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Hopeful constructive criticism in how Finland could do even better

(Originally published in Facebook 13th of February 2014, and now re-run here with very minor edits)

Finland is a tolerable place to live in. Like just about everywhere on planet earth there are good things, and there are bad things. Finland has its share of outright insane things and very very harmful things too. As an entrepreneur I have learned to strive for perfection where it counts, and apply the 20/80 rule everywhere else (20% of effort counts for 80% of results). Finland in many cases isn't putting in even the 20% of effort, and could relatively easily be a much more prosperous place. Thus through this writing I seek to offer input on how to progress things towards that goal of prosperity.

This is a small rant about why Finland could do better than our current sorry state of affairs. This is positive & hopeful constructive criticism with the aim of hoping to collectively do better:

Finland is a control freak country, ultimate nanny-state, wishing to dictate every aspect of life with absurd, unwelcome and overkilled precision. Perfect playground for mentally ill bureaucrats long since gone wild and unchecked. We start with the default of freedom and every new law (about 1 new law per day at current rate) and rule (many more new rules per day than just 1) restricts that freedom and makes life harder and more demented. Finland is not a model country when it comes to upholding human rights, and some of these "new rules" trample all over basic human rights and twist bureaucracy closer to the inhuman absurd level.

The typical consequences are everywhere we look: less variety in choice, higher prices across the board, and lower quality. Overall sluggishness and slowness of things. The absence & opposite of fast and dynamic. Wonderful characteristics, courtesy of regulation. Think for example: food markets, motoring, or all to do with real estate. Everything that possibly can be expensive, is expensive in this country (with virtually no exceptions at all. There are things that are seemingly cheap: like fighting a legal case to the court of appeals, but even in those cases somebody else pays for the cost, and often that "somebody" is the society, as in we all through our taxes..) According to official statistics Finland is the most expensive Eurozone country in consumer prices. And to be precise: everything is regulated, ensured by regulation, to get more expensive in the future as well. petrol, cars, real estate, food, alcohol, tobacco, energy, etc etc.

While simultaneously we have the amazing combination of;

One of the lowest income differences on this planet (there are no "rich earners" in Finland as nobody makes any significant money. Even the best performers among us earn about the same. Remember that I'm talking about income here (as in salary, bonuses, tax free travel daily allowances, etc) and not profit accumulated through risk taking, investing your hard earned wealth and accumulating capital gains from your already taxed money).

Combined with one of the highest decrees of regulated & forced income transfers in Europe (transferring what little extra a high performer earns, away from her to the less performing folks).

And finally trice combined with one of the lowest net purchasing powers in Europe (meaning that people are not wealthy, they have no savings, no huge disposable income, no investments, no net worth, and their net purchasing power is abysmally small - all that while the prices of everything around them are high!).

As an anecdote; a friend of mine has for years asked Swiss and Austrian people (among other Europeans and Americans too) to guess what's the threshold of the top 10% earning salary in Finland. They frequently guess numbers like 14,000€ a month, or 15,000€ a month, some even 20,000€ a month. And they are totally in shock and silence after hearing that with a meager salary of about 4500€ you are already in the national top 10% earning bracket..

The silence deepens and evolves into total disbelief when they realize that simultaneously this country has extremely high taxes overall: If you buy a new MacBook Pro for 3000€ from your hard earned salary; all throughout the chain you paid about 66% of taxes in average. Meaning with zero tax you would have had 3 MacBook Pro's for the price of one, or one for 1/3 the price.. That same system of tax-on-top-of-tax chain with my salary amounts to about 81% Tax if I buy a MacBook Pro with my net salary.. 81% Tax is so much that the only conclusion can be the realization how unfair the punishing system is and how much it is robbing private individuals of their wealth and hard earned possessions.

We are not only low earners (in the eyes of Swiss etc), but also piss poor & broke concerning our wealth & savings, while paying one of the world's highest % of taxes.

