Home > Economics > Norway, Scotland, and why I was wrong about the arc of insolvency
Norway, Scotland, and why I was wrong about the arc of insolvency
Norway’s state pension fund has topped the United Arab Emirates’ Abu Dhabi Investment Authority (ADIA) to become the largest sovereign wealth fund in the world
Last week Iain Macwhirter wrote an excellent article ‘Face reality: We could be as prosperous as Norway.’ It was a must read essay, not least because it was written by the journalist who coined the term “the arc of insolvency” in relation to Iceland and Ireland after the 2008 banking crash. Interestingly, Macwhirter is now dissociating himself from the widely used, albeit inaccurate, meme. The information in his article needs to be discussed and disseminated in Scotland as widely as possible which is why we’re re-blogging it here. Iain Macwhirter has also re-blogged it on his excellent Now and Then blog with a new title for the article. We’re going with the new title.
Norway, Scotland, and why I was wrong about the arc of insolvency
It was only ever one side of the story. While some neoliberal small nations exploded because of their irresponsible banks, the rest of the Nordic arc – Denmark, Sweden and Finland – passed through the eye of the storm largely unscathed. Certainly, in Norway, where I have been hanging out this week, there is no sign of any financial hangover from the great crash.
Oslo is, as usual, a building site. There can be few cities outside south-east Asia that are so obviously booming. Unemployment here is very low, salaries are very high, beer is ruinously expensive at £8 a pint – though that doesn’t seem to stop people going to the pub. Even the banks are doing well in Norway, largely because they didn’t get caught up in the property madness that exploded Iceland and Ireland.Deficit? Nonexistent – Norway has the largest budget surplus of any AAA-rated nation in the world. Growth is “only” 3.7%; inflation is 1.4%; unemployment at 3.3% is the lowest in Europe and poverty is almost too low to measure. This is a country which regularly tops the global quality-of-life indexes. So what is the secret? Why has Norway been largely immune to the economic crises that left countries like Britain as debt zombies, kept going only by zero interest rates and money printing?Well, oil for a start. Norway is Europe’s largest exporter. Mostly the revenues have been parked in the Norwegian sovereign wealth fund, which is now the third largest in the world and worth $500 billion. The government is only allowed to take a tiny amount out each year, so this wealth accumulates without generating inflation.When you visit Norway you really appreciate how giddily altruistic the Scots were in the 1970s and 1980s – giving their oil away in exchange for the Barnett handout and a couple of savage industrial recessions. The Scottish people were the ultimate ragged-trousered philanthropists: the only nation, region, principality or state in the world to have discovered oil and never to have directly benefited.The oil is running out, of course, but there’s still “enough” as Norwegians like to say, and gas is all over the place. Norway is now the second largest gas exporter in the world. There is much anguish in Scotland about how North Sea oil is a “sunset industry”, and how no country can depend on a diminishing natural resource. But it can be a pretty long sunset. It might surprise people in Scotland to learn that Norway does not put its economic success down to natural resources but to social solidarity.Norway is one of the most egalitarian of countries. In 2010, 95% of Norwegians earned less than £50,000 a year, and they have one of the flattest income distributions in the world. They look with horror on countries like America and Britain where millions are in poverty while the top 1% get richer and richer. They believe that low wages damage the economy – and they are right.
