7 ms·

What should you do with an oil fortune?

28 points by MrsPeaches 3y ago

eulgro 3y ago
https://12ft.io/proxy?&q=https%3A%2F%2Fwww.newyorker.com%2Fmagazine%2F2023%2F08%2F14%2Fwhat-should-you-do-with-an-oil-fortune https://12ft.io/proxy?&q=https%3A%2F%2Fwww.newyorker.com%2Fm...
teddyh 3y ago
Ask Norway.
- Simon_O_Rourke 3y ago
  > Ask Norway This... The entire article could have been shortened to those two words.
  - dna_polymerase 3y ago
    The article is about shaming her for having some sort of privilege and what she wants to do about it.
    - karmakurtisaani 3y ago
      It, in fact, is not.
      - dna_polymerase 3y ago
        > “She has better politics than anyone else who’s that rich, and she’s better at fund-raising than anyone else with her politics,” Max Berger, who worked on Elizabeth Warren’s Presidential campaign in 2020, told me. Is all you need to know about the direction of this idiotic culture war piece.
        karmakurtisaani 3y ago
        Nope. I read it and found many interesting points on how the ultra rich on the left operate, as well as about this family that I had never heard of. If you want to see it as a culture war piece, then you will see it as a culture war piece, can't really help with that.
  - Epa095 3y ago
    The philosophy behind Norways management of the oil wealth is that the natural resources are the property of every future generation, not just the one that happens to extract the wealth. So it is invested to last "forever", and max 3% is taken out of the found every year. This had the added benefit of avoiding the "Dutch disease". Importantly, the goal is NOT to make a better world in general, but to secure income for the future generations while avoiding "clearly very bad stuff". Typical middle of the road stuff. This is a political discussion, and some parties want to "pull the wealth out of the hands of the money-bureaucrats and back under democratic controll" and use it to make a better world, even if means spending a significant chunk of future generations money. But currently the dominating view is that the primary goal of the wealth found should be a stable income, while avoiding the worst companies. I don't know if this is a satisfying answer to what a private person should do with their inherited wealth. Does she feel a moral obligation for her descendants to also be rich? Maybe she feels some obligations towards those suffering from climate change? Is she afraid of destroying local economy with inflation? Anyway, Norway don't have all the answers.
  - mycologos 3y ago
    No it couldn't have? The article is about an oil heiress who has spent her adult life working with and bankrolling various leftist causes, and is a long examination of how that kind of person fits into those causes. As the article puts it: > When libertarian or right-wing plutocrats buy influence—fossil-fuel executives pushing for deregulation, hedge-funders who want lower taxes—it’s easy enough to understand what they’re up to. But leftist class traitors are harder to pin down. They can always be suspected of performative reputation-laundering, or dilettantism, or dual loyalty. The left is wary of them for having been born into an obscene level of privilege; the right resents them for not having the common sense to shut up and enjoy it. It’s one thing to be a rich liberal—acknowledging your unearned privilege, endeavoring to leave the world a little better than you found it—and another to be a rich anti-capitalist radical, galvanized by the conviction that you are complicit in a historic injustice. Norway's oil fund, as far as I know, was started to exchange the country's hydrocarbon revenues for less volatile income and, in more recent years, avoid investing in places and companies that it deems unethical. It is still basically about growing investments, and its ethical choices are much more conservative and institutional than those covered in the article. I don't see how anybody could actually read this article and think it's asking a question that Norway's oil fund answers.
