Moneybox: The Norwegian Butter Crisis

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Moneybox The Norwegian Butter Crisis An absurd dairy shortage and its very valuable economic lessons . By Matthew Yglesias Posted Wednesday, Dec 14, 2011, at 08:03 PM ET The occasional spree killing aside, Norway normally only makes it into the American press as a lighthearted human interest story. Back in the spring of 2010, for example, when the Eyjafljallajökull eruption stranded Prime Minister Jens Stoltenberg in New York, there was much joy over the spectacle of him calmly running the country via iPad from his hotel room. Today, Norway is back in the news for its nationwide butter shortage, a story so silly it was brought to America's attention by the Colbert Report. It seems more than a little absurd for one of the richest countries on earth (per capita of GDP, only Luxemburg and tiny Liechtenstein have it beat) to be rationing a basic household commodity, which is what's happening . But behind this silly story are several important economic lessons about trade and the surprising economic dilemmas posed by striking it rich. Let's start with trade. Norway is tiny—more people live in Colorado or Cook County—and it has very marginal agricultural climate. They had some bad weather this summer, hurting the small dairy industry. It's easy to see how that could lead to reduced national butter output and shortages. Except small places don't normally try to produce everything themselves: That's a stupid and wasteful strategy in a global economy. If Norway can't make enough butter for everyone to slather on their eller morkt rugbrod, shouldn't they just import butter from abroad? The supermarket downstairs from my ... To continue reading, click here. Join the Fray: our reader discussion forum What did you think of this article? POST A MESSAGE | READ MESSAGES Also In Slate Why Does Obama Always Think a Speech Can Save His Presidency? The Tragic Demise of the Recipe Card—That Grease-Stained Grandmotherly Token Why We Use Balloons To Celebrate Things: A History	Advertisement
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