Commentary

Norway not

 

 

Commentary

Norway’s version of the Alaska Permanent Fund hit the $1 trillion mark this week. 

That’s $1,000 billion, or about 16 times the $61.2 billion the state of Alaska is now sitting on. The Norwegians created their account in 1990. Deposits into the Alaska Permanent Fund began in 1977. 

Cue the discussion about how Alaska, which is now suffering through the worst recession since the 1980s, would be better off if it was more like Norway. This idea has popped up so many times in recent years it has almost become a cliché.

Only months ago, the Alaska Dispatch News ran a story headlined “Norwegians and Icelanders let Alaskans in on the secrets to economic prosperity.”

Beneath that story, reporter Jeannette Lea Falsey wrote that Norwegian economist Morten Brugard had a plan that “might appeal to Alaskans all along the political spectrum: Efficient government and a strong social safety net are the keys to Norway’s economic prosperity.”

Oh, if it were only so simple.

Certainly Alaska’s government could be more efficient. But it’s unlikely there’s a government of which that can’t be said. Not to mention that government efficiency is a hard thing to score.

When it is scored, Norway ranks from third to 11th in a comparison of various indices pulled together by the Institute for Government, a United Kingdom think tank. The highest U.S. ranking is seventh.

“The disparities in performance highlight a key problem with these cross-national studies: they may see the job of government differently, use different variables, and even measure the same thing differently,” the Institute notes.

The U.S., the globe’s biggest economy, doesn’t even make the top-25 on the World Economic Forum’s Global Competitiveness Index, one of the indices the Institute references. Rwanda is seventh there, four countries higher than Norway. Canada is 15th.

Clearly there is more to economic success than “efficient government.” There are some indications a stronger social safety net can help somewhat , but the net clearly isn’t going to create economic success on its own.

Economic success is built on people wanting to succeed. It’s that simple, and it’s that Darwinian: adapt or perish.

Fundamental differences

The Norwegians largely get it. The Swedes and Finns probably even more so. Helsinki, the capital of Finland, sits at about the same latitude as Anchorage. It is the largest city north of 60 degrees latitude.

Helsinki is about as far south as one can go in Finland. There is no “Finnish Panhandle” hanging below the country for hundreds of miles. Helsinki sits within 450 miles of the Arctic Circle, and a third of the country is officially in the Arctic. 

Anchorage, Alaska’s largest city, is only about 70 miles farther north, and only about 20 percent of the 49th state is actually in the Arctic. But the differences between Finland and Alaska are even more of an eye-opener than the differences between Norway and Alaska.

“Although it’s on the fringe of Europe geographically, Finland has for years been at the center of the continent’s tech industry,” Michael Kanellos writes at Cnet.

“The country gave birth to cell phone leader Nokia and has emerged as a place where multinationals like to recruit and erect labs. The government and local entrepreneurs are now moving into clean technology.”

And Anchorage, AK?

Well, with apologies to Mayor Ethan Berkowitz who is a guy who dreams big and likes to talk about the”quality of life,” Anchorage – and Alaska in general – is a place people come to visit in the summer and get the hell out in the winter because there are limited economic reasons to stay.

Go ahead. Take a drive around town. What do you see? A whole lot of hotels devoted to making money off the three short months of summer (now maybe four; thank you global warming) before the city shuts down.

Finland is headquarters for Suunto and Polar, two world leaders in the manufacture of wrist computers. Anchorage is home to a small number of cross-country skiers and fat-bike cyclists who wear those wrist computers.

Not just Finland

Finland and Norway, to a similar but lesser extent, are far north countries succeeding because they made a conscious choice to embrace the future. Alaska is economically struggling as it tries to cling to some sort of fairytale past.

What exists there is history. Economic survival lives in the present and the future.

Against this backdrop, Alaskans should be mightily thankful for the state’s oil because without it, there wouldn’t be much here. What Alaskans have done with the wealth of that oil up to his point is open to debate, though the picture isn’t as black and white as some of the Alaska government-bashers might like to make it.

You have to consider where the state of Alaska started. The George Parks Highway linking the two largest cities – Anchorage and Fairbanks – didn’t exist at the time of Statehood, and the Seward and Sterling highways connecting the state’s largest city to the Kenai Peninsula weren’t much more than goat trails.

