Welcome to socialist Finland, where socialism works just as well as it has everywhere else.
To start, all wages are centrally planned by a tripartite commission made of the government, trade unions and business representatives. They call them “national income policy agreements.” It causes immense rigidity in our labor markets and a cascading series of problems, the least of which is a high unemployment number. Add to that the high social security and insurance payments employers are legally obligated to pay, in addition to a progressive tax rate and dumb-as-**** bureaucracy, Finnish labor markets are a mess and not getting any better. Entrepreneurs are considered kind of insane, which is quite understandable in my opinion. You would have to be somewhat odd in the head to start a business in Finland.
On the subject of labor markets, another quite stupid policy are the three or four different kinds of social security funded no-wage job forms which distort the labor markets intensively, causing even worse macroeconomic problems. More aware social commentators are describing it as modern-day slavery (which it almost is), though I’d say it stinks of corporatocratic fascism.
As if that is not enough…
The EU and our own politicians are forcing environmental regulations on our industries as well, as if the cost of production is not high enough already. Our pollution levels are nothing compared to China or the US. Also we are dependent on imports, so almost all EU and domestic environmental regulations increase the price of everyday commodities due to the long distances and cost of transporting the goods.
There’s a 24% VAT on all basic commodities that are not food, books or magazines, in addition to a progressive payroll tax. As a retailer, this causes some problems for us. All of our products have to be a quarter more expensive just to pay off the VAT, not to mention the other added costs.
Social security is causing soaring prices in rents and food, and it attracts unskilled migrants from third-world countries in the thousands. Additionally it’s the root-cause of youth unemployment, as it’s better to just live off SocSec than work long hours for either a wage that is not tenable with these prices, or no wage at all. You lose all social security benefits if you work for any wage at all, so even in that sense it is better to just not work. The largest trade union had started up a large real estate company years and years ago that is using its tax-exempt status to make huge profits out of renting apartments to poor people, who pay for it using social security. The VVO rent prices (and thus the taxpayer costs) rise constantly, which is causing inflationary pressure on other rents as well.
It’s disgusting.
If you want to run a business that sells any kind of food, you need 3 sinks in the kitchen. You can’t buy alcohol between 9pm and 9am. You need to have at least 2 different work permits to work as a bartender, in addition to needing a supervisor at all times. All retail alcohol over 4,7% is sold from the national monopoly corporation Alko. You need several months of testing and piles of euros to get a new product approved for market consumption, especially if it’s food. Everything is regulated to death over here.
And those are just the examples that first come to mind. I’m sure there are mountains of regulations that I’m not even aware of. Excess regulations cost Finnish businesses approximately 1 billion euros annually, according to our national entrepreneurship society Suomen Yrittäjät (“Entrepreneurs of Finland”).
WTF?
In Finland we have this thing called “hyväveliverkosto.” The British call it the “old boy network,” which is basically the social structure of wealthy and influential people knowing each other and giving each other special deals and privileges. In any other instance that would be called corruption but here it’s called “maan tapa,” the way of the country. They support a large and overencumbering state because it gives them more resources and power to use for their own gain.
Our politicians are so entrenched in their social-democratic stance that even the so-called “right-wing” parties are economically centre-leftist (though Americans would call it ‘far-left’). I’m quite worried for our future.
We need libertarianism ASAP.
* Tommi Nuolioja is a newly-started entrepreneur and long-time customer service agent, who is running for the local municipality council. He is also a libertarian due to the overbearing socialist policies of his home country of Finland.
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In identifying the appropriate reforms to some of the problematic and inefficient policies you have identified, which libertarian country or countries would you use as a model for reform?
[…] downwards by the “progressive” tax system and countless regulation of their business. Finland, for instance, is a well known practitioner of such obstructive socialism, albeit only within the […]
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