https://www.npr.org/sections/money/2011/09/06/140110346/how-...
Three of the six largest oil producers. Norway's lack of suffering from the so called resource curse isn't that special. What's special about Norway is their privilege to control so much oil with such a small population, quite similar to the sheiks of the Middle East (who have often made their people quite wealthy compared to their less oil fortunate neighbors, as in the case of Saudi Arabia, Kuwait or UAE). No coincidence Norway is also still a backwards monarchy that installs a king as head of state after a thousand years.
Our royal family is there mostly just for show. Lots of us walk past the castle on our constitution day and wave to the king and the rest of his family and they wave back. Over the remainder of the year they hold some speeches, attend some openings and other events.
We are a democracy, and the power that is given to our king in the Norwegian constitution of 1814, has actually been managed by the government instead for a long time since then.
The function of our monarchy is largely one of ceremonial nature these days.
There was a vote in stortinget a couple of years ago over whether to disband or retain the monarchy. 36 representatives vote for disbanding the monarchy, and 130 representatives voted for keeping it. I think this is reflective of the overall attitude that we have of our monarchy; some are against it but the majority wants to keep it.
· Norway is wealthy because of oil. Can it give up fossil fuels? | https://news.ycombinator.com/item?id=28576597#28577318 | 50 points | 66 comments
The previous discussion was also spawned in similar fashion:
· https://news.ycombinator.com/item?id=19594153 | 347 points | April 7, 2019 | 129 comments
· Battery Reality: There’s Nothing Better Than Lithium-Ion Coming Soon | https://news.ycombinator.com/item?id=19590854#19593054 | 443 points | April 6, 2019 | 249 comments
Some suggest the money raised went towards tax cuts and contributed to house price inflation. [1]
Although I'm not sure about house price inflation, as there has been similar inflation in Canada and Australia.
[1] https://www.theguardian.com/commentisfree/2014/jan/13/north-...
Norwegians need to erect monuments to this guy and help other countries like he helped them.
That was four years before al-Kasim stopped by the office in 1968.
> His was a lonely, contrarian voice. After examining exploration results, he wrote a report that warned Norway was sleeping, that even though no one had found oil yet, it was only a question of time. And time was short: the country’s leaders needed to prepare Norway to become an oil nation, but they were doing nothing. “I was a constant reminder that they were doing everything wrong,” al-Kasim says pointedly. Only his closest colleagues would listen.
There is another self-congratulatory norway article on the frontpage.
"Norway to hit 100% electric vehicle sales by early next year"
https://news.ycombinator.com/item?id=28777672
There was another one just a few days ago.
"Norway bans gas cars in 2025 but trends point toward 100%EV sales as early April"
https://news.ycombinator.com/item?id=28629184
There have been so much nonsense about norway peddled online for the past decade that I roll my eyes when I read the headline.
While there might be a lot of nonsense peddled around, this article does not belong to that category. It is about one man who saw something that others didn't and convinced them to heed his advice to the betterment of the entire Nation.
All this talk around foresight and smarts painfully ignores reality.
Mining activity is 10% of Australia's GDP. Mineral land rights in Australia are property of the government so why do overseas and private-domestic operators get to make all the profit? When Norway's example shows us that a publicly funded and owned industry was possible!
Too late now though - the last attempt to extract more value out of a booming industry led to the downfall of the government: https://en.wikipedia.org/wiki/Minerals_Resource_Rent_Tax.
This is demonstrably false: https://data.oecd.org/chart/6tTs
Compared to Norway's SWF:
- Fees are 20x larger as a proportion of AUM ($30 billion a year, nearly as much as the military budget, and 2x what the country spends on electricity)
- The assets are overwhelmingly owned by people who are already rich (Norway's SWF shares the wealth equally)
- Super has totally failed to prevent retirement poverty (elderly single women are the most impoverished demographic in Australia).
The post is about a person who has foresignt and self-determination, what is Australia meant to do about it?
Further, Australia is a lot more isolated than Norway.
(Australian BTW)
"its scotland's oil" was about Maggie Thatcher, and how the revenue was spent. Now scotland has independent tax raising powers, the border with england for sea resources was carefully restruck to favour england (look on a map to the boundaries, they aren't what you might think)
Australia has soverign wealth funds. Just, not made with revenue from this kind of industry. This kind of industry dominates the political landscape and has impeded the uptake of solar and wind, and replacement of coal for power generation. I don't mean silently: this is a quite overt distortion, active, such that major corporates actually have withdrawn from the australian mining and minerals council because its like the NRA, single-issue distorting of the polity.