- karencarits 3y ago
  https://www.nbim.no/en/ https://www.nbim.no/en/
- vegabook 3y ago
  I've always wondered if Norway turning all its oil into dematerialized paper securities as fast as possible, is really a better long term investment strategy than just leaving this tangible commodity right where it is, to be tapped when it becomes really scarce at some point decades from now.
  - midasuni 3y ago
    If we get to a point oil is rare then we’re screwed as we’ll have burnt too much of it
  - n1b0m 3y ago
    What happens when the world moves on from oil and it’s no longer a valuable commodity.
  - qwytw 3y ago
    > increasingly scarce Is it increasingly scarce? Proven know oil reserves have been stable since ~2012 and are now about 50% higher than they were back in 1990. Of course the extraction cost has been going up as well since shale is not economical below a certain market price.
    - ricardo81 3y ago
      The average amount of energy to extract new reserves has steadily increased. I think ATM it's around 1/8th of oil/energy extracted is needed to extract said oil. So even if it's not scarce, the factor of how economical it is to grab it is a factor. Sorry, no source, but I'd read it recently.
  - psychphysic 3y ago
    It's worth it because it gives Norway huge geopolitical power through their choice of investment. It also means when push comes to shove invade Norway they have all the oil isn't everyone's top priority.
  - HPsquared 3y ago
    Someone else could move in and take the oil by force. Not so with paper securities.
- Oddskar 3y ago
  Sure they spent it on Norwegian people, but at the same time they're still enabling an unsustainable way of life for the rest of Europe. E.g. the gas and oil-dependence of Germany.
- dukoid 3y ago
  Isn't Norway a bit hypocritical: Amass wealth from providing fossils to other countries polluting the world, then be super environmental locally? Sure, still miles better than most of the other fossil rich countries, but the Netherlands for instance are actively shutting down their gas fields if I am informed correctly..
  - Epa095 3y ago
    Why is that hypocritical? Would it be less hypocritical if they polluted more locally?
  - ricardo81 3y ago
    Relatable, but if the proceeds go from 100% fossil fuel production to less than 100% that seems like an obvious net gain.
zabzonk 3y ago
> “She has better politics than anyone else who’s that rich, and she’s better at fund-raising than anyone else with her politics,” why i will never understand america
ricardo81 3y ago
The article reminds me of the philanthropists of the late 19th/early 20th century like Andrew Carnegie. His attitude was to amass wealth in the first half of your life and then give it away in the second. It makes sense to me that once you accumulate sufficient wealth, the surplus is for 'the greater good'. The big question is what is that greater good. I guess an easy answer to it is 'leaving the next generation in a better place than the previous'.
- keiferski 3y ago
  Not precisely accurate: he had a three-part life plan: The "Andrew Carnegie Dictum" was: - To spend the first third of one's life getting all the education one can. - To spend the next third making all the money one can. - To spend the last third giving it all away for worthwhile causes.
  - ricardo81 3y ago
    Ah, I stand corrected. Perhaps the same modus operandi all the same. That extra education third explains away why he donated so much towards libraries in the US and Scotland.
  - oh_sigh 3y ago
    Was that actually his life plan from the beginning, or was that a post hoc rationalization of his life?
    - keiferski 3y ago