There is now a pretty good road system connecting the 49th state’s largest communities. You can fly into the Ted Stevens International Airport, rent a car or motorhome, and go on an enjoyable, week-long driving tour of Alaska without being left with the feeling you spent a week in a blender.

Score one for Alaska tourism even if the road system was much improved mainly to meet the demands of Alaskans.

Other than this, though, the state with the motto “North to the Future” has pretty much been treading water while living on oil wealth for a couple of decades because a lot of Alaskans like it that way. They abhor change, and the oil money has allowed everyone to go on living as if the world would never change.

Unfortunately, the world always changes. The speed of change used to be measured in hundreds of thousands of centuries. It took early humans something like 500,000 years to discover fire. It would be about 100,000 years more before they built their first wooden huts; another 100,000 until they figured out the spear; about 250,000 before those early spear chuckers figured out rudimentary speech.

The latter occurred about 150,000 years ago,  the archeologists calculate.

It would take another 145,000 years for people to develop the smarts to write things down. That was about 5,000 years ago. After writing began, the speed of change quickly accelerated and the scale of measure shrunk to tens of centuries: the Bronze Age 4,000 to 3,000 years ago; the Iron Age, 3,000 to 2,000 years ago; and into the ever shorter periods of the Babylonians and Persians, the Greeks and Romans, the Byzantines, the Arabs, the Crusaders and the Ottomans. 

By the 1700s, the Industrial Revolution was beginning and the speed of change was rapidly accelerating.  The Space Age would be upon humans within about 250 years, and then things would really take off.

The personal computer in 1975. The mobile phone in 1983. The worldwide web (www.) in 1991. And now the smartphone, which puts in the hands of almost anyone more computing power than the all the rooms full of computers working for the National Aeronautics and Space Administration (NASA) when the U.S. put a man on the moon in 1969.

All of this change created a lot of new businesses and killed a lot of old ones. Places that refused to adapt suffered. Some of them died. What was once the thriving industrial heart of America became the “Rust Belt.” 

If Alaskans want an economic lesson, maybe they should look at what happened there. Clearly the Norwegians have.

Dangers of success

“Anita Krohn Traaseth is a child of oil: she was born in 1971, the year that it started to be pumped from the Ekofisk field in the North Sea,” writes John Gapper at Financial Times. “‘Look at my generation. We do not know what a national crisis is. We were raised with oil and wealth,’ says the chief executive of Innovation Norway, a development body. She gestures like a drug addict putting a needle into a vein.

“It is a problem of affluence, but a problem all the same. This week is Oslo Innovation Week, a gathering of technology start-ups, venture capitalists and Norwegian companies such as Statoil, the state-owned oil and gas company. The theme is omstilling, the name for Norway’s nascent shift to living without the energy industry that has brought it wealth and welfare for 45 years.”

The real differences between Norway and Alaska today is that the former was never as addicted to oil as the latter, and it appears far more willing to embrace change. Norway is growing its tech sector, pioneering the construction of lightweight, carbon-fiber ferries, and embracing what it calls the “blue revolution.”

After setting a record for sea food exports last year, the country is talking about growing its aquaculture production five-fold by 2050, which is not exactly good for Alaska which is locked into a system of wild salmon harvest that basically hasn’t changed in 60 years.

Where Norway aims for maximum efficiency in farming fish, Alaska strives for large-scale inefficiency in the wild harvest of fish. Any number of Alaska salmon runs today go under-utilized because of the lack of harvest gear that can distinguish between plentiful species and those that need protection from over harvest.

Salmon streams in the Matanuska-Susitna Valley north of Anchorage end up plugged with pink and chum salmon the anglers who support the tourist industry there don’t really want, but which commercial fisheries are unable to utilize without catching hundreds of thousands of the sockeye and coho salmon vital to the very same sport fishing businesses.

Meanwhile, the commercial and sport fishermen – who are often warring – readily join hands to oppose almost any kind of mining in the 49th state. Historically, salmon and minerals were Alaska’s economic mainstays.

They have faded in modern times. Salmon prices peaked in the 1980s and hit bottom in the early 2000s. They have crept upward since 2004 or so, but Alaska is now at the whim of markets dominated by farmed fish.

