Text version, with some additional detail and sources. I added note about Norway having greater oil per capita, which I meant to mention in video. www.economicshelp.org/blog/214768/economics/norway-uk-oil/

Great summary! In short, Britain blew through its oil money like a chav lottery winner, while Norway made sensible investments.

I’m on a production platform in the North Sea watching this video. Aberdeen is a city which has benefited the most through oil and gas, yet the city can barely fill in potholes on the streets due to budget cuts after budget cut.. just staggering really, whilst we look over the sea at our neighbours

Great insight. Goes to show what happens when you actually distribute the proceeds of economic growth to the benefit of your population, as opposed to selling off your entire economy to the private sector in a massive fire sale for short term gains at the expense of long term revenues.

As a British person, even though I already knew most of this, this was such a painful watch :,)

I worked for BritOil in their Glasgow HQ (now home to Santander), the scandalous story of it's privatisation is worthy of a an entire documentary...

Evidence of trickle down economics having any benefit has been scant whereas evidence of the benefits of national investment in infrastructure, education and people is everywhere

There is a common issue here with all this content and it was touched on in a recent Economics Explained upload. The issue is this, do our elites (in London) care anymore? I think they have detached themselves from the regular economy and are now transacting amongst themselves. London is now a seperate economy. Our politicians and business leaders see themselves as citizens of the world playing between tax and banking systems. Our democracy is a side show..a career move..a bit of fun..there's no accountability, no action, no meaning. They're not invested in the regular economy. To me this explains why there is no will to reform, no long-term plan, no strategy....NO LOYALTY! "They" are not on the same team..And we need to come to terms with that!!

Absolutely fascinating, thank you for this. It must have helped that Norway wasn’t trying to maintain the illusion of being a world power, so didn’t pursue an expensive defence policy including trident.

Norway has a better governing system (better ethics politicians ) than UK. Even if UK follow the footpath of Norway, outcome would be different.

Excellent analysis. The consequences of the ‘looting’ of Britain’s oil and gas reserves will be felt for many generations to come.

So in Norway, the profits of oil was used for the benefit of the people. In the UK, the profit was just declared abroad and just made shareholders rich.

Sold everything off trying to copy Uncle Sam. A great clip, thank you, these should be used in educational syllabus as they informative and offer an alternative viewpoint to our future policy makers.

The main thing is Norway has a small population, circa 6 million, but has more oil and gas than it needs hence could invest income from sale of excess. Also keep in mind a huge amount of Norways energy comes from hydro.

The UK wealth fund is on the Cayman Islands and in Panama under control of the richies - who own it !! In contrary Norway wants to make sure EVERYBODY has a benefit - not only the richies like in the UK!! a simple difference - so easy to understand - if one wants !

At last a good video. Please do another on how much privatisation across all sectors has cost the UK economy.

In a nutshell, this is the difference between what happens when you let a predatory capitalist elite (UK) manage national resources by privatising them (virtuous enlightened selfishness, Ayn Rand would approve) and what happens when you let the Moderate Right and Centre Left (Norway) manage national resources by banking the profits for the benefit of the entire country (collectivism, Ayn Rand would be horrified).

... and still some people are surprised that so many in Scotland want to get out of the unequal union. What has happened with oil money goes completely against the grain with the Scots, who are noted for fiscal probity.

Norway put 90% of North Sea oil money into a wealth fund for when the oil ran out. The Milk Snatcher reduced income tax. Result Norway os very wealthy. UK is very poor. UK have nothing to show for its oil except a few multi millionaores.

It makes you wonder why no British politician is asked about their party's long term lack of vision or strategy or what they think about this

Its a key part of our total failure in the UK to invest in our whole country. The money has gone and our society has become more unequal and more divided. And the right wing in the Conservatives and Reform want more of this flawed economic thinking.

Because the Norwegians made a state service to extract the oil and so got the full benefit of it. Westminster just gave away licences to private companies to extract it all the while letting said corporations get away with paying the absolute minimum in tax on it.

When I was in UK. I saw empty boarded up streets under a constant grey sky, litter everywhere. Homeless people sleeping in doorways. A women with cat whiskers makeup casually walking into Tesco with her pajamas. Opioid addicts out of their mind and women so drunk they urinated on the streets. It's a sad declined country.

