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Norway: The Socialist's Beacon of possibility

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Dairdo

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I've scoured the forums for a discussion on this, or similar topics, but couldn't find any - so please feel free to point me to another thread if you're aware of one.

In any debate about the efficacy of socialist nationalization schemes, despite mountains of spectacular failures, Scandinavia inevitably is referenced as how "it should be done" in all things socialist.

Most recently, I've been beaten over the head with Stat-oil. The salient facts are:

- originally formed as a Norwegian government company in the early 70's to develop the industry;

- privatized - with the government retaining 67% share ownership

- publicly traded and managed with, allegedly, little government interference in decision making

- no information on how the profits are distributed to shareholders versus reinvested/R&D

Apparently Stat-oil is a miracle of socialism.

It's very difficult to argue against its results. Typically, I point to the fact that anything government creates conflicts of interest between the private interests and the government's proper role in upholding the laws, etc.

Further, I argue that where the government gets involved in private enterprise, they distort behaviour. "IF" they're taking massive amounts of the profit and funneling it elsewhere for political purposes (think: education, healthcare, pensions, etc.) - it has the very long run effect of distorting - over generations - individual behaviour and perceptions about individual accountability which "can" have serious consequences.

Can anyone assist me in fleshing out a balanced - principles up - position that more adequately analyzes a "well run" socialist enterprise? I feel like I'm missing something - and all the good results in the world can't hide the nagging sensation I'm feeling that there are some fundamentally ruinous issues at play.

Cheers

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I feel like I'm missing something - and all the good results in the world can't hide the nagging sensation I'm feeling that there are some fundamentally ruinous issues at play.

Cheers

Socialized countries require unprincipled action which includes force to try and sustain the government. Anythings created in this manner cannot be good,

because it is not good for the individual.

I recommend listening to Peikoff's lecture, "Why One Should Act on Principle", which is available on the registered user page of The Ayn Rand Institute

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[...]

Apparently Stat-oil is a miracle of socialism.

[...]

Stat-oil is a miracle of OIL. Oil is a wildly profitable, relatively low-risk business that's almost impossible to not profit from. Lots of countries have state-run oil companies for this reason.

The other thing to untangle here is that there IS a very reasonable case to be made for the government owning (at least initially) "unclaimed" assets such as remote land, mineral rights, radio spectrum, oil, etc. Any asset owned by "everybody" should be maximized in value for "everybody's" benefit (i.e. the proceeds should be distributed evenly and NOT retained "for government purposes").

With that in mind, I don't have a problem with the government discovering an asset that it owns (viz. nobody else wanted to own it before) and selling it for as much as possible. In practicality, this might involve any sort of business relationship that would maximize it's value (royalties, out-right sale, etc. etc.). This should be done in a framework that maximizes value to the owner (in this case the People) and minimizes the possibility of corruption.

So in simple terms, stat-oil is an organization dedicated to ripping off the people of Norway's rightful windfall from the oil that they all own. It's as if you paid me to buy you a lottery ticket, won, and then I only shared 20% of the proceeds and kept the rest for myself without telling you. The Norwegians are getting the shaft.

***

As for the "workability" of certain economic systems, here it's important to point out the folly of making THIS your standard of value. The Egyptians had a system that "worked" in that they were able to build all of those lovely pyramids and there was relative order in the society and it lasted a long time. (For a visual: http://www.despair.com/achievement.html ).

This is to say that if you ignore the "morality question" you will inevitably arrive at some form of slavery. This is why economists are mere accountants in a society, and never truly "drive" anything (it's amusing to watch Paul Krugman beat his head against this--and get so "confused" about current events).

OP

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@Greebo:

Agreed. Insofar as a persuasive argument goes with a weak pragmatist though - it's not ideal. I suppose I was looking for something more specific to the Norwegian socialist "dream" experiment. I've since gone back and attempted to argue from a principled position. However, other than arguing that tax is theft - which formed the basis for the Norwegian majority share purchase - my argument is lacking oomph!

@brianleepainter:

Thanks for the input. I agree - I think I've become frustrated and impatient arguing with pragmatists and was looking for a different, refreshing angle to run with. Whenever I've jumped into a debate against a pragmatist by hammering home the necessity of acting on principles - I'm dismissed almost immediately as a crackpot. I find that counterproductive to constructive debate in non-objectivist circles. Thoughts?

@OptimizedPrime (love the name):

Thank you. Your comments articulate and crystallize those thoughts that I couldn't find the words for.

With respect to your second paragraph - it's an interesting concept, and one I haven't come across too often studying Objectivism - actual literature or the various forums and contributors. I'm not sure I agree with you on whether there can be a truly legitimate case for government involvement in economic enterprise. Starting from the ground up - they'd necessarily be required to tax additional funds (or voluntarily seek donations - how would that make any sense?) to supply the capital required to explore and build an organization, acquire the expertise and technology. How could this possibly be in "everyone's" best in interest? Who get's to decide such a decision?