About 70 percent of the salmon in the market today are farmed. If the Norwegians meet that 2050 production goal (and never mind the equally competitive Chileans, Scots, and Kiwis) wild salmon will become a minor player – less than 10 percent of the market.

Fish are now a major Norwegian export. So, too, metals. 

The Norwegian economy is already far more diversified than that of Alaska, but the Scandinavian country is still scrambling to diversify because of what it sees coming on the horizon.

Alaska’s future….

Oil long ago passed fish and minerals as the mainstay of the Alaska economy, and in the short-term, the future of the Alaska oil business looks sound despite today’s low oil prices. There has been plenty of new oil found on the North Slope.

The long-term is a different matter.

BP is projecting a global explosion in electric cars will double their number on the roads in the next 20 years and that combined with improved fuel economy in petrol-fueled cars will slow the global demand for oil. 

Others think that might be too optimistic.

“Last year EV sales grew by about 60 percent worldwide. That’s an interesting number, because it’s also roughly the annual growth rate that Tesla forecasts for sales through 2020, and it’s the same growth rate that helped the Ford Model T cruise past the horse and buggy in the 1910s,” writes Tom Randall at Bloomberg. “For comparison, solar panels are following a similar curve at around 50 percent growth each year, while LED light-bulb sales are soaring by about 140 percent each year.

“Yesterday, on the first episode of Bloomberg’s new animated series Sooner Than You Think, we calculated the effect of continued 60 percent growth. We found that electric vehicles could displace oil demand of 2 million barrels a day as early as 2023. That would create a glut of oil equivalent to what triggered the 2014 oil crisis.”

None of this bodes well for Alaska.

Enter Norway again: About 25 percent of the cars on the road there now are electric, and the country hopes to be near 100 percent by 2025. It’s running electric ferries, too. 

All of which is ideal for Norway, which today gets about 96 percent of its electricity from clean, relatively cheap hydropower. The infrastructure for Norway’s hydropower is so well-developed that there is talk of how the nation could become the “green battery” for Europe.

“The idea behind a ‘green battery’ is that excess power from Europe’s growing network of solar arrays and wind farms could be sent to Norway to pump water up from lower reservoirs to higher reservoirs,” reports Phys.org.  “Then, when Europe needs this power again, Norway just opens the tap and lets the water spin through its hydropower turbines.”

Similar combinations of wind, water, solar and even geothermal would appear physically possible in Alaska, but whether they are politically acceptable is another matter. A lot of Alaskans like the idea of the state as one big park. Consideration of a dam on the Kenai Peninsula’s Snow River died almost before it began because of public opposition even though it might have benefitted Kenai River salmon.

And, of course, Alaska lacks the electrical connection to a faraway grid that could make the 49th state the battery for anything. Norway in August completed installation of  the first phase a subsea, high-voltage-direct current (HVDC) power cable linking it to Germany. 

Some looking forward

Granted, not all Alaskans are entrenched in the idea of trying to preserve the state as a place fixed in historic time. There are those actively searching for new economic opportunities.

Bernie Karl, the owner of Chena Hot Springs Resort north of Fairbanks and a leader in the use of geothermal energy in Alaska, has been talking about Alaska carbon fiber production for years, and he claims to be making progress on mating carbon collection to hydrogen fuel.

“We’re going to build a Metrol plant on the North Slope, carbon fiber plant on the North Slope,” he told the 12th Annual Renewable Energy Fair in Chena last month KTVA.com reported.  “We’re talking about creating thousands of jobs, and hundreds of thousands of jobs in the world — all from Alaska, all this material is coming from Alaska.”

Metrol is a fuel that can be made from natural gas. Basically, the process strips the hydrogen out of methane (CH4)  and saves the carbon for the production of carbon fiber. 

Carbon fiber, many believe, is destined to be the steel of the future. Stronger and yet lighter than steel, it is already a dominant material in the production of state-of-the-art aircraft and top-end bicycles, and it is making inroads in all sorts of other industries.

The Ford Motor Company and DowAksa in 2015 signed an agreement to begin developing system for the high-volume manufacture of auto parts, saying that carbon fiber is a “material poised to play a significant role in the drive to make vehicles lighter for greater fuel efficiency, performance and capability.”