In the early 2000s an Australian labor government tried to raise a tax analogous to a petrol royalties and revenue tax, and was pretty much de-elected by sectional interests on the strength of industry opposition. (the PRRT exists. the MRRT was voted down)
Mining employs around 40,000 people in a nation of 25 million. Solar and Wind and Tourism would probably employ more people. But, the voting effects of mining establish a lock on our senate (and sometimes, lower house) which make it next to impossible to see change. The industry is running the government, at one remove.
I don't believe for a minute Norway is all peaches and cream, but it probably has a better sense of cohesion around its role in the world, and the benefits of the sovereign fund, and future money, and de-carbonising the economy. Norway was an extremely poor, -to the extent of massive nutritional death in winter-poor economy. It's moved the dial to a different place, and done it quite carefully, economically speaking. (Norwegian settlers in the USA and Canada came because of a potato famine)
We're envious. (well, the Australians who don't derive income directly from mining, oil or gas)
Australia has done the opposite with their (our? I'm an ex-pat) natural resources.
https://au.finance.yahoo.com/news/why-australia-hasnt-had-a-...
Australia hasn't had a recession since the early 90s and you are complaining?
Of course, immigration-driven growth is great! But for people on the ground, what matters is GDP per capita, not total GDP.
Australia hasn't had a recession since the early 90s and you are complaining?
Just look at Norway as the example of how much better we could have done.
In turn, we wouldn't be lumbered with egregious mining billionaires like Clive Palmer and Gina Rinehart, who - among other monstrosities - heavily back climate-disruption denial.
You act as if the middle east is the only collection of countries beholden to oil exports, and the only countries making what would otherwise be considered short-sighted moves based on those exports.
Yes to all three. How could you have forgotten the colonisation of North America?
It’s almost as if you’re being intentionally obtuse. The established term (that I used) is “modern” colonialism - it doesn’t necessarily involve physical colonization, rather systematic external control.
Russia has been tussling with the West for a prolonged period now. Regardless, they are the second largest exporter of oil to the USA. (1)
Canada is an American, Western country. Not sure why they would fall under my reasoning, which was specifically about non-Western countries. The USA is the one usually leading this oil-hungry warring - it’s even a meme at this point.
Brazil has various issues, most stemming from external influences corrupting the local political powers. Oil is just one of them, they are also coerced to deforest their country for European exports. (2)
(1) https://www.bloomberg.com/news/articles/2021-03-24/russia-oi...
(2) https://e360.yale.edu/digest/major-portion-of-brazils-export...
a) Norway nationalizes their oil
b)Iran nationalizes their oil.
https://en.wikipedia.org/wiki/Dutch_disease
So a country without colonial intervention was still severely harmed. I'd argue similar dynamics apply to resource intensive US states - e.g. West Virginia. The article is largely about how an Iraqi helped Norway avoid the same fate which is really cool.
Certainly over-throwing the Iranian government was terrible. But the key point is that the core economic problem of a resource sector 'crowding out' productive investment is a completely separate issue that occurs frequently in western countries that feature near zero political interference.
However, we cannot also completely deny that they have had some foresight/smarts (and a large dose of luck) in managing their Oil boom.
I was less trying to make a bumpersticker point and more fishing for interesting perspectives like these to broaden my understanding of complex political/economic issues.
I'll ignore the part where you started off by attacking me and point out: I obviously wasn't saying any of the countries you outlined were LITERALLY colonies, so don't imply I did. Thanks.
>Russia has been tussling with the West for a prolonged period now. Regardless, they are the second largest exporter of oil to the USA. (1)
Right... their entire economy is based on "extractive economies".
>Canada is an American, Western country. Not sure why they would fall under my reasoning, which was specifically about non-Western countries. The USA is the one usually leading this oil-hungry warring - it’s even a meme at this point.
Again, their economy is based on "extractive economies" - Canada is entirely beholden to exporting natural resources to western nations, and they are one of the so-called "western" countries you claim this doesn't happen to.
>Brazil has various issues, most stemming from external influences corrupting the local political powers. Oil is just one of them, they are also coerced to deforest their country for European exports. (2)
So.... a western nation subjected to systematic extraction?
If GDP per capita is what you are interested in, you don't want immigration as it increases the "capita" part.
Also, Australia's growth had nothing to do with immigration. It had everything to do with China and China's economic growth.
Australia has the highest median household wealth of any country in the world. https://www.statista.com/chart/19651/countries-with-highest-...
https://knoema.com/atlas/Australia/topics/Economy/Financial-... https://knoema.com/atlas/Norway/topics/Economy/Financial-Sec...
