The state feasts on oil money, sells the krone cheaply, and sends the electricity bill to the people. Norwegians are not becoming poorer through bad luck, but through politically directed plunder in slow motion.

Norwegians are told that they live in one of the richest countries in the world. That is true, but only in the same way that it is true that an heir is rich as long as he can keep selling off the family inheritance. The question is not whether Norway possesses great wealth. The question is what we are doing with it. And the answer is more uncomfortable than the political class likes to admit: We are using ever larger portions of the oil fortune to finance a level of public consumption that the mainland economy can no longer sustain.

This is not merely a question of the state budget, the fiscal rule, and percentages of the Oil Fund. It is a question of why ordinary people have less money to live on. Why food, electricity, housing, interest rates, insurance, and municipal charges are rising faster than wages. Why two incomes in a family today often provide less financial freedom than one income did fifty years ago. Why people work more, borrow more, pay more tax, and still are left with the feeling that they are falling behind.

The answer lies in the structure, not in isolated events.

Norway has two economies. One is the state, the oil, the fund, the taxes, the bureaucracy, and the transfers. The other is the households, the small businesses, the wage earners, the tradesmen, the shops, the transporters, and everyone who must make the accounts balance without being able to draw money from the Oil Fund. The first economy is growing. The second is being tightened. The state has the oil fortune to fall back on. The family has the payslip to fall back on. The latter does not represent the same security.

When the state spends oil money, it sounds harmless. “We are spending the return.” “We are staying within the fiscal rule.” “We are financing welfare.” But pedagogically, it can be put more simply: The state has a deficit in the mainland economy. It spends more than it takes in through ordinary taxes and duties. The difference is covered by the oil fortune. That means that an ever larger part of the state budget is financed not by what the mainland economy produces today, but by values extracted from the seabed yesterday, sold on the world market, and placed abroad.

This is not investment. It is operations.

A family understands the difference intuitively. If one uses savings on new tools, education, a workshop, technology, or something that later increases income, it may be wise. If one uses savings on food, holidays, electricity, and fixed expenses, it may be necessary for a while, but it is not sustainable. One is not richer. One is merely postponing the day when one must change one’s way of life. The state does this on a large scale – and calls it responsible economic management.

Then the krone enters the picture.

The Oil Fund is invested in foreign shares, bonds, and property. In practice, it is placed in dollars, euros, pounds, yen, and other currencies. When the krone weakens, the fund appears larger measured in Norwegian kroner. This is what makes the narrative so seductive. The politician can point to a fund growing in kroner, while the people simultaneously experience that the krone buys less in the shops. Both things can be true. The fund becomes larger in nominal kroner because the value of the krone falls. The household becomes poorer for the same reason.

Imagine that you own one American share worth 100 dollars. If one dollar costs 8 kroner, the share is worth 800 kroner. If the krone weakens and one dollar costs 11 kroner, the same share is suddenly worth 1,100 kroner. Have you become richer? Only on paper in Norwegian kroner. The share is still worth 100 dollars. But imported goods, fuel, technology, medicines, coffee, clothing, machinery, spare parts, and much of the food become more expensive for you because the krone is weaker. The state may smile at the fund’s krone value. You encounter the weakening at the checkout queue.

This is the hidden currency tax.

Then comes the sale of kroner. When the state is to convert oil revenues and move values between the state budget and the fund, kroner and foreign currency must exchange places. The technical details can be explained in a complicated manner, but the effect can be understood simply:

This matters because Norway imports far more of everyday life than people think about. Food products, input goods, machinery, electronics, building materials, clothing, medicines, car parts, and transport costs are affected by currency values. A weak krone is not an abstract graph. It is more expensive coffee. More expensive tyres. More expensive mobile phones. More expensive medical equipment. More expensive fertiliser. More expensive building materials. More expensive spare parts for the tractor. More expensive goods on the shop shelf.

Then the politician says: “Inflation is due to international conditions.”

That is a half-truth, and half-truths are often more effective than lies. Yes, international prices matter. Yes: war, energy, and global supply chains affect prices. But why does this hit Norway so hard? Because the krone is weak. Because energy policy is expensive. Because the state spends too much. Because mainland productivity is too low. Because the money supply has grown. Because housing and credit have been allowed to inflate as a substitute for real value creation.

This is where the monetary system enters.

Many people still believe that money primarily consists of notes and coins printed by the state. That is not the case. Most money in circulation is created as bank credit. When the bank grants you a mortgage, it does not merely move old money from one vault drawer to another. It creates a deposit in your account against your owing the bank money. The loan becomes money. Debt becomes purchasing power. When many people borrow more, the money supply grows.

If there are 100 kroner in a small society and 100 goods, one may simplify and say that one good costs one krone. If the money supply increases to 200 kroner, but there are still only 100 goods, the society has not become twice as rich. It has merely acquired twice as many monetary units competing for the same quantity of goods. Prices are pushed upwards. Those who gain access to the new money first – the state, the banks, capital owners, large borrowers – are able to buy before prices have fully adjusted. Those who receive the money last – wage earners, pensioners, young homebuyers – encounter the new prices before their income has adjusted.

This is the social deception of inflation. It does not strike equally.

Those who own housing, shares, land, power plants, or other real assets may be protected by rising prices. Those who live on wages fall behind. Those who have debt at a fixed, low interest rate may profit from the weakening of money. Those entering the market must borrow more. Those with political access to state budgets may be compensated. Those outside are told to save electricity and buy cheaper food.

Then comes the state budget.

This is the vicious circle.

The state spends more money. Prices rise. People have less to live on. The state creates support schemes. The support schemes require more money. More money requires more tax, more duties, or more oil-money spending. More public spending keeps the pressure up. Norges Bank responds with interest-rate increases. The interest rates hit households and private business. The state continues. The family brakes.