Our national debt in relation to our GDP still is nowhere near the level of Greece (at least some light in a dark dark tunnel) - however if you look at our national debt in relation to the wealth of Finnish households (savings, investments, purchasing power) the only conclusion is that we are in deep trouble. Take the Italians for example: they are a lot more wealthier than us, and while it's true that they have even more debt than we do (both in € and in % of GDP) they are still so wealthy that Italian households combined could pay back the debt relatively easily. Extreme example is Japan: truly rich households with a lot of savings, investments and purchasing power. Lots and lots of national government debt too, but so much wealth that it's not really a serious problem for them. Not so much with Finnish households: we are too poor to have this staggering amount of debt! (and just shy of 10bn€ more of it each year, hell yeah!).

We have one of the relatively highest spending public sectors in the world; public spending to GDP ratio is near 60%. Each year we take in massive additional debt, not to invest (no no, that would be too positive..) but to simply eat the money in our running expenses. It is spending gone mad and amok. It's like a startup company applying for a 10M€ round of funding not for product development, market expansion or product launch, but simply to waste the money on strippers and parties by the management and to pay salaries to all those people the startup hired to occupy the very costly office building, not to mention all those fancy sport cars for the managers..

Not only is our public spending world record high, furthermore if you take the number of households where a minimum of any single one family member has ties to the public sector (is a public sector worker in any capacity, is a school kid, daycare student or student in a public school, is in the municipal council, receives grants to businesses or receives grants to agriculture, etc) - it includes almost all households in the nation. There are virtually no households left with zero ties to the public sector: so the resistance to change is irrational and massive. Public sector is "untouchable monster" because everyone's household is a part of it. A system of evil destruction reinforcing itself.

Everybody's playing the same roulette game and thinking that they are the winners and the others who pay for their winnings are the losers. Guess what: it doesn't play out like that. We all lose. We also own the (unprofitable) casino where we play in, and could change the rules if we wanted to..

Solution is obvious: no weak cuts of ~3bn€ are enough to reverse a situation this bad. We need much much bigger structural overhaul and change. Lately the public discussion has been starting slowly to take a turn towards the better and moving away from minor cuts and tweaks to proposing real actual restructuring. This is a "no shit Sherlock? said Captain Obvious" -moment for Finland, as the burning need for a big restructuring is very much apparent & obvious.

Cutting just a few billion and executing no structural change at all solves nothing. "Austerity" alone is a failed road. So is the utterly laughable and mentally retarded Keynesian proposal of doing nothing and just taking more debt and keep on spending like there's no tomorrow. Cutting spending alone is like an alcoholic who is drinking 10 bottles of Koskenkorva Vodka a day, and now we deny him two bottles (he is left with just 8), only to see him drink the full 10 bottles again tomorrow. There NEEDS to be structural change, a proper rehab, dietary-, and lifestyle change for our collective alcoholic state, and in a big way.

Finland cannot increase taxation and tax more (not now, not in the future); because there's nothing to tax. People have low income, low purchasing power, no wealth.. There's just nothing that could be taxed and confiscated to pay this overwhelming level of government expenses. Nor there ever will be more as the current regulations and taxes make sure that nobody can accumulate wealth easily, and certainly not quickly or in any meaningful way as far as the whole economy is concerned. Taking more debt now is simply future taxation spent today (and would have to be taxed back tomorrow). Thus the road of increasing taxation is entirely spent: in fact the state has overstepped already beyond to the territory where it is outright destructive to tax this much (remember my 81% Tax on the MacBook?). The only manageable road can be the change of the entire system - the hard & freefalling road would be not to change and see the whole nation collapse under impossible circumstances.

The UK has a "1 in, 2 out" rule regarding regulation: for every new rule, two old ones must be removed forever. Finland would need a "1 in, 10 out" rule for starters. Getting rid of all that crap forbidding everything and anything, dementing and strangling us.

We live in an absurd country where the state owns a horsemanship school and a catering company for no good reason (how exactly is that free market economy if the state competes with private providers with those entities?). Also if you use a chainsaw in your work you get a -40% deduction in your income taxes just because that's a silly rule.. (almost wrote: "just because, fuck you, that's why" but censored myself ;)) etc there are endless examples of absurd non-justified stuff all around us. To pick a few more: public sector workers have for years been earning leaders in the Finnish economy, getting the biggest salary increases. According to the OECD Finns have 58 healthy years in their life expectancy (lowest in the Nordics), while the Icelanders have 69. The explanation I offer is that; when you punish by tax, make everything healthy very expensive, and dement your people through rules it shows; people live short and miserable lives. Could go on with the examples, but stopping here for now.