However, I'd say the United Kingdom is an exception here as the Queen still has a lot of power, legally, many of which they have never exercised (atleast in a public manner).
Some weird quirks include not needing a license to drive or not requiring a passport for international travel. She doesn't need to pay taxes (but does pay some). Apparently the Queen of England also owns all Swans in around river Thames and all the Whales / Dolphins in British waters.
More serious powers include being immune to prosecution, exception from Freedom of Information Request, the ability to over rule ministry decisions (in case of emergency or constitutional crisis), the ability to dismiss a government and call for an election. Any law affecting the monarchy requires the "Queens consent" before it can be debated in Parliament or the Queen can also refuse her assent to discuss a particular bill in parliament. She is the Commander-in-Chief of the entire UK military and has the power to order a nuclear strike.
(Ofcourse, in recent decades, it is understood that most of these powers should only be exercised under the advice of the elected government, but that is not how the laws are written and framed. All in all, I'd say she is the most brilliant politician of the 20th century to hold on to power for so long.)
Some of the power you are referring to is the Royal Perogative in which the monarch is important constitutionally but not practically because the use of the Perogative is reserved for the Prime Minister.
Some of the things you mention, such as 'owning' swans and dolphins are not the possession of the Queen as a person (she can't sell them) but the Crown which is almost a deliberately confusing term that means the state. We'd talk about Crown buildings rather than government buildings for example.
Britan has a deliberately confusing unwritten constitution which works well much of the time and while we like to use language which makes it seem that the monarch has lots of power they really don't. The Queen absolutely does not have a nuclear button nor can she nuke anyone. The power to go to war used to be a Royal Perogative (the PM could declare war) but even this is now lost after adventures in Iraq and requires assent by parliament. Here you are confusing a symbolic role for a commanding role.
But no, I am not confused about the symbolic roles vs what is written in law.
I am an indian and our current Parliamentary system is a British legacy. We understood the need of a titular role like the Queen in our system, and thus created the position of the President for it. So in India, everything happens in the name of the President of India. E.g. A law becomes a law only if the President signs it. However, our constitution clearly defines the role and the post has no real power over the Executive, Parliament or the Judiciary.
Personally, my perception of the British monarchy has been that the laws assigning the power to the monarchy, as it was then written gives them a lot of power. But it is only in the last 3 - 4 decades that they are being interpreted more "democratically" in modern parliamentary traditions (a reflection of the changing times). And thus it is being taken to mean that all her powers can only be exercised "under the advise of the cabinet", even if some of the laws don't explicitly state that. (As you rightly pointed out, the lack of a written constitution is a very interesting feature of the British system, as it allows for a more "flexible" interpretation of the law by the courts).
Interestingly, unlike in the indian system, a Queen can actually refuse to sign a bill into law. (In India, it is clearly spelled out that the President can refuse to sign a bill into law and send it back to the parliament with his objections. But if it is sent back again, the President has no choice but to sign and make it a law). So in theory, the Queen can over rule any law abolishing the monarchy or its role in the British system! There's also enough leeway, in theory, in the laws for the Queen to assume full power anytime in the future as the Queen can dismiss an elected government and elections can only be held when the Queen calls for it.
> The power to go to war used to be a Royal Perogative (the PM could declare war) but even this is now lost after adventures in Iraq and requires assent by parliament.
If I remember right, didn't the Queen refuse to give her assent to table this bill to the Parliament? (One of the rare times she exercised this power).
In one instance the Queen completely vetoed the Military Actions Against Iraq Bill in 1999, a private member's bill that sought to transfer the power to authorise military strikes against Iraq from the monarch to parliament.
The maritime border used to be a straight east-west line despite the east coast of England being curved. In 1999 it was changed so that it followed established international maritime border conventions regarding distances from the mainland[0].
[0] https://en.wikipedia.org/wiki/Scottish_Adjacent_Waters_Bound...
On balance, the maritime border appears to me to have been restruck to be fair.
Obviously being given free oil money is better than needing to save.
OK, let me explain it. Yes, the assets owned by both funds are financial assets that are comparable. They both own bonds and corporate shares, etc. But the issue is not what assets are in the funds.
When you are given lots of money, this reduces poverty much more than when an individual gets a tax break on saving their own money. Norway has trillions in oil reserves to support a small population. I am not sure why I need to explain this, but having a trillion dollar windfall reduces poverty much more effectively than subsidizing the savings of each individual.
Moreover, when you save each pay period you have to make lots of small little asset purchases, as opposed to making huge purchases in a SWF fund in which the money comes from selling oil, so transaction costs are higher in a 401K style system than when you are sitting on an ocean of free oil.
