Damned, pinko entrepreneurs

Whether in business, education, or any other field, what works there might not work here. With that caveat in mind, take a look at "In Norway, Start-ups Say Ja to Socialism" by Max Chafkin in Inc. magazine (or, if you're in a hurry, you can go to Felix Salmon's pithy analysis of the article and get much of the meat without the local color).

Here's the keystone of the piece:

Norway is also full of entrepreneurs like Wiggo Dalmo. Rates of start-up creation here are among the highest in the developed world, and Norway has more entrepreneurs per capita than the United States, according to the latest report by the Global Entrepreneurship Monitor, a Boston-based research consortium. A 2010 study released by the U.S. Small Business Administration reported a similar result: Although America remains near the top of the world in terms of entrepreneurial aspirations -- that is, the percentage of people who want to start new things—in terms of actual start-up activity, our country has fallen behind not just Norway but also Canada, Denmark, and Switzerland.

I tend to be distrustful of international comparisons, but, as I've mentioned before, if you're going to do it, Canada is probably where to start. "Demographically, economically, culturally and historically, Canada would seem to be the obvious country to look to when trying to determine the effectiveness of potential U.S. policies..." Having our northern neighbor on the list makes me more inclined to give its obvious implications some weight and those implications conflict with a lot of what we've been told about business-friendly policies.

According to much of the conventional economic wisdom, we should be leaving all of these countries behind in terms of entrepreneurs and new businesses. Their progressive taxes and extensive social safety nets should leave people with little incentive to work hard while their restrictive regulations (in Norway "firing an employee for cause typically takes months, and employers generally end up paying at least three months’ severance.") should make running a nimble and efficient business virtually impossible, but what should happen clearly isn't.

It would be interesting to see Greg Mankiw's explanation for this.