entrepreneurial paradise

January 20, 2011 10:40 AM

In Norway, Start-ups Say Ja to Socialism - We venture to the very heart of the hell that is Scandinavian socialism—and find out that it's not so bad. Pricey, yes, but a good place to start and run a company. What exactly does that suggest about the link between taxes and entrepreneurship?
posted by kliuless (52 comments total)

> Dalmo likes the government's services, and he believes that he is paying a fair price...This is socialism, the sort of thing your average American CEO has nightmares about.

I'm picturing your average American CEO reading this and shuddering in disgust like Troy McClure did when he tried to imagine a world without lawyers.
posted by The Card Cheat at 10:58 AM on January 20, 2011 [4 favorites]

Social democracy.
posted by Pope Guilty at 11:00 AM on January 20, 2011 [11 favorites]

I imagine the significant oil wealth helps as well.
posted by leotrotsky at 11:01 AM on January 20, 2011 [3 favorites]

like Troy McClure did when he tried to imagine a world without lawyers.

Lionel Hutz. </comicbookguy>
posted by zamboni at 11:03 AM on January 20, 2011 [7 favorites]

Oh, man...rookie mistake. I'm getting old.
posted by The Card Cheat at 11:06 AM on January 20, 2011

If socialism means we all have to dress like those doofuses in the top picture, I'll keep being a capitalist pig till I drop dead
posted by spicynuts at 11:13 AM on January 20, 2011

Holte pays himself $125,000 a year. His lowest-paid employee makes more than $60,000. “You can’t just treat them like machines,” he says. “If you do, they’ll be gone.”

Ah, so it's a religious/philosophical difference. That explains it.
posted by anarch at 11:15 AM on January 20, 2011 [15 favorites]

leotrotsky: I imagine the significant oil wealth helps as well.

Doesn't help in your namesake's country, nor in Saudi Arabia or the Emirates.
posted by anarch at 11:18 AM on January 20, 2011 [8 favorites]

The vast majority of the oil money goes into their sovereign wealth fund, the social services are paid for out of taxation as far as I'm aware.
posted by knapah at 11:22 AM on January 20, 2011 [2 favorites]

If socialism means we all have to dress like those doofuses in the top picture, I'll keep being a capitalist pig till I drop dead

Good point. No in America ever dresses like that.
posted by NoMich at 11:23 AM on January 20, 2011 [3 favorites]

I imagine the significant oil wealth helps as well.

Isn't Norway actually pretty spendthrift about its oil revenue? I thought there was a NYT article on this a while back.
posted by Blazecock Pileon at 11:24 AM on January 20, 2011

Good point. No in America ever dresses like that.

Only the socialists.
posted by spicynuts at 11:25 AM on January 20, 2011

I imagine the significant oil wealth helps as well.
posted by leotrotsky at 11:01 AM on January 20 [+] [!]

There's this "resource blessing" canard trotted out whenever Norway is brought up in discussions of political economy, but I don't get it - the U.S. also had enormous resource wealth of a variety of kinds (and other types of wealth). Other European and Scandinavian countries have similar success without giant resource reserves as well.

The fact is that the U.S. frittered away its wealth on bloated, inefficient social spending and wars of choice; whereas some other countries invested it and use the dividends wisely. The US just doesn't have the political will to extract the proper price for its natural resources when it sells and leases them off to the private sector, or to manage them prudently.

OTOH, for a successful USian example of Norway-style resource management, see the Alaskan Permanent Fund. It's too bad it wasn't emulated nationally for timber, coal, minerals, etc.
posted by r_nebblesworthII at 11:28 AM on January 20, 2011 [6 favorites]

The food isn't great.

That's the understatement of the year, as far as I'm concerned.

I have pointed out time and time again that the amount I pay in tax (although high) here in Norway is still less than my peers in America, when you add up what they pay in tax, plus what the pay in heath care, plus what they pay for retirement.

Yes, the oil wealth helps, but Sweden and Denmark do similar things, but without the oil wealth.

The one majorly unaccounted for thing in this article is that things are very very expensive here - not just because of the 25% sales tax on everything, but things are also just really expensive - especially food (despite being bad). So while $60k sounds like a lot, it is perhaps not as great as it sounds.

