But What About Norway?

This challenge was posted to libertarians on reddit:

Maybe your government is fucked up. Then you need better government, not less. I have a hard time taking the libertarian stance seriously, because I have never heard a convincing answer to the Norway argument.

1. Social Democracy.
2. Words happiest people.
3. Blooming economy.
4. Highest standard of living in the world. This one gets ignored a lot. This means, that even though taxes are high (effectively 80-90%), people living here can afford more than the people doing the same job in for instance the states. This is true for 99% of the people.
5. One of the least religious countries in the world, even though the state sponsors religion (no separation between church and state).
6. Actually made money from the "recession" because of sound banking policies.
7. Has oil, but only spends 4% of oil revenues each year - hardly the only reason for its prosperity.
8. High level of investment from foreign countries because social democracy creates a stable state and currency (Friedman would predict zero investment from abroad because of high taxes. Friedman was wrong about a lot of things, apparently).
9. High risk behavior leads to high gains because people feel safe about not falling to the bottom. I.e. lots of start-ups.
10. Almost no crime.
11. No national debt.
12. Only 5,000,000 inhabitants, but Sweden has shown that the same system can work as well for twice as many people, and there's no reason to believe that it wouldn't for 3 times as many, or 10 times as many - the whole point of the system is that it evens out the population.

State involvement is bad, you say?

Here was my response (I didn't do any fact checking, just took his word for it):

1. I've often commented that parts of europe may actually be more free market, in a certain sense, than the US because people have more direct control of what goes on. The free market is a way of decentralizing control and decision making. Pure democracy, easier in small populations, is similar in nature. In the US, laws are designed to enrich people at the expense of others. High taxes can be used to offset that. I'd prefer the privileges, which I expect exist in Norway as well, be revoked, but you're going to get a more free market looking society when such taxes and redistribution occurs. And that's not to mention that Norway/Sweden are small, homogeneous populations where democracy is more likely to function without chaos. If Sweden is any indication...
2. If my statements above ring true, then this would seem to make sense to me. Allowing people freedom and choice in the things that they would like to have choice in makes them happier.
3. Same as #2
4. This is kind of a misleading statement. I live in Orange County. The standard of living here can be really, really high. (Mine isn't, but whatevs.) The population here is 3 million. Norway's is 5 million. The US is huge and there is great variation in culture, norms, wealth, happiness, standards of living, etc. Bump the population of Norway up to 100 million and see how great it is.
5. No, they're very religious, just not in the way that most would identify it. Religions are just sets of beliefs -- all people have them. "Secular humanism" is a religion.
6. You mean it has policies that aren't designed specifically to rip off the consumers? That would seem to be beneficial to society. I wish the US was like that.
7. Are you saying they save 96% of all their revenues? That sounds highly suspect.
8. No. Friedman would argue that the amount of investment would be dependent on the ROI which is dependent on tax rates and risk. If Norway is a stable place for investing, we'd expect investment to be strong. Again, I'd argue it's the homogeneity and decentralized nature of Norway that makes it work.
9. Which is why many libertarians support mutual aid and voluntary safety nets. Friedman himself proposed a "negative income tax." You shouldn't get all your ideas about libertarianism from Ayn Rand. ;)
10. Understandable given what I've already said.
11. Same as #10
12. Actually there is. With the addition of each new person, the political power each original citizen diminishes. This leads to a situation in which it becomes unprofitable to make the effort to engage in participatory democracy while it then becomes profitable to undermine that system by engaging in corruption, lobbying, bribing, etc. See Public Choice Theory

The ethics of society play a huge role in how that society will function. A population where everyone is averse to murder and corruption will not have much murder or corruption. There are institutions which reduce the costs inherent in such actions. The State is such an institution. And the more unwieldy the state becomes as a result of population growth, the more likely these anti-social behaviors are likely to emerge.

"State involvement is bad, you say?"

State involvement is a worse alternative. But a state that treats its citizens better and mimics free society best is a still a better State.

His(?) response:

Thank you for your well thought out answer. The idea that the dynamics of a society change in unpredictable (that is to say complex) ways when population increases seems obvious when I think of it.

I agree with your arguments, as in, a large reason for why this works in Norway has to do with the countries history and the inherent mentality of the people coupled with the fact that it is homogeneous. I would still like to believe, that even though it grows less homogeneous daily, as long as the population increase is proportionate, this system will continue to work - for the simple reason that the benefits it gives are obvious to the people living here, also the immigrants.

A good example is the muhammed drawings. While muslims around europe were going bananas, the muslims in Norway were calm and collected and the imams went out and publicly condemned action against the state and/or newspapers who had printed the drawings. Because, I suspect, they weren't discontent to start with.

The one point where I believe we strongly disagree, is that no government is the best. If there were no government, something else would fill that power vacuum. I'm way too conservative to believe in a happy go lucky world where everyone makes their own decisions independently, and that this somehow works to the best of everyone. More likely than not, corruption, organized crime and power abuse would increase in an anarchy (that is to say local government) - not diminish.

And yes, they save 96% in a fund (It's the 2nd largest sovereign wealth fund now). Norway owns more than 1% of all the stocks in the world.

And my reply:

Thank you.

I don't think that "power vacuum" accurately describes anarchy. I might suggest reading Without Adjectives. The distinguishing characteristic of a State versus any other organization is that a state is considered "untouchable." States often, in modern democracies and republics anyways, have ways by which the internal dynamic can be shifted around/altered (in some places more than others), but what will always remain is the basis on which such organizations exists in the first place. For example, the US can have elections, amend the constitution, write laws, and whatever else, but it's unthinkable to most people to even question that idea that those are the appropriate methods by which law is determined and provided. As an anarchist, this is essentially the only point that I make (as a libertarian, I make more profound arguments) -- that maybe the systems that we use to determine our law and social structure are insufficient and not optimal and that, surely, universalization to the degree we have is totally unwarranted.

Would definitely recommend checking out this lecture by Milton Friedman's grandson.

Did my "catch flies with honey" approach work? Hopefully, but opening the dialogue is at least a step in the right direction.