In this post, I'll delve into why there's an entrepreneurial exodus from Norway, how we got here, and what the future might hold.

Socialist Left leader and me on the “Wall of Shame” (Dagbladet)

Norway: A real life Atlas Shrugged 

Ayn Rand's 1957 novel Atlas Shrugged paints a vivid picture of a dystopian society where government overreach and socialist policies kill innovation and demonize entrepreneurs. In Rand's world, working hard and taking risks is not celebrated, but looked at with suspicion. As the government tightens its grip, mandating how businesses should operate, the nation's entrepreneurs begin to vanish and are nowhere to be found. People get poorer while the state keeps growing. Step by step the functioning of society starts to crumble. The trains first go off schedule, then start crashing and eventually stop going all together.

Present-day Norway mirrors this dystopia in unsettling ways. Taking risk with your own money, working hard and then making a profit is frowned upon. While politicians spending the people’s money on non-viable green projects, and delivering dysfunctional public services at high costs has the moral high ground. The government is spending 35 Billion NOK on offshore wind that industry experts think is financially unviable. This is about the same amount as the total wealth tax revenues. Norway spends 45% more than Sweden on health care per capita with approximately the same health outcomes. Norway has 2,5 times bigger share of the working population on sick leave than Denmark. Norway spends ~50% more than Finland on primary and secondary school with worse results.

With unshakeable ideological conviction, socialist politicians are rapidly undermining Norway’s wealth creation. They're imposing taxes that explicitly disadvantage Norwegian business owners, and are often straight up impossible to pay. When confronted with the reality that you can't pay taxes with money you don’t have—or that loss-making businesses can't afford massive dividends just to cover owners' wealth taxes—the response is vague moralism like "Those with the broadest shoulders must bear the heaviest burdens." Any argument against any part of the system is by default invalid because there’s free health care…

Norway's entrepreneurs are now indeed disappearing from society. In the past two years alone, a staggering 100 of Norway's top 400 taxpayers, representing about 50% of that group's wealth, have fled the country to protect their businesses.

Norwegian trains have for a long time been notoriously unreliable - even less reliable then in war time Ukraine! In chilling similarity to Atlas Shrugged there've been two train crashes, including one fatal, in the last month alone.

Tram crashing into a retail store in Oslo 29th of October 2024 (NRK)

The Unrealized Gains Wealth Tax: A Self-Inflicted Wound

Norway imposes a wealth tax that taxes unrealized gains at approximately 1% annually. Calculated on the full market value for publicly traded assets and the book value of private companies. On New Year's Eve, whatever your net worth - including illiquid assets - is subject to this tax. It doesn't matter if you're running a loss-making startup with no cash flow, if your investments have tanked after the valuation date, or even if your company has gone bankrupt—you still owe the tax.

This creates a perverse scenario where business owners must extract dividends or sell shares every year just to cover their tax bill. With dividend and capital gains taxes at around 38%, you need to withdraw approximately 1.6 million NOK to pay a 1 million NOK wealth tax bill. You're essentially paying taxes to pay taxes, draining capital from your business without any personal financial gain.

Moreover, the tax incentivizes Norwegians to take on excessive debt to reduce their taxable wealth, inflating housing prices and making the economy more fragile. While real estate and oil companies can mitigate this through debt financing, tech startups—often equity-financed and loss-making for years—are disproportionately harmed.

The Berlin Wall Exit Tax: Another Tax on Unrealized Gains

After witnessing a mass exodus of top taxpayers, the Norwegian government had a golden opportunity to reassess its policies. The wealth tax contributes less than 2% to the state budget; eliminating it and marginally increasing capital gains, corporate, or dividend taxes could have halted the entrepreneurial bleeding without affecting government budgets.

Instead, the government doubled down on what’s not working, introducing an exit tax on unrealized gains. Now, if you choose to move from Norway, you're immediately liable to pay 38% of the total market value of your assets upon departure. It doesn't matter if you have no liquidity, if your assets are high-risk and could plummet in value, or even if your company does fail after you leave—you still owe the tax. Previously, entrepreneurs could at least relocate if the wealth tax became too burdensome. Now, they're incentivized to leave before they even start their businesses.

