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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 pos

by 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.
  - buboard 7y ago
    > I wonder if it's about being developed, vs being about having a high-trust society? Thats a virtuous loop. You institutions work because you trust that strangers trust your institutions.
    - imtringued 7y ago
      Yes, that is how trust works.
  - AlexTWithBeard 7y ago
    It's about Norwegian climate: you don't work - you freeze to death in winter. In a dozen of generations an idea that everyone must work hard becomes an obvious thing.
    - achillesheels 7y ago
      I would expect similarly: if you are vocationally dishonest you will freeze to death.
    - varjag 7y ago
      Norwegian climate in the most populated areas isn't particularly harsh.
      - hdfbdtbcdg 7y ago
        Snow and ice 5-7 months of the year in Oslo...
        varjag 7y ago
        If by 5-7 you mean 3-4 in a good year, sure.
        hdfbdtbcdg 7y ago
        No I mean 5-7. The skiing is rubbish until January but the ground is frozen by the end of October and defrosts in late March/early April. Lots of places have colder winters than here but they do drag on.
- stingraycharles 7y ago
  But to have the restraint of not spending the money and putting it into a fund is a whole different level. Being from the Netherlands, which has/had large gas fields, it makes me jealous our government didn’t have a similar foresight.
- collyw 7y ago
  Wasn't most of the middle east pretty undeveloped before oil?
  - beat 7y ago
    Most of the middle east is underdeveloped today. There's been some progress (sometimes huge progress, such as Iran), but it may be a generation or more before they really catch up.
  - smcl 7y ago
    That’s precisely the point the GP is making
  - buboard 7y ago
    Yes and it remained that way
- kyruzic 7y ago
  The US and Canada (Alberta) both were as well. Yet both have massive debt instead of huge amounts of money.
  - endorphone 7y ago
    In the US, and to a lesser extent Canada, the idea of the state benefiting too much is seen as lefty socialism (Canada briefly flirted with economic nationalism with the creation of Petro-Canada, but this was vehemently opposed by US energy companies). So we have a classic situation where the profits are privatized to the very few, and the costs are socialized (climate change, abandoned wells, pollution, etc).
  - buboard 7y ago
    as mentioned elsewhere, they don't export nearly as much oil
- djsumdog 7y ago
  The Dictators Handbook is a great book that talks about how natural resources can lead to autocracy a lot of times, because leaders can extract resources, sell them to get money/power and not give a damn about individuals. Countries that have fewer resources tend to need support from a larger selectorate and tend to (not always) lead to more democratic societies. So that does go with what you said (I don't know their oil history, but I assume they build a society that was culturally western European before they discovered and started extracting oil resources).
- aussiegreenie 7y ago
  There is/was more oil in the UK controlled North Sea and England has nothing from the resource. Australia is the largest exporter of LNG and gets about 3% of the Royalties that Qatar earns. it is simply incompetence and corruption.
  - imtringued 7y ago
    I'm sure some England has something from the resource but most of the wealth probably accumulated in the hands of one or two people.
- agiri 7y ago
  Norway was a poor country prior to the discovery of oil, mostly farmers and fishermen
blub 7y ago
There's a newer study from 2017, where the average is 232.800€, but the median is 70.800€ net. I'm not sure what net/gross is supposed to mean in this context. The big difference between the two suggest an unequal distribution of wealth.
- iguy 7y ago
  That's a pretty small difference, in such numbers, I think. If everyone had exactly the same job, and saved 10% for retirement their whole working lives, and got promoted occasionally, then you'd get about that much skew.
ekr 7y ago
Farouk al-Kasim is the Iraqi who is said to have played a big role in this outcome. I believe his story has been on HN before: https://www.ft.com/content/99680a04-92a0-11de-b63b-00144feabdc0 https://www.ft.com/content/99680a04-92a0-11de-b63b-00144feab...
- punnerud 7y ago
  And I think Brazil is trying to replicate the model
  - knd775 7y ago
    No, this is what Brazil should've done decades ago but could not due to corruption and short-sightedness. Nowadays, the only model that they are trying to replicate is that of authoritarian regimes.
  - flaviojuvenal 7y ago
    how so?
- KFC_Manager 7y ago
  This might be a good resource to get some more context on different countries’ energy systems and where petroleum plays in. https://ocw.mit.edu/courses/sloan-school-of-management/15-031j-energy-decisions-markets-and-policies-spring-2012/lecture-notes/ https://ocw.mit.edu/courses/sloan-school-of-management/15-03... This is particularly visual. Not taking away from Farouk al-Kasims contribution but find Norway to see how unique their particular situation is.
  - KFC_Manager 7y ago
    Forgot the link to the energy maps https://e-reports-ext.llnl.gov/pdf/473335.pdf https://e-reports-ext.llnl.gov/pdf/473335.pdf
    - ZeroGravitas 7y ago
      Those are a little hard to compare since the green square for petroleum is the same size reagrdelss of number. But ignoring that, Norway's chart don't seem that different from Iran, Iraq etc. What did you intend to demonstrate via these charts.
ASalazarMX 7y ago
I'm sure many crooks are salivating and dreaming ways to get their hands on that money. Impressive governance.
fulafel 7y ago
I wonder which model is better for phasing out oil/gas extraction, which is a precondition to stopping climate change. It might be bad for the voting public to be invested in oil.
- UnFleshedOne 7y ago
  If public receives regular dividends then yeah, there is a risk. If the fund is used for large scale projects and as an emergency fund, then votes are harder for populists to buy. There are fewer vested interest with a megaphone that would stand to personally lose or gain massively, so more rational discussions can be had.
- atq2119 7y ago
  The beauty of the Norwegian oil fund is that it isn't invested in oil. The fund grows from oil revenue, but it invests in all sorts of things that are specifically not oil. So there's not much conflict regarding oil divestment.
  - fulafel 7y ago
    I agree that the fund's diversification helps some. But the fund is still fed from the oil income. And some of the oil income is spent in state budget, not all of it goes into the fund. And this is in addition to all the money being pumped into the economy from the oil industry (Norway has high wages, most Teslas per capita, etc). I think the financials of the citizens are much more connected to the oil profits than in other developed oil producing countries like the USA/UK/Netherlands.
- SOLAR_FIELDS 7y ago
  Time will tell it seems. Norway is very invested in at least appearing to get out of the oil business and into renewables. Couple pretty significant moves include renaming Statoil to Equinor and rebranding all of their gas stations (many in Scandinavia are branded as Circle K now). Norway very much wants to get out of the perception of being rich because of oil.
  - 7y ago