Restructuring our broken and sorry state of affairs is the top priority. And a major part of the restructuring effort is to set up a better system that runs lean and costs much much less than our current behemoth of world record high public spending. No cuts to spending only; but rather restructuring that leads to replacing the old and expensive with the new, lean and affordable. Some objectives regarding that:

Public spending to GDP ratio needs to get to a semi-healthy level of below 40% (big cuts in spending, between 15-20bn€, or rocket-fast GDP growth of private sector primarily - I'm aware that public sector productivity is also a part of GDP, tho a minor part), and quickly after that to a much more healthier level of less than 20% (massive cuts in spending, around 30-40bn€, or lighspeed fast GDP growth of private sector primarily). Finland could run lean with a 10-20% public spending to GDP and get great amazing value for that taxpayer money. There are countries out there who do it today and show us the example.

Good benchmark nations for Finland in this would be countries of similar size in population, like: Singapore, Hong Kong, Switzerland, New Zealand and even Denmark to some extent. Also Sweden & Austria, and smaller nations too: Estonia in particular. Perhaps some selective aspects of Ireland too.

Enough of us see what needs to be done - and that's why I'm positive and think we can do better than this! It's about time to start renovating and building a better Finland for us all for all of future to come! Because I hope we haven't given up on our country just yet, right?

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Entrepreneurs as the source of wealth-diffusion

Here's a good video about entrepreneurship made by the Kauffman Foundation:

Video also in YouTube here:
http://www.youtube.com/watch?v=M7VZIbeUrSU

This same topic; innovators, entrepreneurs etc as wealth creators, job creators in society is also a hot topic here in Finland at the moment. The country would desperately need precisely those things.

The global crisis of oversized governments, with reckless overspending and debt taking has already all but ruined the economy and will continue to haunt us for the near future. The governments will not be able to solve a problem they themselves have created.

Finland also has a massive oversized and bloated behemoth of a Government. Currently the 2010 figure for GDP % of the public sector in Finland is 55.3%, according to Eurostat, that means that the public sector in its entirety is larger than the private sector. How long can this madness go on? Not for long. I have been told that no nation in the history of the world has survived for long with a larger public sector than it's private sector.

The Finnish Statistical Bureau, Tilastokeskus, Also has some 2009 data available: they state that the public sector is 56.3% of GDP in 2009. Source here.

As the public sector expenditure is so massive % from GDP this forms a particular problem: it makes the economy increasingly dependent on the public sector and its cash flow. If simultaneously the public sector purchases from the private sector are conservative in attitude and always favor the big corporations then we have another particular problem as the spending never flows to the new. Public sector spending is massive and to large extent its just maintaining the status quo. A cynical person might comment that perhaps this is by design, working as intended?

Needless to say this is totally batshit insane and cannot be sustained for long. The public sector needs to diminish to half it's size, or possibly more, immediately. And the longer we wait, the more massive the cut will have to be later on. The only alternative to this is to rapidly grow the private sector in such a massive way that the GDP% balance shifts and the private sector quickly becomes much larger than the public sector. What do we need for this?: you guessed it; successful innovators and entrepreneurs. By the thousands.

This brings us back to entrepreneurs and innovators. They are the solution to turn this around and get the country, the EU and the economy back on a healthy track.

Every time a brilliant innovator and entrepreneur successfully takes a magnificent product/service/whatever to the markets we all benefit from it in a massive way;

Imagine someone inventing a free, easy to produce, endless energy source and taking that to market. Something like a quantum zero point energy source possibly. We would all benefit and be enriched by it in a massive way. Such an innovation would bring disproportionate amounts of wealth, extra free time in our lives, etc.

Imagine someone inventing a cell-phone (and network) that operates with gravitons and gravity-micro-ripples in the gravity field instead of the usual electromagnetic radiation and distortions in the electromagnetic field of earth as our current cell phones operate in. This tech, taken successfully to market, would mean massive benefits and cool stuff for us all. Making the cell phones work underground (or undersea) amongst other cool things.

