Norway’s welfare state is known the world over as a model of equity and care. By all appearances, it does an excellent job of balancing the needs of its population with economic pragmatism. The extensive infrastructure projects, social safety nets, and universal healthcare are a shining example of what a country can do if the profits from its natural resources are invested back into the country instead of lining the pockets of a few wealthy individuals.
Yet, in recent years, flaws have started to show through. OsloMet professor Erika Gubrium points out that Norway’s welfare state doesn’t exist in a vacuum; it is affected by global factors.
Climate change has made natural disasters more severe, requiring more money to mitigate; wealth inequality puts more people at risk of needing welfare support; geopolitics drives the prices of essential goods above what many can afford; and an aging population is going to need more help from the health system. Despite the increased need, there is talk of cutting services as the only way of making sure the welfare state can continue in the future.
Professor Gubrium teaches in the new master’s program Nordic Social Policy and Global Sustainable Development (NORPOL) where students are challenged to imagine a new, sustainable way of thinking about the welfare state: one that takes a broader view of how the Norwegian welfare state functions, both historically and looking forward. It even explores how we might reduce the harm historically and currently caused by oil and gas extraction.
The Norwegian dilemma: oil wealth meets welfare cuts
Gubrium is an interdisciplinary researcher studying globalization, social development, and sustainability. On paper, she says, Norway’s welfare system seems invincible. Almost one quarter of public programs and services are supported by Norway’s Oil Fund, the world’s largest sovereign wealth fund.
Despite nearly 20 trillion NOK in the fund (about 2 trillion USD), the state is cutting back on crucial services like education and healthcare. There’s even talk of tightening sick leave policies.
“If you think in terms of profits, we're doing pretty well, oil and gas are making record profits, but when we talk about budgets, it appears that our welfare state is struggling,” Gubrium expressed.
This cognitive dissonance is striking. According to her, the problem is a focus on eternal growth and 100 percent employment rather than solidarity, care, and support. It is a problem that spans the political spectrum.
Gubrium has criticized this infatuation with growth and employment before. It is the subject of her earlier research on how immigrants find belonging. Now she is looking at how it affects the broader question of welfare sustainability.
“We’re not moving in a direction where welfare is being expanded,” Gubrium observes, “we have record profits on the one hand and cuts on the other hand.”
Welfare policies should promote rather than punish for the idea of slowing down.– Erika Gubrium
Welfare, oil, and colonial echoes
The history of the Norwegian welfare state influences how we think of its future. The common story is that the welfare state was built by a strong working class – strong farmers and strong industry workers – who had a strong voice.
“That history is not incorrect, but it's focused only on what was happening inside Norway,” explains Gubrium.
The other side of the story, she says, is Norway’s deep reliance on natural resources, and exploiting people to get them, both here and abroad. Even before the discovery of oil in the North Sea, Norway was entangled with colonial ventures embedded within global systems of extraction.
In an upcoming publication, Gubrium describes how she saw this firsthand on a research trip to Uganda in 2011.
“We were shocked at what was going on, a whole village was being moved to allow oil drilling. But then we were even more shocked when our guide mentioned Norway.”
She learned that the Oil Fund invests in these kind of extraction projects around the world. While Norway isn’t directly involved, the country certainly benefits from it.
“We might not be drilling there, but we're investing in companies that are drilling and exploring new pipelines and new drilling areas.”
These oil and gas projects are still central to Norway’s economy. Gubrium stresses that this “profiteering by proxy” complicates Norway’s image as an eco-conscious welfare state.
From growth to sustainability
The welfare state, supported as it is by the extraction industry, is at odds with the realities of climate change and economic interdependence. Its foundation on exponential growth is unsustainable.
As Gubrium frames it, “COVID and climate change showed us that we need to change the way we think about our major economic and social paradigms.”
She imagines Norway’s welfare system transitioning to a circular model centered on social care, environmental responsibility, and equity. A shift from continual exponential growth to prioritizing well-being, sustainability, and global solidarity.
“We need to shift our gaze to think innovatively about how we structure our welfare systems, how we finance our welfare systems, and what our welfare systems are there to do” says Gubrium.
Key to this shift is reimagining the role of the Oil Fund. Currently, 3 percent of the fund’s profits may be used in the national budget, with the rest reserved for supporting future generations. Gubrium is critical of the way the reserves are discussed.
“It’s said to be for future generations, but when all is said and done, the place it goes to is a big bank led by a former hedge fund manager, both of whom earn massively from their connection to the fund.”
We will need to think of the fund not as a hedge against the future but as a tool for transformative change today.– Erika Gubrium
Norway’s role in a connected world
Gubrium’s understanding of the importance of these connections comes from a surprising place: her plant cell biology background.
Cells respond to outside stimulation with a cascading sequence of events at the molecular level that ultimately leads to a response. It’s not a single input and output, but rather the result of the “crosstalk” of hundreds of small components reacting and interacting with each other.
Similarly, Norway’s welfare state, typically envisioned as operating within a national bubble, has crosstalk with globally extractive activities. This has repercussions far beyond Norway’s borders. The welfare state is supported by Oil Fund investments in oil and gas abroad that create economic instability abroad and carbon emissions.
“It’s a global phenomenon,” Gubrium explains. “Investments in oil abroad come back to haunt us here.”
Yet Gubrium takes care to note that thanks to this interconnectedness, Norway has a fighting chance to make large improvements both at home and abroad. By channeling its oil wealth into global sustainability efforts – rather than perpetuating extraction – it can begin to address its colonial entanglements and confront its role in the climate crisis.
A new vision for welfare
Sustainability isn’t just about systems; it’s about people. Today, many people in Norway are struggling to make ends meet amid rising living costs.
“Our lives are improving, but the cost of childcare and groceries don’t go away just because I have modern conveniences.”
She imagines a welfare state that recognizes these challenges and provides mechanisms for everyone – regardless of their background – to meaningfully participate in society. This might include basic income schemes, paid sabbaticals for volunteer work, or community care initiatives.
“Welfare policies should promote rather than punish for the idea of slowing down – for achieving a society marked by meaningful activity and care rather than a race to produce the most.”
Gubrium says this will require having tough conversations about the future of the welfare state and the role of the Oil Fund.
“We will need to think of the fund not as a hedge against the future but as a tool for transformative change today.” It also involves questioning who benefits from the welfare state and ensuring that its resources are shared equitably, both within Norway and beyond its borders.
As climate change, economic inequality, and social fragmentation reshape the world, Norway’s welfare state can embrace a model that values care over growth, equity over exclusion, and sustainability over short-term profit. If it succeeds, it could be a model for the world that a better future is within reach. If it fails, it risks becoming another cautionary tale of a nation blinded by its own success.
It’s a bold vision, but Gubrium insists it’s possible.
Norway’s welfare state has the unique combination of features that could enable a just, equitable, and sustainable welfare state.– Erika Gubrium
