August 8, 2005

BETTER LOOK WHERE THE FOOTSTEPS LEAD:

In Finland's Footsteps: If We're So Rich and Smart, Why Aren't We More Like Them? (Robert G. Kaiser, August 7, 2005, Washington Post)

Finland is a leading example of the northern European view that a successful, competitive society should provide basic social services to all its citizens at affordable prices or at no cost at all. This isn't controversial in Finland; it is taken for granted. For a patriotic American like me, the Finns present a difficult challenge: If we Americans are so rich and so smart, why can't we treat our citizens as well as the Finns do?

Finns have one of the world's most generous systems of state-funded educational, medical and welfare services, from pregnancy to the end of life. They pay nothing for education at any level, including medical school or law school. Their medical care, which contributes to an infant mortality rate that is half of ours and a life expectancy greater than ours, costs relatively little. (Finns devote 7 percent of gross domestic product to health care; we spend 15 percent.) Finnish senior citizens are well cared for. Unemployment benefits are good and last, in one form or another, indefinitely.

On the other hand, Finns live in smaller homes than Americans and consume a lot less. They spend relatively little on national defense, though they still have universal male conscription, and it is popular. Their per capita national income is about 30 percent lower than ours. Private consumption of goods and services represents about 52 percent of Finland's economy, and 71 percent of the United States'. Finns pay considerably higher taxes -- nearly half their national income is taken in taxes, while Americans pay about 30 percent on average to federal, state and local governments.

Should we be learning from Finland?

The question occurred to me repeatedly as I traveled around Finland this summer. Americans could easily get used to the sense of well-being that Finns get from their welfare state, which has effectively removed many of the tangible sources of anxiety that beset our society.

But the United States could not simply turn itself into another Finland. Too much of Finnish reality depends on uniquely Finnish circumstances. Finland is as big as two Missouris, but with just 5.2 million residents -- fewer than metropolitan Washington. It is ethnically and religiously homogeneous. A strong Lutheran work ethic, combined with a powerful sense of probity, dominates the society. Homogeneity has led to consensus: Every significant Finnish political party supports the welfare state and, broadly speaking, the high taxation that makes it possible. And Finns have extraordinary confidence in their political class and public officials. Corruption is extremely rare.


Finland has huge advantages in its small size, geographis isolation, ethnic homogeneity and religious uniformity, but it also has a fertility rate of just 1.7% and as a result a rapidly aging population, which won't be able to pay for all these social services.

Posted by Orrin Judd at August 8, 2005 5:32 PM
Comments

Wrong question Bob. If they had heart and hope why aren't they trying to be more like us?

Posted by: Luciferous at August 8, 2005 6:01 PM

This also ignores the free-rider benefits that Finland gets as a small country, particularly in the development of technology. That's not to slight Finland, but that context has to be considered.

Luciferous;

Why should they be? I've posted on this general subject before but there's no fundamental reason that one can't have a happy, wealthy, productive society that backdrafts on the pace setters. You only have to be like the USA if you want to compete with the USA. If you value things other than being in the A-list then you can make very different choices.

Posted by: Annoying Old Guy at August 8, 2005 6:35 PM

Every few years, there's another country that is held up as doing everything exactly right while we do everything exactly wrong. The tell-tale is that it is always a different country.

Posted by: David Cohen at August 8, 2005 6:42 PM

"The tell-tale is that it is always a different country."

Not only that, but just after a slew of such stories appear, the country being held up becomes another victim of what must be a variant of the Sports Illustrated cover story curse.

Poor Finland. Sell your Nokia stock now.

Posted by: Raoul Ortega at August 8, 2005 6:55 PM

Another question to ask is if they would have even survived as a nation this past sixty years had the US not been there in the background. It was touch and go whether they would have ended up in the Soviet sphere at the end of the war, without the US they would have and along with the other Baltic states would no doubt still be there, a backwater of the Russian empire rather than a free nation. They would have waved bye bye to their ethnic and religious homogeneity, their language too even. So for their idyllic life, someone has to pay a price, and I don't think it's a stretch to say that the US has done just that. The same goes for the rest of pacifist, wellfare-ridden EUtopia.

Posted by: ligneus at August 8, 2005 6:55 PM

It's unfair to say the Fins didn't pay for their freedom, they fought like tigers in ww2 and deserve alot of credit. But it's true to say it wouldn't have made any difference, they are a tiny country that would have been eaten up by one dreary fascist empire or another without the USA.

So today they don't spend anything on defense, how nice for them.

Posted by: Amos at August 8, 2005 7:35 PM

Isn't Finland right up there in the suicide rate and heavy drinking department?

Posted by: erp at August 8, 2005 8:08 PM

"...but it also has a fertility rate of just 1.7% and as a result a rapidly aging population, which won't be able to pay for all these social services."

Maybe we could give them a few of our illegal aliens?

Posted by: at August 8, 2005 9:10 PM

Mr. Kaiser tip-toed right to the brink of advocating uniculturalism before he realized where he was. Must have soiled his armor.

Posted by: ghostcat at August 8, 2005 9:25 PM

"they fought like tigers in ww2 "

As German allies, against the Russians.

Posted by: Raoul Ortega at August 8, 2005 9:42 PM

Finland lost WW2, as Raoul correctly pointed out, as they were allied w/Germany against the USSR. Interestingly, it is the only axis allied country not occupied by the allies at the war's end. Finland put out the "tervetuloa" sign for us during the cold war, enabling us to put our ear up to the USSR's door.

In 1917, when Finland gained its independance from Russia, a German prince was invited to become Finland's king, but the people voted for a republic instead.

Posted by: Dave W. at August 8, 2005 10:31 PM

Very good comments on the "free ride" angle.

