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Norweigan oil fund

254 points by punnerud 7y ago

cheeky78 7y ago
Isn't this contributing to climate change? The economy everyone uses as an example to replace the current system in the US...
- BluffFace 7y ago
  Perhaps this is why they can afford many government programs that the US simply cannot. Without a prolific income stream comparable to Norwegian oil, the only way to provide more social services is to tax individuals and businesses harder. Tax any group too heavily and you create brain drain, which hurts in the long run.
  - skj 7y ago
    Without advocating taxing any group too heavily, is there any evidence that this practice has ever created a brain drain?
    - kingkawn 7y ago
      Just anti-tax propaganda
    - isostatic 7y ago
      No
    - marvin 7y ago
      That would be a very interesting study. Anecdotally, only one person in my group of ambitious acquaintances has left Norway due to better opportunities elsewhere. Some super-wealthy (>$20 million net worth) have left to avoid paying the annual wealth tax of 0.85% of the market value of all taxes.
  - thatguyagain 7y ago
    Their income tax is 22% if I'm not mistaken.
    - punnerud 7y ago
      Sales tax is 25% (lower on food + public transport). Income tax is close to 50% for most of people (progressive), in addition there is a 14% tax per employee that the companies have to pay. If you take out dividend there is a 25% tax that don't earn you pension.
      - Scoundreller 7y ago
        But where/how does the money get spent? Surely the government doesn’t burn it. And a better metric would be to look at tax burden, because top marginal rates are just that: what you pay on our last dollar, not your first. Sales tax isn’t charged on rent/food/property so it’s only charged on a small percentage of one’s after-tax income.
      - eisa01 7y ago
        Average income tax (as taken from your paycheck), seems to be around 30% - it’s lower than many other north west European countries
        magicalhippo 7y ago
        But coupled with the VAT of 25% the effective tax rate is closer to 50%.
      - atombender 7y ago
        Norway is also one of the few remaining countries that have a wealth tax (among OECD countries, the only other one is Switzerland), which is currently at 0.85% of all net assets above 1.4m NOK, including cash, public and private stock, cars, boats, and of course real estate. Material assets such as real estate is assessed based on tables that take square footage, age, etc. into consideration. The tax is, unusually and somewhat controversially, uncapped. In theory, you could end up owing 100% or more of your income in wealth tax.
  - punnerud 7y ago
    The government is not allowed to use more than 4% (return on investment), in practice today this is close to 2% because the return on the fund is lower these days.
  - vonseel 7y ago
    You hit the nail on the head. Half-Norwegian here. Locals all speak of the oil as a gift to Norway from the seas/God/whatever. An economic analysis in comparison to Finland and Sweden would be interesting.
  - ceejayoz 7y ago
    The US produces 10x the oil Norway does, and was producing significant amounts of oil as far back as the 1860s. We've had that profit stream, we just let it get captured by private corporations (or in Alaska's case, given away to garner votes).
    - ISL 7y ago
      Population of Norway, 2017: 5.258 million Population of United States, 2018: 327.2 million
      - asark 7y ago
        Shoulda been taxing any extraction of non-renewable resources into a fund like this. The whole country—literally, the physical country—gets poorer when that stuff's taken out. Shame we didn't capture some of that value for public, shared, long-term benefit. [EDIT] all non-renewables, that is, not just oil. Should easily make up the difference between population and extracted natural resource value vs. Norway.
        Scoundreller 7y ago
        That makes a lot more sense than taxing people’s work.
      - ceejayoz 7y ago
        Discovery of oil in the United States: 1859. Discovery of oil in Norway: 1969. Imagine if we'd have had the foresight to take Norway's approach that natural resources are the nation's natural resources and let the returns build for 160 years.
        chrisco255 7y ago
        We used ours to build an automobile-based economy. We didn't exactly lose out on the deal. The unfortunate discovery that CO2 contributes to global warming came much, much later. But at any rate, American economic dominance largely depends on infrastructure and mass market autos.
  - DanCarvajal 7y ago
    U.S. Government spending is roughly 38% of GDP and in Norway it's 48%. I think it's safe to say that the U.S. can and does spend a lot, the debate is more towards what ends and how. I'm inclined to think we do a really poor job, with numerous reasons why. Source: https://data.oecd.org/gga/general-government-spending.htm https://data.oecd.org/gga/general-government-spending.htm
    - coliveira 7y ago
      Most spending in the US is squandered around war and socialism to the rich. The country has doing little int the last few decades to support science and combating global warming; they're also cutting social programs.
      - DanCarvajal 7y ago
        Like I said, various reasons. Though in terms of science I'm not sure you're correct. U.S. spends above age in R&D spending as a percentage of GDP. Source: https://data.oecd.org/chart/5Dtz https://data.oecd.org/chart/5Dtz
  - chiefalchemist 7y ago
    > "Without a prolific income stream comparable to Norwegian oil..." The USA certainly has such streams. The difference is priorities, not revenue.
  - michaeljohansen 7y ago
    Norwegian software developer here. I pay my taxes with pleasure, knowing that the money supported my education, my ability to go to the hospital, good roads, good airports, and lots of other public functions that are great because we collectively invest in them. I think anything below 20% in taxes simply means a country's public functions will suffer. It's weird to me that Americans have so much against taxes. If a country has a low degree of curruption, and has incentives to innovate in the public sector, then taxes are a good thing. Obviously I can't speak for the general population, but as for my close proximity: My colleagues think taxes are good too. No brain drain here.
    - coliveira 7y ago
      I believe that the problem in most countries is that rich people have successfully brainwashed the population into thinking that is bad to support their own people with schools, health care, cultural programs, etc. On the other hand, they successfully brainwashed the masses into believing the socialism for the rich is necessary: for example, you will see people crying on the newspapers because the rich are paying "too much" in taxes, when in fact they never payed so little.
    - Majromax 7y ago
      > I think anything below 20% in taxes simply means a country's public functions will suffer. Honestly, the biggest difference between nations isn't so much in income/payroll taxes, but in the VAT. The US simply doesn't have one at the federal level, and state sales taxes are typically in the neighbourhood of 6% (https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_Stat...).
      - weberc2 7y ago
        I don’t know what that graph is showing but it’s not the sales tax I pay at the register. In Illinois it’s usually 9-11% if I recall correctly. I’m in Chicago, so maybe the local sales tax is much higher than the state average?
    - slowhand09 7y ago
  - hannob 7y ago
    > Tax any group too heavily and you create brain drain, which hurts in the long run. Sweden and Denmark disagree. And they're among the most wealthy countries with the highest standard of living anywhere.
  - deleted 7y ago
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  - roywiggins 7y ago
    The best comparison is Sweden, which is right next door, culturally and linguistically similar, but does not have oil like Norway does.
    - kwhitefoot 7y ago
      But is does have more and more easily used land. And while it looks very similar from outside Scandinavia it doesn't look quite so similar close up. Culturally similar but far from the same. Topographically they are quite different, timber is more profitable in Sweden for instance because the country is much flatter and transport is much easier. The two countries have different challenges to overcome and different histories that still affect the way people think.
  - YeahSureWhyNot 7y ago
    yeah also take a look at how many immigrants and refugees they let into their country. the number is probably very close to 0.
    - ceejayoz 7y ago
      https://en.wikipedia.org/wiki/Immigration_to_Norway https://en.wikipedia.org/wiki/Immigration_to_Norway > In 2017, Norway's immigrant population consisted of 883,751 people, making up 16.8% of the country's total population. This includes both foreign-born and Norwegian-born with two foreign-born parents, and four foreign-born grandparents. In this population, 724,987 are foreign-born immigrants, while 158,764 are Norwegian-born with foreign-born parents. The ten most common countries of origin of immigrants residing in Norway are Poland (97,196), Lithuania (37,638), Sweden (36,315), Somalia (28,696), Germany (24,601), Iraq (incl.Kurdistan region) (22,493), Syria (20,823), Philippines (20,537), Iran (incl. Kordestan province) (21,364) and Pakistan (19,973). The immigration population comprises people from a total of 221 countries and autonomous regions.
      - YeahSureWhyNot 7y ago
        so more like 130k real refugees 2% of total populationthat have been handpicked and all paperwork in order or now compare rhat to UK, France or USA where the number is close to 10% where 1/3 of them are illegal, don't speak the language and don't pay any taxes.
        kwhitefoot 7y ago
