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“Oil that is, black gold, Texas tea . . .”

23 November 2011

22 July launched this otherwise quiet country into world news, but its conspicuous prosperity against the rubble of a crumbling European economy is keeping it in the headlines. The most recent of these “Look at Norway!” articles appeared in Friday’s Financial Times Magazine (and was commented on by our local Bergen newspaper, lest you think I would actually read the FT on my own).

“Visiting Norway during the global crisis felt like prosperity tourism, or ‘wealth porn’,” writes author Simon Kuper. (“Wealth porn”?!) “The world now wishes it were Norway.”

For the most part Kuper rehashes what everyone has already heard about Norway. The story goes something like this:

Come and listen to a story about a man named Jed (or Knut),

A poor mountaineer (or fisherman), barely kept his family fed,

Then one day he was shootin’ at some food,

And up through the ground came a bubblin’ crude.

Oil that is

Black gold

Texas tea.

 Well the first thing you know ol Knut’s a millionaire . . .

Sailboats docked at Kristiansand on the southern coast of Norway.

The argument that Norway is one of the wealthiest nations in the world because of its oil is both true and false. It is true because without oil Norway would have remained the relatively poor, cod-fishing nation that Kuper describes from the pre-oil 1970s as “a place where fashions arrived just a little later and people watched Swedish TV to keep up with the world.”

What is misleading about the constant link between Norway’s oil and wealth is that oil, while making governments extremely wealthy, does not automatically make a nation’s people wealthy. Take, for example, the fact that Norway is only 15th worldwide in oil-producing countries, behind terribly not rich countries like Nigeria, Algeria, and Mexico.

What, then, is the key? It can be found in Kuper’s observation that “in Norway the oil actually belongs to the people.” What should be striking about the enormous houses Kuper sees during his visit, “only to be told that many residents were adding extensions, and often had a summer house, winter cabin and boat besides,” is not that people can afford such things (has he been to Miami?) but that this type of wealth is the norm in Norway. Their wealth derives not simply from oil, but from Norway’s particular system of government: a social democracy which ensures that Norwegians enjoy a relatively equal distribution of wealth and a very equal access to social services and education.

Imagine, then, if the oil in America actually belonged to the people. (And why shouldn’t it? It is, after all, a natural, national resource.) The U.S. ranks third in world production of oil, well above Norway, and its oil production comprises 10% of the world’s total (compared to Norway’s 2.45% share). If you don’t already have an idea of how much wealth comes from oil in the U.S., Exxon, only one of several large oil companies, posted a $10.3 billion profit in the third quarter of 2011, compared to the $2.07 billion posted by Norway’s Statoil. Granted, the U.S. population is 300 million compared to Norway’s 5 million, but it would certainly be a start towards providing more affordable education and healthcare.

Norwegians know they are the envy of many countries, but they also feel very strongly about their active role in choosing this type of government and society for themselves. They did not simply “strike it rich” Beverly-Hillbilly style; they adhere to the solid belief that the nation and its wealth belongs to everyone.

Kuper recounts a jovial conversation he overhears in Bergen:

“We could buy Sweden.”

“Buy it and close it down.”

“Or use it for holiday homes.”

Although nothing more than bar banter, something stood out to me: this was the sort of joke I would expect a small group of Wall Street brokers to make over a champagne lunch. Except for one difference: their “we” most certainly did not refer to the nation.

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2 Comments leave one →
  1. Jeff permalink
    23 November 2011 16:37

    When I see what Norway has done with its oil wealth, it makes me sad to see what has been wasted in Canada on our own oil wealth. I’m not entirely educated on the subject (despite working in the oil industry, woops), but our National Energy Program introduced in 1980 was supposed to share the wealth amongst other parts of the country, but turned into an ‘us vs. them’ battle (‘us’ meaning oil rich Alberta, and ‘them’ generally meaning the ‘eastern bastards’ of Ontario/Quebec). There were famous bumper stickers that Albertans had on their cars saying “let the eastern bastards freeze in the dark”. The program was cancelled in 1985 or 86, which I think is a bit of a shame since I think it had its positive points. It’s sad to see so much divisiveness within the country when it’s been clearly demonstrated in Norway the benefits of sharing the wealth (okay, perhaps it wasn’t obvious then, but it makes sense to me).

    I do wonder though, does the presence of state/provincial governments exacerbate the ‘us vs. them’ attitude and make states and provinces less reluctant to want to share the benefits of resources from their region?

  2. 23 November 2011 22:04

    “Well the first thing you know ol Knut’s a millionaire” cracked me up! I live in a National Forest which belongs to everyone, allegedly. The government actually loses money on logging sales, but the loggers make a living. With the housing market in the toilet there is limited demand and prices for lumber are fairly low so there are only so many mills left and retailers struggle. When times are good everyone makes a living and the profits go to the owners and shareholders. If all that went into a public fund instead, it might be easier to weather the bad times. But no, it’s usually feast or famine, just like most of our privately held industries.

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