Norway is an interesting case. It is amazingly resource rich and basically finances its massive social safety net with it's oil and gas money, which the government controls. Also, Norway is very small. There are about 2.6M people in its labor force. It's resources are massive relative to its small population size. It's kind of like Bahrain and those small ME countries with massive oil supplies relative to their population, so everyone is rich.
Norway is unquestionably socialist. So why does it seem to work for them? Well, the above oil rich resources are the primary reason, in my opinion. The secondary reason is that they seem to have a fiscally conservative country that runs surpluses, which are invested in their sovereign wealth fund, which then funds the social safety net. In other words, they are providing social services out of national SURPLUSES. They are living WITHIN their means. They are making social promises that they can keep, because the promises are smaller than their income.
Here in the US, socialism does not work for many reasons, but chief among them, it's because we are fiscally irresponsible.and we make Entitlement promises that far exceed our income.
I don't have all the answers, but what I can tell you based on my experience is that the more people involved in a system, the more complex that system becomes. One way to think of this is that with 2 people, you have one communication channel needed to keep those people connected. With 3 people, you need 3 channels. With 4 people, you need 6 channels. With 5 people, you need 10. You can see how it grows fast.
Norway is a much simpler economy than that of the US. With the amount of complexity and competing interests in the US, a centrally planned economy is simply impossible to implement successfully. What is necessary to deal with increasingly complex systems is to use the power of the masses to organize the system. Think of the Internet and Social Networks created within the Internet. These are chaotic, but powerful organizing systems. Companies have harnessed that power to create great wealth, like Apple, Google, Facebook. They did it using Free Market principles to guide the complexity towards a useful purpose, but not destroying the power of the market forces that makes the complexity useful in the first place.
Same goes for socialism or free markets in the US. We need to hew a path that allows us to harness the power of free markets, without destroying them. Part of the solution has to be to live within our means and not make promises to pay citizens more than we earn in tax revenues. |