That is why interest-rate increases feel so unfair.

Then comes electricity.

Historically, Norway possessed an enormous competitive advantage: cheap, controllable hydropower. It was not merely electricity. It was a national infrastructural advantage. Cheap energy made households safer and industry stronger. Cold was not a luxury tax. Hydropower had been developed through interventions in nature, the acceptance of the community, and long-term thinking. It was a social good before it became an exchange-traded commodity.

Today electricity is sold in a market where the price is set at the margin. That means it is not the average cost of Norwegian hydropower that determines the price the household pays. The price is determined by the most expensive power needed to meet demand in the market. When Europe requires gas power to cover the peak, Norwegian hydropower can be priced as though it were gas power. It is as if the farmer with potatoes in the cellar is told that the price of his potatoes must follow the price of imported truffles because the market currently lacks truffles.

This is defended as efficient resource utilisation. And in a textbook market, marginal pricing may have its logic. The problem is that electricity is not like other goods. You can refrain from buying a new sofa. You can postpone a holiday. You can skip restaurants. But you cannot opt out of heating in January. You cannot leave the freezer switched off. You cannot run a bakery oven, a welding hall, a cowshed, or a data system on ideological market logic. Electricity is a necessity. When necessities are priced like speculative commodities, social unrest arises.

This is the essence of energy poverty.

Energy poverty does not merely mean lacking electricity. In rich countries it means not being able to afford to use enough electricity to live normally. One turns down the heating. One closes rooms. One avoids taking long showers. One cooks less hot food. One dries clothes cold. One sits indoors wearing woollen jumpers. One’s body aches. Children are cold. Elderly people fear the bill. Sick people must choose between health and finances.

The absurdity is that this is happening in a country built on hydropower.

And again:

This pattern recurs everywhere. The state creates or reinforces the cost, and then offers a scheme to alleviate the effect. The housing market is inflated by credit and regulations, and then young people receive starter loans. Electricity prices are disconnected from national cost realities, and then people receive electricity support. Taxes are increased, and then deductions are granted. Nursery care becomes expensive, and then nursery care is subsidised. Food becomes more expensive, and then maximum prices or duty measures are discussed. Every time the state “helps”, the citizen becomes slightly more dependent on the state.

It is here that the system reveals its will.

This is not sustainable because it makes people freer. It is sustainable for the state because it makes people more bound. A household with a large mortgage, high electricity bills, uncertain interest rates, expensive food, and small margins has no surplus with which to challenge the system. It will want compensation. It will want support. It will want predictability. It will want the next transfer. Thus the state first makes life more expensive and then makes itself necessary as a saviour.

This is not a market. It is managed dependency.

And it is not merely a moral problem. It is a productivity problem. For where is future prosperity to come from? Not from the state employing more people to administer one another. Not from the Oil Fund appearing larger because the krone falls. Not from housing prices rising because debt increases. Not from electricity being sold more expensively to one’s own citizens. Not from people having to spend ever more of their income on necessities. Prosperity comes from productivity: that we produce more, better, and more intelligently with the same or less effort.

Mainland Norway requires investment in energy, industry, technology, infrastructure, competence, and capital formation. But the state draws labour, capital, and attention into its own circuit. The public sector grows larger while the productive foundation becomes relatively weaker. Then the state must spend even more oil money to cover the gap. And the more it does so, the harder it becomes to stop.

This is oil-money dependency.

A drug addict, too, may function for a while. He may go to work, pay bills, and smile at the neighbours. But if he needs a larger dose each year to hold everyday life together, the problem has not been solved. It has been postponed. Norway has made oil money into such a dose. We say that we only spend the return, but more and more of the state budget rests upon the fund being enormous, the krone remaining weak enough to inflate the krone value, and future generations accepting that their room for manoeuvre has already been disposed of.

This is not a culture of saving. It is political postponement.

The explanation is that the system works – just not for them.

It works for the state, which can finance ever larger budgets. It works for the banks, which live from debt. It works for the power producers, which can sell cheap hydropower at expensive marginal prices. It works for those who own real assets. It works for those who receive public funds without bearing the cost. But for the wage earner, the small-business owner, the young homebuyer, the pensioner, and the family with electricity bills and a mortgage, it functions as a slow draining away.

That is why people have less money to live on.

Not because they have become lazy. Not because they do not understand economics. Not because they complain without reason. They have less money because the krone weakens, the money supply increases, the state spends more than the mainland economy can bear, electricity is priced according to a market detached from national cost realities, and necessities absorb an ever larger share of income. When food, housing, electricity, and interest rates take more, freedom becomes smaller. It is as simple as that. And as brutal.

A country cannot become rich by weakening its currency, inflating its debt, selling its energy expensively to its own inhabitants, and using natural wealth to finance public consumption. It can only postpone the reckoning.

And the reckoning always comes. Either as higher taxes. Or as a weaker krone. Or as more expensive electricity. Or as lower real incomes. Or as cuts in welfare. Or as all of these at once.

This is what the politicians do not say. They speak of “safe economic management”, but govern a system in which security is financed by making citizens less free. They speak of “community”, but the community has become the name of a machine that converts natural resources, labour, and future purchasing power into ongoing public consumption. They speak of “responsibility”, but responsibility without productivity is merely more elegantly administered decline.

Norway does not lack money. Norway lacks restraint. Norway lacks productive discipline. Norway lacks the will to distinguish between consumption and investment. Norway lacks politicians willing to say that oil money spent on operations today is room for manoeuvre taken from tomorrow.

For a nation does not become poor on the day the account is empty. It becomes poor on the day it grows accustomed to living off the capital and calls it income.

It is not the people who are living beyond their means. It is the state. The people are merely paying the bill.