Norway’s Foreign Students: A Benefit not a Burden

The diversity of Norway’s higher education system is under threat. Sweden, Denmark and Germany are the latest countries to start charging fees to foreign students.  Indeed, Norway increasingly appears like a last beacon of kindness, or  if you take the other view, a beacon of stupidity; “the sucker” in a prisoner dilemma game.

Why should Norwegian tax payers subsidise these foreign free loaders?  This appears to be the direction political consensus is swinging in; the Progress Party, KrF and the youth of Hoyre have all suggested introducing foreigners.  Given their polling it is also probably the direction Norway  will shortly be moving. Trygve Slagsvold Vedum of Sp gives us insight into the logic  underpinning this movement in an interview with Aftenposten  “It’s natural that we follow our neighbouring countries in this area”. Indeed, Trygve’s logic seems to make intuitive sense if you don’t think about it too hard.

The trouble is that forming policy like a slow witted sheep chooses where he wants to go is not really Annerledeslandet style. Norway historically,  has understood that what is best for the rest is not necessarily best for Norway; whether it’s the EU, the state ownership of the oil, or the focus on rehabilitation rather than retribution in the penal system. Norwegian society has not got where it is by following their neighbours blindly.

Trygve Slagsvold Vedum of Sp

The Minster of Agriculture’s tit for tat protectionist game may work for farmers but not for higher education.  While it is certainly unfair that Norway’s students have to pay so much to study in the US and the UK, it doesn’t necessarily follow that Norway would gain anything from retaliating in kind. It must judge international education fees equation on consideration of the merits not on emotion.  It is certainly not as clear cut as Trygve seems to believe..

Before I begin I should refute the case that as a foreigner benefiting from world class Norwegian education right now, I have a vested interest in keeping eduction free. Actually, if I were your economist’s “rational man”, I should be lobbying in the opposite direction. I graduate this year and so any changes won’t affect me; I will continue working in Norway next year and so new foreigners coming in, if one accepts that they are a burden on the Norway’s taxpayers, will be a burden on me too. No, I write this as a permanent foreign resident of Norway, with a vested interest in Norwegian society remaining prosperous and a pleasant place to live.

The education question must be broken down into the costs and benefits to Norway. To do that one must first recognise that university education is not one generic good which foreigners use and throwaway at equal cost to the tax payer. Certain courses cost a lot more than others. For example, medicine takes 5 years and is extremely expensive to teach as it requires scarce high cost items like cadavers to practice on. It is also a subject that is very much “taught”, having international students there does not improve the quality of classes.  Medicine therefore classifies as something that it would be extremely difficult to argue that it offers value for money to Norway’s tax payers to fund. Particularly if, as is currently the case non-EU students would be unable to stay and work in Norway even if they wanted to.

Social Sciences on the other hand cost a fraction of the price.  The marginal difference of an extra student in the occasional lectures and classes is minimal up to the size of the room they happen to be taught in and the 30m extra it takes to mark the exam or term paper. Meanwhile the materials required to study require only online journal access (increasingly this disproportionately expensive, but still not very much). If you look at two years Masters in Social Sciences then the cost benefit equation – regardless of whether the student stays in Norway- begins to look a lot more favourable. The wider point is that different subjects costs different amounts, and any policy must take this into account when weighing up the cost benefit equation of fees for foreigners.

It critical to understand that educating Foreigners is not charity; they do contribute to Norway in a number of ways during their studies. Certainly, they are getting very good deal, but this is not a zero sum game, Norway also benefits. While Norway’s foreign students are takers in terms of education, that is pretty much it in terms of public provision. 18-30s are the least likely to use health service, do not qualify for welfare, while Norway’s defence, infrastructure and policing costs would remain the same regardless. Meanwhile in return, the students pay for living with either a) paying with money sent from their home country, or b) working (frequently jobs natives don’t want) and paying taxes. Both of which are beneficial to Norway. How much?  Assuming an average yearly living cost of 150,000 NOK, that is not an insignificant contribution to the economy.

Then there are the spinoff or ‘soft’ benefits that are difficult to measure but nonetheless important. First of all in the class itself, having diversity improves the quality and variety of the classes and the research. The cross pollination of ideas, experiences and knowledge from different cultures is certainly valued by Ivy league universities in the US, most of which offer a large number of full scholarships to international students. Presumably it is also why most university ranking systems international use international diversity as one of their inputs for measuring the quality of an institution..