DowAksa is a partnership of the Dow Chemical Company in the U.S. and Turkey’s Aksa Akrilik Kimya Sanayii A.Ş. Turkey was one of the early leaders in the manufacture of  carbon-fiber composites. 

The only thing holding carbon-fiber back is high cost, but costs are expected to come down as production goes up. Karl, who dreams big, envisions one day shipping produce from his geothermal powered greenhouses north of Fairbanks to the rest of the state using hydrogen-powered dirigibles made out of carbon fiber.

This Wally Hickel-esque idea might not be as far-fetched as it sounds, and it is certainly looking forward, not back.

“We should all be part of Bernie’s crazy talk,” Sen. Lisa Murkowski, R-Alaska, was reported to have said at his energy fair.

“‘Boy, do I wish I’d paid more attention in chemistry when I was in high school in Valdez, but I’m catching up,'” Gov. Bill Walker added, KTVA reported. “I’m not saying I completely understand it, but I love the passion.”

Walker, however, continues to back a $45 billion to $65 billion gas pipeline from the North Slope to tidewater to produce liquified natural gas (LNG) to try to sell in a global market already oversupplied with LNG. The state took over leadership of that project after the major oil companies working in Alaska said it was time to throttle back until markets improve.

Markets for LNG are at the moment so soft that India was last week able to negotiate a cheaper rate with Exxon when it renegotiated a 20-year contract for gas from Australia.

That does not bode well for Walker’s plan to boost the state economy by building a gas pipeline, and even the governor is starting to admit maybe it’s time to time to bury that pipe dream.

All of which would seem to leave Alaska approaching the point where it truly has to start to change with a look to the future to find ways to diversify its economy, or it has to scale back the state’s economy and go largely seasonal.

Former state economist Gregg Erickson, now a resident of Oregon, years ago suggested the traditional Alaska industries – tourism, fisheries, maybe a little mining – could still support a state the size of Alaska before-oil. There were about 350,000 people resident in Alaska then.

They represented a population about the size of the  Santa Ana, Calif., of today. Downsizing would require some significant shrinkage. The Anchorage Metropolitan Area alone is now estimated to be home to about 400,000 people. Forget about the rest of the state.

But there are some things to be said for downsizing. If the Alaska population shrunk to about half of what it is today, for instance, the Permanent Fund Dividend paid those still living here would double, and Alaska would remain a great place to visit in the summer.

The potential for growing tourism in Alaska is near limitless. And it’s possible that if the state population shrunk back to pre-oil days, Alaskans would appreciate tourists more instead of dissing them as people who plug the state’s highways, crowd the state’s best fishing holes and generally just get in the way.

And in the latter regard, Alaskans should probably be happy Alaska isn’t Norway – a country less than one-fourth the size of the 49th state that attracts three times as many tourists.

Being Norway comes with both upsides and downsides.

 

 

 

 

 

 

 

 

 

 

 

 

 

Norway is chasing the production of carbon fiber and experimenting with it as the steel of the future. TK

Alaska is trying to browbeat the globe’s biggest private petroleum companies into helping build a pipeline to haul Alaska North Slope natural gas – a prime feedstock for carbon fiber – to tidewater so it can be liquified and shipped to China or Korea.

This the economic dream of Alaska Gov. Bill Walker. With state revenues crashing because of the global decline in the price of crude oil (the tax on which pays for most of state government in Alaska), Walker started spending millions on planners and gas salesman for project with low odds for success.

There is no accounting his spending benefited China, Korea and Japan, but those are the places to which Walker trekked off with his entourage to spend money on foreign hotels, food, drinks and who knows what else.

When Norway was hit with an oil-sparked recession similar to Alaskans, prime minister Erna Solberg started her own stimulus spending program.

 

 

 

 

 

 

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19 replies »

  1. Thank you for the thought provoking piece. I’ve done city, state, national/international benchmarking on gov’t income, gov’t spending (esp. health and education (preK-16+)), economic sectors (oil & gas, telecom/ICT, electric, utilities, US health insurance/medical care) and wanted to note that a key difference between Alaska / U.S. & Nordic countries with respect to public/private finance of services is the organization and financing of health care, health insurance and medical care.