The examples could go on forever. Every time an innovator or an entrepreneur creates something new, something valuable and successfully takes that to the markets - we all benefit as a result. We all receive a gift of more free time, the gift of increased performance, etc.

Imagine having to cook a chicken for dinner without any technology; taking a knife (or a sharp stone), butchering the chicken at first, then skinning it, processing it, taking a few hours to light a fire without any tech (or is fire tech also?, yes it is, in fact..), and perhaps after a full day of work you could have it cooked. Imagine having to visit Oulu without any tech: walking there from Helsinki would take more than 5 days according to Google Maps directions. Tech and successfully commercialized innovations make our life fabulous, rich and give us free time to do other things with our lives besides live in caves and hunt for food every day (as we would be without innovations and technology.)

The wealth created by such success would be diffused throughout the society in every level; making the poor richer, and also the rich richer. This diffusion happens through mutually voluntary exchange of value-for-value and ends up effectively diffusing wealth to every level and corner of society. Today, however this doesn't happen optimally: as the public sector is so freaking massive, larger than the private sector, we have a parasite in the system: instead of healthy natural diffusion we get suction. We have a massive freeraiding vermin in the system that sucks away the wealth created, and intercepts the diffusion - by means in intervention, excessive taxation, regulation, the non-producing public sector sucks a lot of it away, and doesn't allow for the diffusion to happen. Instead of voluntary value-for-value exchange we get involuntary value-for-nonvalue exchange. That isn't an exchange at all; it's more like a violation of individual rights and legalized robbery.

The Finns often think that "society" is the same as "government" or "the state". We must be pretty much the only nation thinking this way. Finns are government-worshippers, statists. In just about every other part of the world people tend to think that society = the people, and the that the people pay for the government, the people allow the government to exist by their mandate, and that the government works for the people. Lately I have seen interviews in the media here in Finland from the Green Party politicians saying that "we must increase taxes because the government needs to be pay for the society".. it's amazing how fucked up this issue can be in people's brains; it's the society that pays for the government, certainly not the other way around.

Innovators, entrepreneurs and growth companies cannot flourish in an environment of massive taxes, larger public sector than private, over-regulation and over-intervention at every level. Governments simply can't regulate and tax innovations and growth companies into existence and success. Cannot be done.

Today we have a crisis. This would be our way out. Currently however I am worried that the public debate on the issue is going to the other direction: more restrictions, more taxes, more tackling down this process of innovation and the new that could benefit us all. It's almost like the government would not want people to be better, would not want everyone to benefit from cool new things that enrich our lives and massively benefit us all. Is this the case for real? I'm starting to suspect that it is. I'm beginning to suspect that because one massively successful entrepreneur might capture 0.5% of the value for herself (and the 99.5% goes to the rest of us) the Finns are so jealous that they won't allow or accept this to happen. This is pure evil. Unethical behavior that leads to maximizing human misery and making the poor more poorer, along with making the rich more poorer too.

Think about it for a while, and consider how you can affect this attitude. We are in crisis, the clock is ticking, every day our oversized government is spending and going deeper into dept. Courageous urgent action is required and this topic needs to enter and stay in the public eye.

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Professional board member work is now illegal in Finland

Finland has seen the rise of very positive new breed of business accelerators in recent years. They are called professional board members. Many of them are also angel investors and experts in various topics like law, business, internationalization, finance, technology etc. Professionalism towards Board of Directors work has been a much welcomed change into the old culture where only founders/owners of the company used to occupy board seats, entirely despite of their competence in actual board work. Finland has benefited tremendously from this new level of professionalism; networks, specific expertise in advising growth, finding funding, providing valuable insight, advice, mentorship, sparring and acting as a credible list of known names that back the company up by being members of its board (which is legally liable if the company behaves badly, mind you). Countless growing companies have benefited from these board professional experts who make it their professional competence to really excel in responsibility carrying, decision making and strategic level board work.