This has almost nothing to do with the Oil itself in the North Sea. It has everything to do with Politicians. Anyone can see objectively that the Norwegian politicians made an effort to look to the future interests of their nation and people. The British (English really) Politicians only served themselves and their millionaire shareholder interests. Thats all there is to this. English politicians mostly don't care about anything beyond advancing their own careers and getting in with the London City crowd, making friends with bankers and corporation stooges. The idea that they would even attempt to begin to do anything to make the country better off is laughable naivete. English Tory politicians are mostly in the politics game for money and career advancement.

Wonderful commentary , This should be compulsory reading in my country Australia. We had a great Pri minister Geof Whitlam who only served 3 years yet bought in more social reforms than every pri minister before and after combined. Sadly he was dismissed for corrupt reasons. But none of his reforms and initiatives were cut or replaced. Yet they were the very reason for his dismissal.

And in the red corner we have Schumpeter's Social Democracy, taking on in the blue corner local hero Smith's Laissez Faire. An ideological set piece. Thank you for you work. Well done.

It could have been Scotland's oil

Privatisation was about individuals in a government selling public assets to themselves and others with money to buy those assets, which, on the whole, was not the public.

Main reason: Norway has got less than a tenth of UKs population. Further, Norway's oil and gas resources are a fair bit bigger than UK's. Also Norway doesn't need much of its oil and gas for its own energy supply, most comes from Hydro power plants. Well, apart from that, Norway's politics is way smarter to keep the money in the country and invested in national fonds for everyone's welfare instead of making only oil and gas multis rich.

It is in scotland's territorial waters, it is part of scotlands wealth, it's always been hers, it's been used and abused for many decades now by every UK gov since its discovery. Our country has been held back by every UK gov. Aberdeen should look like Dubai by now. No licences should have been awarded to private companies to extract it without an oil fund in place. The Shetland Isles have at least 9 public swimming pools, the best roads anywhere in Britain and more community centres on every corner for 22,000 people. All aquired because a local Councillor negotiated 1p per barrel from every barrel landed ashore in the mid 70's. All because the oil companies needed planning permission for somewhere to store it on land. Scottish industry and citizenry didn't need it all and only 1/6th of the gas reserves are required for the country, so the rest could have been sold to the highest bidder and the profits stored in a sovereign wealth fund like Norway and the interest used to further the advancements of our entire infrastructure and a social contract for our people for generations to come. But no, that's not good for the greedy bastards who want ALL the profits for themselves and fck the people who live there. Scotland.... the only country in the world to stike oil and get poorer for it..

Well, buying up stocks all over the world is also a defense policy in a way. Norway owns around 2% of all stocks on all stock markets globally. And it has prohibited investment in the arms industry, and in industries with poor working conditions globally, as well as prohibited investment in any industry using child labor or with a discriminating work and salary policy anywhere on the planet. So it is not only about money, it is also about equal rights, child care, and peace.

Tejvan, this was an excellent insight into a factor that still influences our economy today. Your channel is so useful and accessible to students and the general public. Keep up the good work.

The main difference between uk and Norway is that the rich get away without paying taxes, while in Norway wealth is distributed. Thanks for this great program!

If not for being part of the UK Scotland would be nearly a trillion richer with nearly 96% of UK oil in Scottish waters.

This is great. Exactly up my street these videos. Subscribed babyyyyyyy.

It’s in off shore bank accounts of multinational companies.

Absolutely great video ! CON GRA TU LA TIONS ! I never had a that clear and easy to understand explanation on this subject before ! Thank you very much ! May God bless you always ! Keep up the excellent work and I already subscribed to your channel ! If I could make a request, can you make a video on the Israeli economy ? (thr growth caused by the hi-tech sector etc. ?)

Great video. Thanks. Keep it up. I'm finding this channel very educational.

Thanks, that was really clarifying.