In Norway, pay is still mostly negotiated centrally by a tripartite arrangement of unions, government and business. It sounds like something out of the 1970s and probably is. But Norwegians feel this corporatism works well in a small country of five million people and that social solidarity is not incompatible with economic dynamism. The state in Norway doesn’t have to spend billions on tax credits to subsidise low pay because firms pay decent wages. And because labour costs are inelastic, Norwegian companies have a strong incentive to grow by innovation in productivity. Compare and contrast with Britain where productivity is flatlining as employers cut wages to keep going through a triple downturn.Also, consumer demand in Norway is steady and predictable because people feel secure and able to spend for the future. Thus you don’t get the debt cycle of boom and bust that happens in Anglo-Saxon countries such as Britain and America where people had to borrow to maintain living standards and are now cutting back, burdened by debt. Effective demand is stable in Norway so companies can invest with greater security.There are so many lessons for Scotland here, it’s hard to know where to begin. Obviously, if Scotland had benefited from its oil wealth since 1970 it would be a very different country to the one it is today. It is doubtful whether we would still have some of the worst mortality rates for middle-aged people in Europe, as the Glasgow Centre for Population Health reported this week. Also, Scotland is not backward or naive in favouring collective solutions like free higher education and elderly care, which are all regarded as essential pillars of the Norwegian welfare state. The feel of Norwegian society is very much like Scotland, in terms of social expectations and outlook. Looking at Norway today, it is hard to argue that Scotland could fail to be an extremely successful independent country, were the Scots to vote Yes – though they don’t seem to minded to take this option.Once independent, Scotland would probably find a place as one of the energy-rich small nations of the true arc of Nordic prosperity. As for the debate about Scotland in Europe, Norway is of course not a member of the European Union and has its own currency, the krona. The Norwegians stayed out of the EU largely on the grounds that it was too right wing – a proposition that astonished the Tory Eurosceptic former defence secretary Liam Fox on a visit here last month. Norway is one of a block of Nordic currencies including Denmark and Sweden that kept the krona though they are in the European single market. Which confirms there are many ways small countries can relate to the EU, and to neighbouring countries.Norway isn’t that much engaged with Scottish independence. Most people still call the UK “England” – the country that helped liberate Norway from the Nazis. They are intrigued at the prospect of a referendum on independence. In 1905, the Norwegians voted to dissolve he union with Sweden by a margin of 99.5%. Only 184 people voted No. So, perhaps a little way to go yet, Alex.Iain Macwhirter’s Now and Then blog
Let me start by saying how welcome this piece by Iain Macwhirter was.
Iain, don’t know what to make of him! Just after the SNP victory in 2007, he was writing “Scotland’s Oil An Argument who’s Time has Come”. Then as time passed and we approached the Westminister election his articles were on giving advice to Labour and criticising the SNP.
We’re two years out from the referendum the hacks have to keep us reading their articles, so the audience are all there for the big “ye canny dae it” message in 2014.
So let’s see how Iain performs right up to the day of the referendum, don’t judge him this far out.
The last paragraph says it all. Norway is a unitary nation with a strong sense of national purpose and direction. It is socially cohesive and confident, nothing in present day Scotland suggests that we are even remotely close to this state of affairs, and blaming the English for these ills simply won’t wash. Dreaming Nordic dreams is all well and good (especially if you’re getting paid to do it) but the simple facts on the ground are that where it really counts Scotland is about as far from these countries as its possible to imagine. Our history and heritage are so completely different as to make these comparisons almost meaningless. As I’ve said before on BC, the country whose path we are most likely to follow is Eire, and before you scoff it wasn’t long ago that the thinking mans Bertie Ahern, Alex Salmond was lauding our Celtic Tiger cousin as inspiration.
Before engaging in flights of fancy one should actually look not only at the factors that have shaped the various Nordic nations; for there are major differences between them and perhaps more importantly between what they were and where they look likely politically to be heading, much more rightward as the post-war Keynesian social contract systematically collapses.
Another word of caution, even with the the majority of their oil revenues essentially being buried ‘in the back garden’ for future generations in the Oljefondet, asset price inflation and its attendant problems are all to readily evident in Norway: eight pound pints, etc. Tourism is irrelevant in Norway, eight pound pints and five hundred pound hotel rooms are quite another thing for this country where for better or worse it is a key sector of the economy. Pumping vast amounts of money into relatively small economies is a recipe for disaster, asset prices go nuts, wages follow as does inflation as sure as night follows day. In short order the native population develop an aversion to work, especially the dirty well less paid variety which in turn inevitably leads to a ‘hoovering’ in of guest workers with all its attendant ills. Resources are quickly diverted to grandiose schemes (the list is endless, from Gaddafi’s aquifers to the Saudi military) that enrich politicians and their ‘friends’, while the middle class are kept happy and contented with subsidised ‘everything’ and ever rising house prices. The problem is that theres not actually much oil left in the North Sea, its way past peak and the talk of massive Atlantic reserves are just that, talk.
Scotland, but for a brief time during the early to mid industrial age was a poor place. That is our history, that as a people we still managed to affect our world so much with so little should be a source of great pride and the road map for our future. The silver bullet lottery mentality is as demeaning as it is futile. On one hand Japan; little or no natural energy resources, ditto South Korea. On the other Iran, Iraq, Angola…….. basket cases the lot of them.
My argument isn’t that you can’t use oil revenues, but that in order to do so you have to have very robust, honest and accountable state structures and even then theres still no guarantee. The recent history of Scotland’s local government most notably Glasgow City Council and an utterly underwhelming parliament leaves me with little doubt that we have a long long way to go before we hand over the golden chequebook to this lot.
