist has been open about their neoliberal beliefs since the magazine's inception.
  - tormeh 11y ago
    Yes, but they are opinionated, not biased. It sometimes result in weird articles where the conclusion is in disagreement with the facts stated in the article. This one's just poorly researched, however.

jdbernard 11y ago

I stopped taking this article seriously when they cited a 37-hour work-week as an indicator that the state is "undermining the work ethic." After finishing the article, it really sounds more like the author is prescribing their favourite solution for something that may not even be a problem. This is one third party talking to another third party about someone else's "problem". Basically gossip and just as useless.

acdha 11y ago
I particularly liked the way it just breezes over the better part of a trillion dollars in reserves. If they can't adjust to a crisis starting with that many advantages, working an extra few hours a week isn't even going to register.
mtgx 11y ago
And didn't Sweden just adopt a 6h work-day recently? (30 a week, so even fewer).
- raziel2701 11y ago
  I think it was some companies in Sweden that had done that, not the whole country.
- kryptiskt 11y ago
  Sweden isn't adopting a 6-hr workday. That was some bogus news item that went viral. There are some small-scale experiments, but there is no prospect of it becoming law, or even common.
parennoob 11y ago
> I stopped taking this article seriously when they cited a 37-hour work-week as an indicator that the state is "undermining the work ethic. Yeah absolutely, wtf? Sounds like someone who is trying to apply Industrial Revolution-era economics to today's world and pissed that it isn't quite working out.
TazeTSchnitzel 11y ago
They also complain about how much Norway spends on welfare, without explaining why this would be a bad thing. Okay, their neighbours spend less. So? Maybe their neighbours' welfare systems are inadequate.
- jpatokal 11y ago
  Norway's neighbors are Sweden, Finland, and Denmark, whose welfare systems are generally not characterized as "inadequate".

kristofferR 11y ago

It's weird that the article didn't mention the large tax reforms and other measures in the recently announced 2016 budget, seems like that would be obvious to include in an article like this.

Gustomaximus 11y ago

I found it interesting how they praise the privatisation route for schools and hospitals etc. We clearly see this doesn't benifit the masses from the US model. And to criticise Norway for paying out more in benifit to the lower end of society compared to other OECD, why is this bad? It simply means they are paying out less in other areas but what are these and why is it a negative? Personally I found this a weak article. I expect better fact driven discussion from the economist rather than a piece that seems to want to find a reason to bash a country for popular reading.

tormeh 11y ago
Private school choice fails because most parents are not rational agents on their children's behalf, but rather on their own behalf - parents prefer convenient logistics to quality education. The end result is that bad schools have no pressure to perform, neither from the government nor from parents.
- brc 11y ago
  I don't think that is true at all. Many parents undertake difficult logistics to ensure good education. Those parents who choose convenience over education quality are not interested in education quality - therefore no change in the school apart from location will matter to them.
  - tormeh 11y ago
    Some parentes care about education, but a surprising share of parents don't. School privatization experiments show that good schools become a little bit better, but the bad ones become a lot worse because the parents that choose bad schools just don't care.
    - acdha 11y ago
      “don't care” is a value judgement for which you lack evidence. I'm sure there are a few who truly don't but you're also lumping in e.g. the parent working 3 jobs who cannot entertain the possibility of taking their kids to a school which is further away, not close to the grandparents who will be watching the kid until a parent finishes work, etc. Study after study has shown that most of the differences in student performance are caused by poverty. Some of that manifests in e.g. challenges having clean clothing, sufficient food, etc. but many of the effects aren't as obvious – high levels of stress, very limited amounts of time, difficulty having things like Internet access to even review the options, etc. If you look at the causes of poverty, those also tend to be related: e.g. a recent immigrant with very limited English proficiency is likely to be working crazy hours and poorly equipped to read the forms the school district is sending, much less spend time talking with other parents about how the local charter schools are working.

caminante 11y ago

Weird article. That said, the NOK, a petrocurrency, has been hit hard relative to other petrocurrencies. Over the LTM, USD's up 24%, 18% and 15% v. NOK, AUD, and CAD, respectively[1]. [1]https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=Linear&chdeh=0&chfdeh=0&chdet=1444603138934&chddm=357679&cmpto=CURRENCY:USDAUD;CURRENCY:USDCAD&cmptdms=0;0&q=CURRENCY:USDNOK&ntsp=1&ei=z-QaVtniG8GljAHRnZDYDw https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...

sjogress 11y ago
I'm no economist, but from what I understand a lower valued NOK will over time help Norway's export industries (who have been suffering the last years due to high costs), which in turn will help the economy during a transition from oil and gas.

samfisher83 11y ago

I think norway was super smart. They took their oil money and invested in non oil things. Now when oil prices are low they can use the reserve to help pump their economy. I think they are actually doing things right.

clarkm 11y ago
A lot of the Gulf states took a similar route. Just look at the rise of the region as an airline hub, location of many satellite campuses, etc.
refurb 11y ago
The issue is that Norway created a social services network that was dependent on the oil money coming in. Will they starve if the oil runs out? No. Will they have to cut back on social services? Yes.

dharma1 11y ago

Agree with all the other comments, super light on facts and tried to apply an ideological "solution" where there is no issue. Surprised The Economist printed it. The Norwegians are sitting pretty on top of world's largest sovereign wealth fund, which holds 1.3% of the world's listed stocks. Their oil&gas tech industry is taking a beating, yes, as are every nation and business who depend on the oil&gas industry, but I don't think the Norwegians will starve any time soon. If new revenue from their oil industry stoppe tomorrow they would still be alright. I don't see how there is a "weakness" in their model or how this calls for privatisation of anything. If anything, their SWF's exposure to QE inflated stock markets is a bigger risk.

junto 11y ago
This also bugged me: The state is undermining the work ethic: most people enjoy a 37-hour working week, and three- day weekends are common. Sounds like a good idea to me. Why do people need to work 50 hours a week exactly? I imagine there are long term health, social and psychological benefits to a more restful and less stressful life?

tormeh 11y ago

While there's no doubt that there's a lot of fluff that has built up simply because we can/could afford it, this article doesn't really touch on any of them. Instead it seems to, among other things, bash state-owned corporations that are doing very well and are in no need of reform. In general, it's a very weak article. Someone opened Wikipedia and saw some numbers that don't agree with how they think economies should be run, and then wrote about that. It's hard to fire employees who are slacking off, especially in government, but there's not a mention of it. But I guess that wasn't on Wikipedia, but the work-week was. The turn to the left is mostly aa swinging pendulum thing, but I don't dread it, as the Labour party usually has a better grasp of economics than anyone else. What's happening is a restructuring born of the decline in one sector with a time-delay until the others can absorb the sacked employees. It's not a crisis in government.

littletimmy 11y ago

What rubbish. The article talks about the welfare state as if it is inherently bad. Their solutions? Surprise, surprise! Freer markets. Obvious bias here. Unsurprising, of course. The Economist is owned wholly by a few billionaire families.

daemin 11y ago
Also referenced in the article is that despite boards needing to consist of 40% women, that all board members are still only from a single school. Like that is any different to unbounded boards where the members are generally from the same small set of schools. Talk about the pot calling the kettle black...