by Frank Thomas
I haven't had time to respond to this article [In Norway, Start-Ups Say Ja to Socialism] properly. You must understand Max Chafkin's excellent information is old hat to me as I have lived in Europe and worked for European firms for over 30 years now. Here are my abbreviated personal comments on some key differences in how the economies of Europe and America work.
At the age of 30, I was Scandinavian Director of Finance for Merck, Sharpe & Dohme located in Denmark. Had extensive direct contact with all the Nordic countries, including Norway. Later, as a consultant-manager for the Dutch shipbuilding and offshore oil-gas industry for many years, I had a number of business dealings/negotiations with Norwegians as result of their offshore oil-gas discoveries in the late 60s.The Norwegians have much in common with the Dutch. They both have a plethora of entrepreneurial family companies and small firms, and some very successful global firms .... an entrepreneurial history that goes way, way back.They both have been conducting business around the world since the 17th century -- the Norwegians with their enormous tanker fleets and the Dutch starting with the Dutch East India Company, then Royal Dutch Shell, Unilever, Phillips, etc.. For centuries, both nations have been very worldly-engaged people, making them super alert to new ideas, ways of making, doing things, and dealing with vastly different cultures.In brief, here are a few important points of Norway's story that similarly relate to other mature EU countries like the Netherlands, Sweden, Denmark, Switzerland, etc.:(1) European countries have to be extra focused on the internal general welfare of their citizens and quality-of-life because the majority will never live and work in another country .... as each country has such a completely different history and cultural at-home cohesiveness. This, of course, is just what makes Europe so attractive.(2) The European welfare system with its higher taxes gives something concrete and valuable back to all its citizens regardless of income level, e.g., state-of-art productive transport/water-sewer systems; generous vacations; quality-affordable basic health care for all (as our study of Dutch-American health care systems dramatized); free pre-college public education (although the Netherlands, unlike Norway, does have some private schools) and very low cost of universities; very low poverty rates due in part to advanced/refined internal flexible-work markets and extreme ease and low cost of starting up so-called "one-man firms"(as in Holland); energy efficiency and conservation standards far exceeding those in America; GDP COMPONENTS OF GROWTH that reflect a sound economic culture of higher savings rates, lower consumption, stronger public and private investment, modest trade deficits .... compared to the U.S.(3) A relatively far more stable and harmonious regulatory environment that does not drastically vacillate with political mood or with newly elected officials.(4) A fundamental cultural value of sharing and enjoying life has also nutured the idea that, "Life is much less about living to make money than it is about making money to live." Quality-of-life priorities are high on everyone's list.(5) The relatively higher social-nets are silent Economic-Stabilizers (not noted by most U.S.economists) in weak economic times thus making the slowdowns less severe while the recoveries can be slower. I've watched this dynamic occur here for many years.So, what all the supposedly expert U.S. economists have seldom understood and what the U.S. fear-mongering politicians constantly are lying about is that although taxes may be higher in Europe (and Max Chafkin is closer to the truth when he suggests this may even be highly questionable), taxpayers get something back of real value. This fact and the deeply-rooted European cultural value, "We are all in this life together," give support to the acceptance of progressive taxation to insure that prosperity is broadly shared.When the economic environment dictates the need for change and financial austerity, the mature European countries generally go about doing what has to be done promptly and systematically in a fair, clever manner ... without hurting the lower middle-class nor drastically reducing social capital for deregulated, fundamental market capitalism. An important omission by Americans is that there is always much more room to economize or make more efficient generous European social-net systems than to cut America's social-nets. The latter are already ridicuously "bare-bone" and might more appropriately be labeled "poverty social-nets."Europe now has its plate of problems and problem countries -- Ireland, Greece, Spain, Portugal. But all the U.S. media/politician hysterical and demagogic misrepersentations (e.g., typically by Paul Ryan recently and Fox news) of Europe's general economic demise due to massive out-of-control social-nets are pure NONSENSE!Of course, the euro's future and financial problems certain countries present are awesome challenges. But for over 30 years I've watched European coalition governments come realistically to grips with institutional policy mistakes, excesses or new system-threatening challenges. A key advantage is that most mature EU countries have inherently more balanced, stable economic models than the US has on which to make adjustments to meet the new global circumstances .... crisis situations like now where both austerity measures as well as intelligent investments are essential.In sharp contrast, the US is out-of-balance with an extraordinary level of unaffordable military spending (at +5% of GDP vs. 1.5% in Europe), an ancient broken-down infrastructure, an extraordinary dependence on consumption combined with stagnant middle-class wages stimulated by outsourcing/automating/robotosizing/downsizing where labor's value for society is seen as a replaceable machine of 400 times less value than top management and shareholder wealth enhancement ...all resulting in low middle-class savings, huge trade deficits, high long-term structural unemployment, explosive budget deficits as tax revenues decline.The Norways, Swedens, Denmarks, Hollands, Switzerlands of the world are not into any form of self-destructive capitalism extolling a "survival of the fittest" caricature as being the ideal social-economic paradigm for long-term stability, cultural cohesiveness or quality-of-life experience. The European economic models have interesting shades of differences, but all have the central value and priority to keep in proper balance a dynamic market of entrepreneurship/innovation and the protection of society's general welfare.As Steven Hill has so correctly noted in his book "The Promise of Europe: "It's the steady state society of Europe versus the "On your own society of America," each with its inherent weaknesses and unique strengths .... with the major exception that Europe pragmatically steps up to the task of refining/correcting any capitalistic and general-welfare imbalances in their societies under the principle of SOLIDARITY.Whereas we in the U.S. are addressing (better said not addressing) our societal imbalances by encouraging greater class DIVISIONS and GAPS between the Haves and Have Nots.