A Vision for Work in the Country That Can Soon Retire
Norway’s unique opportunity to create the blueprint for a golden age of prosperity
My Norwegian passport arrived in the mail the other day. It’s a beautiful thing. Beneath the soft red cover lies a high-tech back page with several windows and shiny surfaces that manipulate light in fun ways. I even look cool in the dreaded passport mug shot!
This little booklet grants me entry to almost any country. That’s nice and all, but the biggest perk of my new passport is that I’m now an official citizen of the world’s most perfectly positioned society.
Allow me to elaborate.
Black Gold
Norway is rich. And no, I’m not talking about its high GDP per capita. I’m talking about the Norwegian oil fund — the world’s largest sovereign wealth fund that Norway wisely built up by investing about a third of its oil and gas export profits over the last 25 years.
At the time of writing, the fund stands at $1.37 trillion. For a country of 5.4 million people, this is a stupendous amount of money. Here are some of the eye-popping numbers:
- In an average year, the fund returns about 22% of Norway’s GDP in passive income. In comparison, all the hard-earned taxes Americans pay to the federal government sum to only 17% of GDP.
- Per capita, the fund returns about $17,000 in an average year. This is higher than the entire per capita productivity (GDP) of more than half the world’s countries. Admittedly, this stat makes me feel quite guilty.
- The fund sums to 340% of Norway’s GDP. If we subtract government debt of 40% of GDP, it puts Norway 300% of GDP in the green. In comparison, most other Western governments are about 100% of GDP in the red.
And here’s the real kicker: The fund is still growing rapidly. With oil and gas rents (state profits from hydrocarbon exports) remaining steady at about 7% of GDP, Norway will be able to minimize withdrawals for years to come. At this rate, the fund should double in a little over a decade. If today’s very high oil and gas prices persist for a few years, it will happen even sooner.
Thus, somewhere in the mid-2030s, Norway may well be earning 50% of its GDP in passive income. It’s crazy to imagine a country retiring, but Norway may soon have that possibility. Indeed, when annual returns from the fund equal the entirety of (very generous) government spending, Norway technically no longer needs to tax its citizens.
Great Responsibility
With great wealth comes great responsibility. After all, passive income from the oil fund doesn’t just magically fall from the sky. It represents the growing fraction of the rest of the world’s hard work the Norwegian people have a legal claim on. Imagine we decide to kick back and leech off the world just because we managed to restrain ourselves and consume “only” two-thirds of our massive oil bounty. That would be seriously uncool.
It will be so much better for everyone (including Norwegian citizens) if Norway uses this wealth to do something truly special for the world. And that brings us to the main point of this article: Ironically, the prospect of not having to work anymore gives Norway a unique opportunity to heal the world’s broken relationship with work.
Today’s Sad State of Affairs
To put it mildly: We have a terrible relationship with work.
Globally, only one-fifth of workers are actively engaged in their jobs, with the remainder just doing it for the money. Luckily, the long-term trend is heading in the right direction. But progress is slow, and stress keeps rising in parallel with engagement.
These are some of the saddest stats I’ve ever seen. We spend most of our waking lives doing, getting to/from, or thinking/worrying about our jobs. And most of us wish away most of this huge chunk of time. What a waste!
Worse still, the natural response to all this suffering is overconsumption, often of the self-destructive kind. And since everything we consume must first be produced by someone else, all this self-sabotaging consumption creates loads of soul-killing work for others. The resulting vicious consumerist cycle of self-sabotage hampers happiness, supercharges stress, harms health, endangers the environment, and increases global inequality of opportunity.
The Most Beautiful Virtuous Cycle
It took all my self-discipline to keep the previous section short. I could go on an hour-long stats-laden rant about all the resources, health, and happiness we waste forcing each other to do hateful work. But no, let’s not go there.
Instead, let’s head off in the diametrically opposite direction. Over there, we find what has to be the world’s most beautiful virtuous cycle:
I’m intimately familiar with this cycle because it shaped my entire life. Let’s briefly unpack my experience following the numbered arrows in the figure above:
- High engagement means work is a reward in and of itself. Thus, I get to create my own joy and meaning and feel no need to purchase it.
- Not having to spend money to try and buy happiness means a very high savings rate and rapidly increasing financial freedom.
- Diminishing dependence on a paycheck means I can trade a lower salary for more creative freedom, better tools, and more human resources.
- This environment grants me ever-growing freedom and power to turn my visions into reality. And that’s the recipe for maximum engagement.