As a young Brit i lived and worked in Norway in the 80s, married a Norwegian and lived there until my job took me to Asia. The main difference is better Politicians and above all proportional representation. Yes you might get a few extream politicians but thats just democracy in action, but above all Politicians work with each other and dont act like a bunch of baying hounds. When i listen to the news from back home i get depressed about how politicians and the media love to fight and stir each other up. Until the UK changes to PR your never going to get stable government which thinks long term rather than worrying about the next election cycle and giving tax cuts to push the country into more debt. And Brits themselves need to be realistic about wanting a high level of welfare without wanting to pay the taxes it costs.

When l first heard we'd struck oil in the 1970s l thought, that's the end of unemployment. Boom times ahead! But the opposite happened. Only British politicians could receive such a bonanza and preside over the explosion of unemployment the UK suffered in the 1980s.

Firstly, Norway's oil revenues are many times greater than the UK's when compared with its GDP. So the positive impact of oil revenues for Norway was much, much greater. Secondly, you have to consider the opportunity cost of creating a sovereign wealth fund. In the UK's case, this would have been either higher taxes (to fund the same level of public expenditure) or lower public expenditure (as oil revenue was saved rather than spent). It is not clear that creating a sovereign wealth fund would have been better than the combination of lower taxes and higher expenditure that the UK experienced.

Another stuff up by the Cons. It would be a short list of what positive achievements they've made starting from the Thatcher era.😢

It’s like the famous spat that Gordon Brown had with a member of the public in the north, where he was talking about GDP and she ended the conversation by saying it’s not OUR GDP! Just big corporations, (foreign owned) and city spivs in London got rich in the 80s and 90s.

Great explanation, thank you.

Really interesting content - thank you. So sad for current state the UK...

Fantastic video. I know some of the details of the paths that the two economies took and where they stand today. With your presentation, it is clear that a free market economy i.e an unlimited potential for corruption, may be the key to understanding where the UK stands today as an 'also ran oil economy'! It shines a spotlight on honest politicians who have the long term interests of their population at heart vs English leaders who have sold off the assets of their country in a fire sale for their own benefit and their shareholders!

The Act of Union was a treaty of unification between England and Scotland as equal partners in a combined country. But we’re not, the English lied to Scotland over the oil reserves and this is enough to null and void the union. Someone should take a legal case to the United Nations to have Scotland officially recognised as a protectorate of England which would legally dissolve the Act of Union.

fantastic video, great quality

Heh, an economics channel was bound to cover Norway's oil eventually.

Tony Benn set up an oil revenue investment fund for UK industry in 1978...in 1979 the Tories got in and Nigel Lawson abolished it - as well as getting rid of public holdings in BP etc. Result: the mess we're in now...

Your absolutely right about the 80’s -business was saying leave it in the ground as the exchange rate surged and made exports unprofitable.

This is what Canada could have done as well. Over roughly the past 40 yrs Canada extracted a similar amount of oil as Norway. In fact Peter Lougheed the Alberta Premier in the 70s started a similar Heritage Fund - but they've stopped investing in it in the 90s and raided it a few times so now its like $16billion which is nothing compared to Norway's 1.3trillion $ fund. In fact Alberta proudly advertised the lowest royalties in the world. Consequently it follows the boom and bust cycle of oil prices.

We had a shop keepers daughter for a Prime Minister being advised by an OIL rich American Monetary adviser who like a star struck child, went along with his policies which syphoned off UK oil income into the American economy. She always said NO NO NO to sensible advice from UK advisers and YES YES YES to American manipulation.

The health care chart hits hard. My wife is south Korean and their healthcare system is cheaper and much more efficient than the UK potentially a thousand fold. You can literally go to the hospital and get treated within a day. Can you do a video on UK education levels and show that we're one of the lowest educated nations in the OECD.

An excellent video. Thank you

It's not just oil. Think about London property. The government owned loads, all those central London civil service buildings but rather than retaining and commercially letting them in a wealth fund it was all sold off to foreign entities. At least the Crown estates have been protected so far from the grubby hands of the MPs those at least still generate a bit of cash for the country even if the King gets a kickback.

The story of Britain oil folly can ge summed up in two words. THATCHER, TORIES.

We are still feeling the effects of Thatcher and will long into the future ☹️

Very interesting this one - thank you. I have had this argument about all the oil money being squanderd many times. Never any long-term thinking in this country - and it has now caught up with us. The Tories will still probably get back in, not that it will make much difference.

