We're Rich, You're Not. End of Story.
OSLO — THE received wisdom about
economic life in the Nordic countries is easily summed up: people
here are incomparably affluent, with all their needs met by an
efficient welfare state. They believe it themselves. Yet the reality
- as this Oslo-dwelling American can attest, and as some recent
studies confirm - is not quite what it appears.
Even as the Scandinavian
establishment peddles this dubious line, it serves up a picture of
the United States as a nation divided, inequitably, among robber
barons and wage slaves, not to mention armies of the homeless and
unemployed. It does this to keep people believing that their social
welfare system, financed by lofty income taxes, provides far more in
the way of economic protections and amenities than the American
system. Protections, yes -but some Norwegians might question the
part about amenities.
In Oslo, library collections are
woefully outdated, and public swimming pools are in desperate need
of maintenance. News reports describe serious shortages of police
officers and school supplies. When my mother-in-law went to an
emergency room recently, the hospital was out of cough medicine.
Drug addicts crowd downtown Oslo streets, as The Los Angeles Times
recently reported, but applicants for methadone programs are put on
a months-long waiting list.
In Norway, the standard line is
that there must be some mistake, that such things simply should not
happen in "the world's richest country." Why do Norwegians have such
a wealthy self-image? Partly because, compared with their
grandparents (who lived before the discovery of North Sea oil), they
are rich. Few, however, question whether it really is the world's
After I moved here six years ago, I
quickly noticed that Norwegians live more frugally than Americans
do. They hang on to old appliances and furniture that we would throw
out. And they drive around in wrecks. In 2003, when my partner and I
took his teenage brother to New York - his first trip outside of
Europe - he stared boggle-eyed at the cars in the Newark Airport
parking lot, as mesmerized as Robin Williams in a New York grocery
store in "Moscow on the Hudson."
One image in particular sticks in
my mind. In a Norwegian language class, my teacher illustrated the
meaning of the word matpakke - "packed lunch" - by reaching into her
backpack and pulling out a hero sandwich wrapped in wax paper. It
was her lunch. She held it up for all to see.
Yes, teachers are underpaid
everywhere. But in Norway the matpakke is ubiquitous, from classroom
to boardroom. In New York, an office worker might pop out at
lunchtime to a deli; in Paris, she might enjoy quiche and a glass of
wine at a brasserie. In Norway, she will sit at her desk with a
sandwich from home.
It is not simply a matter of
tradition, or a preference for a basic, nonmaterialistic life.
Dining out is just too pricey in a country where teachers, for
example, make about $50,000 a year before taxes. Even the humblest
of meals - a large pizza delivered from Oslo's most popular pizza
joint - will run from $34 to $48, including delivery fee and a 25
percent value added tax.
Not that groceries are cheap,
either. Every weekend, armies of Norwegians drive to Sweden to stock
up at supermarkets that are a bargain only by Norwegian standards.
And this isn't a great solution, either, since gasoline (in this
oil-exporting nation) costs more than $6 a gallon.
All this was illuminated last year
in a study by a Swedish research organization, Timbro, which
compared the gross domestic products of the 15 European Union
members (before the 2004 expansion) with those of the 50 American
states and the District of Columbia. (Norway, not being a member of
the union, was not included.)
After adjusting the figures for the
different purchasing powers of the dollar and euro, the only
European country whose economic output per person was greater than
the United States average was the tiny tax haven of Luxembourg,
which ranked third, just behind Delaware and slightly ahead of
The next European country on the
list was Ireland, down at 41st place out of 66; Sweden was 14th from
the bottom (after Alabama), followed by Oklahoma, and then Britain,
France, Finland, Germany and Italy. The bottom three spots on the
list went to Spain, Portugal and Greece.
Alternatively, the study found, if
the E.U. was treated as a single American state, it would rank fifth
from the bottom, topping only Arkansas, Montana, West Virginia and
Mississippi. In short, while Scandinavians are constantly told how
much better they have it than Americans, Timbro's statistics suggest
otherwise. So did a paper by a Swedish economics writer, Johan
Contrasting "the American dream"
with "the European daydream," Mr. Norberg described the difference:
"Economic growth in the last 25 years has been 3 percent per annum
in the U.S., compared to 2.2 percent in the E.U. That means that the
American economy has almost doubled, whereas the E.U. economy has
grown by slightly more than half. The purchasing power in the U.S.
is $36,100 per capita, and in the E.U. $26,000 - and the gap is
The one detail in Timbro's study
that didn't feel right to me was the placement of Scandinavian
countries near the top of the list and Spain near the bottom. My own
sense of things is that Spaniards live far better than
Scandinavians. In Norwegian pubs, for example, anyone rich or insane
enough to order, say, a gin and tonic is charged about $15 for a few
teaspoons of gin at the bottom of a glass of tonic; in Spain, the
drinks are dirt-cheap and the bartender will pour the gin up to the
rim unless you say "stop."
In late March, another study, this
one from KPMG, the international accounting and consulting firm,
cast light on this paradox. It indicated that when disposable income
was adjusted for cost of living, Scandinavians were the poorest
people in Western Europe. Danes had the lowest adjusted income,
Norwegians the second lowest, Swedes the third. Spain and Portugal,
with two of Europe's least regulated economies, led the list.
Most recently, the Danish Ministry
of Finance released a study comparing the income available for
private consumption in 30 countries. Norway did somewhat better here
than in the KPMG study, lagging behind most of Western Europe but at
least beating out Ireland and Portugal.
The thrust, however, was to confirm
Timbro's and Mr. Norberg's picture of American and European wealth.
While the private-consumption figure for the United States was
$32,900 per person, the countries of Western Europe (again excepting
Luxembourg, at $29,450) ranged between $13,850 and $23,500, with
Norway at $18,350.
Meanwhile, the references to Norway
as "the world's richest country" keep on coming. An April 2 article
in Dagsavisen, a major Oslo daily, asked: How is it that "in the
world's richest country we're tearing down social services that were
built up when Norway was much poorer?"
Obviously, this is one
misconception that won't be put to rest by a measly think-tank study