        Not sure where you get the 130k from but yes Norway is strict about applying the rules on refugee status, economic migrants are sent back out unless they qualify for a residence permit (have a job so they can support themselves and their dependents). For those who are allowed in Norway provides free or cheap language classes, accommodation, and enough money to live on. However, unlike other countries, refugees who are granted asylum are not allowed to live just wherever they like, they are scattered around the country and effectively can only move when they can provide the money to do so on their own. So one doesn't get the same degree of concentration of foreign people as one gets, for example, in Sweden where until recently such a policy did not exist. My impression is that this has made Norway a less popular destination for those who are, or cannot prove that they are not, economic migrants.
  - marvin 7y ago
    Withdrawals from the oil fund amounted to 17.4% of the total state budget of Norway in 2018. (This is in the neighborhood of 3% of the fund size). This is the only "oil money" that is used on the government budget -- incomes from taxation of petroleum companies are put into the fund, never used directly. Taxation in general is very high, at approximately 55% of the gross domestic product. We could fund plenty of social welfare programs on tax revenue alone. The electorate in the US would not accept a tax burden that is close to that of the Scandinavian countries.
- shakyshakyshaky 7y ago
  The fund was fed by oil profits, but has now divested from oil-centric companies and invests heavily in renewable energy.
- philip1209 7y ago
  The fund started with oil money, but now focuses new investments on renewable energy sources: https://www.wsj.com/articles/norways-sovereign-wealth-fund-boosts-renewable-energy-divests-fossil-fuels-11560357485 https://www.wsj.com/articles/norways-sovereign-wealth-fund-b...
  - deleted 7y ago
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  - wang_li 7y ago
    Did they divest the fund of all monies that ultimately originated with oil or did they just switch some of their foreign investments? Because if they went ahead and kept all that money, this is the classic "I've got mine" theory of economics.
  - cheeky78 7y ago
    Yes, but it's based on oil, which is contributing to climate change..and not 100% is not used for renewable energy, so it's a net negative. It's strange to me that people aren't protesting and complaining about this fund, when it's a big issue for future.
    - cheeky78 7y ago
      So because Norway is a bastion of liberal policies, they get a free pass when it comes to climate change? This is why I know it has nothing to do with science or actually solving the problem.
      - dang 7y ago
        Would you please stop using HN primarily for ideological battle? We ban accounts that do that, regardless of which flavor they favor. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
    - dcbadacd 7y ago
      Oil isn't going anywhere soon, this is the least evil thing you can do and we should do so with all oil money.
- punnerud 7y ago
  A lot of focus these days on floating offshore wind, autonomous ships and pumping CO2 back into the ground. Thats why they changed the name from Statoil to Equinor, because of the shift away from oil+gas.
- deleted 7y ago
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- tristanperry 7y ago
  It may have in the early days (just like many countries' oil programmes), however now the fund is helping to provide subsidies which makes gasoline cars more expensive than electric cars (amongst other policies), and hence Norway is now one of leaders of EV adoption (per person): https://www.greencarfuture.com/electric/how-norway-so-many-electric-cars https://www.greencarfuture.com/electric/how-norway-so-many-e...
  - kwhitefoot 7y ago
    There is nothing in that article that says that the oil fund subsidises the purchase of EVs. As far as I know the oil fund is not used directly for such purposes, can you provide a reference?
panpanna 7y ago
> On average, the fund holds 1.4 percent of all of the world’s listed companies. Why fund businesses in other countires? Shouldn't Norway try to set up some more industries at home? Everyone claim Europe (was: EU) needs more VC funding to stop the brain drain. Well, here is a huge pool of money just waiting to be spent
- utopian3 7y ago
  The point is diversification. If norway’s economy collapses, they’ll still be invested elsewhere. It’s financially unwise to keep all your eggs in one basket
- sct202 7y ago
  Norway isn't in the EU, so that wouldn't exactly be home for them either.
  - panpanna 7y ago
    My bad, you are correct. Anyway, the point still stands. Why not make Oslo the silicon valley of Europe? I mean the weather is roughly the same, give or take 30 degrees :)
    - lallysingh 7y ago
      Do we need another SV? It's not really putting out the same quality of startups it used to.
    - nemothekid 7y ago
      If all it took was money, New York would be Silicon Valley.
    - mcv 7y ago
      Do you think they need even more money? The goal of this fund is not to invest in the economy, but to work as an insurance if ever the economy turns bad. If for whatever reason the economy in Norway collapses, they will still have this.
Keyframe 7y ago
What's the percentage of all US stocks fund owns?
- anthonybsd 7y ago
  https://www.nbim.no/contentassets/d3a372eb9d234e57a07caaf0f35cef67/spu_1q_19_web.pdf https://www.nbim.no/contentassets/d3a372eb9d234e57a07caaf0f3... Updated: 1.3% Edit: Oops, I misunderstood a question. Actually further in PDF they specify that US specifically is 39%, which is roughly 400 billion. If we go by this number of total capitalization of the US stocks being 30 trillion, then Norwegian oil fund owns 0.4/30 which is 1.3%
  - drawnwren 7y ago
    That's the percentage of the fund that is invested in US stocks. It is not the percentage of stocks that the fund holds.
  - ldite 7y ago
    The quote is: > North American stocks returned 14.6 percent and amounted to 41.4 percent of the equity portfolio. That's to say 41% of their equities are North American stocks, not that they own 41% of all North American stocks!
    - isostatic 7y ago
      41% of all US stocks would be about $13 Trillion
hackathonguy 7y ago
"On average, the fund holds 1.4 percent of all of the world’s listed companies." This blew my mind.
- erikpukinskis 7y ago
  Meaning a stake in 1.4% of companies, no indication of size of stake?
  - kgwgk 7y ago
    No, meaning it owns 1.4% of the global public equity market. They have some $700bn in stocks. The market cap of the S&P 500 is $25tn. If they held US large cap stocks only they would have almost 3% of each one of the S&P 500 companies.
    - dmoy 7y ago
      And US is about 50% of the world market cap, so yea 1.4% sounds about right.
calvinmorrison 7y ago
.
- epaga 7y ago
  Incorrect, it's 1T USD, 9.5T Kroner.
- Hypx 7y ago
  It's 9.5T Kroner. Which is ~1T USD.
- ginko 7y ago
  No, it's in USD. it's about 9.5 trillion kroner.
- bkovacev 7y ago
  Not true - it's 9.5T Kroner.
lnsru 7y ago
Wow! These people must be extraordinary to use oil money this way! Not kidding! Never been in Norway, but in countries I have ever been this would be barely possible due to corruption and the needs of the politician’s buddies. Like yachts, private jets, Bentleys and Vertu phones. This $186k/person isn’t far from what average German poses: https://www.bundesbank.de/resource/blob/617492/cd59713c156ad135e0a84518cd5ed4b6/mL/2016-03-household-data.pdf https://www.bundesbank.de/resource/blob/617492/cd59713c156ad...
- punnerud 7y ago
  We often talk about our uniqueness with the 'tripartite cooperation' between the employees, employer and state: https://translate.google.com/translate?sl=no&tl=en&u=https%3A%2F%2Fsnl.no%2Ftrepartssamarbeid https://translate.google.com/translate?sl=no&tl=en&u=https%3...
- buboard 7y ago
  Norway was lucky to be a very developed society before oil was discovered. In most countries oil is a curse
  - deleted 7y ago
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  - ptero 7y ago
    I would even make a more general statement: in most countries excess money is usually spent quickly (and usually inefficiently) on the scare-of-the-day. Developed countries are not immune to this. For example, in late 1990s and early 2000 US budget deficits were falling, then budget went into growing surpluses. But those surpluses were quickly spent on tax breaks and war on terror and US went back into large deficits. Politics :(
  - lordnacho 7y ago
    I wonder if it's about being developed, vs being about having a high-trust society? In a lot of places people will immediately get suspicious if you say you're setting up a government fund to hold everyone's money. For the benefit of society, of course.
lr4444lr 7y ago
The Norwegian success is the single biggest piece of evidence as to why the Venezuelan catastrophe was largely avoidable, and the fault of irresponsible leadership.
- lelima 7y ago
  Not Leadership but corruption
- dev_dull 7y ago
  It’s not so much the amount that will prove them successful, but the length. Over time will it revert to the mean?
- atemerev 7y ago
  Of course it was avoidable. Just should have kept capitalism.
  - sp332 7y ago
    How does capitalism decide who gets extraction rights for natural resources?
    - atemerev 7y ago
      The discoverer? And then whoever wants to buy the extraction rights from her at the market price? What’s even the problem?
      - hutzlibu 7y ago
        Because buying extraction rights from corrupt politicians who happen to be in the declared backyard of the empire number one, famous for covert operations .. might have not much to do with "fair capitalism" and investment..
      - sp332 7y ago
        So whoever discovers something automatically owns it? What if I discover an oil field that continues under someone else's land - is it mine because I discovered it? Do I get to take all the oil as long as the extraction equipment is only on my land? If my extraction activities lower the value of their land, do I owe them damages? My point is not to actually get into these details but to point out that capitalism does not give the answers. Capitalism can only start after you have nailed down the rules about how public and private property work.
godelski 7y ago
Considering this is explicitly stated to be for welfare, it would be really interesting to see a major UBI experiment. If the fund doesn't grow there's 186k 4 per person could be 12k/yr for over 15 years.
- Ididntdothis 7y ago
  15 years is not UBI. If you can’t rely on it being around for the rest of your life it would be insane to leave your career to live on UBI.
