Societies have long grappled with the question of how to share (or not) the wealth derived from natural resources. Some, like the United States, have embraced systems that allow much of that wealth to fall into the hands of a few private citizens. Others, like Norway, have taken a different approach, adopting policies that facilitate a more equitable distribution of that value to all citizens.
In a recent speech, Norwegian Minister of Finance Trygve Slagsvold Vedum described Norway’s progressive approach to resource management, tracing its origins from its application to most familiar form of shared assets (natural resources) and using his country’s experiences and perspectives to describe a similarly equitable approach to the management of a distinctly modern segment of the economy: the digital commons.
Norway’s model, which ensures that the profits from resources like hydropower and oil are shared among the entire population, offers a compelling blueprint for equitable resource management. This approach, rooted in the economic principles of American economist Henry George, underscores the importance of collective ownership and benefit from natural wealth—a concept that the United States could greatly benefit from today.
The Legacy of Henry George
Henry George, in his seminal work “Progress and Poverty” (1879), focused on the concepts of “land rent” or “resource rent,” arguing that the economic value derived from land and natural resources should belong to society rather than private landowners. A firsthand witness to the realization of America’s manifest destiny, George observed the rampant speculation and soaring property prices where he lived in San Francisco, particularly around the newly completed transcontinental railroad. Observing the clear but (seemingly) counterintuitive relationship between increased affluence and destitution all around him, George believed that it was the duty of government to ensure that wealth derived from natural resources should be shared by all, going further to contend that advances in technology should similarly be governed to improve the quality of life of all people.
Although popular, George’s ideas did not carry the day in his own country, but they did reach across the Atlantic, significantly influencing Norway’s policies in the late 19th and early 20th centuries. At that time, foreign investors had started buying up Norwegian waterfalls, which were vital for generating hydropower. By 1906, three-quarters of these waterfalls were foreign-owned, leading to concerns that the profits from hydropower would leave the country.
Norwegian politicians, inspired by George’s principles, engaged in fierce debates and ultimately decided to nationalize these resources. This decision ensured that the wealth generated from hydropower, dubbed “white gold,” would benefit all Norwegians. This model of national control and equitable distribution of natural resource wealth later extended to the oil industry, discovered in 1969. Norway’s oil and gas policy, which includes substantial state ownership and taxation, ensures that the profits are reinvested in society, notably through the Norwegian State Petroleum Fund.
Norway’s Model and the Digital Economy
Natural resources remain a critical part of every nation’s economy, but in the digital age, data have come to play an even greater role in wealth generation. Recognizing the importance of this (no longer so) new economic frontier, Minister Vedum’s speech also addressed the modern digital economy, drawing parallels between natural resources like waterfalls and oil and the data that are created by the global population past, present, and future. And just as Norway has previously ensured that the profits from its natural resources were shared by all, Vedum suggests that the wealth generated from personal data should be similarly distributed, positing that data, the foundation of the digital economy, should be viewed as a collective resource.
Vedum’s ideas are both timely and critical. In the digital age, companies generate enormous profits from data collected from individuals worldwide. One need look no further than the litany of lawsuits filed against ChatGPT to see that content creators recognize this truth, but one need not be a published author or famous musician to see your data added to the chimera of knowledge from which big tech makes its profits, the truth is, we’re all in there somewhere whether we like it or not. But unlike the wealth produced by Norway’s natural resources, the unimaginable sums produced by harnessing big data are largely concentrated in the hands of a few tech giants and their shareholders.
Vedum’s call to action is clear: we must ask who owns these data and how their value can be equitably shared. And the analogy to George’s land rent is apt—just as the value of land increased due to public infrastructure like railroads, the value of data increases due to collective digital activity.
A Call for U.S. Adoption of Norway’s Principles
The United States, with its significant role in the digital economy, should engage with Vedum’s call to action, even if we did not heed George’s. Why? Because the U.S. is becoming increasingly paralyzed by the staggering wealth gap between the haves and have nots, and adopting a model of national control and fair distribution of resource wealth will help address economic inequality and ensure long-term societal benefits.
Here are key lessons the U.S. can take from Norway:
- National Control of Resources: Just as Norway nationalized its waterfalls and oil fields, the U.S. could ensure that profits from its natural resources—such as oil, minerals, and even data—are controlled and distributed for the public good.
- Equitable Taxation: Implementing a resource rent tax, as advocated by Henry George, would ensure that the extraordinary profits from natural resources and data are taxed and redistributed to benefit all citizens.
- Long-term Investment: Establishing sovereign wealth funds, similar to Norway’s State Petroleum Fund, can secure future generations’ prosperity. These funds can be used to provide public services, invest in sustainable development, and ensure economic stability.
- Global Cooperation: In the context of the digital economy, global cooperation is essential. The U.S. can lead efforts to create fair taxation frameworks for the digital economy, ensuring that data-generated wealth is shared globally.
Conclusion
Henry George’s principles, which profoundly influenced Norway’s approach to resource management, offer valuable insights for addressing the contemporary challenges posed by the digital economy. As big data, machine learning, AI, and all the rest, continue to change the way we live our lives, viewing data as a collective resource and implementing policies to distribute the resulting wealth among us is (apart from climate change) perhaps the most pressing challenge of our lifetimes.
I don’t speak Norwegian, but google tells me that “Gammel vane er vond å vende” (basically, “old habits die hard”) is one of Norway’s top idioms and it seems particularly resonant now. Will the U.S. finally listen to the message Henry George gave us all those years ago? Perhaps we can learn from a country that did and benefited as a result.
Full disclosure: Yes, I used ChatGPT to write the first draft of this post (which I then edited, rewrote, edited again, etc.). Generative AI is an immensely useful tool, as are so many of the technological marvels the tech giants bring us. But they’re just that – tools – and it’s up to us to govern their use, and the distribution of the wealth their use creates, equitably. Today’s “robber barons” aren’t just benefiting from the resources “out there” that everyone should have access to, they’re benefiting from us as resources…
