I’ve had a love affair with Norway forever, since I first visited there back in the ‘80s, which has prompted more than a few mash notes on this blog.
And now I get to write another one, thanks to Inc.’s story on entrepreneurship in Norway. It appears that, right-wing talking points notwithstanding, entrepreneurship and innovation aren’t stagnant in places like Norway, where taxes are brutally high and socialism is embraced whole-heartedly:
Norway is also full of entrepreneurs like Wiggo Dalmo. Rates of start-up creation here are among the highest in the developed world, and Norway has more entrepreneurs per capita than the United States, according to the latest report by the Global Entrepreneurship Monitor, a Boston-based research consortium. A 2010 study released by the U.S. Small Business Administration reported a similar result: Although America remains near the top of the world in terms of entrepreneurial aspirations — that is, the percentage of people who want to start new things—in terms of actual start-up activity, our country has fallen behind not just Norway but also Canada, Denmark, and Switzerland.
That’s gotta hurt. This flies in the face of every Republican talking point we’ve been given since, well, forever. I’m sure we won’t be hearing about the “Norwegian miracle” in the Wall Street Journal.
In fact, I actually know people who live and work in Norway. One American friend recently told me about how his Norwegian partners laughed in his face when he asked about liability insurance for the hotel they were opening. Not necessary, he was told. What about lawsuits? “Silly Americans, always with the lawsuits!” they laughed. “Why would anyone sue? If you’re hurt you go to the hospital!” Apparently Norway’s strong social safety net and socialized medicine is a better defense against frivolous lawsuits than the “tort reform” conservatives are always pushing.
Imagine that. Indeed, that appears to be what Inc.’s reporter found. It’s a fascinating read, I hope you will hop over there and give the article your time. (And that goes for my wingnut friends–*cough*cough*JIM*cough*cough*–who I’m sure are dying to post Cato Institute and Heritage Foundation links here. Read the damn article first, please. Thanks.)
I found really interesting the article’s discussion of taxes. Tax rates in the U.S. have basically been slashed in half over the past 30 years but what did we get for it? Zip:
But there is precious little evidence to suggest that our low taxes have done much for entrepreneurs—or even for the economy as a whole. “It’s actually quite hard to say how tax policy affects the economy,” says Joel Slemrod, a University of Michigan professor who served on the Council of Economic Advisers under Ronald Reagan. Slemrod says there is no statistical evidence to prove that low taxes result in economic prosperity. Some of the most prosperous countries—for instance, Denmark, Sweden, Belgium, and, yes, Norway—also have some of the highest taxes. Norway, which in 2009 had the world’s highest per-capita income, avoided the brunt of the financial crisis: From 2006 to 2009, its economy grew nearly 3 percent. The American economy grew less than one-tenth of a percent during the same period. Meanwhile, countries with some of the lowest taxes in Europe, like Ireland, Iceland, and Estonia, have suffered profoundly. The first two nearly went bankrupt; Estonia, the darling of antitax groups like the Cato Institute, currently has an unemployment rate of 16 percent. Its economy shrank 14 percent in 2009.
Moreover, the typical arguments peddled by business groups and in the editorial pages of The Wall Street Journal— the idea, for instance, that George W. Bush’s tax cuts in 2001 and 2003 created economic growth—are problematic. The unemployment rate rose following the passage of both tax-cut packages, and economic growth during Bush’s eight years in office badly lagged growth during the Clinton presidency, before the tax cuts were passed.
And so the case of Norway—one of the most entrepreneurial, most heavily taxed countries in the world—should give us pause. What if we have been wrong about taxes? What if tax cuts are nothing like weapons or textbooks? What if they don’t matter as much as we think they do?
Ah yes, what if? What if “we” have been wrong, lo these many years?
It’s almost laughable. Of course “we” haven’t been wrong, but conventional Villager wisdom has been. Folks like Paul Krugman have been writing about this for years. Nobody but a bunch of Dirty Fucking Hippies have bothered to notice what a bunch of voodoo nonsense “trickle down economics” and “the Laffer Curve” are. But, ya know, don’t listen to us!
