—“Norway’s modern manufacturing and welfare system rely on a financial reserve produced by exploitation of natural resources, particularly North Sea oil.”—
Look. I have a non-trivial understanding of economics. Norway is the Scandinavian version of Dubai. The Dubai has 4 billion barrels and Norway has 5.5 billion barrels in reserve. Just like Dubai can operate on a resource economy, Norway can. For exactly the same reasons.
—“Forty years of oil and gas production has produced values of $1.2 trillion for Norway and the petroleum sector accounts for 22% of Norway’s GDP. The petroleum industry has enabled one of the most extensive welfare systems in the world, with free public health care and generous disability and unemployment benefits. To provide a buffer when the petroleum revenues decrease the Government Pension Fund was established in 1990 and its current value is over $500 billion. The so-called spending rule, made effective in 2001, states that only the real returns of the fund (estimated to be 4% per annum) should be spent in the national budget, thus saving oil wealth for future generations.”—
At current rates of consumption Norway has (optimistically) 24 years of oil production left. In other words, one new generation. After that it will dwindle. We can expect Norway to incrementally tighten r
Dubai is investing in becoming the arab world’s switzerland, and norway is investing in fulfilling the scandinavian utopia. While dubai’s objective is sustainable, norway’s is not.
Norway is not repeatable any more than Dubai is repeatable. And norway will change rapidly in the foreseeable future because of it.
That’s the answer.
YOU CAN’T DO SOCIALISM (FOR LONG).
In the end it destroys everything. Corruption and black markets, Incentives to produce most importantly, prices and calculation and the impossibility of organizing production, and knowledge. Just can’t be done. It can be done in a few industries. But there is no escape from market forces any more than there is from gravity.
Eugenicists were right. There is only one route to permanent prosperity and that is the reduction of the unproductive classes. The bottom is 6x more damaging than the top is productive. and in an evenly rotating economy (no major asymmetries of technology) which the world is approaching, the size of the underclasses will determine the level of poverty.