Economic counter-factuals - Norway and Britain

From Justin Fox,

As Thatcher took office as Prime Minister in 1979, booming oil revenue from the North Sea offered big opportunities and posed big decisions for the UK and Norwegian governments. Under Thatcher, the UK chose to spend the windfall as it came in and cut other taxes — a policy that her successors didn't really alter. Norway started out on a similar track, albeit using the money more to prop up its increasingly expensive welfare state than to cut taxes, but in 1990 established what was then called the Petroleum Fund, now a $720 billion sovereign wealth fund with significant global influence and hugely positive implications for the country's fiscal present and future. Now, not surprisingly, some in the UK are saying that's an alternative they should have considered.

The Norwegian Sovereign Wealth Fund is indeed one of the most visionary policies by any government in history. There is a limit that no more than 4% of the funds capital be spent in one year. It is estimated to top a trillion dollars in the foreseeable future and currently "owns an estimated 1p in every £1 of world equity, which is a colossal stake in the global economy from such a small base, and is reckoned to be the largest owner of stock in Europe". Its interest and dividend returns are estimated to be around 14.3 bn pounds.