Conservative economics doesn’t work, never has, we all know it yet people keep repeating the same tired old canards about high taxes crushing entrepreneurship and killing jobs because they’re fucking children, little itty bitty babies who want their cake and candy and not their nutrition. We’re children who prefer to believe fairy tales because they feel oh so good even though they aren’t real.
No wonder the empire crumbled.
But don’t worry, America. You will never, ever have to suffer the slings and arrows of affordable healthcare, a clean environment, low unemployment, and a high standard of living like our Norwegian friends. That’s because we in America have been brainwashed for an entire generation into thinking certain things like taxes are a soul-crushing evil. Who needs taxes when we have our beloved Puritan work ethic, and “rags to riches” mythology, ammiright? The idea that America is the land of opportunity is as central to our national identity as the Stars and Stripes and National Anthem. Continually these national talismans prove to be worthless fairy tales, yet we cling to them because the idea that America is not the land of opportunity is just too painful to bear.
Norwegians have a completely different attitude toward taxes which I just can’t imagine flourishing in the United States. They don’t see it as a “punishment” the way some people, especially conservatives, do. Norwegians see taxes as an investment in their families and their country. Because they receive such high level of tangible services — healthcare, pensions, free education (from preschool to college), robust family leave, etc. — there’s an actual value. America never invested in itself in such a fashion; instead, what we get for our tax dollar is war. Buyers’ remorse, anyone?
This may help explain why entrepreneurship in Norway has thrived, even as it stagnates in the U.S. “The three things we as Americans worry about—education, retirement, and medical expenses—are things that Norwegians don’t worry about,” says Zoltan J. Acs, a professor at George Mason University and the chief economist for the Small Business Administration’s Office of Advocacy. Acs thinks the recession in the U.S. has intensified this disparity and is part of the reason America has slipped in the past few years. When the U.S. economy is booming, the absence of guaranteed health care isn’t a big concern for aspiring founders, but with unemployment near double digits, would-be entrepreneurs are more cautious. “When the middle class is shrinking, the pool of entrepreneurs is shrinking,” says Acs.
I guess one could say Norway has never had to worry about being overrun by Russian tanks in the past 60 years — I mean, since the end of World War II America has basically decided to be the world’s police force. I’m not smart enough on foreign affairs to ascertain how credible such a threat has been, anyway. But when comparing our two countries, it does seem like we got a raw deal.
Ultimately, the problem America faces is psychological. We’re just completely unable to have a serious conversation about anything right now, and I don’t see that changing:
Holte was fascinated by this last topic, particularly the angry opposition to President Obama’s health care reform package. “It makes me laugh,” he says. “Americans don’t understand that you can’t have a functioning economy if people aren’t healthy.”
Holte’s American subsidiary pays annual health care premiums that make his head spin—more than $23,000 per employee for a family plan—and that make the cost of employing a software developer in the United States substantially higher than it is in Norway, even after taxes. (For a full breakdown, see “Making Payroll.”) Holte is no pinko—he finds many aspects of Norwegian socialism problematic, particularly regulations about hiring and firing—but when he looks at the costs and benefits of taxes in each country, he sees no contest. Norway is worth the cost.
This makes so much sense — in fact, it is the logic behind such things as liberals’ desire for single-payer healthcare — yet we just can’t seem to have a rational conversation about these things anymore (if we ever did). Because as soon as someone tries to point out the economic impact of our lack of any reasonable social policy, America’s Vuvuzela Chorus strikes up and it’s all “job killing healthcare reform” and “death panels” and “Socialsim-Fascism-Nazi-baby-killer” bullshit. We never get to have a grown-up conversation! Everything immediately disintegrates into lies and bullshit.
It’s killing this country and it’s leaving us in the dust behind more progressive countries like Norway.