  - belltaco 7y ago
    I don't the point of UBI is for everyone to leave their careers. If anything, it's the opposite.
    - godelski 7y ago
      Which is exactly why UBI is generally suggested to give below the poverty line. Enough to survive but not enough to be comfortable. Enough to get you through downturns but not enough where you'll abandon a well paying job.
      - giarc 7y ago
        I believe it was Andrew Yang who talked about UBI on Recode podcast recently. He also talked about UBI giving people the freedom to try something new. You may be more likely to start a business if you knew you had something to fall back on. This might be especially beneficial in the rural areas of America where $1000/month will support you longer than in urban centres.
      - buboard 7y ago
        Which is why i can't fathom why every business would not raise their prices to match the UBI minimum. I mean it's not like there would be anyone who can't afford that.
capsch 7y ago
Yes those social Norwegian's invested; and the UK gave there north sea oil revenues to all the oligarchs
- coliveira 7y ago
  Yes, most capitalist countries decided to help the rich and are now singing the blues with their social services being depleted. I wonder if the billionaires of the world will do anything to help workers (rhetorical question, of course they will see this as just another opportunity to make more money).
- NeedMoreTea 7y ago
  Of course the UK has a far larger population, so it would be worth far less per capita. It's sobering to remember that Norway started this fund only in 1990. The UK mooted but cabinet ultimately rejected a North Sea Oil fund on similar lines in 1975. It was suggested by Tony Benn while he was Energy Minister. All that did materialise was the British National Oil Corporation (later Britoil having been privatised by Thatcher, now BP) as operator. What a waste.
  - sgt101 7y ago
    The UK was more or less on it's knees in 1975, I think that without North Sea Oil there would be very little chance that it could have build the services economy and infrastructure it did in the 80's and 90's. I think that you also give our politicians too much credit in terms of managing a fund; remember that the UK was the biggest recipient of marshall aid after the war, and it spent it on patrolling an empire that it was clearly about to lose and subsequently lost. I think that politicians of both parties would have been very likely to raid any fund and use it for vanity projects.
    - NeedMoreTea 7y ago
      As was most of the western world, recovering from the oil crisis of 73, and experiencing chaos as a result through the rest of the decade. Hardly unique to the UK. UK was largest recipient of Marshall aid for having the most need along with France only slightly behind. Being used as you say for maintaining world power status, and into the general treasury fund. We spent less on infrastructure during Marshall aid than without! They pissed that away just like was done with all oil revenues. Considering the vast majority of oil revenues went on empty tax cuts and benefit spending through Tory created recessions, I'm not sure we'd have noticed the difference. 1 or 2p off income tax barely registers. I know I noticed none of Lawson's tiny bribes. At all. :p The politicians would not, and should not be managing it being better served as some sort of apolitical hands off trust. I don't think politicians manage Norway's fund. Now there is little doubt that it would not have survived the privatisation and asset stripping of the eighties on unscathed, but, like the NHS there's no reason to suppose it would have been destroyed. The Tories debated but chose not to re-privatise the NHS in 51. Thatcher had a selection of industries that were felt were beyond the pale that were subsequently privatised by later administrations. Created in 75 might have been a bit late for achieving adequate perception in the public consciousness so who knows. Still, it remains one of the very many great missed British opportunities that could easily have been a couple of trillion or more by now. 15 years of additional contributions and growth. There's many nations have sovereign wealth funds now, we easily could have too.
buboard 7y ago
Assuming that a fund like that grows ~10% per year or so, each norwegian makes a bonus of 19230.7 just by existing. That is enough for a family to live in the european south. https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Norway#/media/File:Norway_Oil_Fund.png https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...
- getup8 7y ago
  "Since 1998 the fund has generated an annual return of 5.8 percent, or 4,404 billion kroner."
  - buboard 7y ago
    Still, for a family of 4 that's ~ 45.000$ of free money. If southern european countries were smart , they would give incentives to norwegians to move there and have a permanent vacation in the sun.
    - vasco 7y ago
      The fund is not distributing to citizens like that.
lelima 7y ago
A friend lives in Oslo, sometimes I visit, it shock me the amount of electric vehicles, in one single street all cars parked were Tesla(not the posh area). The city have so much nature, is even hard to explain.
- daj40 7y ago
  Along with being more eco minded, electric cars are actually more affordable in Norway, there is a significant tax placed on other vehicles. https://elbil.no/english/norwegian-ev-policy/ https://elbil.no/english/norwegian-ev-policy/
  - Y_Y 7y ago
    They let poor countries burn the oil, and use the money to pay for electric cars.
    - kwhitefoot 7y ago
      True but other countries also let poor countries burn the oil and do nothing useful with the money.
      - Cthulhu_ 7y ago
        Some invest it themselves into real estate, both in their own country (like highest towers, most fancy hotel, palm tree shaped islands) and abroad (skyscrapers and office buildings in various financial structures). They're really setting themselves up for them and their future generations to remain rich and comfortable for the forseeable future even when oil dries up or demand goes down.
  - chrisbolt 7y ago
    Gas is also highly taxed, third highest prices in the world: https://www.globalpetrolprices.com/gasoline_prices/ https://www.globalpetrolprices.com/gasoline_prices/
- deleted 7y ago
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Leader2light 7y ago
Norwegian success is the single biggest piece of evidence as to why small white society is the best way for humans to live.
harryh 7y ago
Some points of comparison. - CalPERS[1] has about $360 billion in assets under management. - The US Social Security Trust fund (which, depending on your POV you might count as an accounting fiction) is about $2.9 trillion. - Vanguard has about $5.3 trillion in AUM. 1. California Public Employees' Retirement System
- millettjon 7y ago
  How many employees does this cover? California has almost 40 million people. Norway has about 5.3 million.
  - harryh 7y ago
    ~1.6 million employees + their families for CalPERS
dorfsmay 7y ago
Think hard about it, would you rather your government do something like this, or get a cheque every year like in Alaska (or right before an election in Alberta)?
badestrand 7y ago
This transparency is just admirable, with investments down to the exact real estate properties that is invested in. Just beautiful.
- nshung 7y ago
  So much transparency is that, in Norway, you can look up the yearly income of anyone online on the government's website :)
Gravityloss 7y ago
Does Alaska have something like this? Or Texas?
- RankingMember 7y ago
  Alaska does, and also pays a dividend every year: https://en.wikipedia.org/wiki/Alaska_Permanent_Fund https://en.wikipedia.org/wiki/Alaska_Permanent_Fund
royandre 7y ago
Our fund has grown by 500 Billion Norwegian kroner (aprox $55 USD Billion) just since April this year
joshspankit 7y ago
There but for the poor policial decisions goes Canada
a-priori 7y ago
I did some quick math and with their current annual return rate of 5.8%, the returns from the the Oil Fund could finance the government's budget entirely once it gets to be about $2T in size. That's about 2x its current size. That's still about 20 years away at their current growth rate, and the government budget would probably increase by then, but it's still probably achievable. What happens then? Norway could theoretically cut its other income, including income tax, to zero and still maintain its current expenses.
- marvin 7y ago
  Unfortunately (as a Norwegian), that is never going to happen. Norway's is a success story, but there is a darker side to the oil fund. This money will be spent on something. Our public sector has a tendency to grow without questioning from any political group, such that the total tax level stays the same, regardless of any incomes from the oil fund. Currently, 1/3 of working-age Norwegians work in the public sector. 1/3 works in the private sector, and the final third are either unemployed or qualify for government benefits. (Meaning: Retired, long-term disabled, in full-time parental leave and so on). That this seems sustainable at all is very strange. We might as well go straight to a large-scale basic income experiment, because we almost have a basic income system in place already. In my opinion, this would be a more honest way of providing government benefits than the system we already have. Currently, 3-4% of the oil fund is liquidated each year to pay for the deficit in the national budget, while total taxation has in fact _increased_ under the current Right government. To my eyes, Norway has an exotic form of Dutch Disease in the form of our government spending, which is prevented from becoming a catastrophe by the oil fund. It will be interesting to see what the future brings, but it's not all roses.
  - dkural 7y ago
    I agree with your general argument - one thing to nitpick. Full time parental leave is not a bad thing in creating social wealth. Domestic labor is often unappreciated - until one has to do it or pay for it. I wouldn't lump those in with what you clearly consider "unproductive" use of human capital and labor. You get the benefit of a meal or a clean house, and if you pay for a maid and a cook, it also shows up on the national statistics for GDP.
