Scandinavia not as rich as we thought?

sovtek

TomF wrote:

The role, and status, of the EU in the economic reform process has also changed. Instead of a clear focus on economic reforms and growth, the EU (the Commission as well as the Council) has concentrated its ambitions on other political objectives. Hence, the EU no longer is – or is seen as – the great economic liberator of Europe. It is generally not performing as a vehicle for reforms, nor as leverage for policies that are needed but impossible to accomplish in the national political arenas.

I wonder what "reforms" are being refered to here. Might they be the "neo-liberal" reforms that are increasingly unpopular because they dont work so well. That's after being preached like a religion in the early 90's (well they still are actually)...and that many people besides Europeans are seeing them for what they really are.
Maybe that makes them "impossible to accomplish in the national political arenas" because people don't want them...but then screw democracy...we must have "free markets" or else.

PH01

I really wonder how accurate the data can be that comes out of these surveys? Like what is the accuracy provision given? And since there is so much factors at play here are they accurately comparing the US and the EU like for like?
I doubt it.
Sure we can say the US is richer than the EU. That's a given. And Norway and the other Scandinavian countries are never going to be richer than US.

They should be talking more about quality of life rather then purchasing power. That would be a far better comparable and it would tell you more.

The Saint

I fond it interesting that the division of wealth is completely ignored in this report. The US might well be richer but where does the money lie. It is most certainly not distributed amongst all peoples in the country. As the list below shows, 1% of the population has 38% of the wealth of the country where the bottom 40% has just 0.2%. I don't care if the US is the richest country in the world. I would not want to live in a place that such a vast difference between the richest and the poorest.


% of US Population % of Wealth Owned
==========================================================
Top 1% 38.1%
Top 96-99% 21.3%
Top 90-95% 11.5%
Top 80-89% 12.5%
Top 60-79% 11.9%
General 40-59% 4.5%
Bottom 40% 0.2%

http://answers.google.com/answers/threadview?id=2050


Per capita GDP in 2003 was $37,700, $100 less than the United States and up from $27,700. Norway has a superb balance of trade and no foreign debt. (The U.S. foreign debt is $1.4 trillion).

Norway's hourly productivity rate is 10 percent higher than that of the United States. Norway's unemployment rate for 2003 has been estimated at 4.6 percent.

Most Norwegians have five weeks of vacation time each year, and there are eleven paid holidays.

The top 10 percent in household income in 1995 did 21.8 percent of the spending, and the lowest 10 percent of households did 4.1 percent. In France these figures for 1995 were 25.1 and 2.8. These figure for the United States in 1997 were 30.5 percent and 1.8 percent. The relatively poor of Norway spend about twice as much as do the relatively poor in the United States.

Norway is highly advanced in technological and medical equipment. Infant mortality is 3.73 deaths per 1,000 live births, compared to 6.63 in the United States.

In 2003, Norway spent $308 per capita on foreign aid, compared to $23.76 for the United States.

In total crimes reported, Norway ranks close to Germany -- less than the United States and more than Japan. Norway had 39 reported assaults in 2002, 3.3 per 1,000 in 2003, well below 7.7 per 1,000 in the U.S., well above 1.8 for France and 1.4 for Germany.

Norway leads the world in the average number of years spent in education: 16.9. US being 15.2.
http://www.fsmitha.com/world/norway.html

Murders per capita
Norway 0.01 per 1000 people
United States 0.04 per 1000 people

http://www.nationmaster.com/red/graph-T/cri_mur_cap&int=-1


I know which country I'd like to live in.

shotamoose

The Saint wrote:

I fond it interesting that the division of wealth is completely ignored in this report.

Exactly. People at the bottom of the ladder in Scandinavia seem to be better off than their equivalents in the US. My favourite illustration is this graph of child poverty (not relative poverty, but measured according to the US poverty line). Around 14% of children in the US live in poverty according to its own poverty line; compare that to 3% in Norway, 5% in Denmark and Sweden and 7% in Finland (again, according to the same measure of poverty).



I'd echo what Saint said about the the importance of leisure time and debt when measuring economic progress, and what Meh said about factoring in free services and benefits in kind. Also, according to The Economist US GDP figures are artificially boosted by different accounting practices:

American statisticians count firms' spending on software as investment, but in much of Europe it counts as a business expense, and so is excluded from final output. Thus the surge in software spending since the mid-1990s inflated America's GDP growth relative to elsewhere.