What “utterly underwhelmingly parliament” are you talking about – or does that idiot description merely underline your unreasoned agenda.
If there is an “utterly underwhelmingly parliament” it’s a few hundred miles south.
As a matter of interest Iran is no economic basket case, Iraq under the wicked Saddam Hussein was the best ordered middle Eastern state until we blew it back into the middle ages and comparing Scotland to Angola merely identifies you as a fool.
Now and again it’s quite nice to have ones prejudices confounded; there was me thinking that your double-barrelled moniker was indicative of a well-funded education at one of our elite scholastic institutions, well obviously not.
Leaving aside the school yard insults lets have a look at your reply, which I should add before we proceed any further fails utterly to engage let alone refute any of my substantive points.
1. The Parliament, so in the universe you inhabit the likes of Iain Gray (never has a name been so, so apt), Jack (rabbit in the headlights) McConnell, Henry (finger in the till) McLeish, John (less charisma than a rock) Swinney, Anas (the liable laws forbid me) Sarwar, David (more hands in the till) McLetchie. Basically the place is the gift that just keeps giving. Now I’m not saying that all the inhabitants of the Miralles Miracle are either buggers on the make or just plain incompetent former union hacks, for one there’s my old teacher Robin Harper, but the general standard of debate in the chamber is generally pretty piss poor and for me at least it hardly suggests that this group of time servers are remotely up to the task of taking on their senior civil servants let alone affecting profound radical political change.
2. “basket case – noun informal
A person or thing regarded as useless or unable to cope.
ORIGIN early 20th cent.: originally slang denoting a soldier who had lost all four limbs, thus unable to move independently.”
“Iraq under the wicked Saddam Hussein was the best ordered middle Eastern state until we blew it back into the Middle Ages….” Yes and Hitler made the trains run on time, that didn’t stop Nazi Germany or Saddam’s Iraq being basket cases. But of course you’d know differently having been a frequent visitor to the country in the 1970’s? No I thought not, just a case of regurgitating Robert Fisk. The World Bank and IMF were in their time both very complimentary about Iraq during the period referred to, but then their sense of what constitutes “success” and mine (and I would hope any rational Left leaning individual) don’t share the same street let alone room. One last thing lets not forget that Saddam had already completely buggered his country by launching his murderous invasion of Iran, which left millions of his countrymen dead long before the first American bombs landed in Baghdad.
Anyway, even if we leave all this aside, what is your point? That if the geological gods give a murderous megalomaniac several billion dollars he can put together a semi functioning state, Christ I could get a five year old to do that. I’m not for an instant disputing that with vast oil wealth you can’t go out and buy lots of shiny stuff; weapons, mass transit systems, motorways, hospitals and all the other trappings of modernity, of course you can, that’s the easy part. The difficulty lies in synthesising this vast windfall into a deeply dysfunctional pre-existing political economy. In common with most of the contributors to this site you seem incapable or unwilling to recognise this fundamental problem, instead you blindly trot out the well-worn Nordic nostrums. Put very simply trying to absorb this amount of money into the Scottish economy is going to be disastrous for the reasons I have elucidated upon here and elsewhere on BC. A conscious decision needs to be made at the outset of independence to do as the Norwegians did and invest the bonanza for future generations, not least because we in this generation have no God given right to selfishly blow the lot. Now DM-H you may fancy a second car, a villa in Tuscany and a live-in Filipino maid for your new build executive home in the Pentland Hills, all to be funded by a stroke of sheer good fortune, if so I suggest you buy a lottery ticket and cross your fingers and toes, but lay off the ‘political’ comment of which you are so eminently unsuited.
3. Iran, maybe you should think of moving to the theological paradise. Then you cold see first hand how God does indeed work in mysterious ways. Iran’s status as a first category hellhole has absolutely nothing to do with the imposition of sanctions. Since 1979 the mad mullahs have been happily slaughtering communists, liberals, homosexuals, freethinkers and just about anyone who posses a threat to their rule irrespective of what the outside world has said and done. As Nick Cohen has so eloquently documented, the sickening defence of regimes like this and others across the Middle East by Western “Progressives” is fellow travelling of the very worse kind. Being America’s enemy doesn’t make you my friend.
4. Angola = Scotland, if you’d bothered to actually read what I wrote you simply couldn’t make this absurd statement, whatever your educational and intellectual shortcomings.