growlist 7y ago
I do wonder whether this fund should be subject to punitive measures, since it is built on an activity that is generally acknowledged to be destroying the planet. It's not right that a group of people should be able to insulate themselves from the carnage they have wrought.
abvdasker 7y ago
A lot of comments in this thread seem fixated on the fact that this originated from oil profits, but to me it feels like more of a consequence of the Norwegian government's partial public ownership of its domestic energy companies and other industries. Lots of countries have a surplus of at least one natural resource; few of them have central governments with the authority (and lack of corruption) to publicly own those resources. Most governments just can't keep their hands out of the cookie jar. Every time I hear someone talk about socialism, whether its pundits or politicians or columnists, they talk about welfare. Everyone seems to have forgotten that that public ownership of capital is by definition the more important part of socialist policy that makes welfare possible. Norway is probably the best example of this idea's power. I'm not saying socialism is without weaknesses, but I don't understand how anyone can look at Norway and think that it doesn't work or is somehow evil.
- asdfgasd 7y ago
  Yes, thinking of funds like this as cash flow is absolutely a mistake. Strong democratic ownership of capital will be necessary for true democratization of society, and this is an important step (although too centralized in my uninformed opinion :D).
rfwhyte 7y ago
One of the most mind blowing things to me, is that where I'm from (Canada) we've pumped almost 2.5 times more oil and gas than Nowrway over the past 30 years, yet our "oil fund" is somewhere around $20 Billion. Norway decided the benefits of resource extraction should be universal, while my country decided that the benefits should go to the wealthy and multi-national corporations.
- mdorazio 7y ago
  Ha. Here in the US where we produce more than double what Canada does, there isn't even an oil fund.
  - outside1234 7y ago
    The oil fund is Exxon, which is in the S&P 500, which is in your 401k.
    - odonnellryan 7y ago
      Only available to people who have the means or opportunity to invest. We're taking from everyone and giving to few.
      - hcurtiss 7y ago
        There are a lot of people who rely on those investments, whether through their government retirement, their employer's retirement, or through their own holdings. Even many social programs are funded with investments in equities.
        asdfgasd 7y ago
        Slightly less than half of all Americans have any investment in the stock market. Pension funds were largely replaced with 401k's, but salaries were not increased to compensate. While you're technically correct, the stock market primarily benefits those with enough disposable income to generate large investments where they do not need to draw down the principle, and that certainly isn't the majority of Americans.
outside1234 7y ago
And all it cost was the earth's climate. I think this "oil fund" will be an interesting target when countries and states start disappearing under water and their crops start failing for reparations. Also, why does Norway not contribute the full 2% to NATO spending again?
- punnerud 7y ago
  We have the second largest investment per person in NATO. 1. US = 1894 USD (3,5% GDP) 2. Norway = 1483 (1,61%) 3. UK = 899 (2,1%) 4. France = 787 (1,81%) 5. Canada = 643 (1,23%) https://www.regjeringen.no/no/tema/forsvar/innsikt/budsjett/budsjettgrafikk2019/nato/id2613480/ https://www.regjeringen.no/no/tema/forsvar/innsikt/budsjett/... Because of the GDP-measure, if we stop producing oil/gas we will be over the 2% but with a lot of value in the ‘bank’. So the GDP measure is not the best. We still try to get to 2% by building up our own industry around the money, not pending it blindly.
  - outside1234 7y ago
    The NATO treaty is that every member will spend 2% of GDP and nothing about per person or per capita. This keeps it fair for countries that are less wealthy.
- UnFleshedOne 7y ago
  Yes, the solution to that is obviously to burn most of the oil money now, so there will be nothing for others to come after and give the rest to oligarchs (those guys know just where to hide it). Good to see that the rest of the world is working tirelessly at that.
dg4 7y ago
It's interesting to me that they don't appear to hold private equity or venture funds, unless I'm missing something. Presumably at that scale they have unlimited access to any asset class in the world. Does anyone have any insight as to why they might be avoiding those?
- duderific 7y ago
  My guess would be that they are considered too risky.
- punnerud 7y ago
  I am living in Oslo/Norway, and there is a bill now on vote to open up for investment in companies that are not listed.
wslh 7y ago
Holding details: https://www.nbim.no/en/the-fund/holdings/holdings-as-at-31.12.2018/ https://www.nbim.no/en/the-fund/holdings/holdings-as-at-31.1...
Kjeldahl 7y ago
Surprised nobody mentioned that the whole fund and its future returns have been promised away already as future pension for the people working for the government (far too many). This is due to politicians and a too large part of the population that mistake "feeling good" as "being smart", and failure to recognize that the economic model that has worked for as long as the oil revenues kept flowing in, will stop working once the oil revenues start declining. There is no frugality, and all the traditional parties on the right/conservative side would be characterized as socialist in most other developed countries. And as the government overspending keeps growing, so do the taxes...
- andness 7y ago
  The "About the fund" page has a section called "The fund's purpose and history" which seems to completely contradict what you're saying.
  - marvin 7y ago
    It's a contentious political question, and it's impossible to make predictions about how the fund might eventually be emptied. We could easily end up on a track that would empty the fund in 50 years, but of course you'd hope the electorate is wise enough not to let this happen.
Expez 7y ago
I haven't seen this fact mentioned in this thread yet, but it's super important: This stack of money doesn't belong to any one generation. It's set aside for all future generations to enjoy. Each year the government can choose to pull some of the money in to the current budget, but by law[0] they can't pull in more than 3%. This is the fund's estimated sustainable yearly return (It was adjusted down from 4% in 2017). Some posters in this thread seem to think that this is all going to get spent on covering too-generous promises of pensions (yes we have those too!), but that isn't going to happen. It would be a travesty to rob Peter to pay Paul even if Peter hasn't been born yet. Everyone here generally agree on this. [0] https://www.statsbudsjettet.no/Statsbudsjettet-2019/Statsbudsjettet-fra-A-til-A/Handlingsregelen/ https://www.statsbudsjettet.no/Statsbudsjettet-2019/Statsbud...
beeschlenker 7y ago
Copy and paste this post and repost it. I keep getting censored by these people. Peter Thiel and Jack Dorsey raping and killing three boys each. Turn the volume all the way up and put head phones on.[ https://s3.wasabisys.com/conv1/Overnight_14-17Jan/15JanCh3_100-200.avi https://drive.google.com/file/d/1mzZrjobxhNIEf38M3xk-IeA5SeF4aUtB/view?usp=sharing Obama admits to raping and killing boys here, with commentary from Peter Thiel, George Soros, Matt Porter: https://s3.wasabisys.com/out2/Out2/15JanCh3_0545.avi https://drive.google.com/file/d/1LCDoc1kT7cfSeKQ1vniP_sx32_bRsHau/view?usp=sharing Obama explains the Illuminati with Jack Dorsey: https://s3.wasabisys.com/conv1/Overnight_14-17Jan/15JanCh3_200-347.avi https://drive.google.com/file/d/1Ok1-9IvANULzKBOwADFgaiYCFi6yszfj/view?usp=sharing At 230 a conversation is occurring on the embedded Porter camera system with Jack Dorsey, Peter Thiel, Barack Obama, Bill M^urray, and the Porter's. Jack Dorsey provides a statement defining who their group is: "The Illum%inati is an underground organization of child rapists and homosexuals." Matthew Porter: "We have to thin the herd, so Barack is going to explain a few things." At 232 Barack Obama says the following: "You people have to realize we are child rapi'sts. The Illuminati are child rapists. As soon as you figure that out, you can decide what to do. Everybody is freaking out about what just happened [child raping event still going on]. This is who ^we are." Full 71 page document: https://s3.wasabisys.com/aviewmefirst/FBI_FinalDraft_26Jul2019_BSchlenker.pdf
simonebrunozzi 7y ago
Interesting news [0] on companies that were previously on the "black list" of the fund's investments (most notably, Rio Tinto): > "Decision to revoke exclusions of companies from the Government Pension Fund Global" > Norges Bank has decided to revoke the exclusions of Grupo Carso SAB de CV, General Dynamics Corp, Nutrien Ltd, Rio Tinto Ltd, Rio Tinto Plc, Walmart Inc and Wal-Mart de Mexico SAB de CV from the Government Pension Fund Global. [0]: https://www.nbim.no/en/the-fund/news-list/2019/decision-to-revoke-exclusions-of-companies-from-the-government-pension-fund-global/ https://www.nbim.no/en/the-fund/news-list/2019/decision-to-r...
nojvek 7y ago
The thing that's the most powerful to me is that they actively decide which companies aren't following ethical practices and decide to invest away from them. https://www.nbim.no/en/the-fund/news-list/2019/decision-to-revoke-exclusions-of-companies-from-the-government-pension-fund-global/ https://www.nbim.no/en/the-fund/news-list/2019/decision-to-r... When the companies behave properly and decide to follow ethical behavior, they put them back again on the investment list. I also wonder how the Softbank 100B vision fund is going to fare compared to the Norway investment fund. Although 5% growth rate sounds meager, they have done well since 1998, and it seems that the fund is generally betting on low risk returns. Massive kudos to Norway for showing the world how not to fuck up your country like Venezuela when you're sitting on a money mountain.
seaghost 7y ago
Right people on the right places. Simple as that.