      Well he grew up in poverty so I don’t think it was from the beginning. I do think that he became interested in philanthropy from his thirties onward and I believe he made his first library donation at at 44, but didn’t retire and commit himself to philanthropy full-time until his sixties.
- HumblyTossed 3y ago
  > The big question is what is that greater good. Yes. And the second question is, should only a handful of people be deciding that. They amass great fortunes on the backs of the labor force then tell them what's good for them is to ... go to mars[1]. The fuck!? No. Hell no. People shouldn't be allowed to be THAT wealthy. I don't know how that looks but just no. [1] Knowing full well that same labor force won't be invited.
mechhacker 3y ago
I was always inclined to spend it something like this if I had it: https://en.wikipedia.org/wiki/Kermit_Weeks https://en.wikipedia.org/wiki/Kermit_Weeks
xeckr 3y ago
The first paragraph reads like something written by a villain in an Ayn Rand novel.
dukoid 3y ago
How about repairing the damage done by polluting the world with hydrocarbons and combustion products?
aklein 3y ago
I can’t tell if this Max Berger quote is a lament or just unintentionally ironic: “Whatever you want to call my faction—the Bernie wing, the Warren wing, democratic-socialist, social democrat—we would have way less power if Leah didn’t exist.”
steveBK123 3y ago
Worst ways to spend a fortune, and her politics largely align with mine, but.. "funds social movements that want to end the use of fossil fuels" We won't "raise awareness" ourselves to a carbon-free future. We aren't going to vote away the need to heat/cool/power our homes/factories/transport/etc. I'm also let down by "kitchen sink progressives" who while espousing the desire to end fossil fuel usage, are basically funding/promoting just about every left of center activist topic you can think of. I don't think this leads to great success in any one area. I am fairly confident that activist-driven stuff around the edges like banning gas stoves in NYC is not putting a dent in the path to a carbon-free future. The only things that will are nuclear/wind/solar generation, storage tech, transit, smart grid/transmission lines, and all the permitting reform needed to keep the NIMBYs & degrowthers & fake environmental review people from slowing it all down. Basically boring non-sexy stuff that doesn't animate the base. I always find the 2nd/3rd generation philanthropist class a bit opaque as well. At least with the 1st generation, you have a pretty solid idea of their net worth and thus how much of a "sacrifice" their charitable works are (Gates/Mellon/Buffet/etc). With people like Hunt-Hendrix, you have only a pretty spotty record of giving (10s of millions) with no idea how much money she got for being born (50M? 100M? 2B?).
- steveBK123 3y ago
  And if you think I exaggerate the permitting reform stuff.. North of ~80% of IRA/CHIPS related investments since Aug 2022 have gone to red districts. https://www.ft.com/content/06fcd3dd-9c39-48d3-bb08-6d75d34b5ed1 https://www.ft.com/content/06fcd3dd-9c39-48d3-bb08-6d75d34b5... This lines up with the other numbers we have seen of oil&gas loving, renewable-hating Texas is also... the leading builder of renewables. Why? Because regardless of what the party controlling the statehouse prefers in red & blue states, it's just easier to build anything in a red state. Similar anecdote re: housing permitting/building in blue districts/states - in the entire 5 boros of NYC, there were ~200 housing unit permits approved in July. Look at some of the "housing units built per capita, by state" numbers like this - https://constructioncoverage.com/research/states-investing-the-most-in-new-housing https://constructioncoverage.com/research/states-investing-t... Blue northeast states like NY/PA/MA/NJ/MD are clocking in 18-30 units per 10K residents of construction. ID/UT/CO/SC/FL/NC/TX range from 66 to nearly 90 units per 10K residents. DC is an outlier as a high construction blue area around 66 as well.