Or are you assuming that the case can be made within the context of today's heavily involved government and pseudo-free market mixed economy... with an eye to less restricted future?

With respect to Stat-oil - it was formed, in the early 70's, as a 100% government owned corporation. It 'privatized' in the 80s or 90s when the government converted it to a publicly traded company and acquired a 67% ownership. I have no data on whether or not 67% of the profits are distributed to the whole population; however, I do know that Norway manages a public pension - +$600B - one of the single largest asset pools of its kind in the world. Allegedly, 30 years of oil profit has made it possible for the little population of 5 million people. I simply don't have the data to know how "benevolently" or "malevolently" the profits are being shared.

As for workability - pragmatism - I couldn't agree more. It was this line of reasoning that I pushed and am now advancing. =)

Did you see Krugman's recent comments? Check out what these guys have to say: http://mises.org/daily/5559/Keynes-and-Space-Aliens

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Thanks for the input. I agree - I think I've become frustrated and impatient arguing with pragmatists and was looking for a different, refreshing angle to run with. Whenever I've jumped into a debate against a pragmatist by hammering home the necessity of acting on principles - I'm dismissed almost immediately as a crackpot. I find that counterproductive to constructive debate in non-objectivist circles. Thoughts?

You're welcome, and I too have been frustrated at times when speaking with liberals, who try and bombard me with data and statistics independent of principles. I've learned that it is effective to ask a series of inductive questions to better understand what contradictions they hold.

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I'm not sure I agree with you on whether there can be a truly legitimate case for government involvement in economic enterprise. [...]

Yes, the government ownership thing is a narrow technical point that you don't see too often. I don't think I was making a case for government involvement in enterprise being a "good" thing--it's not. However, for various reasons it's perfectly legitimate for the government to own land (for instance) in order to do it's legitimate business, and the government might hold various forms of property because nobody has claimed it. When this happens, the property belongs to The People.

In the case of Norway, a long time ago the government probably found itself owning a whole bunch of ocean that nobody much cared about. Then somebody probably surmised there might be oil there, and asked the owner--the government in this case--for permission to look. At this point, the government is acting as a manager of the People's property, and they should do everything they can to maximize the value of the asset. This would probably involve some sort of agreement that might span from the company buying the entire area of land (or viz. only the oil rights) from the government, to the government assuming some of the risk in exchange for a bigger upside later. In a rational and free society, everybody knows that it is impractical for the government to be in the risk-taking business, so whatever deal they create should reflect that (however I'd disagree that an outright sale is always the best option--this needs to be decided on a case-by-case basis).

So the rule is probably this: the government should try not to own assets it doesn't need in the long run, and insofar as it does, all proceeds from the asset should be transferred directly to the people.

As such, I would have no problem if Norway's government contracted its land to one or more companies in exchange for a royalty on the oil. In this case all proceeds should be DIRECTLY transferred to the People equally (i.e. there should be no question of "ben/mal evolence"--it money does NOT belong to the government).

***

One last point to make about Norway is this: everything's easier when you are ULTRA RICH. Norway makes something like $30,000 PER CITIZEN in oil revenues (I just looked this up and I had no idea it was that high, holy cow).

If every citizen in Norway collected a check for $30k every year, they could have almost zero government and they'd still call that a MIRACLE.

OP

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You're welcome, and I too have been frustrated at times when speaking with liberals, who try and bombard me with data and statistics independent of principles. I've learned that it is effective to ask a series of inductive questions to better understand what contradictions they hold.

You qualify "questions" with "inductive." Why?

What do you mean by a series of inductive questions? What are inductive questions? Are there deductive questions or series of deductive questions? How do inductive (or deductive) questions differ from simple questions?

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You qualify "questions" with "inductive." Why?

What do you mean by a series of inductive questions? What are inductive questions? Are there deductive questions or series of deductive questions? How do inductive (or deductive) questions differ from simple questions?

I think I had misspoken, by qualifying "questions" with "inductive" which would then follow that there are "deductive" questions that differ from "simple" questions. It

would have been better had I simply said to use induction and deduction to better understand the proponent of Norwegian government and what contradictions

he holds. To try and know when in the conversation it is necessary to move onto more advanced topics such as helthcare and taxation, or go back to more basic concepts such

as rights and principles.

I think it would be difficult to debate a proponent of socialism in Norway if their understanding of rights is incorrect, if they hold floating abstractions such as "greater good", etc. I would first have to know what knowledge they held by asking for definitions and referents and ask the proponent to show me why man needs rights(in this case), such as for the concept "taxation" (since this thread is on norwegian government I'll use that as an example) Then I could reduce back to taxation is the initition of force, which is anti-reason, man needs reason to survive,etc. At the same time I'd have to know the proponents understanding of the use of principles. If there was an error in the understanding of the the concepts "rights" and "force" I would have difficulty in talking about advanced concepts such as"taxation" , "obamacare" and other things that are subsumed under the concept force, such as government programs in Norway.

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