254 points by punnerud 7y ago

Isn't this contributing to climate change? The economy everyone uses as an example to replace the current system in the US...

BluffFace 7y ago
Perhaps this is why they can afford many government programs that the US simply cannot. Without a prolific income stream comparable to Norwegian oil, the only way to provide more social services is to tax individuals and businesses harder. Tax any group too heavily and you create brain drain, which hurts in the long run.
- skj 7y ago
  Without advocating taxing any group too heavily, is there any evidence that this practice has ever created a brain drain?
  - kingkawn 7y ago
    Just anti-tax propaganda
  - isostatic 7y ago
    No
  - marvin 7y ago
    That would be a very interesting study. Anecdotally, only one person in my group of ambitious acquaintances has left Norway due to better opportunities elsewhere. Some super-wealthy (>$20 million net worth) have left to avoid paying the annual wealth tax of 0.85% of the market value of all taxes.
- thatguyagain 7y ago
  Their income tax is 22% if I'm not mistaken.
  - punnerud 7y ago
    Sales tax is 25% (lower on food + public transport). Income tax is close to 50% for most of people (progressive), in addition there is a 14% tax per employee that the companies have to pay. If you take out dividend there is a 25% tax that don't earn you pension.
    - Scoundreller 7y ago
      But where/how does the money get spent? Surely the government doesn’t burn it. And a better metric would be to look at tax burden, because top marginal rates are just that: what you pay on our last dollar, not your first. Sales tax isn’t charged on rent/food/property so it’s only charged on a small percentage of one’s after-tax income.
    - eisa01 7y ago
      Average income tax (as taken from your paycheck), seems to be around 30% - it’s lower than many other north west European countries
      - magicalhippo 7y ago
        But coupled with the VAT of 25% the effective tax rate is closer to 50%.
    - atombender 7y ago
      Norway is also one of the few remaining countries that have a wealth tax (among OECD countries, the only other one is Switzerland), which is currently at 0.85% of all net assets above 1.4m NOK, including cash, public and private stock, cars, boats, and of course real estate. Material assets such as real estate is assessed based on tables that take square footage, age, etc. into consideration. The tax is, unusually and somewhat controversially, uncapped. In theory, you could end up owing 100% or more of your income in wealth tax.
- punnerud 7y ago
  The government is not allowed to use more than 4% (return on investment), in practice today this is close to 2% because the return on the fund is lower these days.
- vonseel 7y ago
  You hit the nail on the head. Half-Norwegian here. Locals all speak of the oil as a gift to Norway from the seas/God/whatever. An economic analysis in comparison to Finland and Sweden would be interesting.
- ceejayoz 7y ago
  The US produces 10x the oil Norway does, and was producing significant amounts of oil as far back as the 1860s. We've had that profit stream, we just let it get captured by private corporations (or in Alaska's case, given away to garner votes).
  - ISL 7y ago
    Population of Norway, 2017: 5.258 million Population of United States, 2018: 327.2 million
    - asark 7y ago
      Shoulda been taxing any extraction of non-renewable resources into a fund like this. The whole country—literally, the physical country—gets poorer when that stuff's taken out. Shame we didn't capture some of that value for public, shared, long-term benefit. [EDIT] all non-renewables, that is, not just oil. Should easily make up the difference between population and extracted natural resource value vs. Norway.
      - Scoundreller 7y ago
        That makes a lot more sense than taxing people’s work.
    - ceejayoz 7y ago
      Discovery of oil in the United States: 1859. Discovery of oil in Norway: 1969. Imagine if we'd have had the foresight to take Norway's approach that natural resources are the nation's natural resources and let the returns build for 160 years.
      - chrisco255 7y ago
        We used ours to build an automobile-based economy. We didn't exactly lose out on the deal. The unfortunate discovery that CO2 contributes to global warming came much, much later. But at any rate, American economic dominance largely depends on infrastructure and mass market autos.
- DanCarvajal 7y ago
  U.S. Government spending is roughly 38% of GDP and in Norway it's 48%. I think it's safe to say that the U.S. can and does spend a lot, the debate is more towards what ends and how. I'm inclined to think we do a really poor job, with numerous reasons why. Source: https://data.oecd.org/gga/general-government-spending.htm https://data.oecd.org/gga/general-government-spending.htm
  - coliveira 7y ago
    Most spending in the US is squandered around war and socialism to the rich. The country has doing little int the last few decades to support science and combating global warming; they're also cutting social programs.
    - DanCarvajal 7y ago
      Like I said, various reasons. Though in terms of science I'm not sure you're correct. U.S. spends above age in R&D spending as a percentage of GDP. Source: https://data.oecd.org/chart/5Dtz https://data.oecd.org/chart/5Dtz
- chiefalchemist 7y ago
  > "Without a prolific income stream comparable to Norwegian oil..." The USA certainly has such streams. The difference is priorities, not revenue.
- michaeljohansen 7y ago
  Norwegian software developer here. I pay my taxes with pleasure, knowing that the money supported my education, my ability to go to the hospital, good roads, good airports, and lots of other public functions that are great because we collectively invest in them. I think anything below 20% in taxes simply means a country's public functions will suffer. It's weird to me that Americans have so much against taxes. If a country has a low degree of curruption, and has incentives to innovate in the public sector, then taxes are a good thing. Obviously I can't speak for the general population, but as for my close proximity: My colleagues think taxes are good too. No brain drain here.
  - coliveira 7y ago
    I believe that the problem in most countries is that rich people have successfully brainwashed the population into thinking that is bad to support their own people with schools, health care, cultural programs, etc. On the other hand, they successfully brainwashed the masses into believing the socialism for the rich is necessary: for example, you will see people crying on the newspapers because the rich are paying "too much" in taxes, when in fact they never payed so little.
  - Majromax 7y ago
    > I think anything below 20% in taxes simply means a country's public functions will suffer. Honestly, the biggest difference between nations isn't so much in income/payroll taxes, but in the VAT. The US simply doesn't have one at the federal level, and state sales taxes are typically in the neighbourhood of 6% (https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_Stat...).
    - weberc2 7y ago
      I don’t know what that graph is showing but it’s not the sales tax I pay at the register. In Illinois it’s usually 9-11% if I recall correctly. I’m in Chicago, so maybe the local sales tax is much higher than the state average?
  - slowhand09 7y ago
- hannob 7y ago
  > Tax any group too heavily and you create brain drain, which hurts in the long run. Sweden and Denmark disagree. And they're among the most wealthy countries with the highest standard of living anywhere.
- deleted 7y ago
  [deleted]
- roywiggins 7y ago
  The best comparison is Sweden, which is right next door, culturally and linguistically similar, but does not have oil like Norway does.
  - kwhitefoot 7y ago
    But is does have more and more easily used land. And while it looks very similar from outside Scandinavia it doesn't look quite so similar close up. Culturally similar but far from the same. Topographically they are quite different, timber is more profitable in Sweden for instance because the country is much flatter and transport is much easier. The two countries have different challenges to overcome and different histories that still affect the way people think.
- YeahSureWhyNot 7y ago
  yeah also take a look at how many immigrants and refugees they let into their country. the number is probably very close to 0.
  - ceejayoz 7y ago
    https://en.wikipedia.org/wiki/Immigration_to_Norway https://en.wikipedia.org/wiki/Immigration_to_Norway > In 2017, Norway's immigrant population consisted of 883,751 people, making up 16.8% of the country's total population. This includes both foreign-born and Norwegian-born with two foreign-born parents, and four foreign-born grandparents. In this population, 724,987 are foreign-born immigrants, while 158,764 are Norwegian-born with foreign-born parents. The ten most common countries of origin of immigrants residing in Norway are Poland (97,196), Lithuania (37,638), Sweden (36,315), Somalia (28,696), Germany (24,601), Iraq (incl.Kurdistan region) (22,493), Syria (20,823), Philippines (20,537), Iran (incl. Kordestan province) (21,364) and Pakistan (19,973). The immigration population comprises people from a total of 221 countries and autonomous regions.
    - YeahSureWhyNot 7y ago
      so more like 130k real refugees 2% of total populationthat have been handpicked and all paperwork in order or now compare rhat to UK, France or USA where the number is close to 10% where 1/3 of them are illegal, don't speak the language and don't pay any taxes.
      - kwhitefoot 7y ago
        Not sure where you get the 130k from but yes Norway is strict about applying the rules on refugee status, economic migrants are sent back out unless they qualify for a residence permit (have a job so they can support themselves and their dependents). For those who are allowed in Norway provides free or cheap language classes, accommodation, and enough money to live on. However, unlike other countries, refugees who are granted asylum are not allowed to live just wherever they like, they are scattered around the country and effectively can only move when they can provide the money to do so on their own. So one doesn't get the same degree of concentration of foreign people as one gets, for example, in Sweden where until recently such a policy did not exist. My impression is that this has made Norway a less popular destination for those who are, or cannot prove that they are not, economic migrants.
- marvin 7y ago
  Withdrawals from the oil fund amounted to 17.4% of the total state budget of Norway in 2018. (This is in the neighborhood of 3% of the fund size). This is the only "oil money" that is used on the government budget -- incomes from taxation of petroleum companies are put into the fund, never used directly. Taxation in general is very high, at approximately 55% of the gross domestic product. We could fund plenty of social welfare programs on tax revenue alone. The electorate in the US would not accept a tax burden that is close to that of the Scandinavian countries.
shakyshakyshaky 7y ago
The fund was fed by oil profits, but has now divested from oil-centric companies and invests heavily in renewable energy.
philip1209 7y ago
The fund started with oil money, but now focuses new investments on renewable energy sources: https://www.wsj.com/articles/norways-sovereign-wealth-fund-boosts-renewable-energy-divests-fossil-fuels-11560357485 https://www.wsj.com/articles/norways-sovereign-wealth-fund-b...
- deleted 7y ago
  [deleted]
- wang_li 7y ago
  Did they divest the fund of all monies that ultimately originated with oil or did they just switch some of their foreign investments? Because if they went ahead and kept all that money, this is the classic "I've got mine" theory of economics.
- cheeky78 7y ago
  Yes, but it's based on oil, which is contributing to climate change..and not 100% is not used for renewable energy, so it's a net negative. It's strange to me that people aren't protesting and complaining about this fund, when it's a big issue for future.
  - cheeky78 7y ago
    So because Norway is a bastion of liberal policies, they get a free pass when it comes to climate change? This is why I know it has nothing to do with science or actually solving the problem.
    - dang 7y ago
      Would you please stop using HN primarily for ideological battle? We ban accounts that do that, regardless of which flavor they favor. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  - dcbadacd 7y ago
    Oil isn't going anywhere soon, this is the least evil thing you can do and we should do so with all oil money.
punnerud 7y ago
A lot of focus these days on floating offshore wind, autonomous ships and pumping CO2 back into the ground. Thats why they changed the name from Statoil to Equinor, because of the shift away from oil+gas.
deleted 7y ago
[deleted]
tristanperry 7y ago
It may have in the early days (just like many countries' oil programmes), however now the fund is helping to provide subsidies which makes gasoline cars more expensive than electric cars (amongst other policies), and hence Norway is now one of leaders of EV adoption (per person): https://www.greencarfuture.com/electric/how-norway-so-many-electric-cars https://www.greencarfuture.com/electric/how-norway-so-many-e...
- kwhitefoot 7y ago
  There is nothing in that article that says that the oil fund subsidises the purchase of EVs. As far as I know the oil fund is not used directly for such purposes, can you provide a reference?