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    • I don’t think that person knows what communism is. Anyone can make a video that calls anything whatever they want to. That doesn’t make it so.

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  2. For an interesting view into Norwegian culture watch the Netflix show Lilyhammer. It’s well written and acted, shows the foibles of all the characters as well as their strengths. With increased immigration from non-European countries it also shows the challenges they will face as recent headlines from other Scandinavian countries have shown.

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    • It should be noted that the Scandinavian high tax structure was in place long before the recent influx of immigrants. And it is the source of much discontent these days. People that pay these high taxes realize they are now subsidizing many immigrants that receive much more from the system than they contribute back into it. Modern day Scandinavian discord with their system should be noted by Sanders and his devoted disciples. And by socialists in Alaska, like Walker. Placing high tax burdens on those that work does not result in harmony amongst an economically and culturally diverse society.

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  3. As usual. discussions of Norway vs Alaska (or the entire USA) revolve around statistics. But statistics say nothing about a key factor – value. The taxpayers in Norway (and other Scandinavian countries) don’t gripe that loudly about high taxes, because they get a lot of value for the taxes. The taxpayer in places like Norway gets much more value per tax dollar/kronar paid than in the US. In Norway they get a wonderful transportation infrastructure, great healthcare, generous retirement options, quality and affordable education and a government that works more for the people, not for a self-propogating government.

    Compare that to the US where taxes are mostly not used for value that is returned to the tax payer. Our infrastructure is crumbling, health care is broken and unaffordable, our retirement system is a house of cards, higher education is unaffordable to most and our government is a decisive and corrupt hot mess (especially in Alaska, Haavard pointed this out well). Instead of these things of value being returned to us for our tax payments, we get the world’s biggest military industry, wars around the world, the world’s biggest debt payments, subsidies and loopholes for businesses with well-connected lobbyists and $ billions in aid to dozens of foreign countries (many that don’t like us). These public investments help those that the government wants to help. But the average US taxpayer does not see much ROI value from our country’s use of tax revenue.

    So, getting back to statistics. If the US tax rate is less than Norway, and the US tax payer gets little value for their tax dollar (compared to Norway) … then what will happen if tax rates in the US are increased? Answer: A little of it will be used for good value. A very little. But mostly, increased taxes will only enable the US government to spend more money on stupid stuff. The value returned to the tax payer will only be marginally better, if better at all. Our culture is the same no matter what the tax rate, so the same degree of government waste will perpetuate. Again, tax statistics between the US (or Alaska) and Norway are meaningless unless you take into account the value returned to the citizen for the taxes paid.

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  4. Re energy: Don’t think we necessarily need an interconnection to the Lower 48 grid. At around $1 million / linear mile, transmission lines that long are expensive to build and then maintain.

    The Watana Dam could power half the railbelt for half a century. Sadly, neither the Walker democrats or the local nimbys want it. Rationale is the same as the Snow River, something about fish, though it would help control flooding on the Big Su.

    Another option is a Coal to Liquids (CTL) plant using Chuitna Coal. Would produce all liquid fuel (synthetic diesel among other things) for the railbelt and much of the interior. Think of it as a refinery for coal. Would make us self sufficient for liquid fuels. One of the neat things from the Fischer – Tropsch process is that the last step is exothermic, and that heat can be harnessed to turn turbines and produce electricity, perhaps a third of what the railbelt uses today.

    Removing the ban on fish farming here in AK would be another step. The more commercial nets out of the water, the better the returns to Cook Inlet (and other) streams will get, to the benefit of all of us. No reason we can’t figure out how to farm Pacific species.

    Marvin Yoder has long proposed small modular nuclear reactors for the Bush. They would work for parts of the railbelt also. Reactors are heat engines and excess heat can be harnessed to heat homes & businesses, greenhouses, and produce hydrogen bio to liquids plants. Would go a long way to start making part of the Bush self sufficient.

    So much opportunity. So much idonwannas. Much more satisfying to bash the producers. Wouldn’t take much to get started, though. Cheers –

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  5. I have two friends who live in Norway. I am told that they pay almost a 60% overall tax rate, and that they are typical of tax payers of modest means. Could that be one of the reasons the country’s fund is so big? Is the Govt’s spending per capita as high as Alaska’s? How efficient is their Govt? Ours does not seem to be very efficient.

