The Culture of Greed It was a perfect June afternoon at the city stadium in Bordeaux, France. The seats were good, the Scots were singing, and the Norwegians were talking to their cellular phones. «Personally, I´m really not that interested in football,» said the guy next to me, a restaurant owner. Nevertheless, he and his hosts — a state-controlled liquor distributor — chartered a private jet to fly a handful of Norwegians down to France, to visit a couple of chateaux, taste some sublime vintages and see Norway play a draw against Scotland in the initial rounds of the 1998 Coupe de Monde. The event was an anthropologist´s dream. The Scots present were generally true soccer fans — young lads who had scraped the bottom of their savings, argued fiercely with the bonnie lass at home, hitch-hiked to France and bought their tickets off touts at forbidding prices. The Norwegians, as a rule, did not pay for their own tickets (I myself did not). A great proportion wore their corporate insignias along with the Norwegian colours. In Norway, sports, money and power mix well. To put matters into perspective, Scotland has the highest unemployment rate in Northern Europe, Norway the lowest. To put it bluntly, the Norwegians are filthy rich. And the sort of thing seen at the soccer stadium is something new to Norwegian culture. It´s comparable to Japanese corporate culture — at the prohibitive domestic prices, the companies wine and dine their employees, provide entertainments and so on. An educated guess would put expenses to put the rank and file of (mainly) successful corporations, plus bureaucrats and celebrities, at French soccer stadiums this summer, at several million NOK. Why is this interesting? Because the corporations themselves are partly or wholly owned by the Norwegian state. Individual Poverty The Norwegians are filthy rich, but the individual Norwegian would protest this loudly. He or she is «just scraping by». He or she is not guaranteed a swift operation or a dignified hospital stay if accident should strike. He or she usually can´t afford to dine in a decent restaurant. He or she would have to make great personal sacrifices to be able to drive the car of their dreams. Unless the company is paying for it, of course. The Norwegian state, however, is filthy rich. And the major contribution to this wealth comes from oil and gas drilling rigs out in the North Sea. Norway is now the second largest oil exporter in the world, after Saudi Arabia. The volume produced is slightly less than the amount of oil pumped in the U.S., but then Norway has a population of a mere 4 m people. Oil was discovered in the North Sea in the late 1960s. Later, one discovered that oil resources were far greater than initially estimated. Then came natural gas. Initial investments were high, offshore drilling technology expensive, and the offshore business did not show a sizeable profit until the 1980´s. With oil and gas being found offshore, on what used to be common fishing grounds, there was never a real debate on whether or not this wealth should be nationalized. The situation was not comparable to Kuwait or Saudi Arabia, where a few families with more or less dubiuos claims on arid desert land suddenly got rich beyond measure. The money belonged to the Norwegian people, through the Norwegian state. The Inflated Welfare State It was a bit like winning the lottery. And never before has a social democracy won a lottery of this kind. Norway has been a social democracy, and (along with Sweden and Denmark) the quintessential «welfare state», since the last war, when Norway was occupied by Nazi Germany. The cost of reconstruction, the rigeurs of postwar rationing and so on, led to a great strengthening of government as opposed to private enterprise, and a tremendous rise in public spending. And while the neighbouring countries during the last ten years have seriously considered dismantling parts of the welfare state, the petrochemicals drilled offshore has fueled an astronomical rise in public spending. Privatization of state-owned businesses, much discussed during the liberalist minded1980´s, has proceeded slowly, if at all. It wasn´t until the mid-nineties that Norway finally realized that pouring all that wealth into the domestic economy would spell disaster. After being affected by the global slump of 1987-88 — which bankrupted, among others, Norway´s largest bank — the economy started picking up in 1992-93. By 1995, the sky seemed to be the limit. Interest rates reached an all-time low, inflation was minimal and unemployment dwindling. The Labour Party (Arbeiderpartiet), who were in power at the time, proposed establishing an «Oil Fund», a scheme to invest abroad the billions steadily pouring in. Today, the Norwegian state is a heavy player on the world´s markets. In Oslo, a squad of 25-year-old financial whizzkids are playing high-stakes Monopoly with the taxpayer´s money, in every market from Singapore to Buenos Aires. Towards the end of this year, the Oil Fund, depending on oil market prices and general global economics, is