28 points by MrsPeaches 3y ago

https://12ft.io/proxy?&q=https%3A%2F%2Fwww.newyorker.com%2Fmagazine%2F2023%2F08%2F14%2Fwhat-should-you-do-with-an-oil-fortune https://12ft.io/proxy?&q=https%3A%2F%2Fwww.newyorker.com%2Fm...

teddyh 3y ago

Ask Norway.

Simon_O_Rourke 3y ago
> Ask Norway This... The entire article could have been shortened to those two words.
- dna_polymerase 3y ago
  The article is about shaming her for having some sort of privilege and what she wants to do about it.
  - karmakurtisaani 3y ago
    It, in fact, is not.
    - dna_polymerase 3y ago
      > “She has better politics than anyone else who’s that rich, and she’s better at fund-raising than anyone else with her politics,” Max Berger, who worked on Elizabeth Warren’s Presidential campaign in 2020, told me. Is all you need to know about the direction of this idiotic culture war piece.
      - karmakurtisaani 3y ago
        Nope. I read it and found many interesting points on how the ultra rich on the left operate, as well as about this family that I had never heard of. If you want to see it as a culture war piece, then you will see it as a culture war piece, can't really help with that.
- Epa095 3y ago
  The philosophy behind Norways management of the oil wealth is that the natural resources are the property of every future generation, not just the one that happens to extract the wealth. So it is invested to last "forever", and max 3% is taken out of the found every year. This had the added benefit of avoiding the "Dutch disease". Importantly, the goal is NOT to make a better world in general, but to secure income for the future generations while avoiding "clearly very bad stuff". Typical middle of the road stuff. This is a political discussion, and some parties want to "pull the wealth out of the hands of the money-bureaucrats and back under democratic controll" and use it to make a better world, even if means spending a significant chunk of future generations money. But currently the dominating view is that the primary goal of the wealth found should be a stable income, while avoiding the worst companies. I don't know if this is a satisfying answer to what a private person should do with their inherited wealth. Does she feel a moral obligation for her descendants to also be rich? Maybe she feels some obligations towards those suffering from climate change? Is she afraid of destroying local economy with inflation? Anyway, Norway don't have all the answers.
- mycologos 3y ago
  No it couldn't have? The article is about an oil heiress who has spent her adult life working with and bankrolling various leftist causes, and is a long examination of how that kind of person fits into those causes. As the article puts it: > When libertarian or right-wing plutocrats buy influence—fossil-fuel executives pushing for deregulation, hedge-funders who want lower taxes—it’s easy enough to understand what they’re up to. But leftist class traitors are harder to pin down. They can always be suspected of performative reputation-laundering, or dilettantism, or dual loyalty. The left is wary of them for having been born into an obscene level of privilege; the right resents them for not having the common sense to shut up and enjoy it. It’s one thing to be a rich liberal—acknowledging your unearned privilege, endeavoring to leave the world a little better than you found it—and another to be a rich anti-capitalist radical, galvanized by the conviction that you are complicit in a historic injustice. Norway's oil fund, as far as I know, was started to exchange the country's hydrocarbon revenues for less volatile income and, in more recent years, avoid investing in places and companies that it deems unethical. It is still basically about growing investments, and its ethical choices are much more conservative and institutional than those covered in the article. I don't see how anybody could actually read this article and think it's asking a question that Norway's oil fund answers.
karencarits 3y ago
https://www.nbim.no/en/ https://www.nbim.no/en/
vegabook 3y ago
I've always wondered if Norway turning all its oil into dematerialized paper securities as fast as possible, is really a better long term investment strategy than just leaving this tangible commodity right where it is, to be tapped when it becomes really scarce at some point decades from now.
- midasuni 3y ago
  If we get to a point oil is rare then we’re screwed as we’ll have burnt too much of it
- n1b0m 3y ago
  What happens when the world moves on from oil and it’s no longer a valuable commodity.
- qwytw 3y ago
  > increasingly scarce Is it increasingly scarce? Proven know oil reserves have been stable since ~2012 and are now about 50% higher than they were back in 1990. Of course the extraction cost has been going up as well since shale is not economical below a certain market price.
  - ricardo81 3y ago
    The average amount of energy to extract new reserves has steadily increased. I think ATM it's around 1/8th of oil/energy extracted is needed to extract said oil. So even if it's not scarce, the factor of how economical it is to grab it is a factor. Sorry, no source, but I'd read it recently.
- psychphysic 3y ago
  It's worth it because it gives Norway huge geopolitical power through their choice of investment. It also means when push comes to shove invade Norway they have all the oil isn't everyone's top priority.
- HPsquared 3y ago
  Someone else could move in and take the oil by force. Not so with paper securities.
Oddskar 3y ago
Sure they spent it on Norwegian people, but at the same time they're still enabling an unsustainable way of life for the rest of Europe. E.g. the gas and oil-dependence of Germany.
dukoid 3y ago
Isn't Norway a bit hypocritical: Amass wealth from providing fossils to other countries polluting the world, then be super environmental locally? Sure, still miles better than most of the other fossil rich countries, but the Netherlands for instance are actively shutting down their gas fields if I am informed correctly..
- Epa095 3y ago
  Why is that hypocritical? Would it be less hypocritical if they polluted more locally?
- ricardo81 3y ago
  Relatable, but if the proceeds go from 100% fossil fuel production to less than 100% that seems like an obvious net gain.

zabzonk 3y ago

> “She has better politics than anyone else who’s that rich, and she’s better at fund-raising than anyone else with her politics,” why i will never understand america

ricardo81 3y ago

The article reminds me of the philanthropists of the late 19th/early 20th century like Andrew Carnegie. His attitude was to amass wealth in the first half of your life and then give it away in the second. It makes sense to me that once you accumulate sufficient wealth, the surplus is for 'the greater good'. The big question is what is that greater good. I guess an easy answer to it is 'leaving the next generation in a better place than the previous'.