I remember Iain described himself, a while back, as one of the Blair’s “unresconstructed” left wingers. A hae ma doots aboot that. If this is the case, he’ll be one of the “keep the British working class united” people, waiting for the one last heave approach to sweep the nasty capitalists aside in London. He may still harbour such thoughts but the selfish, the greedy and the sociopaths who founded the Union in the first place, the merchants, bankers and poiticians are always a mile ahead of those who desire change at Westminster and on the odd occason they’re not, they use the tools of state and law to crush dissent. Iain’s is a forlorn hope. Better to do what comes naturally Scots and let our neighbours learn from our example.
Excellent article. The key point is social solidarity and low income inequality (the two go hand in hand). The capitalist model is well past its sell-by date, and people know it. The “Economist” recently published the results of a survey conducted in December 2010 which asked people in ten countries (unfortunately none of the Scandinavian countries) whether they agreed with the statement: “The market economy and capitalism is a system that works well and should be preserved”. The results make interesting reading. China came out top, with 65% agreeing. The rest as follows: Australia 63%, Brazil 57%, USA 55%, Poland 54%, Germany 46%, Britain 45%, Netherlands 42%, Italy 26% and France only 15%. One third of French respondents said the system works poorly and must be eliminated (22% in Italy, 20% in the Netherlands). Very large numbers in several countries (52% in France and Italy, 45% in Britain, 42% in Germany) felt trapped because although they could see that the system works poorly, they couldn’t see an alternative.
That’s precisely the challenge of the Left – to convince people that there is an alternative. Telling them about the success of countries like Norway, Sweden, Denmark and Finland based on social solidarity and cohesion – or about countries like Germany and Switzerland in respect of direct democracy – is part of the propaganda battle that has to be won before there can be a majority in favour of significant economic and social change. Of course, external events may bring about more rapid, and not necessarily welcome, change. The vast majority of people asked in all ten countries (average 78.5%; France 91%, Britain 88%) agreed there was a strong likelihood that a new economic crisis will happen in the coming years. Not much confidence in the market, then!
While in general terms I concur with much of the above, the one criticism I do have is that makes the classic mistake of presenting capitalism as one choice among many. The collapse of the Soviet Union and the rise of China should one would have thought put paid to that misnomer. Though I find most of Marx a turgid waste I agree with him on the historical determinism bit. I’m not going to rehash my analysis (yet again) on where the global economy is inexorably headed – for that you can look elsewhere on this site, other than to say that a very good summary of the meta level problems facing all the World’s advanced economies is made by Jamie Galbraith on the most recent of Doug Henwood’s/Left Business Review podcasts – not on the LBO site yet I see but available via iTunes. It’s also worth mentioning that Henwood’s superb book “Wall Street” is available for free PDF download from the same.
PS For a good example of the inane supper-market sweep economic school of thought I find such fault with you can’t get any better than the “allymax bruce” post on:
“We Don’t Need to Count on Oil to Balance the Books”
Ian Bell, November 22, 2012
Pure fantasy island, but dangerous non the less. This something for nothing mentality is as morally corrupting as it is delusional. Nordic countries are the way they are (but may not be for much longer) not because they were historically rich (Norway in particular was gutted by emigration to the US in the late 19th Century), rather they became rich because of enterprise, hard work and sustained social and political cohesion. These simple truths seems for many of the contributors to this site quite impossible to fathom. If you want live in a cargo cult society just hop on a plane to the Emirates, and please stay there.
Mr Macwhirter, in 1974 the now infamous McCrone report applied to both Scotland and, for all the same economic reasons, Norway too.
So, what happened next?
As you know, despite the oil, today UK Public sector net debt climes to £1,065.4 billion at the end of September 2012, or equivalent to 67.9% of GDP – yet remarkably NO sovereign wealth fund
As pointed out in 2012, Norway has no national debt, and its oil wealth allows it to run structural budget deficits and still use only a fraction of its oil revenue for budget purposes.
Also the Norwegian government plans to spend more of its oil revenues in 2013 than it has earmarked in 2012 because it expects its economy to grow faster than earlier thought.
That’s right no debt and plans to grow their economy.
As the article is pointing out all the conclusions of the McCrone report really all did come to pass!
In Norway though, not Scotland!!
Mr Macwhirter given your very considerable contribution over many years to ridicule those of independence ambition – who’s main aim was simply to work towards a better standard of existence for all of Scotland – it would be perhaps right and proper that this recent Nordic epiphany actually turned into a sustained and ongoing resource of resoned, positive commentary on the factual benefits of independence – rather than a one off essay.