Even if the students don’t end up staying in Norway, they provide an excellent advertisement for Norway and its education system; something which an ambitious but small country like Norway should be gunning for.  Indeed,  Hoyre proper appear to understand the value of these intangible benefits, Bent Høie in rebuking his youth party’s policy, argued keeping education free for foreigners  “boost[s] the status of higher education in Norway.” and that “ it’s positive that folks from outside the country want to study in Norway”. It is difficult to count these soft benefits, but only a philistine would claim that we should not attempt to take them into account.

Certainly higher education would appear like a better long term bet for Norway’s branding than some of the MFA’s other efforts. While Sweden has design and Denmark has television the MFA has been attempting to re-sell the world Aha to boost Norrways brand. Surely university education is a more beneficial, desirable and sustainable area where Norway can promote itself.

I love Aha as much as the next man, but is it really what Norway wants to be known for?

High prestige education can work as a great lure to high skilled immigrants that Norway needs. However  as Sweden is finding out now, a country should not take for granted that the foreign students are not price sensitive. One of the benefits of pausing to observe the flock before following is that you can see if they fall over a cliff. Sweden is an excellent case, perhaps they assumed that Swedish education was so well known that fees would just mean free money for their universities. Not quite: Their international student applications fell 85% the year they changed (one must presume they are now left with the richest and the dumbest). If Norway made the same mistake now, then Trygve’s policy would look less like that of a sheep than a lemming.

Norway cannot presume it can successfully copy the UK and US model. While they are  not superior in educational terms, they have the prestige of their name to draw students, that is what counts when prices become similar. Reputation. Lets be honest, if you added fees to Norway’s famously high prices, the reputation of even Blindern would unlikely be sufficient but for whatever few mega-rich Norwegaphiles exist.

In addition, allowing universities to charge foreigners fees can undermine a university’s qualitiy control. In the UK, where there are over 100 universities, many are now dependent on the largesse of foreign students for survival. As a result many of the smaller universities more or less allow anyone to study so long as they have the money. Heck, this is even seen at the best universities, LSE’s former director Howard David,  apprarently blinded by pound signs, allowed Ghaddifi’s sons and henchmen to study at LSE. Norway’s universities, with the high cost of living and general lack of internation fame, will have even more trouble attracting a high quality of foreign students.

But that could change. Instead of viewing other countries educational priorities as a pattern to follow, Norway could see it as an opportunity. Norway’s world class free education is increasingly unique in the developed world; this means that Norway could have the pick of the best of the academically excellent, ambitious but not rich international students. Heck, even rich ones do not much like fees. As the number of international applications increases, getting into Norway will become tougher and tougher and could potentially become synonymous with extreme academic excellence in the same way as Harvard.  High demand combined with scarce supply breeds prestige.

If that sounds far fetched, then consider that the reputation of school is as much based on its students and alumni as on its teaching. At the moment I am at Aas University, where the teaching and lecturing is significantly superior to the internationally prestigious LSE (where I did my undergrad). The key difference is that the other students at LSE  had to beat off famously stiff competition to get in (or be a member of some international elite; sons of dictators that sort of thing) and everybody knows that you have to be smart to go there. If Norway promoted itself, just by

With a little bit of promotion, perhaps just by making the ratio of applicants to places public knowledge, Norwegian universities could benefit from the same thing. In a few years, Norway could become famous for being  the only country in the world that values education so highly it provides it for free to foreigners, provided they can beat off the ferocious competition for the prized few places. This will quickly become self sustaining as talented alumni leave, Norway’s reputation as a place for the best and brightest will grow attracting more talented students and future successful alumni. Indeed, LSE’s laissez faire attitude to its students shows how this can happen almost on its own.

The next Norwegian government must look long and hard before following the flock on higher education.  This a a question of ambition, whether Norway wants to look inwards and think small or look outwards and think big. Norway might be able to save a little by introducing fees, but certainly not without losing a lot in terms of human capital and massive long term reputation gains. Indeed if it backs itself, then there is no reason why in a few years time Norway’s universities could be home to some of the brightest in the world, and Norway itself could become a byword for elite university education adding to its existing soft power palette of oil, development and environmental. All without any additional costs to the Norwegian tax payer and absolutely no Aha.