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    • it’s part of the reason. Norway puts all its oil money in the fund and covers the cost of government with taxes, but the rate appears more like 38.5 to 47.5 depending on income. it’s Finland that’s up there around 60 percent. https://tradingeconomics.com/country-list/personal-income-tax-rate
      but maybe you friends get hit with some local taxes on top of that. Norway’s gov’t spending is the highest in the world on a per capita level, but appears to be lower than that of Alaska which skews the U.S. average because we are so high. https://ballotpedia.org/Total_state_government_expenditures
      then, too, you sort of have to take the numbers with a grain of salt because as Mark Twain observed, “”There are three kinds of lies: lies, damned lies and statistics.” the best figure, as far as i’m concerned, might be average disposable income. on that scale, Norway ranks right up there; it’s sixth; the U.S. is 13th; Canada is 25th; Mexico is 89th. http://www.nationmaster.com/country-info/stats/Cost-of-living/Average-monthly-disposable-salary/After-tax

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      • Norway has a federal income tax flat rate in the mid 30% range that applies to anyone earning greater that 1.6 times the national average. The U.S. Highest rate of around 40% applies to anyone earning more than 8.5 times the national
        average after deductions. It is not a flat rate. Norway has a 25% standard rate VAT. Real property taxes are almost 1% of the assessed valuation of the property. And finally gasoline tax is approx $3.50!per gallon in Norway. It’s approx 55 cents in Alaska. My friends were quite clear in believing they were paying around 60% of their income in taxes of some kind. Sounds like they may be correct. Meanwhile I pay 22% in fed taxes after deductions, no state or national sales tax, about 1% of my home’s value in property tax and get money from the state for just living here.
        Considering that Alaska does not have an income tax at all and no state sales tax and a low state gas tax, I would say that it has been pretty good in accumulating nearly 60 Billion in its permenant fund while at the same time paying for Govt spending.

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      • Your figure of 60% is actually more accurate than Medred”s because it’s not just income tax that they struggle under. Just like my income tax rate is 15%, but I pay about 40% of my income in various taxes, so do Norwegians and Swedes. The difference is that we get to keep about as much of our income as they have taken from them. It gives us a great deal more freedom of choice than they have.

        Alaska’s largest problem is not the ennui of its people, although there are plenty of Native villages who want to stay locked in the snow globe, but the permitting issues that federal regulations cause. We could do so much here if we could just figure out how to do it without angering the environmentalists and their sledgehammer, the EPA. Until we somehow break the power they have over us, we will continue to struggle … no more than a colony of the United States, a state in name only.

        A large issue too is that we do not own our subsurface rights, which limits financing for private development very difficult. We cannot leverage our subsurface rights, which means we are limited to financing based on our incomes and the equity of our homes and businesses.

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      • lela: i’d refer you again to the “disposable income” calculations which get you around all these taxes to what people actually do get to keep to spend. norway looks to be doing pretty good there no matter their tax structure: http://www.nationmaster.com/country-info/stats/Cost-of-living/Average-monthly-disposable-salary/After-tax

        but there are so many differences between us and them it is hard to make realistic comparisons.

        as to the rest of it, the evidence would appear to agree although you understate the case. it isn’t just environmentalists and the EPA. a whole lot of Alaskans who don’t want much of anything done here unless it’s out of sight on the North Slope or in the form of entertainment – restaurant, movie, hotel, bar, etc. – in Anchorage or Fairbanks.

        and yes, we have many similarities to a colony and the reason why would appear to be as simple as economist Gunnar Knapp observed: “a lot of people like it that way.”

        i seriously doubt the two-thirds of commercial salmon gillnetters who come to Bristol Bay from Outside to fish every summer want anything done in that region ever. and they probably don’t want anything done in Alaska period.

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      • Right. Those “Bristol Bay” gillnetters aren’t Alaskans. And while you may find a lot of Anchorage residents who think we can subsist on eco-tourism dollars, most Fairbanksans are not that naive. Fairbanks and the Mat Su have a much slower turnover of population than Anchorage does. Far fewer “I just got here and think I know everything because I’m from the Lower 48, so I’m going to educate you hicks” residents makes for a less-environmentally dumbed-down population

        I think there are also a lot of people who have been misinformed about a lot of things – economics, the environment, modern mining methods. They have these cartoonish views of things because they just don’t know what they don’t know.