And yet people will still tell you austerity was necessary.

As a scot i cant listen to this without having a stroke.

Unfortunately i see this same short term thinking with present resources too, the Polyhalite deposits resources found for example.

Is the uk doing the same with wind power?

The Tories since 1979 have done so much damage and that includes the red tories of Blairs years.

Norway has vastly more oil per capita than the UK. Helps a lot.

Producing large amounts lowers the price. It's why OPEC carefully hoards oil to keep the price high, whereas under Thatcher, Britain just spaffed our valuable oil onto the open market and squandered the profits.

The UK is on the same Neo-Liberal program as the US, which is just an academically respectable beard covering base corruption and nepotism. Unfortunately, this won't be fixed in elections, since the amount of private leverage is too great to bring things back into balance with a vote. What we need is some high profile corruption trials to demonstrate publicly that the present arrangements, although pro-forma democratic, are in fact the result of criminality of the highest order. Hence the contracts made were invalid, and the resources must return to public ownership.

Very good video!!

Many thanks for this insight. It is beneficial to understand certain developments in different countries with similar preconditions.

What's the price for Scotland? (Asking for a friend.)

“….there was never much effort to make long term investments from the proceeds of oil. It was all very much short term gain” I think you’ll find that’s pretty much the situation now, not just with oil, but all long term planning in the UK, and has been for many decades.

Due to our corrupt politicians

Main lesson: Thatcher is the worst thing that ever happened to the UK.

Some more considerations - oil money in Norway was about to go into the pockets of a wealthy elite by contract when literally at the 11th hour a lady politician (her name escapes me just now) leaked what was going on, stood up and made sure the money went to the state, the people - it didn't come about by planning or some nicety nice agreement, it came about because of one clever, caring and astute woman with a bee in her bonnet who wasn't having the greed we suffer from in the UK. To liken Norway and the UK post-war is ridiculous - the demographics, geography, pollitics and societal trust levels could not be more different. Norway has 99.9% hydro electricity because of its geography, something we could never do, and had the booming neighbour Sweden which had not been wrecked in the war - indeed profited from it and was able to supply all manner of skills, raw materials, etc.

Very good analysis which omits one main point - the narcissistic psychopathy of the English upper class. It continues to damage the UK, primarily beyond the SE of England, to this very day. It is unlikely to stop because the English love tradition and well over 40% of them have proven to be very slow learners.

It works as intented. You either want private equity or state remaining funds/equity.

The UK is not the only country to have done this. My country, Australia, has and continues to squander the procedes of our mineral wealth. We have a thing called the Future Fund, but it is there to finance the retirement costs of federal government employees and is not a soveriegn wealth fund as such. Like most democracies, we only attract, in the main, second rate people into politics and these clowns have no understanding of any thing outsider the current electoral cycle.

There is the slight difference in sheer scales if the two economies too, the oil receipts as a percentage of revenues is many times smaller in the UK than Norway, not to say it would have not been welcomed. It would have not moved the dial anywhere near the way it did first Norway

If only people in power would learn from their failures or others successes. I doubt the privitisation train and "trickle down economy" will stop anytime soon.

One huge crack and our fund is gone... Still, I agree with you that the Norwegian population owe THAT GENERATION of politicians a lot. The US offered to pump the oil "for us" and we would get some percent of the revenue. Fortunately, they refused. Unfortunately, the overwhelming majority of todays politicians in Norway would for sure accept the offer without even blinking and we would have gone the same way as many other oil producing countries..

Put Simply Norway doesn't have the political parties the UK has. Oil in the North Sea was discovered in the 70s when we had a labour government then followed several periods of Tory rule. Labour kept it secret how much the oil was worth fearing Scottish independence then the Tories came along with their instinct for personal greed. Scotland is unfortunately tied to the UK.

Take a delve into the Alberta Heritage fund in Canada. it was worth $14 billion US at one point, it's empty now.