estimated to be worth about NOK 200 billion ($28 bn). The 20 year perspectives are staggering. Which does not mean that all the petroleum wealth is being invested abroad. Consider this: The national budget of Norway is about the same size as that of Russia. At about one-fortieth of the population. Sin Taxation And it´s not all oil money, either. Taxes in Norway are among the highest in the world. Income tax is at the average around 40 percent, and in addition there are consumption taxes on just about everything. Taxation on cars and even gasoline is sky high (gasoline is cheaper in Sweden or Denmark than in petroleum-producing Norway). Unparalleled «sin taxes» on tobacco and alcohol make these products the most expensive anywhere in the world. A packet of Marlboros costs around $7.00, and a dollar or so less will buy you a pint of beer in a pub or cafe. You would assume that hardly any Norwegians smoke or drink. Very wrong. Norwegians actually smoke more than the European average. Over the last ten years, high taxes, bans on advertising, dire government warnings on the packaging and uncountable millions spent on non-smoking campaigns, has made Ola Nordmann (Joe Public) cut his cigarette consumption by one — 1 — fag a day. And then there´s the smuggling. Almost weekly, whole trailers full of contraband cigarettes are apprehended by Norwegian customs officials and police. Drinking is lower than European average, but drinking habits are changing — from the traditional beer and cheap liquor, even moonshine, which nowadays is smuggled in from Poland — towards wines (and often vintage wines) and expensive liquors. Norway is one of the few markets in the world — since the Asian monetary crisis — where French cognacs are showing a significant rise. Also, the Norwegians are moving away from the simpler whiskies and cognacs, towards the more exclusive single malts, the VSOP´s and the XO´s. Champagnes are doing nice business as well, as you might have guessed. Conspicious Consumption Yes, conspicious consumption is all the rage, despite heavy taxation. Today, if you want to purchase a domestic luxury yacht, you´d have to wait in line for one or two years. Boatyards can´t keep up with demand. If you´d like to renovate your Oslo apartment, getting a trained carpenter is close to impossible. Last year, Norwegians spent NOK 27 billion on home improvement, which comes close to $3000 per household. Obviously, there´s a little bit left even after taxes. Traditionally, Norwegian society could be described as fanatically egalitarian. There is no nobility; that was abolished by the Constitution of 1814 (inspired by the US Constitution). The minute upper class — mainly industrialists and shipping tycoons — never went fox hunting on spacious estates, or yachting in luxurious vessels. Instead, they were seen mountain hiking or skiing along with the populace. The most memorable image of the previous king, Olav V (died 1991), shows him using public transportation during the 1974 oil crisis. Today, all that has changed. The darling of the Norwegian press during the last two years has been Kjell Inge Røkke (40), a school dropout turned fisherman turned billionaire seafood and entrepreneur tycoon. This is the modern Norwegian capitalist, a heavy spender with a private Gulfstream jet (and reputedly in the process of purchasing a far costlier vehicle), competing among Saudi princes in that pursuit of the filthy rich: high speed boat racing. Last summer, Røkke´s popularity persuaded the municipality of Oslo to allow the King´s Cup Race in the Oslo Fjord, to the grave peril of a thousand leisure boaters. This year, Røkke and partner Bjørn Rune Gjelsten built a new football stadium for their home town of Molde, at the cost of NOK 130 m. They already own controlling interest in the English football club of Wimbledon. Molde is coincidentally also the home town of prime minister Kjell Magne Bondevik, a confessed football fanatic, and it´s been whispered that ties between tycoon and politician are embarrassingly close. The Norwegian government has no private jet, and it caused a minor uproar when the PM was seen riding Røkke´s. Cottage Nobility Kjell Inge Røkke and fellow big spenders sets the standard for Norwegian consumption in the late nineties. Take, for instance, the time-honoured Norwegian leisure home. The old English truism says that «a man´s home is his castle», but not so in Norway. The Norwegian´s true castle is his leisure home, or «hytte» (hut). It used to be a modest little house, often without electricity or plumbing, a place to feel at one with nature and the elements. No more. It is now perfectly acceptable to spend much more on a beachfront leisure home — which will be used for four to six weeks, in the cold and wet season that the Norwegians call summer — than on one´s actual home. Norwegians prefer to own property in their own country, never mind the weather, and never mind the expense. And in the mountain areas — where building restrictions are more lax than by the sea — a weird growth of new-wave «huts» is