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Topic: More on the economic stupidity of economic conservatism (was Martin

Replies: 8   Last Post: Sep 10, 2012 10:42 PM

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Paul A. Tanner III

Posts: 5,920
Registered: 12/6/04
Re: More on the economic stupidity of economic conservatism (was Martin Bic...)
Posted: Sep 7, 2012 11:38 AM
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On Fri, Sep 7, 2012 at 2:03 AM, Wayne Bishop <> wrote:
> Following the Norway model, I assume you are strong proponent for California
> dramatically increasing its offshore oil drilling possibilities and other
> possible coastlines as well and then compare books again when our oil
> production gets up to a quarter of our GDP. Right?
> Norway, one of the world's
> richest economies, is a model of prudent economic management of resource
> wealth. So states the IMF 2000 Article IV consultation with Norway. Norway
> is the top non-OPEC oil exporter, the world's third-largest exporter of oil,
> and pumps about 3.2 million barrels per day. Norway's oil and gas industry
> underpins the economy, providing up to 25% of the country's gross domestic
> product. This country of nearly four and one half million people has a
> steady growth rate, almost no poverty, and negligible unemployment. Norway
> has a diverse economy based on agriculture, forestry, fishing and
> manufacturing, among other things, and its oil industry has developed amid
> much planning, bargaining, and public debate.

This idea that socialist/capitalist Norway is as rich as they are only because they "have lots more oil and gas than we do" is just yet another myth made up by conservatives to try to explain away how economic conservatism is being proved by the facts to be all wrong.

I don't know who the author you cite is, but you need to wonder where this person gets the numbers cited. In 2012 the total worldwide revenues (not just profits) Norway expects from its *government-owned" oil and gas industry is roughly 60-65 billion dollars. The nominal GDP of Norway last year was roughly a half-trillion dollars, that roughly is 500 billion dollars, about 100,000 dollars per capita nominal GDP in Norway, about twice as large as the per-capita nominal GDP of the US, roughly 50,000 dollars. That means that since the GDP of Norway is still growing at a strong clip, as a percentage of nominal GDP, Norway's oil industry makes up roughly only 12% of its nominal GDP. Only 12%. Perhaps this author was thinking PPP GDP, which per-capita is roughly a bit more than 10% larger than the US, which is (averaging all sources) roughly 55,000 dollars compared to slightly under 50,000 for the US. (In most countries, nominal GDP is larger than PPP GDP, but in the US they are about the same, and in China, it's the reverse with PPP being not far from twice as large as nominal.)

(Side note: I again point out that Norway's government owns their oil and gas industry - lots of socialism, giving lots of revenues to government that is not in the form of taxes. In my link below reporting on their prosperity, there are links that show that their government owns the majority of stock and therefore controls roughly 1/3 of all publicly traded companies in Norway, as well as owning many more companies outright, which means that their government controls not far from half of all corporations of their country. Those are about the same percentages we see in modern China. Like I said, lots of socialism, giving lots of revenues to government that is not in the form of taxes, keeping taxes lower than they would otherwise be although taxes there, like in all the very rich, very socialist, very capitalist Scandinavian countries, are still at not far from 50% of GDP.)

Guess what that percentage is for the US? The total value added contribution to the present US economy of roughly 15 trillion dollars nominal GDP by the entire oil and gas industry of the US is presently roughly 1.2 to 1.3 trillion dollars, at roughly 8-9%, close to 10% of US nominal GDP.

The point made that Norway's much greater prosperity than the US is not due to their having lots more oil and gas than we do" at all. A difference that amounts to only a few percentage points of nominal GDP is not the explanation. To the explanation, see my link further below about truly moral economics yielding the world's greatest prosperity and happiness.

And so we see yet another myth of economic conservatism busted by fact.

By the way, I reiterate not only everything I said in my original post

of this thread as well as the link

"Moral economics -> world's highest living standard and greatest

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