One could also argue that the title should be "Say Jo to Socialism", but that's probably being overly pedantic.
posted by grajohnt at 11:29 AM on January 20, 2011 [12 favorites]

I've been thinking about this for a while in the context of health benefits specifically. Of course it's intuitive that if you make it easier for people to get their most important needs met outside of the context of the typical full-time job, then they're freer to start a new enterprise.

It works from an investment as well as a personal angle too, though. Health care makes up a significant chunk of labor costs. Tell investors and entrepreneurs they can lower their upfront costs by 10-20% in exchange for some order-of-magnitude smaller percentage of their profits (should they even succeed) and... well, given that this is the kind of deal people make all the time in the capital markets, you'd think they'd take it.

But we don't really want to offer it to everybody, apparently.

I imagine the significant oil wealth helps as well.

There's some discussion of that in the comments of that last link. Oil probably does help, but given how many places don't seem to turn their natural resources into the kind of broad benefits that Norway enjoys, it's not a stretch to give real credit to their policies.
posted by weston at 11:30 AM on January 20, 2011 [2 favorites]

If socialism means we all have to dress like those doofuses in the top picture, I'll keep being a capitalist pig till I drop dead.

Yeah you tell 'em.
posted by Civil_Disobedient at 11:45 AM on January 20, 2011 [7 favorites]

*Every* time there is an advance for workers proposed, "serious businessmen" say it will destroy the economy. The few times that hasn't killed the advance, it has turned out that not only did life go on, but business actually improved. What they really fear is change. Conservatives are conservative.
posted by DU at 11:45 AM on January 20, 2011 [14 favorites]

Most Norwegians seem to be saying 'Nei' or at best 'Tja' to socialism. The only real socialist alternative got zero MPs in the last election, and the quasi-socialists in government are being overrun in case after case by a (increasingly conservative) labour.

And then there's the Tea Party, polling in the 20's. I wouldn't worry too much.
posted by klue at 11:48 AM on January 20, 2011

Conservatives are conservative.

Except when changes would result in higher profits.
posted by anarch at 11:50 AM on January 20, 2011

Except when changes would result in higher profits.

No, as pointed out, many labor advances have resulted in higher profits. The only changes-resulting-in-higher-profits that Serious Businessmen care about are short-sighted ones (e.g. raising prices, cutting corners, shipping jobs to China, etc).
posted by DU at 11:56 AM on January 20, 2011 [3 favorites]

Yeah, entrepreneurs and business owners really seem dumb as fucking rocks sometimes. Their reasoning so often boils down to "Ug! Me own business! Me need make money! Taxes take my money! Taxes BAAAAAD!". The more "Capitalist" the country, the stronger this attitude.

Surely anyone with the beginnings of a brain would think to themselves "Hey, wouldn't it be nice if there was a strong, well maintained infrastructure underlying my business? It would be nice if the wealth was more evenly distributed in the population too, so everyone could by my product, rather than a whole section of the population being too poor to even try to sell to. It would be great if a wider section of the population was able to receive an excellent education as well - it would make for smarter employees, and less investment in training by me. And it would be great if the population were kept healthy as well, so my workforce were healthier, and I didn't have to negotiate as a lone actor to provide them with health care. I mean, sure it's going to cost to have all this stuff, but if I could get this kind of service for an annual fee (taxes!) and let the experts in these fields handle it all, it would surely make for a more stable, low-risk environment in which to do business!"
posted by Jimbob at 11:57 AM on January 20, 2011 [32 favorites]

I've been thinking about this for a while in the context of health benefits specifically. Of course it's intuitive that if you make it easier for people to get their most important needs met outside of the context of the typical full-time job, then they're freer to start a new enterprise.

Yeah, that's the thing I just don't get. Our current health care regime sucks up so much overhead from businesses, especially small businesses. It's such a pain in the ass, an expensive pain in the ass, that I can't understand why there isn't a loud clamoring from the business community to scrap it and replace it with something, anything, else.

Single-payer seems like it would be a huge blessing to employers. They wouldn't have to worry about providing their workers with health care any more.