mushrooming. A «hut» might have forty rooms and ten bathrooms, a couple of saunas and an indoor swimming pool, and the building style is similar to ancient palaces in Norwegian fairy tales, with thatched roofs and chemically aged wood. The owners are industrialists, stockbrokers and the money-savvy Norwegian sports establishment. Last year, the left-wing Sosialistisk Venstreparti (around 6 percent of voters) proposed a law that would limit the indoor area a private person might use for his «hytte». Though conspicious consumption is everywhere, everyone is embarrassed by it. It´s even got a new name: «The Culture of Greed». Which is why the current government is highly preoccupied with values. Everyone feels that Norwegian values are changing, from egalitarianism to elitism, from solidarity to egotism. And, to the Norwegian mind, there must be something government can do about it all. New Values One of the most publicized efforts by the current government (a centre coalition dominated by Kristelig Folkeparti, the christian conservative party) is the appointment of a «Values Commission», a government-funded body supposed to gather information about values from the population and make suggestions of policy. The high-profile search for suitable members turned up, among others, a professor of social medicine, a supreme court justice, a pop songstress, a celebrity football hooligan, and a performing transvestite, comparable to Brit/Australian TV star Dame Edna. Thus far, the Values Commission has mainly provided fuel for Norway´s satirists, but a great many people are eagerly awaiting results. «I´m searching for one new value/But nothing comes my way», to quote Iggy Pop. Meanwhile, government has a hard time imposing their specific values on the general public. Norway´s prime minister since last September, Kjell Magne Bondevik (51), is an ordained minister of the Church. A teetotaller and previous leader of a homophobic and extremely puritan party, he softens his stance by being photographed with, alternately, a cigar and a football. The party leader, Valgerd Svarstad Haugland, who is also Minister of Children and Family Affairs, before elections confessed to enjoying a glass of red wine at times — an eyebrow-raising sign of «modernization» in a party traditionally opposed to such decadent vices as waltzing and bridge games. Cartoonists now routinely portray her as a hooker. Haugland is the real «values person» in the current government, and also the architect behind a quite controversial and wildly expensive reform: the newly passed «Cash Support» for parents with pre-school children. Parents who elect to stay at home to raise their children, will henceforth receive a monthly cash compensation at NOK 3000 per child, regardless of income. «Parents» meaning women, the opponents claim, and see the scheme as a thinly disguised plot to drive women out of the workforce. Cynically, one might add that Norway needs something of the kind. With employment approaching 98 percent (highest in the world), the cost of labour is rising steeply, and this spring´s labour settlements was a big triumph for organized labour, approaching 10 percent in some areas. A Guy Thing? The Minister of Children and Family Affairs (sounds pretty Eastern Bloc, doesn´t it?) is the great self-appointed warrior against The Culture of Greed. Last year, she caused an uproar blaming men and male culture for the greed in Norwegian society. And this year, her burning zeal for traditional family values caused a series of controversial statements about homosexuals; whether they´re fit to raise children, whether they should be allowed to adopt and so on. Statistics fail to show if gays are greedier than straights, however. Another basic value upheld by this government is Norway´s perhaps costliest luxury, their regional politics. To live in rural areas is in itself supposed to be a blessing, and in order to stem the tide from the countryside to the cities, government pours billions into communications, infrastructure and subsidies. Especially agriculture is heavily subsidized, Norway not having exactly the climate and soil conditions of, say, Tuscany. A recent TV ad for a supermarket chain satirizes the absurd realities: They sell their milk so cheap that, in a film, a dairy farmer buys milk in cartons at the supermarket, pours it into his tanks in the dairy, and sells at a profit. Maybe not that far from the truth. Only thing is, it doesn´t work. In times of high employment, like the present, people are leaving the countryside to work or study in the cities, especially Oslo, by the tens of thousands. The capital recently reached the half million mark, and has a severe shortage of housing. It´s also extremely expensive — The Economist Spectator recently found Oslo the fourth most costly city in the world, behind Tokyo, Osaka and Hong Kong — and has great social problems. People are literally dying in the streets. Street violence is worse than ever, and more often fatal. As of June 20th, Oslo has had 66 people dead from drug overdoses this year. More than