        But, finally, we do have Alaskans who would love to start some big developments, but again, without subsurface rights, it’s really hard to secure financing unless you are already wealthy, which is unlikely to happen if you don’t own your subsurface rights. People who are limited to what they can earn at a job are never going to be able to finance large, necessary projects like gas lines and dams. In other states, people can leverage their subsurface values to acquire the funding to invest in large-scale projects. Here … not so much. And, that remains a problem. Really, the only people who can fund large projects are the Native Corporations — hence why ASRC is the largest non-government instate business.

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  6. Thanks, Craig, for another thought-provoking piece, especially the history stuff. My personal favorite in the this-is-how-smart-we-are department: The apparent 5,000-year gap between farming and irrigation. “Geez, my plants are dry. Wish it would rain as much water as is in that river over there.”

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  7. Norway’s economy is robust because the majority of Norwegians are on the same page; they come from the same heritage and want good for all Norwegians. But Norway would not be doing as well if they had the social structure of Alaska.

    Norway does not have a large indigenous population that has high social costs, many of which don’t want to work, most expecting endless entitlements, many beset with substance abuse issues and with the desire to kill anything walks or swims by them. Such a population does not foster moving forward to the modern world. The indigenous adults that do adapt to the modern world seem to quickly be drawn to Native corporation corruption. Rampant corruption does not move a state or country forward.

    Norway does not also have the diversity of Alaska. Norway has a much more homogeneous population than Alaska. In Alaska people that have come from all over the world to harvest the entitlements Alaska provides, like the PFD. The end result – endless minority groups shouting as loud as they can to get what they can. And that also keeps Alaska anchored in the past.

    And then there are people with power, monetary or political, in Alaska that are divided more than Norwegians could ever imagine. They are not for Alaska, they are for themselves. The infighting and corruption at the top of the food chain holds back Alaska’s economic maturation.

    And finally, we have a governor that is fiscally dysfunctional. He thinks uneconomical gas lines and bloated state governments make sense when you are bleeding money. In other words, Alaska has no one with a hand on the ship’s wheel.

    Norway is a first world country. Alaska is a third world country. Third world oil countries like Alaska don’t adapt to change well. Just ask Venezuela.

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    • Haavard: i agree Norway has a less diverse society. i heartily disagree that Alaska has “a large indigenous population…many of who don’t want to work.” i’ve met few in rural Alaska who don’t want to work, and historically Alaska Natives were the among the hardest working people on the planet. they had to be so survive.
      i do think some have given in to a system that makes it more rewarding to not work than to work, but a man (or a woman) would be a fool to fight such a system. that’s not their problem. that’s a societal problem.
      i’ve often wondered if Alaska wouldn’t be way ahead if it tossed part of its welfare system and converted it to something like the Works Progress Administration (WPA) – http://www.history.com/this-day-in-history/fdr-creates-the-wpa – of FDR’s time to make jobs in rural Alaska. people earning wages building year-round trails between villages, or earning wages providing day care for the people building trails, would be way better than people getting money to do nothing, and the state would get something out of the deal.
      and i don’t see anymore or any less Native “corporate corruption” than i do white-folk corporate corruption. corporation very easily become tainted by good-old-boy or good-old-girl politics where in merit is easily overlooked in favor of the ruling clique. i don’t see anymore of that in the Native corporations than i’ve seen in some white corporations.

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  8. It is odd why exactly you chose to compare Finland to Alaska. I guess I am missing the connection. Also look how long the history of both places are, and you can see that there WILL be differences and Finland should be a lot smarter than Alaska. I always thought that Alaska had a majority of the population come from out of state. I always thought as well that those that came from out of state were the ones that wanted to have a slower pace of life. Then you wonder why Alaska is how it is. There are a lot of reasons Alaska is where it is at. I think comparing Alaska to any other state you will see the differences.

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    • geography, orimar, geography. there are people who believe being resident in the far north is an excuse for lack of creativity. all of which leads me to a question:
      why is it you believe “Finland should be a lot smarter than Alaska”?

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