Oh and if you use Gross National Income instead of GDP then Norway is apparently richer than the US.

Lastly, these kind of basic international comparisons ignore very different demographics between countries. Sweden didn't suffer significant losses of working-age people from the two World Wars so it's growth in the few decades after was boosted compared to that of other rich countries. But subsequently it ended up with a big elderly population before anyone else, which partly explains its poorer performance in the 1980s and 1990s. That bastion of leftist propaganda the IMF has produced a nifty chart comparing trends in Swedish GDP per working-age person with a group of five OECD countries with "relatively smaller tax-transfer systems" (Australia, Canada, New Zealand, the United Kingdom, and the United States):



So, not only did Sweden not perform worse than countries with smaller welfare states over the last four decades, it actually overtook them when you adjust your measure for demographic trends!

TomF wrote:

I had never heard of Johann Norberg so did a Google and found an interesting debate between him and Robert Kuttner. There are even photographs of the two men, and judging strictly from appearances, I think Kuttner might get fewer votes in the "Which one would you choose to be stranded on a desert island with?" poll.

Well, Norberg may be a dish but he's not a particularly reliable source. He and Timbro have made it their life's mission to convince everyone of the horrors of Sweden's social democratic system whether it's true or not. Obviously this stuff is lapped up by Republicans in the US desperate to detract attention from the remarkably poor performance of the economy under George Bush.

TomF

shotamoose wrote:

My favourite illustration is this graph of child poverty (not relative poverty, but measured according to the US poverty line).


Well, Norberg may be a dish but he's not a particularly reliable source.

Well, it was far from statistics I was reared, but I'd say graphs of child poverty comparing countries like the U.S. where there is more than a replacement rate of births to European countries that are quickly unbreeding themselves out of existence might be a little on the suspect side.

And, suggesting Norberg being a dish was not my intent in an earlier posting, rather that I'd hate to be marooned with the other guy who has a mad look in his eyes. You'd wonder if he ever stops talking.

Sand

I distinctly remember that market opening up in America about the time the French told Reagan to piss off when he wanted to bomb the baby's room in Libya.

Well seeing as you mention the French, maybe it opened up when De Gaulle found himself in the unacceptable position of finding out that Frances time as a world power was over, and with it the Empire, and the desperately anglo-saxon Americans were actually the world power? The French certainly had no problem with ignoring the UN security council to carry out invasions in the Balkans.

Now if the average American had any clue what was going on in Europe or much less what the Europeans were watching on TV..then you might have a point.

They seemed to wakeup to that freedom fries messing - to the point where Chirac and Schroeder have been trying to kiss and make up ever since....Anyway, this is offtopic. I bow to your superiour knowledge of why the US is the evil empire.

I fond it interesting that the division of wealth is completely ignored in this report.

Equality of income distributions is of dubious merit - one way to look at it would be to say the US rewards successful and motivated people far more than the Norwegian system, which does not provide the same incentives. By definition there has to be inequality to reward the successful over the unsuccessful. Perfect income equality is not desirable, or at least it would complete remove incentive to succeed, which is not desirable.

Obviously this stuff is lapped up by Republicans in the US desperate to detract attention from the remarkably poor performance of the economy under George Bush.

Agreed, much as Europeans lap up predictions of impending US economic implosion rather than recognise their own incoming disasters that are state penions, aging populations, and politically active pensioners who will fight tooth and nail against reforms.

Victor

Ironic on one hand your talk about Norway and then expand your argument to EU-v-USA, when Norway isn't part of either.

And while Norway has it's pension liabilities largely prefunded, a lot of other countries don't (in fact the USA is in a hole of about $20,000,000,000,000). So who really is richer? What does it matter that one country has a greater GNP if it wastes that GNP on war, gas-guzzling and uneaten hamburgers?

Sand wrote:

Perfect income equality is not desirable, or at least it would complete remove incentive to succeed, which is not desirable.