I don't get it.
posted by mr_roboto at 12:00 PM on January 20, 2011 [13 favorites]

mr_roboto, I am in complete agreement, and also completely baffled.

Much of the problem in the U.S. is the American Myth. You too can be fabulously wealthy! Just like Mark Zuckerburg. And Bill Gates and Warren Buffet. It's phony bullshit, but Joe Six Pack obediently laps it up, as he blows the remainder of his paycheck on lottery tickets.

Ever wonder why financial and lifestyle magazines never feature "working-guy-struggles-to-make-ends-meet-despite-60-hour-weeks" on their covers?

The Scandinavians aren't perfect, but the average Scandinavian is a damn sight better off than the average American. (Full disclosure: I have Swedish relatives)
posted by Xoebe at 12:26 PM on January 20, 2011 [2 favorites]

Of course it's intuitive that if you make it easier for people to get their most important needs met outside of the context of the typical full-time job, then they're freer to start a new enterprise.

They're also freer to leave the shitty job in which you currently employ them.
posted by kenko at 12:41 PM on January 20, 2011 [3 favorites]

The reason this hasn't happened yet in the US is because some people are more interested in making sure no brown people are "free riders," than they are in making sure that the overall ride is a good one.
posted by wuwei at 12:52 PM on January 20, 2011 [6 favorites]

*Every* time there is an advance for workers proposed, "serious businessmen" say it will destroy the economy.

Women's suffrage and other visions of right-wing apocalypse.

“It may be impracticable that our distinctively American experiment of individual freedom should go on.”
—Senator David Hill (D-NY), in 1894, bemoaning the creation of a federal income tax

“[T]he child will become a very dominant factor in the household and might refuse perhaps to do chores before six a.m. or after seven p.m. or to perform any labor.”
—Senator Weldon Heyburn (R-ID), in 1908, on why child labor should remain unregulated

“I fear it may end the progress of a great country and bring its people to the level of the average European. It will furnish delicious food and add great strength to the political demagogue. It will assist in driving worthy and courageous men from public life. It will discourage and defeat the American trait of thrift. It will go a long way toward destroying American initiative and courage.”
—Senator Daniel O. Hastings (R-DE), in 1935, listing the evils of Social Security

“It is socialism. It moves the country in a direction which is not good for anyone, whether they be young or old. It charts a course from which there will be no turning back.”
—Senator Carl Curtis (R-NE), in 1965, opposing Medicare

“[T]his bill could prevent continued production of automobiles . . . [and] is a threat to the entire American economy and to every person in America.”
—Lee Iacocca, executive vice president of Ford Motor Company, in 1970, on why the government shouldn’t regulate airborne contaminants that are hazardous to human health

“The doctor begins to lose freedoms; it’s like telling a lie, and one leads to another. First you decide that the doctor can have so many patients. They are equally divided among the various doctors by the government. But then the doctors aren’t equally divided geographically, so a doctor decides he wants to practice in one town and the government has to say to him you can’t live in that town, they already have enough doctors. You have to go someplace else. And from here it is only a short step to dictating where he will go.”
—Ronald Reagan, in 1961, arguing against the creation of Medicare

More at the link.
posted by ibmcginty at 12:55 PM on January 20, 2011 [25 favorites]

I really think the reason why business owners/execs reject "big government" initiatives that could potentially lead to longer-term profits is not evil, but just normal human short-sightedness. It's hard to conceptualize cost savings 10-15 years away, and businesspeople are on the hook for results on a quarterly basis. They (rightfully!) fear the short-term costs that might result in longer-term profits, because no one's really judged on long-term profits.

It's the same reason the UAW could extract enormous salaries from auto companies; neither party was thinking about longer-term cost sustainability; they were only concerned with keeping the line moving.

