Chocolate and Gold Coins

Wednesday, August 17, 2005

Letter From Finland

I received a nice letter from a person in Finland, Topi, who wanted to respond to my post about "What Can Finland Teach Us?":

Dear Michael,

I read your pieces on Finland with great interest. I do disagree with you in that Finland has nothing to teach you. In a sense I understand what you mean since I'm a pro-American Finn but I wouldn't want Finland to be like the United States.

Still, in the globalizing economy all successful countries like Finland and the United States have many things to learn from one another and from other countries. The whole attitude that there's nothing to learn from other cultures and other economic systems (although I'm sure you would think America had something to learn from Finland if it were not for the fact that Finland is a welfare state) is basically promoting ignorance.

Welfare statism, just as liberal markets, are relative phenomena in each individual country. I find both beliefs, "let the state take care of everything" and "let the markets take care of everything" incredibly naive. Here in Finland we discuss quite a lot the pros and cons of liberalizing a certain market in each individual case.

Is it really true that the Finnish welfare state works because Finland is ethnically homogenous but a similar state wouldn't work in America because the country is ethnically diverse? I don't really buy that. At least I don't think this has anything to do with ethnicity. Certainly there is the myth of the Protestant country which is very intriguing. But that is religion, not ethnicity. Last weekend I visited Zurich, a traditionally protestant city in Switzerland and from what I could observe many of the myths aboutthe local people coincided with myths about Finns. Two societies can be culturally very similar, the myths behind the peoples' successes can be similar yet the economies and levels of taxation may differ. Now I'm no Switzerland expert yet I think making all these comparisons between different countries helps and learning from other countries is really the key behind any nation's success - there's no reason to copy everything, countries can maintain incredibly diverse economies even with globalization but any economy's capability to adapt to new circumstances is very important. There many things are to be learned by observing other countries.

I certainly wasn't offended by your remarks because I'm a nationalist - I'm Atlanticist & pro-European more than anything - I would like those things that work with the welfare state even if none of them would be Finnish. Just like it was a pleasant experience as a tourist in Zurich to see that everything works incredibly well and even railway station officials are extremely polite (they're not very service oriented in Helsinki, not to us Finns at any rate, maybe everyone is a bit more polite toward tourists, who knows). The people make the markets and the states work. Ideologies are important but they do not explain everything like they tend to do in most economists' models.

Topi (from Helsinki)

I would say that I am dubious about the Protestant vs. Catholic angle. I know that most Catholic countries are rather poor (Latin America and Africa bring down the average). But Switzerland is split between Protestants and Catholics and the German part of Switzerland is predominately Catholic. I travelled all over Switzerland and could not detect any difference between the Protestant and Catholic regions. They all seemed very prosperous.

Switzerland is not egalitarian, or at least, it didn't appear that way to me. There is no proverty there but there are some very wealthy people. Switzerland is a very nice country, (although I met some rude waiters there).


  • My 2 cents about Switzerland -

    At times I get a feeling that they are too proud of their past. They are unwilling to change with the times. This is evident from the fact that they stayed away from the EU Economic co-operation and the Euro currency.

    they have not allowed the construction of any high rises even in a financial hub like Zurich. During my visit to Zurich I noticed that none of the buildings (even the banks like CSFB, UBS etc) were more than 3 or 4 floors tall. Most of these buildings were traditional buildings built few decades ago.

    By Blogger Kaps, at 5:47 AM  

  • He seems to have misunderstood your point. You were not saying that a particular form of religious belief is better suited to establishing a welfare state or an ethic of self-reliance or whatever, were you?

    You were saying that homogeneity ensures that people are more willing to they are all part of the same group, so they are less likely to freeload and more likely to help each other out. The form of the homogeneity could be anything. It could be religious, racial, ethnic, whatever, as long as it is not an outrightly destructive set of beliefs.

    By Anonymous Ravikiran, at 12:37 AM  

  • You've become a celebrity in Finland :)

    By Blogger Vulturo, at 12:10 PM  

  • Hi Kaps, Ravikiran, and Saket
    Kaps: Switzerland is an interesting country with a unique history. They are fiercely independent and they traditionally avoid links to the rest of Europe. They also don't seem to have eminent domain laws so they lack freeways in their major cities. I'm not sure why they don't have tall buildings.

    Ravikiran: Topi was offering his own explanation for Finland's success. He believes protestantism is the key. I don't agree, of course. I don't think religion has much to do with economic cooperation (although, in theory it should). But it is an interesting topic: do some religions do a better job (or a worse job) of creating homo economous.

    Saket: Finland is quickly loosing interest. I need to post something interesting soon, but I'm still on vacation.

    By Blogger Michael Higgins, at 6:04 AM  

  • Switzerland is not egalitarian, or at least, it didn't appear that way to me. There is no proverty there but there are some very wealthy people.

    Would it shock you completely if I told you that there are some extremely wealthy people in Finland as well, despite what the right-wing bozos tell you?

    On the subject of egalitarianism, I read the original article and its comments and the claim that a CEO makes two times as much as a janitor was absolutely ridiculous. For example, Jorma Ollila, the CEO of Nokia, made 3,56 million euros last year. Trust me, Nokia janitors don't make 1,8 million a year.

    By Anonymous Anonymous, at 10:42 PM  

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