keiferski 3y ago
Not precisely accurate: he had a three-part life plan: The "Andrew Carnegie Dictum" was: - To spend the first third of one's life getting all the education one can. - To spend the next third making all the money one can. - To spend the last third giving it all away for worthwhile causes.
- ricardo81 3y ago
  Ah, I stand corrected. Perhaps the same modus operandi all the same. That extra education third explains away why he donated so much towards libraries in the US and Scotland.
- oh_sigh 3y ago
  Was that actually his life plan from the beginning, or was that a post hoc rationalization of his life?
  - keiferski 3y ago
    Well he grew up in poverty so I don’t think it was from the beginning. I do think that he became interested in philanthropy from his thirties onward and I believe he made his first library donation at at 44, but didn’t retire and commit himself to philanthropy full-time until his sixties.
HumblyTossed 3y ago
> The big question is what is that greater good. Yes. And the second question is, should only a handful of people be deciding that. They amass great fortunes on the backs of the labor force then tell them what's good for them is to ... go to mars[1]. The fuck!? No. Hell no. People shouldn't be allowed to be THAT wealthy. I don't know how that looks but just no. [1] Knowing full well that same labor force won't be invited.

mechhacker 3y ago

I was always inclined to spend it something like this if I had it: https://en.wikipedia.org/wiki/Kermit_Weeks https://en.wikipedia.org/wiki/Kermit_Weeks

xeckr 3y ago

The first paragraph reads like something written by a villain in an Ayn Rand novel.

dukoid 3y ago

How about repairing the damage done by polluting the world with hydrocarbons and combustion products?

aklein 3y ago

I can’t tell if this Max Berger quote is a lament or just unintentionally ironic: “Whatever you want to call my faction—the Bernie wing, the Warren wing, democratic-socialist, social democrat—we would have way less power if Leah didn’t exist.”

steveBK123 3y ago

Worst ways to spend a fortune, and her politics largely align with mine, but.. "funds social movements that want to end the use of fossil fuels" We won't "raise awareness" ourselves to a carbon-free future. We aren't going to vote away the need to heat/cool/power our homes/factories/transport/etc. I'm also let down by "kitchen sink progressives" who while espousing the desire to end fossil fuel usage, are basically funding/promoting just about every left of center activist topic you can think of. I don't think this leads to great success in any one area. I am fairly confident that activist-driven stuff around the edges like banning gas stoves in NYC is not putting a dent in the path to a carbon-free future. The only things that will are nuclear/wind/solar generation, storage tech, transit, smart grid/transmission lines, and all the permitting reform needed to keep the NIMBYs & degrowthers & fake environmental review people from slowing it all down. Basically boring non-sexy stuff that doesn't animate the base. I always find the 2nd/3rd generation philanthropist class a bit opaque as well. At least with the 1st generation, you have a pretty solid idea of their net worth and thus how much of a "sacrifice" their charitable works are (Gates/Mellon/Buffet/etc). With people like Hunt-Hendrix, you have only a pretty spotty record of giving (10s of millions) with no idea how much money she got for being born (50M? 100M? 2B?).

steveBK123 3y ago
And if you think I exaggerate the permitting reform stuff.. North of ~80% of IRA/CHIPS related investments since Aug 2022 have gone to red districts. https://www.ft.com/content/06fcd3dd-9c39-48d3-bb08-6d75d34b5ed1 https://www.ft.com/content/06fcd3dd-9c39-48d3-bb08-6d75d34b5... This lines up with the other numbers we have seen of oil&gas loving, renewable-hating Texas is also... the leading builder of renewables. Why? Because regardless of what the party controlling the statehouse prefers in red & blue states, it's just easier to build anything in a red state. Similar anecdote re: housing permitting/building in blue districts/states - in the entire 5 boros of NYC, there were ~200 housing unit permits approved in July. Look at some of the "housing units built per capita, by state" numbers like this - https://constructioncoverage.com/research/states-investing-the-most-in-new-housing https://constructioncoverage.com/research/states-investing-t... Blue northeast states like NY/PA/MA/NJ/MD are clocking in 18-30 units per 10K residents of construction. ID/UT/CO/SC/FL/NC/TX range from 66 to nearly 90 units per 10K residents. DC is an outlier as a high construction blue area around 66 as well.