Which presumes the only incentive to succeed is money. Which when you look at things is far from correct. Many of the people who have improved either themselves or their societies have done so out of a desire of improvement, whether drawn from personal pride, policital desire, medical compassion or simply the mad-cap idea of making a better widget. The American problem is it can't seem to count anything unless it can be converted to money.

bonkey

TomF wrote:

Well, it was far from statistics I was reared, but I'd say graphs of child poverty comparing countries like the U.S. where there is more than a replacement rate of births to European countries that are quickly unbreeding themselves out of existence might be a little on the suspect side.

It is, indeed, a little on the suspect side. No less so (and probably far moreso) then, say, the various statistics that your "excellent" article used....

I guess seeing as it was far from statistics you were raised that its only coincidence that you can spot the subtle potential flaws only in the statistics that argue against your position, rather than in both sets.

jc

Sand

Ironic on one hand your talk about Norway and then expand your argument to EU-v-USA, when Norway isn't part of either.

If youre talking about my posts, which I assume you are I already highlighted the pointlessness of comparing the US and Norway. For the comparison to be true, the US would need oil reserves roughly the size of the fricking moon that they could tax and spend without the need for creating a bussiness friendly enviroment. Norways wealth comes from its oil, not its economic or social system, which when tried in places without Norways vast natural resource of oil, is surprisingly unsuccessful. Norway is the worlds 3rd biggest exporter. It is as much an oil economy as the Middle East. Look at the Gulf States - is undemocratic monarchy the way to go economically and politically?

From my link:

The country has a small industrial base apart from its oil and gas, shipping, and fishing industries, and its mainland (i.e. excluding oil and natural gas) economy grew by just 0.5% in the first quarter of 2001, year on year. Manufacturing activity fell 3% in 2000. Norway, therefore, is concerned about its economic welfare once its oil runs out, as is predicted for the first half of the 21st century. Norway makes annual contributions to its Petroleum Fund, a financial safety net for the time when oil revenues decline

The above highlights that its an oil economy. Their oil apart, and it isnt infinite, theyre another failing socialist system. Not everyone has oil, so whilst the oil makes socialism affordable it doesnt make socialism a system to emulate.

Which presumes the only incentive to succeed is money. Which when you look at things is far from correct. Many of the people who have improved either themselves or their societies have done so out of a desire of improvement, whether drawn from personal pride, policital desire, medical compassion or simply the mad-cap idea of making a better widget. The American problem is it can't seem to count anything unless it can be converted to money.

Right, well Im sure thats nice - hands around the world and all. But when I went to university it was to get a degree to get more money. When I went for an interview the primary thing I was interested in was how much money I was getting. When I worked hard at my job it was because I wanted a promotion so I could get more money. When I left my job and went to another company it was because they were paying me more money. In fact, its fair to say I wouldnt show up at my job unless I was getting paid money. I probably wouldnt have bothered sitting exams if I didnt see money at the end of them. I've an interest in history, but theres no money in it, so I treat that as a hobby only. HR can witter on about teamwork, and the company caring about its employees and this crap but all I want from them is money - so I can take that money and spend it on things I *do* like. And lets face it, the majority of people do not love their jobs and only show up because they want money.

And unfortunately, whilst youre "job=hobby=vocation in life" mantra might actually make sense in terms of say, working with AIDS victims in sub saharan africa, or planting trees in the rainforests, or other morally superiour jobs its probably hard for a binman to get as worked up over waste disposal unless hes getting paid, thats right...money. If socialism worked the boat people would be heading *to* Cuba, not away from it.

shotamoose

Sand wrote:

Norways wealth comes from its oil, not its economic or social system

Where does Sweden's wealth come from? Or Denmark's? Or Finland's? If you're going to describe Norway as 'socialist' (it isn't, it's a mixed economy with a strong private sector and a hefty welfare state), then they are too. And none of them is 'failing' by any stretch of the imagination.

Sand

Where does Sweden's wealth come from?

Foreign banks pretty much. Oh sure, youve got to hand a lot of credit to Swedens historical and political stability meaning its a strong draw for investment and once infrastructure went in it wasnt torn up by two world wars but lets face it, Swedens national debt hit a high point of 75% of Swedish GDP back in 1994. Since making reforms of their (failing) system theyve managed to get that down to 52% of GDP in 2005.