As to the "Why can't we be like Finland?" question posed by the Washintom Post article, the answer is obvious. It is a free ride arguementr of another stripe. Our cultursl diversity demands the disciplines of the market to ensure that each of us pulls his or her weight.

Repl. Obj.: Yeah, yeah, we all know that such safety net as we have is already used as a hammock by many. Forgetaboutit. Our system works because it is in balance--we don't fall off the edge of ideal types.

Posted by: Lou Gots at August 8, 2005 11:05 PM

In 1940 the Finns did everything right and then got screwed. The winter war against the Soviet Union was a masterpiece showing how to defeat a vastly numerically superior opponent by using terrain, unit cohesion, and brilliant tactics.

No suicide bombers, no terror tactics....just straight up old fashioned strategy and tactics.

They had no choice but to ally with the krauts....Remember they already had the example of Czechoslovakia when they contemplated the benefits of allying with the French and (sadly) the British.

Posted by: Earl Sutherland at August 8, 2005 11:19 PM

The U.S. benefits from a "free ride" of her own - Mexico.

If the U.S. had a Canadian-like society on both sides, and our legal immigration policies were still as self-defeating and xenophobic as they are now, we wouldn't have a huge and constant stream of easily-assimilating immigrants to provide cheap labor and babies.

Relying on native-born American couples to provide population growth would be a failure; we aren't reproducing at a replacement level (although quite close).

Part of the "terminal Europe" argument is quite explicitly that Europe lacks a Mexico to draw human capital from, being instead stuck with a North Africa.

Posted by: Michael Herdegen at August 8, 2005 11:40 PM

Trying to compare Finland with the States is about as fruitful as comparing China with Vermont.

To the standard Nordic virtues of order and industry, for Finland you can add an instinctive small-country understanding that they have to compete internationally, which means filtering every tax and social initiative through a test of productivity, first class education and getting up in the morning. Serious poverty, civil war and international isolation are still recent enough to concentrate their minds. Also, there is socialism and there is socialism. Although big on taxation and regulation, the Nordics have by and large avoided the disastrous British and Central European habit of direct government management. But live there for a while and watch what happens when you try and step outside of the community consensus.

ligneus:

In terms of the sacrifices made by American troops, I agree, but do you really see U.S. military expenditures over the last generation as a net social and economic loss? Would the States be better off if you had spent like Canada, or is it more probable that, like us, you would have found more wasteful ways to spend the money?

Posted by: Peter B at August 9, 2005 7:33 AM

Michael: How is that free-riding. Seems to me that it's arbitrage: we take a resource that the Mexicans have no use for and use it to build a nation just by moving it from one locale to another.

Peter: I'm always amused by the criticism that we spend "too much" on health care compared to nations with socialized medicine. Do you think that if we spent half as much as Finland, our critics would suddenly praise us for our efficiency?

Posted by: David Cohen at August 9, 2005 8:01 AM

They pay nothing at all, whatsoever, it's all free, except for the high taxes. Why do people construct arguments like that?

Posted by: RC at August 9, 2005 8:03 AM

Peter's post about the 'standard Nordic virtues of order and indusrty' remind me of Milton Friedman's observation:

OPPONENT: We have no poverty in Sweden!
FRIEDMAN: That's funny, because we have no poverty among Swedes in America either.

Posted by: Bruce Cleaver at August 9, 2005 8:49 AM

it would be hard for any journalist to top the statement:
'..They pay nothing for education at any level'

as an exhibit of ignorance of basic economics.

Posted by: JonofAtlanta at August 9, 2005 9:46 AM

My personal favorite -

At Absolutely No Cost to You!

Posted by: erp at August 9, 2005 11:58 AM

David Cohen:

Except that Americans DON'T move Mexicans to the U.S.
On the contrary, the vast majority of Americans at least mildly support keeping Mexicans in Mexico, and OUT of the U.S. Our official immigration policies are designed to make emigration to the U.S. difficult, even for highly educated people.

The Mexicans just show up on their own, and we put 'em to work, and make their babies Americans.

If America had a rational immigration policy, then you would be correct.

Posted by: Michael Herdegen at August 9, 2005 5:31 PM

We lure them.

Posted by: oj at August 9, 2005 5:37 PM

Brit:

Even feisty, hard-working Finland is doomed. There is no nut too tough for Orrin to crack on this subject.

Posted by: Peter B at August 9, 2005 8:12 PM

Michael: Isn't your point that ours is a rational immigration policy?

Posted by: David Cohen at August 9, 2005 9:40 PM

David Cohen:

Because rationalism = protectionism ?

I don't quite get the joke.

Posted by: Michael Herdegen at August 9, 2005 11:41 PM

Because we basically have open immigration for those willing to pass one simple test: can they find a way into the US. After all, someone too dumb to find a way into the country is someone whose children we don't want as citizens.

Posted by: David Cohen at August 10, 2005 8:20 AM

"Isn't Finland right up there in the suicide rate and heavy drinking department?"

I think so, but that might have something to do with the fact that they live at the Arctic Circle. Six months of darkness tends to do that to people.

Posted by: Robert Duquette at August 10, 2005 5:13 PM

David Cohen:

Except that our test doesn't effectively cull the stupid; instead, we're essentially selecting the lucky and the desperate.

Posted by: Michael Herdegen at August 10, 2005 9:58 PM

That's exactly who made us in the first place.

Posted by: joe shropshire at August 11, 2005 1:14 AM

Walked into that one, Michael.

Posted by: David Cohen at August 11, 2005 8:49 AM

Finland is certainly among the very best little countries on this planet. A Canadian myself, I have lived in Finland since 1996 and seen the reality. Based on my experience, the blog of Bob Kaiser captures the essentials quite accurately.

Posted by: os at August 17, 2005 1:23 AM
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