This article was originally written for and published in The Foreigner.

The Easter Bunny and Norway’s Dangerous Oil Myth

‘Mister Paul, Sir, what is the Easter Bunny?’ asked Anil, the 19-year-old class joker. Before I could respond He followed up with ‘Is it your god?’

The class, made up of about 15 young Indians erupted into laughter. They had only just got their head around the apparently hilarious idea of the Christmas tree. This was too much. So, your son of God, is crucified, rises from the dead, ascends into your heaven and you celebrate by eating chocolate rabbits.

I have now lost track of the number of occasions when around Easter someone will outwardly ponder the origin of the Easter Bunny over the dinner table. The explanations will usually range from it being originally Pagan, at which point someone – probably me – will make sure the conversation takes a tangent along Jehovas Witnesses (for them everything is pagan, and therefore not to be celebrated), or some long recycled critique that Easter is over-commercialised these days.

The Easter Bunny under this analysis was invented as a clever marketing trick to sell more chocolate. What consensus is reached on the origins of the practice usually depends on which speculation-peddling website the smartphone user at the table happens to click on first.

What can be assumed is that everyone present will agree that the Easter Bunnies and Easter Eggs they may or may not lay is a somewhat absurd way to celebrate Jesus rising from the dead.

But this is a rather harmless, if repetitive little conversation that crops up once a year. In Norway, there is another layman conversation piece that is equally repetitive but a lot more corrosive. Namely, that Norway is lucky, lucky to get oil.

Once they hit the black stuff back in around the 1970’s all this was inevitable. It is less of a conversation, more of a bullet proof riposte to the timeless queries one faces from bemused visitors about the high wages, free education, good hospitals, generous welfare state, and the existence of foreigners working in Oslo.

Norway is rich because of the oil. It comes as second nature from the mouths of resident foreigners and Norwegians alike, almost apologetically from the latter. The problem with this simple and intuitive reasoning is that it is at best misleading and more importantly denies discussion of the real question, how did Norway manage to make its oil work for everyone?

First it’s necessary to briefly take down the inevitability myth. Once you hit oil (or any other valuable resource), inevitably your country will become filthy rich living happily ever after, at least until the Russians come for you. Well no, actually quite the opposite, discovering natural resources is so synonymous with underdevelopment that there is a large and expanding academic research dedicated to trying to explain what they call “The Resource Curse”, from Nigeria to Saudi Arabia, Sierra Leon, from South Africa to the UK.

Natural resources are correlated with rent seeking, corruption and frequently war. Certainly there is absolutely nothing in history to suggest that natural resources will necessarily be used for the common good of the country. And nothing to suggest that the resources will remain under the stewardship of the state for who the benefits will be relatively evenly shared among the general population, while much of the profits are sensibly stored away in national pension.

No that is pretty unique.

I first came to Norway two years ago and I worked as a dishwasher in a bar. When I told people in the UK my wage was 16 pounds an hour they were always shocked. Upon consideration they reached the conclusion, ah it must be the oil money.

But there is nothing in finding oil that implies that dishwashers should be paid a living wage. Indeed, there is no minimum wage in Norway, yet unskilled labour pays living wages. This is almost certainly because the relatively generous welfare the unemployed receive requires that employers pay enough to make the switch from sloth worthwhile.

The upshot is that Norway has followed the old economic idea that the UK and other liberal countries have neglected; money in the hands of the bottom third income group is very healthy for a national economy.

They are more likely to spend it faster; they are more likely to spend it domestically. Moreover keeping the bottom third sufficiently in touch with the middle class spending habits and lifestyle increases social cohesion and reduces social problems.

This correlation is barely disputable since the exhaustive aggregation of studies in “The Spirit Level” demonstrated it across countries, counties and towns:  A more equal distribution in income has a stastically significant relationship with everything from happiness to lower teenage pregnancy and drug use.

In short, higher than average taxes to pay for the transfer of wealth to the poorest pays for itself. Benefiting the poor but also  the rich, who unlike  in many wealthy countries, are able  to walk the streets relative safely (see LA for the inverse).