I'm not sure how to change the short-sighted nature of business culture in America; it's partly human nature but it also has something to do with the way our stock markets are structured. I think a Tobin tax might help, but I'm not entirely convinced.
posted by downing street memo at 1:14 PM on January 20, 2011 [1 favorite]

It seems there are plenty opportunities to explain the Scandinavian system her on the MeFi.
First of all: obviously, we fight a lot among ourselves, and lots of Scandinavians would love to kill Scandinavian economics, regardless of facts. Or rather: because some people imagine they themselves would be Zuckerberg and Gates *if only*, and thus believe they would benefit from a dismantling of our social system. I love telling these guys that if they were Zuckerberg or Gates, they would be our friend Janus Friis, or if they wanted to be Buffet, they would be Maersk.
In other words, one has to be a demagogue to claim Scandinavian countries are socialist. Rather, deals were made, early on in the 20th century, in all the Nordic nations. The specifics aren't at all identical, but at the heart of these deals is the point that the wealth of capitalists and the welfare of workers are two parts of a whole.
So we have universal healthcare and five weeks of holidays. And a year of maternity leave to be shared among spouses. And equal rights for gays. And are still richer and more productive than most nations.
Also, we have all the problems every other western nation knows. Essential production is being outsourced and the population is aging. As in the US, our basic education is falling apart, though high-schools and universities are improving - maybe
At the end of the day - it seems like we have found a way to go. For us. Not for everyone. Guns and general mistrust of others won't fit in here. We are really, really bad at dealing with immigration, even though we need to do so.
posted by mumimor at 1:27 PM on January 20, 2011 [7 favorites]

The more time I spend talking and hanging out with my Norwegian relatives, the more angry I get that by chance I was born in this country. I never really realized until recently how much energy it takes to *worry* about how to pay for my healthcare, and my education, and how depressing it is to have to keep a shitty job because if I quit, I might be *homeless* inside of a month.

My cousins do not worry about any of these things. Nearly *all* of them are entrepreneurs who make a good living, and live in very nice apartments and houses. None of them are entrepreneurial geniuses. None of them work especially hard. They take fabulous vacations that I could only dream of. I have one cousin who by family standards is a bit of a ne'er-do-well. She sometimes does massages, I think. Supposedly she has a health issue that keeps her from doing much more. But guess what? If she lived in the US, she'd be living in a trailer park or Section 8 housing. She'd probably die much younger than she will in Norway. Instead, she gets to run off to Ibiza and run around the beaches naked.

Yes, I have become habitually jealous. The fact that I can't just up and move there is a bit of a thorn.
posted by RedEmma at 1:35 PM on January 20, 2011 [8 favorites]

Also: I have one Norwegian relative who works for a major oil company, and is openly conservative. He's always talking about "reform." But he laughs at US republicans. He thinks they're idiots for denying that you have to pay for public health--and the greed of US CEOs makes him shake his head.
posted by RedEmma at 1:37 PM on January 20, 2011 [7 favorites]

Print-friendly version.
posted by mecran01 at 1:38 PM on January 20, 2011

Also: I realized that this summer, none of them even likes to *visit* the US anymore. They think it's too depressing.
posted by RedEmma at 1:39 PM on January 20, 2011

Also: I realized that this summer, none of them even likes to *visit* the US anymore. They think it's too depressing.

Isn't it grand? Sometimes I lie awake at night and wonder if this is what it's like to live in a dying empire. Then I wake up and chide myself for beating a dead cliche.

Still though, it's unnerving.
posted by thsmchnekllsfascists at 2:12 PM on January 20, 2011 [1 favorite]

"Although personal taxes on entrepreneurs are high, the tax rate on corporate profits is low—28 percent, compared with an average of about 40 percent in combined federal and state taxes in the U.S. A less generous depreciation schedule and higher payroll taxes in Norway more than make up for that difference—Norwegian companies pay 14.1 percent of the entirety of an employee's salary, compared with 7.65 percent of the first $106,800 in the U.S.—but that money pays for benefits such as health care and retirement plans. "There's no big difference in cost," Flo says. In fact, his company makes more money, after taxes, on items sold in Norway than it does on those sold in its California shop."

"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."


If socialism means we all have to dress like those doofuses in the top picture, I'll keep being a capitalist pig till I drop dead.

