• Competitiveness through unemployment

    Andu profilLibera’s Research Director Anders Ekholm on how Finland is starving itself in order to be more competitive:

    “Finland is slowly but steadily sinking into increased economic hardship. The lack of growth combined with increased unemployment is fought off by increased public spending and debt, with the implicit assumption that growth is just around the corner. It is hard to avoid the mental picture, where we stand on the deck of Titanic listening to a string quartet – instead of looking for a life boat.

    The crisis that our nation faces is often quite correctly described as a structural crisis. It is however important to understand, that “structural” does not necessary translate into “unavoidable” in this context. Depicting the crisis at hand as structural, includes an implied assumption that we produce the wrong products, but at the right price. However, anyone who has studies basic economic theory – or attended Black Friday for that matter – knows that prices have an effect on demand.

    Before we joined the euro zone, prices in Finnish markkas (FIM) could evolve differently from for instance prices in Deutschmarks (DM). When prices in FIM increased faster than prices in DM – as often would have been the case – the FIM/DM exchange rate reacted to counterbalance the relative price increase in FIM. Hence, the competitiveness equilibrium was maintained by demand and supply in the currency markets. A freely floating currency regulates the competitiveness of an economy in a much similar way to the centrifugal governor in the Boulton & Watt steam engine of 1788.”

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Lack of tuition fees and the illusion of equality

Matias MakelaLSE master’s student Matias Mäkelä on Finland’s ‘equal’ education system:

“In societies, where tuition fees for higher education are in use, you rarely hear people say ‘entrance into university and graduating from university are difficult, but the part in between is easier’. This is not because it would be easier to get into universities with tuition fees, but graduation rarely poses a problem for the student. This is simply due to the fact that the students’ motivation rarely collapses when they receive their certificate of attendance, but they have to work hard in order to not have to pay tuition fees for additional years. 

In Finland, the discussion regarding tuition fees is lagging. Arguments both for and against are hastily prepared, and it is rare to hear anything but comments exclaimed in a tumult of emotion. This is understandable. University education is not only a cost item at the time of acquisition, but it may have both positive and negative effects on the future economic well-being of the individual and the whole society. In this sense, higher education without tuition fees sounds like a smart and fair solution.

However, this is not necessarily the case if we take another look at the issue.”