With oil revenues soaring, the time has come for Norway to consider how best to apply them to strengthen its economic infrastructure and policy framework to promote the nation’s longer-term development. As matters now stand, the oil wealth is causing problems by making the krone a petrocurrency pricing Norwegian labor and industry out of world markets. Rather than lowering production costs by using the oil revenue to cut taxes, financial policy makers have let themselves be frightened by an unwarranted fear that tax cutting and infrastructure investment are inflationary. Indeed, by unduly burdening industry they are aggravating rather than alleviating inflationary pressure. If there is any economy today that need not tax its manufacturing, shipping and other industries out of business, it is Norway. Yet the nation is subjecting itself to ...

Speech to the Norwegian Shipowners' Association, August 17, 2000 by Dr. Michael Hudson, ISLET © The debate over whether to privatize Norway’s oil, telephone system and other national assets has focused on considerations of whether private management would be more efficient than government management. The discussion to date has turned more on political ideology than on calculations of the quantitative impact of privatization on the balance of payments, tax and monetary policy. Arguing over management efficiency is a blind alley, theoretically speaking. Economic observers evaluating Britain’s privatizations of the 1980s quickly came to the conclusion that ownership has little inherent impact on managerial efficiency. Government agencies can manage enterprises in the same way that private managers do, if instructed to do so. The major effect of privatization concerns the diversion of revenue away ...