In Scotlan we are well aware that “it only takes a few good men to do nothing” for morally wrong and wicked propaganda to prevail. For decades many have lived, and lived well, off the backs of the poor of Scotland. Poverty perpetrated year upon year for party (and personal) political gain.
Perhaps it’s time. Time for someone to reach out and speak up courageously against the economic injustice that suffocates the hopes and aspirations of so many Scots. And Mr Macwhirter, you are fortunate for (in Norway) you have seen with your own eyes what many of the current poor of Scotland would have aspired to and gained – had they but just be given the chance.
It would be unforgivable for those who can – not to at least try to counter the propaganda that suffocates the aspirations and hope of so many economically impoverished family’s in Scotland. People who’s only contribution to their own particular plight was to be born into the wrong postcode.
Mr Macwhirter, Norway don’t do poverty based on postcode – so why dose Scotland have to?
And it’s NOT because we can’t afford to do otherwise!
PPS I stand corrected. But the fact the guy inherited his seat in the way he did from a man who obtained it in the fashion he did I think rather proves my point I’d say. The choice before you with the vast majority of Scottish MP’s and MSP’s is between the blatantly corrupt and the merely incompetent. You may think that this constitutes the raw material for for formative change but I sure as hell don’t.
Oh, and whilst my last post may well have confirmed your opinion of me, you still haven’t taken the opportunity to take issue with any of my arguments. Not that I’m remotely surprised. Pedants rarely have anything of substance to say for themselves preferring instead to let others do their thinking for them.
None of your arguments merit response. Are you contributing from Scotland? They are all the sort of stuff we get from Uninformed English commentators to arguments that have been debunked years ago.
Good article by Mr Macwhirter, well worth posting and re-posting. We should not be too proud to take lessons from anyone who can offer an example of how it should be done. We should certainly not be afraid to aspire to emulate the success of other nations. To say can’t, won’t, shouldn’t is for the defeatist and I think we’ve had enough of that in Scotland.
Its a great piece of information gathering. This, for me, is what we should be looking at especially:
“Norway is one of the most egalitarian of countries. In 2010, 95% of Norwegians earned less than £50,000 a year, and they have one of the flattest income distributions in the world. They look with horror on countries like America and Britain where millions are in poverty while the top 1% get richer and richer. They believe that low wages damage the economy – and they are right.”
Inequality is the most destructive of all social diseases and should have no place in a modern 21st century forward looking Scotland. Inequality has increased in the UK because Westminster and the three parties who run it as a political cartel encourage it.
Yet inequality can be tackled by straightforward changes to corporate and personal taxation as well as land taxes, Robin Hood taxes on banking transactions, windfall taxes on utilities, and suchlike.
There is no mystery bout this, no hidden barrier to achieving it, it just needs the political will to level the playing field through fair and progressive taxation.
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Let me start by saying how welcome this piece by Iain Macwhirter was.
Iain, don’t know what to make of him! Just after the SNP victory in 2007, he was writing “Scotland’s Oil An Argument who’s Time has Come”. Then as time passed and we approached the Westminister election his articles were on giving advice to Labour and criticising the SNP.
We’re two years out from the referendum the hacks have to keep us reading their articles, so the audience are all there for the big “ye canny dae it” message in 2014.
So let’s see how Iain performs right up to the day of the referendum, don’t judge him this far out.
THE
The last paragraph says it all. Norway is a unitary nation with a strong sense of national purpose and direction. It is socially cohesive and confident, nothing in present day Scotland suggests that we are even remotely close to this state of affairs, and blaming the English for these ills simply won’t wash. Dreaming Nordic dreams is all well and good (especially if you’re getting paid to do it) but the simple facts on the ground are that where it really counts Scotland is about as far from these countries as its possible to imagine. Our history and heritage are so completely different as to make these comparisons almost meaningless. As I’ve said before on BC, the country whose path we are most likely to follow is Eire, and before you scoff it wasn’t long ago that the thinking mans Bertie Ahern, Alex Salmond was lauding our Celtic Tiger cousin as inspiration.
Before engaging in flights of fancy one should actually look not only at the factors that have shaped the various Nordic nations; for there are major differences between them and perhaps more importantly between what they were and where they look likely politically to be heading, much more rightward as the post-war Keynesian social contract systematically collapses.