Norway’s success in achieving this is hidden by the oil myth, but a cursory inspection of Norway’s Scandinavia neighbours, less endowed with oil but equally egalitarian (more or less) have achieved some of the best living standards in the world following the same strategy.

But, isn’t this bad for innovation? Not necessarily. While the proponents of neo-liberalism, the dominant economic model in the West, would argue that high taxes disincentivise risk taking and entrepreneurship, this is far from undisputed.

Will a prospective entrepreneur balk at the prospect of starting a business because the marginal tax rate is 40-50% and choose instead to sit on NAV, cursing their bad luck for living in this socialist hell? Or would a prospective entrepreneur  knowing that their state will never let them go homeless and that their kids will always have access to higher education, more gladly risk their house in Norway than elsewhere.  I would guess the latter, but my point is it is not so straightforward.

Certainly, Sweden have high taxes and no shortage of global competitive businesses. Meanwhile, Norway have some of the highest skilled and efficient labour force in the world, precisely because companies need them to be in order to  remain globally competitive

THE Easter Bunny conversation pops up once a year, the oil luck myth is continuously reproduced all year round and frequently left unchallenged. In one sense that is a good thing. Perhaps Norwegians would become unbearably smug if they knew how anomalous their country’s recent economic history was.

But that potential problem now pales in comparison to the more ominous danger looming large in the opinion polls. Norway appears on the verge of electing into office two parties whose current dedication to reducing government spending and promoting privatisation belies a complete lack of understanding of how Norway achieved its envious and unique position on top of both the tables of GDP per capita and social equality.

Privatising saves money through cutting wages and worker benefits. It will artificially save money in the short run (although even this is questionable), but simultaneously cut away the long term roots of the Norwegian economic miracle. Troublingly, it is very difficult to reverse.

So next time you hear your neighbour, colleague, friend or enemy throw away the line about Norway’s oil luck, make sure you clarify them: it’s not what you have, but what you do with with it that counts.

As for the Easter Bunny, let it keep its mystery, if not its dignity.

I originally wrote a shorter version of this article for The Foreigner. An online newspaper covering Norwegian news in English.

“Mackem” Miliband leaves Sunderland in Puff of Righteousness

Miliborg: I love ball…I mean I love football, Yes football is my favourite. What footballs do you like?

Ten years after the invasion of Iraq and more than thousands of civilian deaths later, David Miliband resigned today from his position as vice chairman at Sunderland Football Club.

Demonstrating his renowned social conscience Miliband said  ”I wish the team very well over the next vital seven games. However, in the light of the new manager’s past political statements, I think it right to step down.”.

It did not come as a shock to those who know Miliband. After all, the new manager Paulo Di Caneo had been famously complicit in deceiving the British public into the illegal invasion of Iraq.

Many, including Miliband it seems, still hold him partially responsible  for the subsequent death of  half a million Iraqi civilians and thousands of British troops. Indeed, if Di Caneo had only stood up to his former boss and infamous crook Harry Redknapp, then perhaps the UK would not have this additional bloody stain on its history.

Miliband’s role as vice chairmen for  Sunderland FC first became unstable last week after he resigned his seat as an MP and realised he no longer needed the voters in South Shields to like him.  Following Di Caneo’s arrival it soon became clear his position was untenable.

At the press conference signaling his departure,  Miliband explained how circumstances had forced his hand,  ”Sunderland Football Club  is a great institution,  but sadly I am  going on holiday for a quite some time, and the opportunity to score  meaningless political points following the appointment of Paulo Di Caneo is impossible for me to resist.”

So far Sunderland fans do not seem unduly concerned about Miliband’s departure. When asked his thoughts on the former rising star of the Left, one young Mackem replied   ”Good riddance I say,  that New Labour cyborg can fuck off back Gondor”.  Meanwhile we heard another nearby fan ask his large shirtless friend “This is an April fool right? “.

For more Miliband funnies I suggest you read David Milibands foreword to the 2008 government paper entitled “Lifting the Nuclear Shadow”. With typical Miliband chutzpah it was published just one year after he had voted with the government to invest in new nuclear weapons that will last for the next 50 years .