Martin Bech Holte’s “The Country That Became Too Rich”

This is a review. The author is responsible for the opinions in the text.

Hans Magnus Enzensberger already demonstrated that Norway is a country of paradoxes in his classic essay “Norsk ottak” in the book “Ack Europa!” highlighted. (1988). Norway was one of the most modern countries in the world, but saw itself as a peripheral state with roots in an old farming society. When Enzensberger wrote his text, the realization of how oil would change the country had not yet reached the public consciousness – but it was vibrating in the ground.

It has not gone unnoticed by anyone that the Norwegian self-image is currently shaking for completely different (Epstein) reasons. But it was more long-term problems that the economist and former McKinsey manager Martin Bech Holte wanted to raise the alarm about with his book “The Country That Became Too Rich” last year.

At the center of his criticism stands the Norwegian oil fund founded in 1996. Today it amounts to up to NOK 20,000 billion, according to Bech Holte. The moderation in use, which has also caused criticism, means that you can only use the yield – which still amounts to 20 percent of the Norwegian national budget. Bech Holte’s thesis, however, is that the knowledge of this access to state money has made the country jaded and without a vigilant eye for the challenges of the future. Norway simply relies on subsidies.

The book sparked great debate and is now available in Swedish. It was also criticized quite heavily.

In summary, Bech-Holte divides Norway’s economic development in recent decades into two phases: On the one hand, 1991-2013, which he calls “Day 1” and describes as a golden age for the “mainland economy”, the part of the country’s business life that is not directly linked to oil revenues, the “private service sector”, according to Bech Holte. And partly “Day 2” from 2013 to the present, characterized by declining productivity in this “mainland economy” – a downward curve that would be hidden by the “false security” fund created.

Like Bech Holte himself sums it up: “After 2013, the economy stagnated as public consumption rose sharply and productivity growth disappeared.” The fact that the oil fund enabled parts of the Norwegian public sector to be financed would therefore lead to a loss of “creative energies”. The solutions he wants include, unsurprisingly, sharply reduced taxes – costs that would be deducted from the fund’s surplus.

But the figures he presents as evidence of this have been sharply criticized, not least by the Norwegian counterpart to Statistics Norway, SSB

The restructuring of the public economy for competition that occurred in both Sweden and Norway after the financial crises of the 1990s created a productive service sector, according to Holte. In Norway it was even a “golden age”.

But the figures he presents as evidence of this have been sharply criticized, not least by the Norwegian counterpart to Statistics Norway, SSB. The database he uses, the Maddison Project at the University of Groningen, is simply different from native Norwegian numbers. Based on SSB statistics, “Day 1” is still an economic recovery, but too modest to be called a “golden age.”

When the book arrives In Swedish, Bech Holte could have taken up this criticism, but I can find no such discussion. In general, this is the criticism that can be directed at the book: It lacks arguments and figures that point in a different direction than the author’s. That’s what you otherwise believe – that someone will listen and respond to serious objections.

What made Bech Holte’s book influential in the Norwegian debate is probably that he is not a welfare state eater. He emphasizes that he is interested in the Nordic welfare state solutions. But he also writes that “the welfare state is a reward, not a right,” a formulation that probably shows a certain ideological determination.

For Bech Holte, it is always the enterprising entrepreneur who creates wealth, not high levels of education or stable public health

The fact that the financing of education and health care by the oil fund can be viewed as a distribution policy that in itself creates a stable society is not questioned. For Bech Holte, it is always the enterprising entrepreneur who creates wealth, not high levels of education or stable public health.

Bech Holte emphasized Sweden as a role model. He names his old teacher Assar Lindbeck and his 1990s commission as those who “saved Sweden.” Especially when it comes to the Commission’s recommendation to expose the public sector to competition. And I immediately think of Karin Pettersson’s book “The Curse” from last fall, in which she followed the same process from within and, in retrospect, sees it as the moment when Sweden began to fall apart in racial segregation.

One person’s solution, another’s catastrophe.

Read more texts by Ola Larsmo and others from DN’s book reviews

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