Amsterdam, which is considered the drug capital of Europe. This is the net result of a morally inclined but disfortunate narcotics policy (in Norway, they are still fighting the good old «war on drugs»), an overflowing market and comparatively low prices. By the darkest of ironies, alcoholics in Oslo have been known to switch to heroin. It´s cheaper, and more available. Splendid Isolation More ironically, considerations such as protecting Norway from international crime and drug syndicates, were behind the country´s second decision to stay outside the European Union, in november 1994 (the first was in 1972). Another argument raised by the nay-sayers was international solidarity; Europe was thought to develop into a fortress — a «Festung Europa» — and by staying outside, Norway could independently decide humanitarian policies. It has. 22 people were accepted as political refugees in 1997, 29 the year before. The current government went to elections promising a more humanitarian policy, so we might live to see the 30-person mark reached this year. Needless to say, this reeks of high scandal. While Norway is drowning in wealth, neighbouring EU member Sweden, recovering from a severe economic crisis, accepts refugees and immigrants by the hundreds, or thousands. Domestic politics concerning immigrant/refugee issues have been labeled «The Norwegian Paradox». Racism and militant right activities have increased in a period of great economic growth, something previously considered unthinkable. Today, the racist rhetoric has changed: Immigrants are not «stealing jobs», because anyone can get a job these days. Instead, they are «culturally incompatable», and might cause «Bosnia-like conditions in the future». The political party usually connected to this sort of sentiment, The Progress Party (Fremskrittspartiet), is widely compared to the Front National in France, and scored 17 percent at the most recent poll. There are definitely problems remaining to be solved. The Norwegian public health system (the true mark of the «welfare state») has been in a permanent state of crisis for years. People with crippling diseases have to await operations for months, even years. In the media, the term «corridor patient» was coined about ten years ago; someone who has to lie behind a screen in a hospital corridor, because all the rooms are full. They´re still there, behind their screens, ten years later. And they´ll probably stay. The problem is not really The Culture of Greed, it´s that government has been overspending. For a very long time. And the current government is the most frivolous yet. Leading economists, opposition leader Torbjørn Jagland and even Hermod Skånland, the sober and soft-spoken former director of Norway´s Central Bank, has been sounding the alarm bell for more than eighteen months. The economy is overheated. Upper-level wages are skyrocketing. Banks are lending money like there were no tomorrow. The very near future might spell double-digit inflation, lost jobs, soaring interest rates. Bank of Norway has already «adjusted» interest twice this year. And — worst of all — there is a global oil glut, and oil barrel prices this spring have been disastrous. «It´s the classic story. We´re the man who suddenly becomes rich, and starts living beyond his means,» says Christian Vennerød, economist and editor of popular financial monthly Dine Penger. He points to a study made in 1991 by a group of economists, on behalf of the Department of Work and Administration. Their conclusion was that by rationalizing, privatizing and cutting down government spending, one might release as much as NOK 100 billion, and 500.000 jobs (unemployment was then at 140.000), into a healthy market economy, cut taxes dramatically and make the non-offshore export industry capable of handling international competition, which it wasn´t. It didn´t happen. Never could. Norwegians are usually happy letting government take care of their money. Even today, blessed with a Minister of Finance (Gudmund Restad) that causes the NOK to drop every time he appears on television. This october, you get the chance to see public spending in Norway at its most ostentatious. Then the new Oslo International Airport Gardermoen opens, the most modern in Europe, and sized to handle many times the current traffic in and out of the country. Here, scandal is heaped on scandal, fairy tale budgets were introduced, revised and revised again. The terminal will have elegantly designed luggage trolleys and more art than any public building you have ever seen, but the one thing you won´t be able to do, is to hop on the projected superfast train to central Oslo. That one is getting close to breaking the world record for budget busting in the billions, and has become an environmental disaster to boot. Personally, I figure it´s already cost me more than I´m getting paid for this article, income tax subtracted. Torgrim Eggen is an author and journalist based in Oslo, Norway. His first novel was called «Debt» (Gjeld, 1992), and is dedicated to all his creditors, the taxman included.