The government could have listened to the tornado of negative feedback and adjusted course, but instead, they doubled down on what’s not working. When the Berlin wall was created it was clear which side of the city had the better system… the one that didn’t have to build a wall to retain its citizens. Instead of trying to attract and retrain capital and talent by making Norway a better place for business the Norwegian government chose to build its very own Berlin Tax Wall with yet another tax on unrealized gains. Trapping not only entrepreneurs, but anyone with more than $270k of wealth wanting to move their life abroad for whatever reason…

The first 50 years: Well Managed Oil Wealth 

Norway is one of the richest countries in the world. The government does not need to send their entrepreneurs abroad with non-sensical taxes. So you may ask yourself, "Well, how did we get here?".

In fact, the oil wealth has been amazingly well managed by the politicians for almost half a century. In 1969, Norway struck oil—a discovery that could have led to the same resource curse that plagued other nations. Instead, Norwegian politicians made two genius decisions that benefited the entire population.

1. Genius Move 1: Taxing Oil Profits at 80%
   
   Recognizing the need for foreign expertise but unwilling to let international corporations reap all the benefits, Norway taxed oil company profits at a staggering 80%. This bold move ensured that the wealth generated from the oil benefited the Norwegian people.

2. Genius Move 2: Establishing the Sovereign Wealth Fund
   
   In the 1990s, Norwegian politicians understood that oil is a finite volatile resource and that it would be irresponsible to spend all the oil revenue on a running basis. In an act of rare political austerity and long term thinking they created the Oil Fund, to diversify and invest surplus revenues internationally. Furthermore the "Budgetary Rule" limited annual government spending from the fund to 3%, ensuring the fund in theory goes on forever.

For two decades, politicians across the spectrum adhered to this prudent financial management, displaying an impressive level of restraint and foresight rarely seen in politics.

How Oil Wealth Led to Socialist Ideology over Wealth Creation

But success bred complacency. In theory, everybody agrees that Norway needs new post-oil industries for the long term. In practice, the abundance of oil wealth has led to a detachment from the realities of how wealth and economic growth is created. While the Norwegian politicians impressively managed to restrain themselves for about half a century the current generation are now acting as if tax money grows on trees. 

Ultimately that is the paradox that has caused the current situation: because the state has so much money, it is no longer at the mercy of businesses actually being created and staying in Norway. At least as long as the oil wealth lasts.

The 2025 Election: No Fundamental Solution in Sight

It seems likely there will be a new government after the 2025 elections, as the current government is seeing record-low support in the polls. Unfortunately, even seemingly business friendly opposition parties like the Conservative Party (Høyre) and the Liberals (Venstre) are not committed to abolishing the wealth tax entirely. They propose valuing companies zero for wealth tax purposes—a good step in the right direction, but not a fundamental solution to Norway’s ongoing crisis. Unfortunately The Progress Party (Fremskrittspartiet) is the only party that wants to remove the tax completely. 

The wealth tax's mere existence continues to create absurd incentives for excessive debt and over-investment in housing, detracting from more productive investments like stocks and startups. Moreover, the possibility of future governments reinstating the wealth tax for companies keeps the harmful uncertainty for businesses very much alive.

Many European countries have recognized the harm caused by taxing unrealized gains and abandoned it. Norway’s neighbor Sweden abolished its wealth tax in 2007. Since then they’ve seen its tech sector flourish. Spotify recently surpassed Norway's state-owned oil company, Equinor, in market capitalization. In the last 15 years Norway has gone from having 7 to now only 2 of the Nordics top 30 most valuable companies.

Norway has produced four "unicorns". Since then we the founders of Dune and Cognite have left due to the unreasonable taxes. Oda operates domestically in Norway. All founders have left the company and are wiped out. The last one Gelato is run by a swede that would likely move if they need to raise more money.

The Extra Long Journey to Post-Oil Wealth and Welfare

In Atlas Shrugged, the entrepreneurs refuse to return to society until the oppressive system collapses entirely. I sincerely hope Norway doesn't have to endure such a downfall before entrepreneurs can return. 