panpanna 7y ago

> On average, the fund holds 1.4 percent of all of the world’s listed companies. Why fund businesses in other countires? Shouldn't Norway try to set up some more industries at home? Everyone claim Europe (was: EU) needs more VC funding to stop the brain drain. Well, here is a huge pool of money just waiting to be spent

utopian3 7y ago
The point is diversification. If norway’s economy collapses, they’ll still be invested elsewhere. It’s financially unwise to keep all your eggs in one basket
sct202 7y ago
Norway isn't in the EU, so that wouldn't exactly be home for them either.
- panpanna 7y ago
  My bad, you are correct. Anyway, the point still stands. Why not make Oslo the silicon valley of Europe? I mean the weather is roughly the same, give or take 30 degrees :)
  - lallysingh 7y ago
    Do we need another SV? It's not really putting out the same quality of startups it used to.
  - nemothekid 7y ago
    If all it took was money, New York would be Silicon Valley.
  - mcv 7y ago
    Do you think they need even more money? The goal of this fund is not to invest in the economy, but to work as an insurance if ever the economy turns bad. If for whatever reason the economy in Norway collapses, they will still have this.

Keyframe 7y ago

What's the percentage of all US stocks fund owns?

anthonybsd 7y ago
https://www.nbim.no/contentassets/d3a372eb9d234e57a07caaf0f35cef67/spu_1q_19_web.pdf https://www.nbim.no/contentassets/d3a372eb9d234e57a07caaf0f3... Updated: 1.3% Edit: Oops, I misunderstood a question. Actually further in PDF they specify that US specifically is 39%, which is roughly 400 billion. If we go by this number of total capitalization of the US stocks being 30 trillion, then Norwegian oil fund owns 0.4/30 which is 1.3%
- drawnwren 7y ago
  That's the percentage of the fund that is invested in US stocks. It is not the percentage of stocks that the fund holds.
- ldite 7y ago
  The quote is: > North American stocks returned 14.6 percent and amounted to 41.4 percent of the equity portfolio. That's to say 41% of their equities are North American stocks, not that they own 41% of all North American stocks!
  - isostatic 7y ago
    41% of all US stocks would be about $13 Trillion

hackathonguy 7y ago

"On average, the fund holds 1.4 percent of all of the world’s listed companies." This blew my mind.

erikpukinskis 7y ago
Meaning a stake in 1.4% of companies, no indication of size of stake?
- kgwgk 7y ago
  No, meaning it owns 1.4% of the global public equity market. They have some $700bn in stocks. The market cap of the S&P 500 is $25tn. If they held US large cap stocks only they would have almost 3% of each one of the S&P 500 companies.
  - dmoy 7y ago
    And US is about 50% of the world market cap, so yea 1.4% sounds about right.

calvinmorrison 7y ago

epaga 7y ago
Incorrect, it's 1T USD, 9.5T Kroner.
Hypx 7y ago
It's 9.5T Kroner. Which is ~1T USD.
ginko 7y ago
No, it's in USD. it's about 9.5 trillion kroner.
bkovacev 7y ago
Not true - it's 9.5T Kroner.

lnsru 7y ago

Wow! These people must be extraordinary to use oil money this way! Not kidding! Never been in Norway, but in countries I have ever been this would be barely possible due to corruption and the needs of the politician’s buddies. Like yachts, private jets, Bentleys and Vertu phones. This $186k/person isn’t far from what average German poses: https://www.bundesbank.de/resource/blob/617492/cd59713c156ad135e0a84518cd5ed4b6/mL/2016-03-household-data.pdf https://www.bundesbank.de/resource/blob/617492/cd59713c156ad...

punnerud 7y ago
We often talk about our uniqueness with the 'tripartite cooperation' between the employees, employer and state: https://translate.google.com/translate?sl=no&tl=en&u=https%3A%2F%2Fsnl.no%2Ftrepartssamarbeid https://translate.google.com/translate?sl=no&tl=en&u=https%3...
buboard 7y ago
Norway was lucky to be a very developed society before oil was discovered. In most countries oil is a curse
- deleted 7y ago
  [deleted]
- ptero 7y ago
  I would even make a more general statement: in most countries excess money is usually spent quickly (and usually inefficiently) on the scare-of-the-day. Developed countries are not immune to this. For example, in late 1990s and early 2000 US budget deficits were falling, then budget went into growing surpluses. But those surpluses were quickly spent on tax breaks and war on terror and US went back into large deficits. Politics :(
- lordnacho 7y ago
  I wonder if it's about being developed, vs being about having a high-trust society? In a lot of places people will immediately get suspicious if you say you're setting up a government fund to hold everyone's money. For the benefit of society, of course.

lr4444lr 7y ago

The Norwegian success is the single biggest piece of evidence as to why the Venezuelan catastrophe was largely avoidable, and the fault of irresponsible leadership.

lelima 7y ago
Not Leadership but corruption
dev_dull 7y ago
It’s not so much the amount that will prove them successful, but the length. Over time will it revert to the mean?
atemerev 7y ago
Of course it was avoidable. Just should have kept capitalism.
- sp332 7y ago
  How does capitalism decide who gets extraction rights for natural resources?
  - atemerev 7y ago
    The discoverer? And then whoever wants to buy the extraction rights from her at the market price? What’s even the problem?
    - hutzlibu 7y ago
      Because buying extraction rights from corrupt politicians who happen to be in the declared backyard of the empire number one, famous for covert operations .. might have not much to do with "fair capitalism" and investment..
    - sp332 7y ago
      So whoever discovers something automatically owns it? What if I discover an oil field that continues under someone else's land - is it mine because I discovered it? Do I get to take all the oil as long as the extraction equipment is only on my land? If my extraction activities lower the value of their land, do I owe them damages? My point is not to actually get into these details but to point out that capitalism does not give the answers. Capitalism can only start after you have nailed down the rules about how public and private property work.

godelski 7y ago

Considering this is explicitly stated to be for welfare, it would be really interesting to see a major UBI experiment. If the fund doesn't grow there's 186k 4 per person could be 12k/yr for over 15 years.