Another word of caution, even with the the majority of their oil revenues essentially being buried ‘in the back garden’ for future generations in the Oljefondet, asset price inflation and its attendant problems are all to readily evident in Norway: eight pound pints, etc. Tourism is irrelevant in Norway, eight pound pints and five hundred pound hotel rooms are quite another thing for this country where for better or worse it is a key sector of the economy. Pumping vast amounts of money into relatively small economies is a recipe for disaster, asset prices go nuts, wages follow as does inflation as sure as night follows day. In short order the native population develop an aversion to work, especially the dirty well less paid variety which in turn inevitably leads to a ‘hoovering’ in of guest workers with all its attendant ills. Resources are quickly diverted to grandiose schemes (the list is endless, from Gaddafi’s aquifers to the Saudi military) that enrich politicians and their ‘friends’, while the middle class are kept happy and contented with subsidised ‘everything’ and ever rising house prices. The problem is that theres not actually much oil left in the North Sea, its way past peak and the talk of massive Atlantic reserves are just that, talk.
Scotland, but for a brief time during the early to mid industrial age was a poor place. That is our history, that as a people we still managed to affect our world so much with so little should be a source of great pride and the road map for our future. The silver bullet lottery mentality is as demeaning as it is futile. On one hand Japan; little or no natural energy resources, ditto South Korea. On the other Iran, Iraq, Angola…….. basket cases the lot of them.
My argument isn’t that you can’t use oil revenues, but that in order to do so you have to have very robust, honest and accountable state structures and even then theres still no guarantee. The recent history of Scotland’s local government most notably Glasgow City Council and an utterly underwhelming parliament leaves me with little doubt that we have a long long way to go before we hand over the golden chequebook to this lot.
What “utterly underwhelmingly parliament” are you talking about – or does that idiot description merely underline your unreasoned agenda.
If there is an “utterly underwhelmingly parliament” it’s a few hundred miles south.
As a matter of interest Iran is no economic basket case, Iraq under the wicked Saddam Hussein was the best ordered middle Eastern state until we blew it back into the middle ages and comparing Scotland to Angola merely identifies you as a fool.
Now and again it’s quite nice to have ones prejudices confounded; there was me thinking that your double-barrelled moniker was indicative of a well-funded education at one of our elite scholastic institutions, well obviously not.
Leaving aside the school yard insults lets have a look at your reply, which I should add before we proceed any further fails utterly to engage let alone refute any of my substantive points.
1. The Parliament, so in the universe you inhabit the likes of Iain Gray (never has a name been so, so apt), Jack (rabbit in the headlights) McConnell, Henry (finger in the till) McLeish, John (less charisma than a rock) Swinney, Anas (the liable laws forbid me) Sarwar, David (more hands in the till) McLetchie. Basically the place is the gift that just keeps giving. Now I’m not saying that all the inhabitants of the Miralles Miracle are either buggers on the make or just plain incompetent former union hacks, for one there’s my old teacher Robin Harper, but the general standard of debate in the chamber is generally pretty piss poor and for me at least it hardly suggests that this group of time servers are remotely up to the task of taking on their senior civil servants let alone affecting profound radical political change.
2. “basket case – noun informal
A person or thing regarded as useless or unable to cope.
ORIGIN early 20th cent.: originally slang denoting a soldier who had lost all four limbs, thus unable to move independently.”
“Iraq under the wicked Saddam Hussein was the best ordered middle Eastern state until we blew it back into the Middle Ages….” Yes and Hitler made the trains run on time, that didn’t stop Nazi Germany or Saddam’s Iraq being basket cases. But of course you’d know differently having been a frequent visitor to the country in the 1970’s? No I thought not, just a case of regurgitating Robert Fisk. The World Bank and IMF were in their time both very complimentary about Iraq during the period referred to, but then their sense of what constitutes “success” and mine (and I would hope any rational Left leaning individual) don’t share the same street let alone room. One last thing lets not forget that Saddam had already completely buggered his country by launching his murderous invasion of Iran, which left millions of his countrymen dead long before the first American bombs landed in Baghdad.
Anyway, even if we leave all this aside, what is your point? That if the geological gods give a murderous megalomaniac several billion dollars he can put together a semi functioning state, Christ I could get a five year old to do that. I’m not for an instant disputing that with vast oil wealth you can’t go out and buy lots of shiny stuff; weapons, mass transit systems, motorways, hospitals and all the other trappings of modernity, of course you can, that’s the easy part. The difficulty lies in synthesising this vast windfall into a deeply dysfunctional pre-existing political economy. In common with most of the contributors to this site you seem incapable or unwilling to recognise this fundamental problem, instead you blindly trot out the well-worn Nordic nostrums. Put very simply trying to absorb this amount of money into the Scottish economy is going to be disastrous for the reasons I have elucidated upon here and elsewhere on BC. A conscious decision needs to be made at the outset of independence to do as the Norwegians did and invest the bonanza for future generations, not least because we in this generation have no God given right to selfishly blow the lot. Now DM-H you may fancy a second car, a villa in Tuscany and a live-in Filipino maid for your new build executive home in the Pentland Hills, all to be funded by a stroke of sheer good fortune, if so I suggest you buy a lottery ticket and cross your fingers and toes, but lay off the ‘political’ comment of which you are so eminently unsuited.