by lnsru 7y ago

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.
- buboard 7y ago
  > I wonder if it's about being developed, vs being about having a high-trust society? Thats a virtuous loop. You institutions work because you trust that strangers trust your institutions.
  - imtringued 7y ago
    Yes, that is how trust works.
- AlexTWithBeard 7y ago
  It's about Norwegian climate: you don't work - you freeze to death in winter. In a dozen of generations an idea that everyone must work hard becomes an obvious thing.
  - achillesheels 7y ago
    I would expect similarly: if you are vocationally dishonest you will freeze to death.
  - varjag 7y ago
    Norwegian climate in the most populated areas isn't particularly harsh.
    - hdfbdtbcdg 7y ago
      Snow and ice 5-7 months of the year in Oslo...
      - varjag 7y ago
        If by 5-7 you mean 3-4 in a good year, sure.
        hdfbdtbcdg 7y ago
        No I mean 5-7. The skiing is rubbish until January but the ground is frozen by the end of October and defrosts in late March/early April. Lots of places have colder winters than here but they do drag on.
stingraycharles 7y ago
But to have the restraint of not spending the money and putting it into a fund is a whole different level. Being from the Netherlands, which has/had large gas fields, it makes me jealous our government didn’t have a similar foresight.
collyw 7y ago
Wasn't most of the middle east pretty undeveloped before oil?
- beat 7y ago
  Most of the middle east is underdeveloped today. There's been some progress (sometimes huge progress, such as Iran), but it may be a generation or more before they really catch up.
- smcl 7y ago
  That’s precisely the point the GP is making
- buboard 7y ago
  Yes and it remained that way
kyruzic 7y ago
The US and Canada (Alberta) both were as well. Yet both have massive debt instead of huge amounts of money.
- endorphone 7y ago
  In the US, and to a lesser extent Canada, the idea of the state benefiting too much is seen as lefty socialism (Canada briefly flirted with economic nationalism with the creation of Petro-Canada, but this was vehemently opposed by US energy companies). So we have a classic situation where the profits are privatized to the very few, and the costs are socialized (climate change, abandoned wells, pollution, etc).
- buboard 7y ago
  as mentioned elsewhere, they don't export nearly as much oil
djsumdog 7y ago
The Dictators Handbook is a great book that talks about how natural resources can lead to autocracy a lot of times, because leaders can extract resources, sell them to get money/power and not give a damn about individuals. Countries that have fewer resources tend to need support from a larger selectorate and tend to (not always) lead to more democratic societies. So that does go with what you said (I don't know their oil history, but I assume they build a society that was culturally western European before they discovered and started extracting oil resources).
aussiegreenie 7y ago
There is/was more oil in the UK controlled North Sea and England has nothing from the resource. Australia is the largest exporter of LNG and gets about 3% of the Royalties that Qatar earns. it is simply incompetence and corruption.
- imtringued 7y ago
  I'm sure some England has something from the resource but most of the wealth probably accumulated in the hands of one or two people.
agiri 7y ago
Norway was a poor country prior to the discovery of oil, mostly farmers and fishermen