The Queen, acting upon the advice of her government, refused to grant her consent for the Bill to be debated.
You see how this works? The Queen didn't just decide for herself.
Parliament is sovereign, it can vote to do away with any of these customs and traditions at any time it likes. But we like custom and tradition, it's part of our culture.
> it is only in the last 3 - 4 decades that they are being interpreted more "democratically" in modern parliamentary traditions
That is a ridiculously narrow view. There have been plenty of times we've had constitutional crises. We have an election to resolve them, such as the 1909 finance bill that resolved the issue of which chamber was supreme.
As I understand it the Alberta Fund is completely controlled by the province. There is some national policies, especially with exports, that falls under the Feds, but how much (or little) flows into the Fund is completely up to the province.
It is on Alberta itself that it decided to have low/er provincial income taxes and no provincial sales tax. Those things were 'funded' by the resource revenues, which effectively came a sort-of cheque to the habitants of the province. And when oil prices went down, government funded went sideways.
IMHO Alberta shouldn't blame Ottawa for not setting aside something for a rainy day.
The big example is the National Energy Program which (aside from its economic impact on the province) basically tainted politics in Alberta and probably contributed to their hesitancy to contribute to a fund which could potentially be raided by the Federal government in the future.
This is Alberta we are talking about? If in your hypothetical the Federal Government didn't mess it up the Province would.
* https://www.fraserinstitute.org/fr/node/9227
And they're not the only ones to be positive, as Ontario has had several surpluses or small deficits ($200M):
* https://en.wikipedia.org/wiki/Ontario_government_debt
This of course assumes that a balanced budget (or surplus) is something that even should be aimed for. Certainly one shouldn't go crazy with spending (especially when stimulus isn't needed), but the balanced idea seems to be a strange fiscal fetish that is over-focused upon.
Here's a 2001 legal review from glasgow Caledonia university which obviously favours Scottish interests: https://academic.oup.com/ejil/article/12/1/77/359040?login=t...
Here's closing remarks from the SNP on a parliamentary debate, that shows the predominant driving factor was fisheries, and (if you read the rest of the debate) suggests a lot of confusion about what was being discussed and why): https://www.theyworkforyou.com/sp/?id=2000-04-26.9.0#g58.1
Here's two extremely partisan takes by a pro Indy scot who claims to have previously negotiated sea boundary changes. What's interesting is the "northward drift" : https://www.craigmurray.org.uk/archives/2017/01/scotlands-st...
https://www.craigmurray.org.uk/archives/2012/01/scotlandengl...
That is what I am saying - If the $3 trillion in super were shared equally, poverty would be a lot lower. Keating himself says that he could have set the system up this way, but didn't because he wanted it to be a privatized system of individual ownership.
> Norway has trillions in oil reserves to support a small population.
Norway has $1 trillion in retirement savings to support a small population. Australia has $3 trillion in retirement savings to support a small population. What's the difference? Why does what asset class the money originally came from matter?
> I am not sure why I need to explain this, but having a trillion dollar windfall reduces poverty much more effectively than subsidizing the savings of each individual.
Once again, both countries have trillions in assets, that can be distributed in many possible ways. You can either distribute them equally and reduce inequality (Norway), or individually and make it worse (Australia).
> Moreover, when you save each pay period you have to make lots of small little asset purchases, as opposed to making huge purchases in a SWF fund in which the money comes from selling oil, so transaction costs are higher in a 401K style system than when you are sitting on an ocean of free oil.
That is not how super funds work (they don't make small asset purchases each time you make a deposit, they run a combined asset pool and just keep track of your allocation) and not why super fees are high. They are high because there are so many small funds which spend money advertising against each other and duplicating admin costs, instead of simply having one big fund like Norway does.
Uhh, this is private property, the result of individual households setting aside a portion of their own wages to save for the future. It is not politically feasible for the government to seize private savings it had said were previously for your retirement.
What you want is a defined benefit federal savings program (like social security), but that needs to be funded by taxing incomes, not by seizing existing private retirement savings. Some nations have that and others don't, but it's not a sovereign wealth fund. Please don't confuse the two issues being discussed.
The first issue is whether the government should tax the economy and pay out fixed retirement benefits for everyone, or whether it should promote individuals saving for their own retirement, or some hybrid of the two. This decision has nothing to do with SWFs. Australia has a hybrid system, where households are expected to save for retirement but there are also welfare programs for low income people. Most nations follow this model because it is what the public supports politically and it makes a lot of economic sense.