Fortunately Norway has a highly educated population and a lot of capital. With oil a high tech industry has been built in Norway before. What’s lacking is the political will to encourage entrepreneurship and big ambitions, not punish it.

Trust is built in millimeters and torn down in meters. In just a few years, the trust in Norway as a viable place to build and invest has been shattered. A whole generation of entrepreneurs has been lost. 

The people of Norway currently enjoy and benefit from a host of generous welfare benefits. High income with short work days, free healthcare, free daycare, free education and beyond. For this to continue in the future Norway needs massive new post-oil industries. Due to the politicians' series of unforced errors, the journey to get there will be extra long and painful. A definitive abolishment of all taxes on unrealized capital gains is the obvious first step.

PS. Shout out to you if you caught the Talking Heads reference :) 

The 6 books came out between 2009 and 2011 in Norwegian and have since become an international bestseller and phenomenon. As an audiobook the whole series is a solid 134 hours worth of listening, just shy of a month’s worth of full time work. Through long road trips, walks in the woods and mountains we’ve explored this literary masterpiece - from unimaginably long descriptions of simple matters to epic historic and philosophical insights.

The whole series consists of Karl Ove Knausgård telling the story of his life from his own perspective and memory. It’s written when he was around 40 years old and married, with three young kids. He jumps around between different periods in his life, starting with the death of his father. The very first pages of book one displays the force of Knausgård’s writing with a captivating take on death itself that is at the same time dark, somehow funny, yet profound. Writing both meaningfully and originally about death is not easy, but Knausgård dives right in on the deep end. 

Oftentimes the descriptions and stories told are extremely detailed and elaborate. Pouring a bit of milk in a glass can easily take up a full page as it is described in excruciating detail. He has certainly been criticized for being too elaborate and boring, but this is also part of the power of this novel. There are plenty of biographies and autobiographies, but they practically always depict the big achievements or grandiose lives lived by influential people. What Knausgård is describing is at the core a mundane everyday and straightforward life, but packed with poetic beauty and grand philosophical detours. It’s as far away from the TL;DR-ways of modern social media-life you can get. And this is part of the power of all the words he uses: it takes the mundane so seriously. By taking time to paint explicit and vivid pictures of his everyday life he implicitly tells us how important every piece of it is. He turns every stone of his feelings, even though there is no hero, moral lesson or grand narrative. Life is a random walk, and this is a raw look into the mind and life of a person going through it. I often like to think that less is more when it comes to writing, but the most extraordinary outcomes only emerge when rules are broken: in My Struggle more is more.

But it is not the elaborate storytelling that has yielded the most criticism. In My Struggle Knausgård explores and therefore exposes relationships with people in his life. His wife, his father, his brother, his friends, his kids and beyond. We get his unfiltered account of what he thinks about the family friend on the other side of the dinner table, or how his troubled relationship with his father evolves throughout his life and even after his death. This is what has made these books so controversial. The fascinating thing is that it’s the ordinary that makes the book so controversial. Basically everything he describes is something millions, if not billions, of people have experienced and thought. Yes, his father was abusive and he lays that out to the world in excruciating detail, but how many kids growing up in the second half of the 20th century didn’t have an abusive father? Yes, his relationship with his wife is turbulent but half of marriages end up in divorce. The books are of course controversial because all of these are real and often living people that get their lives exposed to the public. But that is also where the potency of this work lies.

In book six is written at the same time as the first book is published. This yields an interesting meta story where he talks about the process of publishing the first book. What it’s like when his wife reads about his previous girlfriends, his deepest feelings and even an affair that almost happened while they were together. His wife becomes beyond upset, which is very understandable. Reading a book like that written by your partner must be a tough experience. He describes how his uncle tries to stop the book from being published, and the accompanying legal process.