Those guys run this company (please note that both links have rather loud background music) and people are not just buying their clothes, but also this Norwegian création - the OnePiece chillout suit. This t-shirt is also created in Norway.
posted by iviken at 2:40 PM on January 20, 2011

*laughs*

One of my cousins was trying to get me to buy one of those as a gift for my 16 yr old stepkid. I thought--yeah cool, maybe--but I wasn't going to take the chance that my girl would be into wearing a onesie. Chances were too high she'd think i'd gone off my nut. Some fashion stuff over there just ... no, even in Duluth.
posted by RedEmma at 3:09 PM on January 20, 2011 [1 favorite]

In the US, where a president who consistently extols free-market solutions to social problems, can be described as a socialist in mainstream politics, the word has really little meaning.

Norway is a social democracy, and the social part of that construction is not philosophically so different from Bismarck's Germany, the birthplace of social security among other things. Bismarck saw the social welfare safety net as protecting the state *from* socialism.

The main problem in the US is that we don't really believe in the state at all. I mean, a significant proportion of the population believe that government taxation is a fundamental violation of property rights and liberty itself. You can't have government without taxation. In terms of political philosophy that's going back at least 500 years in European history. It's a feudal mentality with only a flimsy cover of 18th century libertarianism ala Tom Paine.
posted by ennui.bz at 3:16 PM on January 20, 2011 [6 favorites]

ibmcginty's excellent list puts me in mind of egalitarian liberal Joshua Cohen's cogent essay on how libertarians are "always at the after party, inconspicuous at the main event, and never on the planning committee" when it comes to advances in liberty and social flourishing. Good stuff.
posted by col_pogo at 3:45 PM on January 20, 2011 [4 favorites]

As a small business owner, I am focused on the bottom line. That's why I simply do not understand why many/most other small business owners seem adamantly against socialized healthcare.

The fact (for my company and personality) is that having employees is a giant pain. That pain is greatly magnified by health insurance costs.

Seriously, having to shop for group health insurance is a giant, wasteful, time-consuming, expensive hassle. Also one that no one is really happy with at the end of the day. Yes, I could conceivably have an HR person do that, but my company isn't big enough to need one other than for that reason.

I would *so much* prefer to simply have the government take care of it, charge me and my employees in taxes, and be done with it. Both I and my company would make a lot more money if we didn't have to waste our time playing the health insurance run-around game. Most notably, I could be selling instead, which I'm a lot more talented at and interested in than insurance shopping.
posted by Invoke at 3:54 PM on January 20, 2011 [12 favorites]

It's a feudal mentality with only a flimsy cover of 18th century libertarianism ala Tom Paine.

Or, maybe not so much. Tom Paine's Agrarian Justice "advocated the creation of a social insurance scheme for the aged and for young people just starting out in life. The benefits were to be paid from a national fund accumulated for this purpose. The fund was to be financed by a 10% tax on inherited property."
posted by weston at 4:41 PM on January 20, 2011 [1 favorite]

So we have universal healthcare and five weeks of holidays. And a year of maternity leave to be shared among spouses. And equal rights for gays. And are still richer and more productive than most nations.

*sigh* I think I'm in love.
posted by NoMich at 5:01 PM on January 20, 2011

Now all you have to do is get her/him to marry you, and you're in like flynn.
posted by RedEmma at 6:30 PM on January 20, 2011

I'm a little surprised by the conservative-bashing going on here. It's not just the right that hinders the adoption of Nordic policies in North America.

Nordic countries tend to be very capitalist and market-oriented, even more so than the USA in a lot of areas (Really! Also, check any economic freedom index), with large progressive income transfers to compensate for that. And it's a system that works very well.

Obviously, American conservatives oppose Nordic-style income transfers and they're dicks for doing so. But can you imagine the American left agitating for a public health option with co-payments like in Sweden? Or opening US markets to foreign investment to the extent that most Nordic countries do? Or welcoming privatization of fire services like in Denmark?

In my view, capitalism and progressive income redistribution are both essential parts of Nordic economies - it's a shame that most North Americans can only accept one part of that equation.
posted by ripley_ at 8:48 PM on January 20, 2011 [2 favorites]

Norway is too small i.e. too different to learn from so straightforwardly
posted by Philosopher's Beard at 10:29 PM on January 20, 2011

It's all power, kids. Businessmen resist change not implemented by businessmen because part of the capitalist ideology is that you are the absolute master of your property. To allow the government, or the workers, or anybody but the owner of the business to have a say in how the business runs is a crime against property and is therefore tantamount to expropriation. To suggest that people other than business owners have a say in how firms are run is, therefore, indistinguishable from communism by business owners and by those who are not business owners but have sold their identities to the ownership class.
posted by Pope Guilty at 10:44 PM on January 20, 2011 [2 favorites]

weston wrote: "But we don't really want to offer it to everybody, apparently."