Bonus benefits from this cycle include optimal health, a sustainable ecological footprint, and ego-boosting levels of productivity. Yep, life doesn’t get much better than this.
Barriers to Going Mainstream
I recently started to subtly promote this beautiful cycle to friends and colleagues. Thus far, no one would bite. Why?
Well, the core problem is the chicken-and-egg nature of this virtuous cycle. One first needs very high job satisfaction or financial freedom before the cycle can start spinning. And both of these are hard to come by before there’s any spinning action.
Practically, the best place to start is to give up some salary in exchange for greater freedom. (Which reminds me of another great reward from asking for a pay cut: the priceless look on your manager’s face.) But willingly foregoing income comes about as naturally to us as breathing underwater. Even I waited (totally unnecessarily) for my wealth to surpass 25x my annual living expenses (the 4% rule) before making my move.
This is nuts. There are hundreds of millions of people around the world living good lives on a fraction of our rich-world incomes. And creative freedom brings far more joy, fulfillment, and self-worth than anything you can buy with a big salary. But still, that’s the way we are wired, so we’ll just have to roll with it.
A Wish for My New Country
Habitually consume more than you produce, and you’ll likely end up stressed, broke, and fat. Produce more than you consume, and you’ll grow. Enjoy producing far more than you consume, and you’ll truly prosper. These maxims hold just as true for a nation as they do for an individual.
Norway has the unique opportunity to help people fall back in love with work. How? By kickstarting the beautiful virtuous cycle mentioned earlier on a large scale. Why Norway? Because Norway has the money to supply the catalyst needed for getting our beautiful virtuous cycle spinning (please excuse a chemical engineer’s instinctive use of a chemistry analogy).
Our catalyst takes the form of a simple government incentive: If someone ramps down his position at work to win more creative freedom, the state pays money into an investment account earmarked for furthering his creative vision. This account will be in his employer’s name, making it accessible only for work-related expenses. There should also be a condition that the employer must match a certain fraction of this investment (maybe half).
For example, let’s say someone earns $50000 per year and decides to reduce his employment to 60%. Under this system, his gross salary will reduce to $30000 (accessing a lower tax bracket), and in return, he will get 40% of extra free time and $30000 ($20000 from the state and $10000 from his employer) to invest in whatever productive initiative he wants to pursue.
Employees taking this incentive will be incredibly valuable to companies because they cost less and produce a whole lot more (both because they get funds to invest and because they are more engaged). This gives them the power to negotiate rapid salary increases. I bet that most of these creators will choose to invest their raises to further increase engagement and creative freedom instead of increasing their consumption, producing ever more innovative solutions for their companies.
The result will be a country with such profitable companies that corporate taxes will soon outgrow the state payouts to creative employees. At that point, Norway can really start flexing its financial muscles to tackle the world’s greatest problems like poverty and inequality of opportunity, self-destructive consumerism, and environmental destruction.
My Trial of the Proposed System
My present-day reality is not too far from the system proposed above. I’m only 40% employed, but my production-centered lifestyle is so cheap (and my taxes so low) that this remains more than enough to cover all my expenses. In reality, I work about 60%, earning a positive balance with my employer for purchasing software, training, and human resources to develop my ideas.
The best thing is that the 60% of my job I chose to keep involves tasks I’d happily do for free. This allows me to invest almost all my time and energy into truly engaging work. Since work feels like play, I end up “working” over 3000 hours per year, finding most of these hours more refreshing than typical consumerist pathways like watching TV, eating out, or enjoying some retail therapy.
If most workers could enjoy this type of creative freedom and engagement, I’m confident that we can build a sustainable and just society of true abundance within our lifetimes (and have a blast doing so).
Closing Thoughts
There’s plenty of child-like naivete in this plan. I could rattle off a long list of practical challenges ahead, but that would be missing the point.
The point, of course, is that we have a stupendous amount of happiness, health, and productivity to gain from upgrading our relationship with work. The consumerist status quo where we generate vast quantities of hateful, planet-destroying, bullshit work for each other is nothing short of a travesty. In its place, we can build a new standard where we enjoy our increasingly meaningful work so much that most of the soul-killing work needed to sustain consumerism becomes redundant.
This new paradigm will unlock such a wealth of surplus productivity that we can realistically build the prosperous, just, and sustainable world of our dreams. Now, doesn’t that sound like a fun project?
We just need a catalyst. I wish Norway would step up to supply it.
