Thursday, May 19, 2011

The Socialist Mødel

A hotbed of startup activity,
Though socialist in their proclivity,
Norwegians eschew
The American view
That the government crimps productivity.  

Stability helps to ensure
That the av'rage norsk entreprenør
Will see, in their tax,
Not "a weight on our backs,"
But a price that one gets service før.

The bible of American entrepreneurship, Inc Magazine, goes against the grain of US business thinking with a thoughtful look at Norway, where "Startups Say Ja to Socialism."  Challenging the view that lower taxes mean more economic growth, author Max Chafkin looks for the factors underpinning Norway's higher rate of growth and entrepreneurship in comparison to the United States.  As against America's more service-oriented, "can-do" business culture, Scandinavians enjoy the benefits of a more stable, low-risk environment fostered by good-quality healthcare and education as well as pensions paid by the government.  Conclusion: it's not what you pay; it's the value you get in return.

Hat tip (and happy birthday!) to my good friend Michael Griffiths.


  1. American academics, who IMHO trend collectivist anyway, love to seek out this sort of thing. It is offered as "proof" that entrepreneurs will continue to produce, in spite of the increasing burden of supporting the socialist dreams of others. However, there are important facets that are missed in Norway's case:

    In Norway, just about EVERYONE is white and Lutheran. Inevitably in most welfare states, certain groups are seen as consuming more government services than others, and tension results. In Norway, with its homogenous population, this is less of an issue, as net welfare recipients look just like their neighbor taxpayer, and probably go to the same church.

    Then there is the oil revenue, which buys a lot of government services at no pain to the taxpayer.

    The Norway- USA comparison is invalid. The United States is a very large apple, and Norway is a very small orange.

  2. Mr. Lawry, you make excellent points regarding the demographics and geology of Norway. However, even where two countries' differences prevent the direct application of the first one's system to the second one, there are still lessons to be learned. We should at least reconsider our religious opposition to paying for social services and adopt a more analytical mindset.

  3. Dr. Goose, I agree we can all benefit from additional analysis. However, as you well know, in the dismal science double-blind tests are impossible. A true analysis would require multiple "control-USA's" and "experiment-USA's", holding all other variables static except for tax levels in the experiment group.

    There are many things our country lacks, and there are ingrained structural reasons why this is so (education, for example). What makes up for it all is that we tolerate much starker inequalities between the "haves" and the "have-nots", in return for a higher overall standard of living. It might be the only reason our system works.

    I'm just reacting to the rabid glee expressed by many in academia and the press when they see data such as this, which supports their prejudices. Very little analysis can be drawn from a microscopic, homogenous population.

  4. Although we don't completely agree, I appreciate your comments, which consistently make this a more interesting and thoughtful site.

    Thank you!


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