I don't think oil.was the reason why the pound was over valued. The reason was the nonesense of moneyerism. The Thatcher government thought it was a good idea to put up interest rates much higher than necessary to push up value of the pound. This devastated the UK's manufacturing base leading to 4m unemployed in 1981 up.from just below 1m when Tnatcher came to power in 1979. Moneterism was quietly abandoned in the mid 80s after it devastates the UK' s manufacturing base

Norway's Georgist policies for its oil would have been amazing for the UK

Great video, undoubtedly correct. But renewable energy is an entirely different story that deserves it's own video. Norway has about 1.500 hydro electric powerplants! Next, Norway has a population of 5 million people. With their vast profits from oil they can subsidize the use of Electric Vehicles and heat pumps and the use of electricity in general. They can electrifiy the entire country in a way that no other country on earth could do. But without their hydro electric power plants and without their oil revenues, this electrification might very well be a dream.

I worked for a Norwegian company making underwater cameras for the oil industry etc, they payed 7% of your earnings into your pension, try getting that in the UK these days.

*TORIES* thats how

Excellent and I would recommend watching Russell Brands documentary called ‘The Emperor's New Clothes’.

Great video. This make me SO sad. Oh Britain.

Having a tiny population and no decaying post industrial base was kinda helpful too.

I think you miss two vital points in this lecture. Norway had a population of about 5 million people and the Government was terrified of the vast resources totally wrecking the economy so nationalised it and used the proceeds for a sovereign wealth fund and providing social benefits. I was born in 1946 so at that time there were several war debts Britain was responsible for: WWI, WWII, and the losses payable to Europe for the bombing damage to factories in WWII. In 1953 we also had the war debt for the Korean War which was half of the cost of WWII. Thatcher’s claim about the vanishing oil re venue was that she had reduced most if not all the war debt. The British at the end of the war although broke and in deep debt launched into social benefits of various sorts but would not listen to the Treasury who said the financial model would collapse in ten years. It did but no further means was taken to provide for it bar writing bigger cheques funded by tax from a population increasing from 56 million post war to depending on who you read today 66 to 68 million population. Oil saved Britain from being a complete basket case to being a bit of a basket case but not much wise pro rata than most other economies where the population is as large or larger. The maths you give is undoubtedly true but you have to lay out the whole equation not just part of it. No political party has ever laid out the financial problems of state and its means of addressing them all we ever get is tiny fractions to address a small core of voters or discomfort a potential incoming government of alternative texture. Much of the problem of the seventies was because of political interference with business and markets by all parties and they all got it wrong.

The UK government sold licences to companies but could have nationalised it and taken most of it, as Norway did.

Selling profitable businesses during the growth stage. Tory policies for their cronies.

What did the UK achieve recently? I can't think of anything. Ah yes, the 2012 Olympics. 🤣 Australia could have also been like Norway, but instead they sold their resource mining operations to the highest bidder.

Since 1997 the UK has been governed by a kakistocracy (both Labour and Conservatives) they financially bribed the electorate with promises of un-earned wealth and these governments (especially the Blair/Brown Labour governments) then financed its own expansion with debt riddled boondoggles such as PFI's, a commercial/residential property Ponzi scheme, corrupt London based financial systems, pet projects and unnecessary/unprovoked wars. This fact always makes me so angry but then I remind myself of the Joseph de Maistre quote "Every country has the government it deserves" so in short we deserve the squandered wealth, the massive debt mountain we are now saddled with, and the future it has bequeathed the UK population. FYI the UK now has a 3 trillion pound national debt (without the hidden debt, personal debt and future unfunded liabilities) that can only lead to a slave based CBDC system or a Sovereign Debt Crisis. Dark days ahead.

Cutting corporation tax is equal to industrial investment. You make some good points, but I think if you subtracted the total influence of oil in the 1980s, the 1980s would simply be that much poorer. We were failing in the 70s as you hinted. I think I recall a stat where investment per worker in Britain was about 6x less than Japan back then. We have suffered from being inefficient, or you could call it lazy or perhaps stupid, but productivity is our problem and investment in non-productive industry is a bad thing anyway.

Read the book Trillion Dollar Baby. Tells exactly this story. Similar errors here in Australia. The Norway model was created and deliverd by a mid level public servant.

No reference to Britains war debt at the time of Thatcher?

UK lost out on oil but making up for it with the woodsmith Polyhalite mine soon to be open.