blub 7y ago

There's a newer study from 2017, where the average is 232.800€, but the median is 70.800€ net. I'm not sure what net/gross is supposed to mean in this context. The big difference between the two suggest an unequal distribution of wealth.

iguy 7y ago
That's a pretty small difference, in such numbers, I think. If everyone had exactly the same job, and saved 10% for retirement their whole working lives, and got promoted occasionally, then you'd get about that much skew.

ekr 7y ago

Farouk al-Kasim is the Iraqi who is said to have played a big role in this outcome. I believe his story has been on HN before: https://www.ft.com/content/99680a04-92a0-11de-b63b-00144feabdc0 https://www.ft.com/content/99680a04-92a0-11de-b63b-00144feab...

punnerud 7y ago
And I think Brazil is trying to replicate the model
- knd775 7y ago
  No, this is what Brazil should've done decades ago but could not due to corruption and short-sightedness. Nowadays, the only model that they are trying to replicate is that of authoritarian regimes.
- flaviojuvenal 7y ago
  how so?
KFC_Manager 7y ago
This might be a good resource to get some more context on different countries’ energy systems and where petroleum plays in. https://ocw.mit.edu/courses/sloan-school-of-management/15-031j-energy-decisions-markets-and-policies-spring-2012/lecture-notes/ https://ocw.mit.edu/courses/sloan-school-of-management/15-03... This is particularly visual. Not taking away from Farouk al-Kasims contribution but find Norway to see how unique their particular situation is.
- KFC_Manager 7y ago
  Forgot the link to the energy maps https://e-reports-ext.llnl.gov/pdf/473335.pdf https://e-reports-ext.llnl.gov/pdf/473335.pdf
  - ZeroGravitas 7y ago
    Those are a little hard to compare since the green square for petroleum is the same size reagrdelss of number. But ignoring that, Norway's chart don't seem that different from Iran, Iraq etc. What did you intend to demonstrate via these charts.

ASalazarMX 7y ago

I'm sure many crooks are salivating and dreaming ways to get their hands on that money. Impressive governance.

fulafel 7y ago

I wonder which model is better for phasing out oil/gas extraction, which is a precondition to stopping climate change. It might be bad for the voting public to be invested in oil.

UnFleshedOne 7y ago
If public receives regular dividends then yeah, there is a risk. If the fund is used for large scale projects and as an emergency fund, then votes are harder for populists to buy. There are fewer vested interest with a megaphone that would stand to personally lose or gain massively, so more rational discussions can be had.
atq2119 7y ago
The beauty of the Norwegian oil fund is that it isn't invested in oil. The fund grows from oil revenue, but it invests in all sorts of things that are specifically not oil. So there's not much conflict regarding oil divestment.
- fulafel 7y ago
  I agree that the fund's diversification helps some. But the fund is still fed from the oil income. And some of the oil income is spent in state budget, not all of it goes into the fund. And this is in addition to all the money being pumped into the economy from the oil industry (Norway has high wages, most Teslas per capita, etc). I think the financials of the citizens are much more connected to the oil profits than in other developed oil producing countries like the USA/UK/Netherlands.
SOLAR_FIELDS 7y ago
Time will tell it seems. Norway is very invested in at least appearing to get out of the oil business and into renewables. Couple pretty significant moves include renaming Statoil to Equinor and rebranding all of their gas stations (many in Scandinavia are branded as Circle K now). Norway very much wants to get out of the perception of being rich because of oil.
- 7y ago