As a comparison Irelands national debt is about 31%. The US has an even higher national debt (60%). The US is accused of living the high life on its credit card and told it must reform or face economic annialation; Sweden is as bad (if not worse as the US has real GDP growth of 3.1% whereas Sweden is 1.7% so it has a better chance of reducing debt in the future, especially as its not burdened by a welfare state and a greying population) and Sweden is credited with having discovered the third way?!?!

Though it seems to be reforming itself via admirable fiscal stability after the heady days of 1980s when it ran that old Weimar trick of paying budget deficits by printing money, leading to inflation of over 10%. It seems for some reason theyve been cutting taxes in Sweden to encourage work.....

As for wealth - I dont know, I guess. GDP per capita is $26,800 2003. Sounds great, its certainly over the EU average of 25000 or so. But the only people making less than the Swedes in the EU are places like Italy, Greece, Spain, Portugal and so on - hardly renowned for their high wages. Hardly surprising as Swedish tax hits some ridiculous levels after $25,000 dollars afaik so why bother looking for more money after you hit 20K+, youre just donating your time to the government at that stage. The US incidentially is $37,800 per capita. And I heard, but cant find stats to prove, that the Swedish cars are on average the oldest in Western Europe.

There unemployment figure is about 5.6% or so, but that doesnt reveal the fact that government make work and training schemes "employ" about the same so the actual figure could be twice that.

shotamoose

Sand wrote:

Swedens national debt hit a high point of 75% of Swedish GDP back in 1994. Since making reforms of their (failing) system theyve managed to get that down to 52% of GDP in 2005. ... The US has an even higher national debt (60%).

So Sweden is failing because of its national debt, but America, where the national debt is higher and rising, is not? Right, glad we've got that one sorted out.

And as I said, growth in GDP per working-age person in Sweden has outstripped that of the less 'socialist' group of OECD countries - funny kind of failure.

Sand

Swedens national debt hit a high point of 75% of Swedish GDP back in 1994. Since making reforms of their (failing) system theyve managed to get that down to 52% of GDP in 2005.

As a comparison Irelands national debt is about 31%. The US has an even higher national debt (60%). The US is accused of living the high life on its credit card and told it must reform or face economic annialation; Sweden is as bad (if not worse as the US has real GDP growth of 3.1% whereas Sweden is 1.7% so it has a better chance of reducing debt in the future, especially as its not burdened by a welfare state and a greying population) and Sweden is credited with having discovered the third way?!?!

So Sweden is failing because of its national debt, but America, where the national debt is higher and rising, is not? Right, glad we've got that one sorted out.

When youre finished with my argument can I have it back please? As I recall it was myself who was questioning why Sweden is to be emulated for running up its debt, whereas the US is doomed?

The US is running a 60% GDP debt alright and weve had anyone and everyone predicting economic doom because of it. However, whilst that is a peak in recent history it is not a historical high for the US - their debt in the late 40s was 121% of GDP due to the cost of the war (Youll have to head down about 70% of the page, theres a chart). Swedens GDP debt might be falling over the past 11 years, but its still comparable to the US debt.

Whose got a better chance of staying ahead of the debt collectors? The Swedish GDP growth performace compared to the US is garbage - 1.8% compared to 3.1%? And its even worse than that because all other things being equal Sweden should be growing even faster than the US if it is going to converge to its GDP per capita... and its not. The US is pulling even farther ahead year on year.

I see you praise their admirable productivity per worker - Im glad they are so productive because theyre going to need caffeine junkies for a workforce inside 25 years as their population ages - increasing the dependancy ratio for each Swedish worker, and the demands of Swedens welfare state and ferociously defended by lobby groups....mean while the US population is predicted to get younger, reducing the dependancy ratio and either way the US hasnt got the same obligations as the welfare state imposes on the Swedish government. The one thing that could save the welfare states in Europe, massive immigration, is heavily resisted by those same states. Ironic.

The US economy has a far better chance of delivering high standards of living to its people over the next few decades than the Swedish one does - barring an economic/demographic miracle for Sweden that will either jump its growth rate to a multiple of its current rate - or they best start getting extremely frisky.

shotamoose

Sand wrote:

I see you praise their admirable productivity per worker - Im glad they are so productive because theyre going to need caffeine junkies for a workforce inside 25 years as their population ages - increasing the dependancy ratio for each Swedish worker, and the demands of Swedens welfare state and ferociously defended by lobby groups....mean while the US population is predicted to get younger, reducing the dependancy ratio

Er, what? No it isn't. The old-age dependency ratio (population aged 65+ as % of whole) in the US is going to rise from about 20% at present to almost 40% in the next twenty years.