Of course not. Why would we want more competition?

Seriously, we as a nation are very good at not doing things that improve the efficiency of our capitalist system out of the fear of not-really-socialism.
posted by wierdo at 11:15 PM on January 20, 2011

High taxes can be a motivation for higher productivity. The more of my money the Government takes in taxes, the harder I need to work to get the same output.

Reducing taxes might well reduce productivity - I can achieve a level of income I am happy with by expending less effort.

It's only if you think that everyone is motivated to earn as much as they possibly can that might justify reducing taxes as a spur to business. My experience is that most people are happy to stop busting a gut when they earn enough.
posted by winjer at 11:38 PM on January 20, 2011 [1 favorite]

Interesting discussion; always interesting to see my country through your eyes. I do have to correct two minor issues in the article:

"There are no private schools in Norway" - Yes, there is. There are two ways to obtain permission to start a private school here: Start a school with an alternative religious fundament (i.e. Catholic schools); or start a school with an alternative pedagocial method (i.e. Steiner or Montessori). The socialist parties want fewer or no private schools, and the conservatives want more.

"Polar bear strikes" - Well, there are no polar bears on the mainland, and even in polar bear territory years pass between slayings. You're more likely to be killed by lightning strike.
posted by Harald74 at 1:53 AM on January 21, 2011 [1 favorite]

Wiggo Dalmo nails it (for me) with this quote on the first page:

"What we're doing when we are paying taxes is buying a product. So the question isn't how you pay for the product; it's the quality of the product."

There are obviously a load of values underpinning that statement, but I really do think that's the pertinent issue. Here in the UK the last government overspent even in the boom years, and yet on almost any metric, didn't deliver improvements commensurate with the spending. That's almost something you can agree with regardless of your politics: the only people I know who disagree are the ones furthest to the left. And so it's now the issue facing the ex-government who are now the (left-leaning) opposition: leftist politics is associated with high government spending on a large civil service / benefits system, but what do you offer, and how do you define a leftist party, when there's no cash in the pot any more?

People want to see value for money in their taxation: the trick is delivering an effective perception of value (or experience of consuming government 'products') to a population with widely differing ideas of what value means in this context.

It seems like they've got a better idea of what this means in Norway, even if the population is a bit more homogeneous in their expectations.
posted by dowcrag at 2:17 AM on January 21, 2011

*Every* time there is an advance for workers proposed, "serious businessmen" say it will destroy the economy.

Whenever a rich bastard tells you that trying to do something for the least well-off in society will "damage the economy", s/he always means, "will damage my personal wealth and my opportunity to screw even more out of a system that's already designed in my favour."

Man, it cracks me up when the American right bang on about "socialism" and call people like Obama a "socialist". To nick a phrase I believe I may have seen elsewhere on MeFi: most Americans wouldn't know left if they turned right three times. Eat the rich.
posted by Decani at 4:19 AM on January 21, 2011 [4 favorites]

Eat the rich.

Huh, no response from the civility in discourse crowd yet. Weird.

Guess we can feast.
posted by thsmchnekllsfascists at 7:24 AM on January 21, 2011

Norway is too small i.e. too different to learn from so straightforwardly

I have heard this idea parroted many times by people who are unwilling or unable to make any substantive defense of it. Why, exactly, is social policy extending to 5 million people not applicable to "large populations"? If anything, the US has a larger risk pool to make health insurance cheaper per capita, and more insanely-wealthy people to tax the everliving shit out of in order to pay for social services.
posted by Mayor West at 7:53 AM on January 21, 2011 [2 favorites]

Huh, no response from the civility in discourse crowd yet. Weird.

posted by thsmchnekllsfascists at 3:24 PM

I ate them.
posted by Decani at 12:08 PM on January 22, 2011 [1 favorite]