3. Iran, maybe you should think of moving to the theological paradise. Then you cold see first hand how God does indeed work in mysterious ways. Iran’s status as a first category hellhole has absolutely nothing to do with the imposition of sanctions. Since 1979 the mad mullahs have been happily slaughtering communists, liberals, homosexuals, freethinkers and just about anyone who posses a threat to their rule irrespective of what the outside world has said and done. As Nick Cohen has so eloquently documented, the sickening defence of regimes like this and others across the Middle East by Western “Progressives” is fellow travelling of the very worse kind. Being America’s enemy doesn’t make you my friend.
4. Angola = Scotland, if you’d bothered to actually read what I wrote you simply couldn’t make this absurd statement, whatever your educational and intellectual shortcomings.
Previous judgements fully confirmed., Thanks
Just as a matter of interest and information Anas Sarwar is not in the Scottish Parliament.
Well said
I remember Iain described himself, a while back, as one of the Blair’s “unresconstructed” left wingers. A hae ma doots aboot that. If this is the case, he’ll be one of the “keep the British working class united” people, waiting for the one last heave approach to sweep the nasty capitalists aside in London. He may still harbour such thoughts but the selfish, the greedy and the sociopaths who founded the Union in the first place, the merchants, bankers and poiticians are always a mile ahead of those who desire change at Westminster and on the odd occason they’re not, they use the tools of state and law to crush dissent. Iain’s is a forlorn hope. Better to do what comes naturally Scots and let our neighbours learn from our example.
Excellent article. The key point is social solidarity and low income inequality (the two go hand in hand). The capitalist model is well past its sell-by date, and people know it. The “Economist” recently published the results of a survey conducted in December 2010 which asked people in ten countries (unfortunately none of the Scandinavian countries) whether they agreed with the statement: “The market economy and capitalism is a system that works well and should be preserved”. The results make interesting reading. China came out top, with 65% agreeing. The rest as follows: Australia 63%, Brazil 57%, USA 55%, Poland 54%, Germany 46%, Britain 45%, Netherlands 42%, Italy 26% and France only 15%. One third of French respondents said the system works poorly and must be eliminated (22% in Italy, 20% in the Netherlands). Very large numbers in several countries (52% in France and Italy, 45% in Britain, 42% in Germany) felt trapped because although they could see that the system works poorly, they couldn’t see an alternative.
That’s precisely the challenge of the Left – to convince people that there is an alternative. Telling them about the success of countries like Norway, Sweden, Denmark and Finland based on social solidarity and cohesion – or about countries like Germany and Switzerland in respect of direct democracy – is part of the propaganda battle that has to be won before there can be a majority in favour of significant economic and social change. Of course, external events may bring about more rapid, and not necessarily welcome, change. The vast majority of people asked in all ten countries (average 78.5%; France 91%, Britain 88%) agreed there was a strong likelihood that a new economic crisis will happen in the coming years. Not much confidence in the market, then!
While in general terms I concur with much of the above, the one criticism I do have is that makes the classic mistake of presenting capitalism as one choice among many. The collapse of the Soviet Union and the rise of China should one would have thought put paid to that misnomer. Though I find most of Marx a turgid waste I agree with him on the historical determinism bit. I’m not going to rehash my analysis (yet again) on where the global economy is inexorably headed – for that you can look elsewhere on this site, other than to say that a very good summary of the meta level problems facing all the World’s advanced economies is made by Jamie Galbraith on the most recent of Doug Henwood’s/Left Business Review podcasts – not on the LBO site yet I see but available via iTunes. It’s also worth mentioning that Henwood’s superb book “Wall Street” is available for free PDF download from the same.
PS For a good example of the inane supper-market sweep economic school of thought I find such fault with you can’t get any better than the “allymax bruce” post on:
“We Don’t Need to Count on Oil to Balance the Books”
Ian Bell, November 22, 2012
Pure fantasy island, but dangerous non the less. This something for nothing mentality is as morally corrupting as it is delusional. Nordic countries are the way they are (but may not be for much longer) not because they were historically rich (Norway in particular was gutted by emigration to the US in the late 19th Century), rather they became rich because of enterprise, hard work and sustained social and political cohesion. These simple truths seems for many of the contributors to this site quite impossible to fathom. If you want live in a cargo cult society just hop on a plane to the Emirates, and please stay there.