For me one of the highlights of the whole series is a section where he describes an imaginary court case between him and his uncle that plays out in his head. Knausgård describes to the judge why he wrote these books: because there is simply no similar work out there where the human experience is laid out and explored in this way. I think that is exactly right; no other piece of fiction or nonfiction across any art medium lift’s the everyday experience of life up into the light in the same uncompromising and elaborate way. No moment, feeling or relationship is too small or commonplace to explore in detail. 

Furthermore, Knausgård has drawn criticism for expressing a sexist worldview. Again, I think the headline critique misses a lot of nuance. He describes his feelings and experiences growing up as a teenage boy in the 80’s. While one might call him sexist, he also tells many stories of how he’s being bullied and is deeply insecure because he is too feminine and starts crying easily. Not to mention his late sexual debut and anxiety around that. It takes a lot of courage to present these things without censoring yourself. It’s a window into a different time and culture. While he does explain how he looked at women and which thoughts were running through his head, the books are by no means a Hollywood story of a masculine womanizer - quite the contrary. 

My Struggle is an exceptionally brave piece of art. Just the title itself is probably the most tainted and loaded book title of all time; it was the title of Hitler’s infamous book. Beyond the unbearably heavy baggage the title carries, writing about your own life while you are still living it and calling it a struggle is also a brave display of vulnerability, especially for a white, middle-aged Norwegian man in the 21st century. He goes places and explores his own, frankly human, deficiencies in an excruciating way few other artists would dare to do.

While the vast majority of the series is about his own recollections and experience of his own life, about half of the massive book six is about Adolf Hitler himself. This was a fascinating section to read because he investigates Hitler’s life in a remarkably intellectually honest way.  I’m rather uncomfortable simply mentioning Hitler in this very post, while Knausgård spends several hundred pages exploring the most explored person in history, and he does so in an original and insightful way. 

He, of course, condemns Hitler’s legacy as much as any other sane person, but he dares to explore questions like: what happens if we try to understand the early life of Hitler without seeing him through the lens of being the most evil person that ever lived? What life did he live before he gained power? What web of historical events, political ideas and art shaped Hitler to become the most brutal man that ever lived? 

I learned that Hitler was a deeply troubled and lonely man growing up in a more or less extreme poverty. Knausgård analyzes and traverses several books directly and indirectly related to Hitler. For instance “The Young Hitler I knew”, written by Hitler’s only childhood friend, August Kubizek. This book together with historical accounts of the wars, Proust and several other historical, political and poetic accounts makes for an incredibly interesting reading. For instance, several years in his early twenties Hitler was homeless and there are essentially no records of where he was or what he did beyond visiting a homeless shelter every now and then. That is pretty remarkable for one of the, if not the, most scrutinized human beings that ever lived! I certainly learned a lot about the ideas and emotions that were flowing through the world in the early 19th century way beyond what I’ve learned from typical accounts of the First or Second World War.

Luckily, the books are not all controversial and struggle. Knausgård writes as poetically beautiful as Proust mixed with the rawness and directness of Hamsun’s Hunger. The books are full of the wonders of life. From discovering your own identity while listening to The Smiths, to the chaos and beauty of having kids, to breaking away and suddenly moving to a new city. Along with countless deep, deep reflections and explorations of death, the meaning of a name, cultural integrity, self-doubt, literature, music, our wider culture, ambition, and beyond. 

Never before have I read something as uncompromising and illuminating as My Struggle 1-6. Over and over I’ve been floored by the sheer ambition, novelty, beauty and power of these books. They have given me a deeper connection and awareness of my own life and relationships. It’s certainly not a short read, but I’d highly recommend it. ** **

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PS. This conversation between Tyler Cowen and Karl Ove Knausgård on literary freedom is my favorite podcast episode of all time (I’ve heard it 5 times over). It’s a deep exploration of some of the above-mentioned controversies, along with Knausgård’s perspective on where he sits within the literary tradition, both internationally and the Norwegian. The Norwegian mix of humbleness and self-doubt that is present throughout the book can be seen in the conversation, even though this was recorded long after he became a global best-selling author. Tyler’s impressive intellectual capacity and breadth is also on full display here. 

https://conversationswithtyler.com/episodes/karl-ove-knausgard/