Ididntdothis 7y ago
15 years is not UBI. If you can’t rely on it being around for the rest of your life it would be insane to leave your career to live on UBI.
- belltaco 7y ago
  I don't the point of UBI is for everyone to leave their careers. If anything, it's the opposite.
  - godelski 7y ago
    Which is exactly why UBI is generally suggested to give below the poverty line. Enough to survive but not enough to be comfortable. Enough to get you through downturns but not enough where you'll abandon a well paying job.
    - giarc 7y ago
      I believe it was Andrew Yang who talked about UBI on Recode podcast recently. He also talked about UBI giving people the freedom to try something new. You may be more likely to start a business if you knew you had something to fall back on. This might be especially beneficial in the rural areas of America where $1000/month will support you longer than in urban centres.
    - buboard 7y ago
      Which is why i can't fathom why every business would not raise their prices to match the UBI minimum. I mean it's not like there would be anyone who can't afford that.

capsch 7y ago

Yes those social Norwegian's invested; and the UK gave there north sea oil revenues to all the oligarchs

coliveira 7y ago
Yes, most capitalist countries decided to help the rich and are now singing the blues with their social services being depleted. I wonder if the billionaires of the world will do anything to help workers (rhetorical question, of course they will see this as just another opportunity to make more money).
NeedMoreTea 7y ago
Of course the UK has a far larger population, so it would be worth far less per capita. It's sobering to remember that Norway started this fund only in 1990. The UK mooted but cabinet ultimately rejected a North Sea Oil fund on similar lines in 1975. It was suggested by Tony Benn while he was Energy Minister. All that did materialise was the British National Oil Corporation (later Britoil having been privatised by Thatcher, now BP) as operator. What a waste.
- sgt101 7y ago
  The UK was more or less on it's knees in 1975, I think that without North Sea Oil there would be very little chance that it could have build the services economy and infrastructure it did in the 80's and 90's. I think that you also give our politicians too much credit in terms of managing a fund; remember that the UK was the biggest recipient of marshall aid after the war, and it spent it on patrolling an empire that it was clearly about to lose and subsequently lost. I think that politicians of both parties would have been very likely to raid any fund and use it for vanity projects.
  - NeedMoreTea 7y ago
    As was most of the western world, recovering from the oil crisis of 73, and experiencing chaos as a result through the rest of the decade. Hardly unique to the UK. UK was largest recipient of Marshall aid for having the most need along with France only slightly behind. Being used as you say for maintaining world power status, and into the general treasury fund. We spent less on infrastructure during Marshall aid than without! They pissed that away just like was done with all oil revenues. Considering the vast majority of oil revenues went on empty tax cuts and benefit spending through Tory created recessions, I'm not sure we'd have noticed the difference. 1 or 2p off income tax barely registers. I know I noticed none of Lawson's tiny bribes. At all. :p The politicians would not, and should not be managing it being better served as some sort of apolitical hands off trust. I don't think politicians manage Norway's fund. Now there is little doubt that it would not have survived the privatisation and asset stripping of the eighties on unscathed, but, like the NHS there's no reason to suppose it would have been destroyed. The Tories debated but chose not to re-privatise the NHS in 51. Thatcher had a selection of industries that were felt were beyond the pale that were subsequently privatised by later administrations. Created in 75 might have been a bit late for achieving adequate perception in the public consciousness so who knows. Still, it remains one of the very many great missed British opportunities that could easily have been a couple of trillion or more by now. 15 years of additional contributions and growth. There's many nations have sovereign wealth funds now, we easily could have too.

buboard 7y ago

Assuming that a fund like that grows ~10% per year or so, each norwegian makes a bonus of 19230.7 just by existing. That is enough for a family to live in the european south. https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Norway#/media/File:Norway_Oil_Fund.png https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...

getup8 7y ago
"Since 1998 the fund has generated an annual return of 5.8 percent, or 4,404 billion kroner."
- buboard 7y ago
  Still, for a family of 4 that's ~ 45.000$ of free money. If southern european countries were smart , they would give incentives to norwegians to move there and have a permanent vacation in the sun.
  - vasco 7y ago
    The fund is not distributing to citizens like that.

lelima 7y ago

A friend lives in Oslo, sometimes I visit, it shock me the amount of electric vehicles, in one single street all cars parked were Tesla(not the posh area). The city have so much nature, is even hard to explain.

daj40 7y ago
Along with being more eco minded, electric cars are actually more affordable in Norway, there is a significant tax placed on other vehicles. https://elbil.no/english/norwegian-ev-policy/ https://elbil.no/english/norwegian-ev-policy/
- Y_Y 7y ago
  They let poor countries burn the oil, and use the money to pay for electric cars.
  - kwhitefoot 7y ago
    True but other countries also let poor countries burn the oil and do nothing useful with the money.
    - Cthulhu_ 7y ago
      Some invest it themselves into real estate, both in their own country (like highest towers, most fancy hotel, palm tree shaped islands) and abroad (skyscrapers and office buildings in various financial structures). They're really setting themselves up for them and their future generations to remain rich and comfortable for the forseeable future even when oil dries up or demand goes down.
- chrisbolt 7y ago
  Gas is also highly taxed, third highest prices in the world: https://www.globalpetrolprices.com/gasoline_prices/ https://www.globalpetrolprices.com/gasoline_prices/
deleted 7y ago
[deleted]

Leader2light 7y ago

Norwegian success is the single biggest piece of evidence as to why small white society is the best way for humans to live.

harryh 7y ago

Some points of comparison. - CalPERS[1] has about $360 billion in assets under management. - The US Social Security Trust fund (which, depending on your POV you might count as an accounting fiction) is about $2.9 trillion. - Vanguard has about $5.3 trillion in AUM. 1. California Public Employees' Retirement System

millettjon 7y ago
How many employees does this cover? California has almost 40 million people. Norway has about 5.3 million.
- harryh 7y ago
  ~1.6 million employees + their families for CalPERS

dorfsmay 7y ago

Think hard about it, would you rather your government do something like this, or get a cheque every year like in Alaska (or right before an election in Alberta)?

badestrand 7y ago

This transparency is just admirable, with investments down to the exact real estate properties that is invested in. Just beautiful.

nshung 7y ago
So much transparency is that, in Norway, you can look up the yearly income of anyone online on the government's website :)

Gravityloss 7y ago

Does Alaska have something like this? Or Texas?

RankingMember 7y ago
Alaska does, and also pays a dividend every year: https://en.wikipedia.org/wiki/Alaska_Permanent_Fund https://en.wikipedia.org/wiki/Alaska_Permanent_Fund

royandre 7y ago

Our fund has grown by 500 Billion Norwegian kroner (aprox $55 USD Billion) just since April this year

joshspankit 7y ago

There but for the poor policial decisions goes Canada

a-priori 7y ago

I did some quick math and with their current annual return rate of 5.8%, the returns from the the Oil Fund could finance the government's budget entirely once it gets to be about $2T in size. That's about 2x its current size. That's still about 20 years away at their current growth rate, and the government budget would probably increase by then, but it's still probably achievable. What happens then? Norway could theoretically cut its other income, including income tax, to zero and still maintain its current expenses.

marvin 7y ago
Unfortunately (as a Norwegian), that is never going to happen. Norway's is a success story, but there is a darker side to the oil fund. This money will be spent on something. Our public sector has a tendency to grow without questioning from any political group, such that the total tax level stays the same, regardless of any incomes from the oil fund. Currently, 1/3 of working-age Norwegians work in the public sector. 1/3 works in the private sector, and the final third are either unemployed or qualify for government benefits. (Meaning: Retired, long-term disabled, in full-time parental leave and so on). That this seems sustainable at all is very strange. We might as well go straight to a large-scale basic income experiment, because we almost have a basic income system in place already. In my opinion, this would be a more honest way of providing government benefits than the system we already have. Currently, 3-4% of the oil fund is liquidated each year to pay for the deficit in the national budget, while total taxation has in fact _increased_ under the current Right government. To my eyes, Norway has an exotic form of Dutch Disease in the form of our government spending, which is prevented from becoming a catastrophe by the oil fund. It will be interesting to see what the future brings, but it's not all roses.
- dkural 7y ago
  I agree with your general argument - one thing to nitpick. Full time parental leave is not a bad thing in creating social wealth. Domestic labor is often unappreciated - until one has to do it or pay for it. I wouldn't lump those in with what you clearly consider "unproductive" use of human capital and labor. You get the benefit of a meal or a clean house, and if you pay for a maid and a cook, it also shows up on the national statistics for GDP.

growlist 7y ago

I do wonder whether this fund should be subject to punitive measures, since it is built on an activity that is generally acknowledged to be destroying the planet. It's not right that a group of people should be able to insulate themselves from the carnage they have wrought.