SWFs, OTOH, are created when a nation gets some unexpected windfall that is short lived, and it wants to smooth the life of that windfall into the future. That is why you invest. Otherwise when the oil runs out, Norway will face a shock. This way, by transforming the oil into investments, Norway can provide a stream of benefits that lasts longer than the oil. That question of transforming benefits across time for the government has nothing to do with whether the government provides defined benefit retirement plans or not for households. This is because even though every household has to plan for retirement when it earns no income, governments do not need to plan for a future when they earn no tax revenue. It is only when you get these predictable revenue bumps, such as discovering you are sitting on a pot of oil, that create a need for the government to smooth revenue across time.
Now Australia does have mineral resources and it even taxes the extraction of those resources just as Norway taxes the extraction of oil. But in Australia, the extraction of coal and iron results in a much smaller surplus spread over a much larger population, and so Australia's mineral wealth, while large in absolute terms, does not support the same level of surplus income per person as Norway's oil wealth - which is not to say that Australia's economy is less dependent on extraction than Norway's. Australia is very much dependent on all the jobs that mining creates, but that is not surplus income, it is income that has to be earned with labor. Therefore when Australia's coal and iron run out, it will be a big shock, but there is nothing Australia can do to smooth that income out, since it's not surplus income. This is why Australia does not put the fees obtained from mining into a SWF - they wont help!
Therefore Australia uses the proceeds from taxing mineral extraction for general revenue, it does not put the money into a special SWF pot, whereas Norway does. Just as Canada doesn't put the money it obtains from selling trees or rocks into a special pot. That decision to not stretch the revenue across time has nothing to do with whether the government has a defined benefit retirement system for households.
Yes - and that was a terrible decision. Australia could have put super contributions into a collective pool, and used the money to increase equality and fund above-poverty-line universal pensions, but it didn't. Instead they put it in individually owned accounts - inequality and poverty is much higher in Australia as a consequence. Elderly women are the most impoverished demographic in the country.
> What you want is a defined benefit federal savings program (like social security), but that needs to be funded by taxing incomes, not by seizing existing private retirement savings.
No, what you want is a collective fund like Norway's - you are talking like this doesn't exist. It would be very straightforward to tax super balances (particularly large ones) and move money into a collective pool.
> Some nations have that and others don't, but it's not a sovereign wealth fund. Please don't confuse the two issues being discussed.
Norway's SWF is literally a pension fund, and explicitly has the goal of creating equally shared wealth.
> SWFs, OTOH, are created when a nation gets some unexpected windfall that is short lived, and it wants to smooth the life of that windfall into the future.
No, that is one reason SWFs are created, but there are many - Australia's own SWF for instance was not created for this reason.
> But in Australia, the extraction of coal and iron results in a much smaller surplus spread over a much larger population, and so Australia's mineral wealth, while large in absolute terms, does not support the same level of surplus income per person as Norway's oil wealth
If we lack the surplus income of Norway, how have we managed to create a pool of wealth 3x as big from surplus incomes, in spite of wasting much more of it on fees each year?
> Australia is very much dependent on all the jobs that mining creates, but that is not surplus income, it is income that has to be earned with labor.
This is incoherent - both oil and mining resources require labor to extract. There's nothing special about oil or resources compared to any other type of capital - you can make a fund out of any type of capital.
Again, what is special about oil is that profits from extracting oil are very large, but the profits from mining coal are quite small. Therefore a nation sitting on a pile of coal has a great jobs program for employing coal miners, but not a lot of surplus industry income that can be taxed to give everyone in the country an extra 200K. A nation sitting on a vast pool of oil can do that.
> If we lack the surplus income of Norway, how have we managed to create a pool of wealth 3x as big from surplus incomes, in spite of wasting much more of it on fees each year?
Australia's large retirement funds are the result of a larger population saving for retirement. They are not obtained by taxing excess profits of the iron/coal industry, but by individual households cutting their spending and saving for retirement.
> Norway's SWF is literally a pension fund, and explicitly has the goal of creating equally shared wealth.
This is a non-sequitur. I am saying that we shouldn't confuse the policy goal of fixed versus individual savings programs with whether or not SWFs are used - as one is a retirement policy and the other is funding mechanism. A nation may want a defined pension but shouldn't have an SWF, or vice versa, or neither. The fact that you keep mixing them is not some rebuttal. It's like when I point out you shouldn't confuse colors with gender of animals, and you say "False, this is a blue, male bird!" At this point I have to disengage.
Are you aware of how Australia's superannuation system works? Contributions are literally paid from company income. You are saying it would be impossible for Australia to save trillions from surplus income when this has already happened and is the basic design of the scheme!