Cometh the hour cometh the man….
Mr Macwhirter, in 1974 the now infamous McCrone report applied to both Scotland and, for all the same economic reasons, Norway too.
So, what happened next?
As you know, despite the oil, today UK Public sector net debt climes to £1,065.4 billion at the end of September 2012, or equivalent to 67.9% of GDP – yet remarkably NO sovereign wealth fund
As pointed out in 2012, Norway has no national debt, and its oil wealth allows it to run structural budget deficits and still use only a fraction of its oil revenue for budget purposes.
Also the Norwegian government plans to spend more of its oil revenues in 2013 than it has earmarked in 2012 because it expects its economy to grow faster than earlier thought.
That’s right no debt and plans to grow their economy.
As the article is pointing out all the conclusions of the McCrone report really all did come to pass!
In Norway though, not Scotland!!
Mr Macwhirter given your very considerable contribution over many years to ridicule those of independence ambition – who’s main aim was simply to work towards a better standard of existence for all of Scotland – it would be perhaps right and proper that this recent Nordic epiphany actually turned into a sustained and ongoing resource of resoned, positive commentary on the factual benefits of independence – rather than a one off essay.
In Scotlan we are well aware that “it only takes a few good men to do nothing” for morally wrong and wicked propaganda to prevail. For decades many have lived, and lived well, off the backs of the poor of Scotland. Poverty perpetrated year upon year for party (and personal) political gain.
Perhaps it’s time. Time for someone to reach out and speak up courageously against the economic injustice that suffocates the hopes and aspirations of so many Scots. And Mr Macwhirter, you are fortunate for (in Norway) you have seen with your own eyes what many of the current poor of Scotland would have aspired to and gained – had they but just be given the chance.
It would be unforgivable for those who can – not to at least try to counter the propaganda that suffocates the aspirations and hope of so many economically impoverished family’s in Scotland. People who’s only contribution to their own particular plight was to be born into the wrong postcode.
Mr Macwhirter, Norway don’t do poverty based on postcode – so why dose Scotland have to?
And it’s NOT because we can’t afford to do otherwise!
And it’s NOT, as your article explains, because we can’t afford to do otherwise!
PPS I stand corrected. But the fact the guy inherited his seat in the way he did from a man who obtained it in the fashion he did I think rather proves my point I’d say. The choice before you with the vast majority of Scottish MP’s and MSP’s is between the blatantly corrupt and the merely incompetent. You may think that this constitutes the raw material for for formative change but I sure as hell don’t.
Oh, and whilst my last post may well have confirmed your opinion of me, you still haven’t taken the opportunity to take issue with any of my arguments. Not that I’m remotely surprised. Pedants rarely have anything of substance to say for themselves preferring instead to let others do their thinking for them.
None of your arguments merit response. Are you contributing from Scotland? They are all the sort of stuff we get from Uninformed English commentators to arguments that have been debunked years ago.
Good article by Mr Macwhirter, well worth posting and re-posting. We should not be too proud to take lessons from anyone who can offer an example of how it should be done. We should certainly not be afraid to aspire to emulate the success of other nations. To say can’t, won’t, shouldn’t is for the defeatist and I think we’ve had enough of that in Scotland.
Top stuff Iain! Loved it. Keep this type of journalism up my guid man. We need more of our writers to write from the heart about politics.
Its a great piece of information gathering. This, for me, is what we should be looking at especially:
“Norway is one of the most egalitarian of countries. In 2010, 95% of Norwegians earned less than £50,000 a year, and they have one of the flattest income distributions in the world. They look with horror on countries like America and Britain where millions are in poverty while the top 1% get richer and richer. They believe that low wages damage the economy – and they are right.”
Inequality is the most destructive of all social diseases and should have no place in a modern 21st century forward looking Scotland. Inequality has increased in the UK because Westminster and the three parties who run it as a political cartel encourage it.
Yet inequality can be tackled by straightforward changes to corporate and personal taxation as well as land taxes, Robin Hood taxes on banking transactions, windfall taxes on utilities, and suchlike.
There is no mystery bout this, no hidden barrier to achieving it, it just needs the political will to level the playing field through fair and progressive taxation.
KW