Ii is a capitalist country but it is dominated by state-owned enterprises; it is an oil giant but it eschews conspicuous consumption. For decades this unusual economic model has served Norway well: in 1970 it was in Europe’s middle ranks as measured by income per head. Nowadays, Norwegians are richer than everyone in Europe except the Luxembourgers. However, the model is beginning to run out of fuel.
The oil bust is exposing two weaknesses in the Norwegian model. One is bureaucratisation, born of Norway’s enthusiastic embrace of state capitalism. The government owns about 40% of the stockmarket, with large stakes in Telenor, a big telecoms operator; Norsk Hydro, an aluminium producer; Yara, a fertiliser-maker; and DNB, a bank, as well as Statoil. That leads to a monochromatic corporate culture. The Norwegians like to boast that they lead the world in corporate diversity because firms are legally obliged to reserve 40% of board seats for women. But sexual balance does not make up for cultural uniformity: many of the country’s most senior businesspeople studied together at the Norwegian School of Economics, and still live in each other’s pockets.
The second weakness is the over-ripe welfare state. The public sector employs 33% of the workforce in Norway, compared with an average of 19% for the OECD countries. The state is undermining the work ethic: most people enjoy a 37-hour working week, and three-day weekends are common. In 2011 Norway spent 3.9% of GDP on incapacity benefits and early retirement, compared with an OECD average of 2.2%. Norwegians have coined a verb, to “nav”, meaning to get money from NAV, the state benefits agency.
Norway is fortunate in that it can learn from neighbouring countries, with similar cultures, that have implemented wide-ranging reforms. Sweden, in particular, has reinvigorated its model by shrinking its state, allowing private firms to run its schools, hospitals and surgeries, and reducing its tax burden.
La gauche aime bien nous casser les oreilles avec le modèle norvégien.
Il est toujours bon de leur rappeler que le modèle canadien est supérieur au modèle norvégien.