By contrast, Sweden's old-age dependency ratio is already very high, around 30%, and will grow more slowly than that of the US. This is why Sweden's economic performance in recent decades is overall quite impressive, a point you seem to be consistently missing. It's also why the welfare-state challenges facing the US are actually relatively bigger, rather than smaller as you think.

Both countries will have to support a larger elderly population in future, but it's Sweden that is actually preparing for it by cutting its debt and running big budget surpluses (and also recording big current account surpluses) (Norway, Denmark and Finland are also running budget and current account surpluses), while the US debt and its budget and current account deficits are huge and apparently growing. This means that at the very time when it should be preparing for the impending crunch, the US is living way beyond its means and is basically at the mercy of the central banks of a few Asian countries, who have chosen to far to fund the deficit by buying dollar reserves in order to boost their exports, but who will not do so forever. And of course, a budget deficit of this size will tend to reduce growth, which just compounds the trauma. The picture painted by the US public debt is bad, but when you add in the twin deficits the outlook is truly awful.

So in summary, by any reasonable measure Sweden is better placed to handle the impact of an ageing population than the US, and your prophecies of doom sound like wishful thinking.

AngelofFire

Sand wrote:

Well seeing as you mention the French, maybe it opened up when De Gaulle found himself in the unacceptable position of finding out that Frances time as a world power was over, and with it the Empire, and the desperately anglo-saxon Americans were actually the world power? The French certainly had no problem with ignoring the UN security council to carry out invasions in the Balkans.



They seemed to wakeup to that freedom fries messing - to the point where Chirac and Schroeder have been trying to kiss and make up ever since....Anyway, this is offtopic. I bow to your superiour knowledge of why the US is the evil empire.



Equality of income distributions is of dubious merit - one way to look at it would be to say the US rewards successful and motivated people far more than the Norwegian system, which does not provide the same incentives. By definition there has to be inequality to reward the successful over the unsuccessful. Perfect income equality is not desirable, or at least it would complete remove incentive to succeed, which is not desirable.



Agreed, much as Europeans lap up predictions of impending US economic implosion rather than recognise their own incoming disasters that are state penions, aging populations, and politically active pensioners who will fight tooth and nail against reforms.

First of all sand i see no corrolation between an application of an apparatus of economic justice and ruination of the economy. Sweeden and outpost of distributionism has little or no access to north sea oil and it has one of the most stable economies and lowest unemployment in europe see www.monbiot.com. Just because someone is richer doesn`t necessarily mean they are more successful or have worked harder believe it or not, there are many other factors to take into account like inherited advantages from the day they were born. Buzzwords like ''rewarding incentive'' are just narrow justifications for economic unfairness. Upward Social mobility in Sweeden is over 5 times higher than it is in the US ie the number of people who move to a differnt class then the class that they were born into. Why? because there are little social supports in the US, this inhibits people who may be born with talent but are hindered by inherited disadvantages. If you`re born into a lower income background in Europe you`re much more likely to be able to get to third level education than if you`re born in America because there are much more social supports like 3rd level grants and child benefit and paid leave for your parents, so much for the welfare state discouraging merit.

Victor

Sand wrote:

The US is running a 60% GDP debt alright

65%, but that would appear to be only one view of debt in the USA. It would appear the Federal Government owes $32 Trillion to the Social Security, Medicare etc. funds.

http://mwhodges.home.att.net/debt.htm - although I "like" the way it says "Link to the full FEDERAL GOVERNMENT DEBT REPORT with pictures".

"With pictures" would appear to point to a certain lowest common denominator. The guy seems a little out of whack, but has reason to be.

pickarooney

The points on cars and packed lunches are bogus. Simply because Northern Europeans place little or no importance on gastronomy and flashy automobiles is no indicator of their wealth or lack of it. The CEO of the company I work for is immensely rich (well, compared to me at least!) and eats plain brown bread with a banana most days for lunch and drives a 7 year old Peugeot.

DadaKopf

Savages.