abvdasker 7y ago

A lot of comments in this thread seem fixated on the fact that this originated from oil profits, but to me it feels like more of a consequence of the Norwegian government's partial public ownership of its domestic energy companies and other industries. Lots of countries have a surplus of at least one natural resource; few of them have central governments with the authority (and lack of corruption) to publicly own those resources. Most governments just can't keep their hands out of the cookie jar. Every time I hear someone talk about socialism, whether its pundits or politicians or columnists, they talk about welfare. Everyone seems to have forgotten that that public ownership of capital is by definition the more important part of socialist policy that makes welfare possible. Norway is probably the best example of this idea's power. I'm not saying socialism is without weaknesses, but I don't understand how anyone can look at Norway and think that it doesn't work or is somehow evil.

asdfgasd 7y ago
Yes, thinking of funds like this as cash flow is absolutely a mistake. Strong democratic ownership of capital will be necessary for true democratization of society, and this is an important step (although too centralized in my uninformed opinion :D).

rfwhyte 7y ago

One of the most mind blowing things to me, is that where I'm from (Canada) we've pumped almost 2.5 times more oil and gas than Nowrway over the past 30 years, yet our "oil fund" is somewhere around $20 Billion. Norway decided the benefits of resource extraction should be universal, while my country decided that the benefits should go to the wealthy and multi-national corporations.

mdorazio 7y ago
Ha. Here in the US where we produce more than double what Canada does, there isn't even an oil fund.
- outside1234 7y ago
  The oil fund is Exxon, which is in the S&P 500, which is in your 401k.
  - odonnellryan 7y ago
    Only available to people who have the means or opportunity to invest. We're taking from everyone and giving to few.
    - hcurtiss 7y ago
      There are a lot of people who rely on those investments, whether through their government retirement, their employer's retirement, or through their own holdings. Even many social programs are funded with investments in equities.
      - asdfgasd 7y ago
        Slightly less than half of all Americans have any investment in the stock market. Pension funds were largely replaced with 401k's, but salaries were not increased to compensate. While you're technically correct, the stock market primarily benefits those with enough disposable income to generate large investments where they do not need to draw down the principle, and that certainly isn't the majority of Americans.

outside1234 7y ago

And all it cost was the earth's climate. I think this "oil fund" will be an interesting target when countries and states start disappearing under water and their crops start failing for reparations. Also, why does Norway not contribute the full 2% to NATO spending again?

punnerud 7y ago
We have the second largest investment per person in NATO. 1. US = 1894 USD (3,5% GDP) 2. Norway = 1483 (1,61%) 3. UK = 899 (2,1%) 4. France = 787 (1,81%) 5. Canada = 643 (1,23%) https://www.regjeringen.no/no/tema/forsvar/innsikt/budsjett/budsjettgrafikk2019/nato/id2613480/ https://www.regjeringen.no/no/tema/forsvar/innsikt/budsjett/... Because of the GDP-measure, if we stop producing oil/gas we will be over the 2% but with a lot of value in the ‘bank’. So the GDP measure is not the best. We still try to get to 2% by building up our own industry around the money, not pending it blindly.
- outside1234 7y ago
  The NATO treaty is that every member will spend 2% of GDP and nothing about per person or per capita. This keeps it fair for countries that are less wealthy.
UnFleshedOne 7y ago
Yes, the solution to that is obviously to burn most of the oil money now, so there will be nothing for others to come after and give the rest to oligarchs (those guys know just where to hide it). Good to see that the rest of the world is working tirelessly at that.

dg4 7y ago

It's interesting to me that they don't appear to hold private equity or venture funds, unless I'm missing something. Presumably at that scale they have unlimited access to any asset class in the world. Does anyone have any insight as to why they might be avoiding those?

duderific 7y ago
My guess would be that they are considered too risky.
punnerud 7y ago
I am living in Oslo/Norway, and there is a bill now on vote to open up for investment in companies that are not listed.

wslh 7y ago

Holding details: https://www.nbim.no/en/the-fund/holdings/holdings-as-at-31.12.2018/ https://www.nbim.no/en/the-fund/holdings/holdings-as-at-31.1...

Kjeldahl 7y ago

Surprised nobody mentioned that the whole fund and its future returns have been promised away already as future pension for the people working for the government (far too many). This is due to politicians and a too large part of the population that mistake "feeling good" as "being smart", and failure to recognize that the economic model that has worked for as long as the oil revenues kept flowing in, will stop working once the oil revenues start declining. There is no frugality, and all the traditional parties on the right/conservative side would be characterized as socialist in most other developed countries. And as the government overspending keeps growing, so do the taxes...

andness 7y ago
The "About the fund" page has a section called "The fund's purpose and history" which seems to completely contradict what you're saying.
- marvin 7y ago
  It's a contentious political question, and it's impossible to make predictions about how the fund might eventually be emptied. We could easily end up on a track that would empty the fund in 50 years, but of course you'd hope the electorate is wise enough not to let this happen.

Expez 7y ago

I haven't seen this fact mentioned in this thread yet, but it's super important: This stack of money doesn't belong to any one generation. It's set aside for all future generations to enjoy. Each year the government can choose to pull some of the money in to the current budget, but by law[0] they can't pull in more than 3%. This is the fund's estimated sustainable yearly return (It was adjusted down from 4% in 2017). Some posters in this thread seem to think that this is all going to get spent on covering too-generous promises of pensions (yes we have those too!), but that isn't going to happen. It would be a travesty to rob Peter to pay Paul even if Peter hasn't been born yet. Everyone here generally agree on this. [0] https://www.statsbudsjettet.no/Statsbudsjettet-2019/Statsbudsjettet-fra-A-til-A/Handlingsregelen/ https://www.statsbudsjettet.no/Statsbudsjettet-2019/Statsbud...

beeschlenker 7y ago

Copy and paste this post and repost it. I keep getting censored by these people. Peter Thiel and Jack Dorsey raping and killing three boys each. Turn the volume all the way up and put head phones on.[ https://s3.wasabisys.com/conv1/Overnight_14-17Jan/15JanCh3_100-200.avi https://drive.google.com/file/d/1mzZrjobxhNIEf38M3xk-IeA5SeF4aUtB/view?usp=sharing Obama admits to raping and killing boys here, with commentary from Peter Thiel, George Soros, Matt Porter: https://s3.wasabisys.com/out2/Out2/15JanCh3_0545.avi https://drive.google.com/file/d/1LCDoc1kT7cfSeKQ1vniP_sx32_bRsHau/view?usp=sharing Obama explains the Illuminati with Jack Dorsey: https://s3.wasabisys.com/conv1/Overnight_14-17Jan/15JanCh3_200-347.avi https://drive.google.com/file/d/1Ok1-9IvANULzKBOwADFgaiYCFi6yszfj/view?usp=sharing At 230 a conversation is occurring on the embedded Porter camera system with Jack Dorsey, Peter Thiel, Barack Obama, Bill M^urray, and the Porter's. Jack Dorsey provides a statement defining who their group is: "The Illum%inati is an underground organization of child rapists and homosexuals." Matthew Porter: "We have to thin the herd, so Barack is going to explain a few things." At 232 Barack Obama says the following: "You people have to realize we are child rapi'sts. The Illuminati are child rapists. As soon as you figure that out, you can decide what to do. Everybody is freaking out about what just happened [child raping event still going on]. This is who ^we are." Full 71 page document: https://s3.wasabisys.com/aviewmefirst/FBI_FinalDraft_26Jul2019_BSchlenker.pdf

simonebrunozzi 7y ago

Interesting news [0] on companies that were previously on the "black list" of the fund's investments (most notably, Rio Tinto): > "Decision to revoke exclusions of companies from the Government Pension Fund Global" > Norges Bank has decided to revoke the exclusions of Grupo Carso SAB de CV, General Dynamics Corp, Nutrien Ltd, Rio Tinto Ltd, Rio Tinto Plc, Walmart Inc and Wal-Mart de Mexico SAB de CV from the Government Pension Fund Global. [0]: https://www.nbim.no/en/the-fund/news-list/2019/decision-to-revoke-exclusions-of-companies-from-the-government-pension-fund-global/ https://www.nbim.no/en/the-fund/news-list/2019/decision-to-r...

nojvek 7y ago

The thing that's the most powerful to me is that they actively decide which companies aren't following ethical practices and decide to invest away from them. https://www.nbim.no/en/the-fund/news-list/2019/decision-to-revoke-exclusions-of-companies-from-the-government-pension-fund-global/ https://www.nbim.no/en/the-fund/news-list/2019/decision-to-r... When the companies behave properly and decide to follow ethical behavior, they put them back again on the investment list. I also wonder how the Softbank 100B vision fund is going to fare compared to the Norway investment fund. Although 5% growth rate sounds meager, they have done well since 1998, and it seems that the fund is generally betting on low risk returns. Massive kudos to Norway for showing the world how not to fuck up your country like Venezuela when you're sitting on a money mountain.

seaghost 7y ago

Right people on the right places. Simple as that.