4 ms·

Sure, but Norway is really the exception to the rule. Dutch disease is pretty much universal.

ashtonkem 7y ago
It’s not though. America’s an oil producing nation, as is the UK and Norway. Dutch disease is common, but hardly universal. There are known mitigation techniques that can be applied, including a sovereign wealth fund.
- dredmorbius 7y ago
  As I just commented elsewhere in thread,[1], the US is an exception. But there are multiple factors: 1. The US ceased being a net oil exporter, and began importing oil, in 1950, over 70 years ago.[2] 2. When the US was an oil exporter, both global oil use and industrial capacity were far lower than today, and cargo shipping costs much higher. The US was among the early industrialised nations (with the UK, Germany, France, and Italy, generally), all (save Italy) with major coal reserves. For the US to meet industrial demand it largely needed to self-provision. 3. WWII. 4. Even within the US, oil-producing regions and industrial regions tended to be quite distinct. Norway became an oil exporter quite recently (major production largely coming online in the 1990s), and its economic and industrial policy has been excellent. The UK similarly, though it's arguably been hindered by a legacy industrial system as well as its role as a major finance centre (another form of Dutch disease). ________________________________ Notes: 1. https://news.ycombinator.com/item?id=23060290 https://news.ycombinator.com/item?id=23060290 2. With fracking, over the past 5 years or so, the US has exported ... some petroleum-based products, mostly lease condensate and natural gas liquids (NGLs), very light fractions of petroleum. This is unsuitable for motor fuel (its octane rating is too low, and much is sold to Venezuela and Canada, effectively to make their tar-like oil more soluble. This is likely a tem-orary circumstance.
  - ashtonkem 7y ago
    I agree that America is unique, but the presence of several examples of oil exporting nations avoiding Dutch disease proves that it’s not a guaranteed process, even if it is a likely outcome. Heck, the fact that America setup an industrial economy while being an oil producing nation is a fascinating counter example to Dutch disease.
    - dredmorbius 7y ago
      There's little in economics which is absolutely determinitive, and for a study whose formative work is titled An Inquiry Into the Nature and Causes of the Wealth of Nations, there's remarkable little by way of a generally accepted theory of national prosperity and decline, as leading luminaries will freely admit (Tony Atkinson and Paul Krugman do so here: https://youtube.com/watch?v=3l6E3mUNW70&t=38m53s https://youtube.com/watch?v=3l6E3mUNW70&t=38m53s). There are several powerful mechanisms, however, of which Dutch Disease / resource curse is one. (There's also Twyla Tharp's wonderful "Whom the gods wish to destroy, they give unlimited resources.") Understanding how it does apply, and why, and where it doesn't, is useful. I've pointed at mitigations for both. exceptions you note, though you don't appear to consider them. Paper, pen, and ink are useful in communications. But neither paper, pens, or ink do this exclusively, nor by themselves. The blank page, the one uniformly covered in ink, or the one scribbled on at random, communicate nothing. This doesn't mean paper, pens, and ink useless. Markings made according to rules of recognised charactersets, words, spelling, grammar, reference to existing facts, references, and concepts, logic, narrative, metaphore, nuance, and culture ... may succeed in communicating something. Occasionally truth. Theory of political economy operates similarly. Beware those offering blank pages, spilt ink, random scribbles, or writing lacking, or ignoring, coherence or correspondences.

It’s not though. America’s an oil producing nation, as is the UK and Norway. Dutch disease is common, but hardly universal. There are known mitigation techniques that can be applied, including a sovereign wealth fund.

dredmorbius 7y ago
As I just commented elsewhere in thread,[1], the US is an exception. But there are multiple factors: 1. The US ceased being a net oil exporter, and began importing oil, in 1950, over 70 years ago.[2] 2. When the US was an oil exporter, both global oil use and industrial capacity were far lower than today, and cargo shipping costs much higher. The US was among the early industrialised nations (with the UK, Germany, France, and Italy, generally), all (save Italy) with major coal reserves. For the US to meet industrial demand it largely needed to self-provision. 3. WWII. 4. Even within the US, oil-producing regions and industrial regions tended to be quite distinct. Norway became an oil exporter quite recently (major production largely coming online in the 1990s), and its economic and industrial policy has been excellent. The UK similarly, though it's arguably been hindered by a legacy industrial system as well as its role as a major finance centre (another form of Dutch disease). ________________________________ Notes: 1. https://news.ycombinator.com/item?id=23060290 https://news.ycombinator.com/item?id=23060290 2. With fracking, over the past 5 years or so, the US has exported ... some petroleum-based products, mostly lease condensate and natural gas liquids (NGLs), very light fractions of petroleum. This is unsuitable for motor fuel (its octane rating is too low, and much is sold to Venezuela and Canada, effectively to make their tar-like oil more soluble. This is likely a tem-orary circumstance.
- ashtonkem 7y ago
  I agree that America is unique, but the presence of several examples of oil exporting nations avoiding Dutch disease proves that it’s not a guaranteed process, even if it is a likely outcome. Heck, the fact that America setup an industrial economy while being an oil producing nation is a fascinating counter example to Dutch disease.
  - dredmorbius 7y ago
    There's little in economics which is absolutely determinitive, and for a study whose formative work is titled An Inquiry Into the Nature and Causes of the Wealth of Nations, there's remarkable little by way of a generally accepted theory of national prosperity and decline, as leading luminaries will freely admit (Tony Atkinson and Paul Krugman do so here: https://youtube.com/watch?v=3l6E3mUNW70&t=38m53s https://youtube.com/watch?v=3l6E3mUNW70&t=38m53s). There are several powerful mechanisms, however, of which Dutch Disease / resource curse is one. (There's also Twyla Tharp's wonderful "Whom the gods wish to destroy, they give unlimited resources.") Understanding how it does apply, and why, and where it doesn't, is useful. I've pointed at mitigations for both. exceptions you note, though you don't appear to consider them. Paper, pen, and ink are useful in communications. But neither paper, pens, or ink do this exclusively, nor by themselves. The blank page, the one uniformly covered in ink, or the one scribbled on at random, communicate nothing. This doesn't mean paper, pens, and ink useless. Markings made according to rules of recognised charactersets, words, spelling, grammar, reference to existing facts, references, and concepts, logic, narrative, metaphore, nuance, and culture ... may succeed in communicating something. Occasionally truth. Theory of political economy operates similarly. Beware those offering blank pages, spilt ink, random scribbles, or writing lacking, or ignoring, coherence or correspondences.