Welcome to Norway, land of high taxes, burdensome regulations, and generous social welfare. It's also, strangely, crawling with start-ups. What gives?
It's taken as an article of faith that socialism—high taxes, government regulation, robust social safety nets—are bad for entrepreneurs and bad for economic growth. But one of the world's most entrepreneurial economies—with more entrepreneurs per capita than even the U.S.—is also heavily taxed, highly regulated, and fully welfared-up.
If you care about the long-term health of the American economy, this should seem strange—maybe even troubling. After all, we have been told for decades that higher taxes are without-a-doubt, no-question-about-it Bad for Business...Few have dared to argue against tax cuts for businesses and business owners. Questioning whether entrepreneurs really need tax cuts has been like asking if soldiers really need weapons or whether teachers really need textbooks—a possible position, sure, but one that would likely get you laughed out of the room if you suggested it. Or thrown out of elected office...
And so the case of Norway—one of the most entrepreneurial, most heavily taxed countries in the world—should give us pause. What if we have been wrong about taxes? What if tax cuts are nothing like weapons or textbooks? What if they don't matter as much as we think they do?
Before you blow your top, have a look at the article and the lively (and mostly civil) discussion going on in the comments. Felix Salmon wrote a nice post with his thoughts, and there are interesting comments coming from Reuters readers. HuffPo readers are all over this too. I'll be back with some more detailed posts as comments and questions come in.