The basic business of a professional board member has up until now gone as follows:

A professional board member, or a group of them, establishes a company, often a limited liability company. Then the company offers its employees (the board pros) to startups and other firms as professional board members. The people sit on the board of directors, carry on the legal responsibilities associated with board work, and help the company in a multitude of ways; often relating to their own specific field of expertise. Many companies have had more than one professional board member contributing throughout the years. They also often do assignments for the company outside the scope of normal board work: like for example work extensively on the company's sales, technology, financing plans or other such major engagements that might often result in weeks of work. I have even seen board professionals who work on jointly creating marketing materials for the company, or participate in trade shows and conferences for the company in other countries etc. Often also this is done together with business angel activities: investing into the very same companies that then become clients to professional board member services.

Naturally this is also something that the Vigo accelerators often do: they invest into their portfolio company, and a manager from the accelerator team often takes up a board seat.

For all of this activity it has been the standard business model that the professional board member company sends an invoice (often a monthly invoice, or per project invoice) to the company it is helping, and this relationship has been quite similar to normal management consultant work - with the exception that the person is a member of the board of directors of the client company, and that the work is typically much more longer term and larger/wider (more strategic) in scope.

Naturally many VC funds and VC firms do this as well: they have venture managers, investment directors and partners who frequently sit at the boards of their portfolio companies - and just as frequently do more extensive projects for the companies and often mutually agree upon sending an invoice as compensation for their work to the company.

Well all of this is now illegal in Finland. Here's why:

Finland's Supreme Administrative Court in alliance and ruling based on advice from the Finnish tax authorities has made a very interesting recent ruling. It can be found here:

http://www.kho.fi/paatokset/54322.htm

From the case you can read between the lines that the "company X" they are talking about is in fact Capman, Plc. a VC firm listed in the NASDAQ OMX stock market.

This decision stacks on top of previous decisions made by the tax authorities, and now as combined to the previous decisions forms the final link in declaring all of professional board member work to be illegal.

Here's what the ruling means together with the old rulings and rules from recent years:

1) anything paid to the board member is considered as income, and under the income tax. This is despite the form of payment: even if you pay in stocks, in options, or in anything the result is the same; they are all considered income.

2) while the person is a board member he or she cannot do any consultancy work at all for the company: any such work cannot be invoiced from the company, it has to be paid as income instead (and taxed as direct income) - and this situation forms a temporary relationship of employment between the parties.

3) while the person is a board member the company cannot pay for or compensate in any way for any travel, flight tickets or such costs: these are also always considered income and in some cases this also can form a relationship of employment between the parties. The logic here however has been that since a board member is not a "normal" employee of the company; the company cannot pay him for travel costs. The tax authorities expect the board member to pay for all travel himself, or then pay income tax for all the travel cost the company pays for him. This changes if the board member is doing a consultancy assignment that is paid to him as regular income (thus forming an employment relationship) if this is the case then travel costs can be paid. But if there is no consultancy agreement, no income salary, just regular board work: then travel cannot be paid without avoiding this.

With that ruling they effective just ended professional board of directors work in Finland. A situation where a person is a member in, let's say, 8 different boards; all this becomes quite impossible. He would pay income tax from 8 different sources and would be frequently temporarily employed by all of those companies when ever there is a more time demanding task or any travel associated.

So now, all professional board members will either have to:

I) Resign their board assignments and become consultants. (my own tax advisor recommended to me that I should do this)

or

II) Become employees of the company they help and pay income tax from everything they do and get compensated for.

You cannot act as a professional, offering board member services and advice, and invoice for your services anymore. Not even if you are a partner in a VC firm and you sit on the board of your portolio company: even then you aren't allowed to do this.

For Vigo Accelerators this means that either;

a) their managers can't have board seats in portfolio companies at all.

b) or they will have to have separate roles; one
manager is a board member and is banned from doing any consultancy at all, while another manager does all the consultancy (the acceleration) without being a board member.

Or they can also, do c) act as up until now and pay huge amounts of income tax personally for accelerating all those startups.

That's how Finland encourages growth, entrepreneurship and economic success. What a wonderful climate to be in!

This is very very sad for Finnish growth companies.

This also pretty much kills the new breed of professional business accelerators from growing and rising any further: now that the whole practice is declared illegal and made totally idiotic in terms of taxation, now there won't be any more professional board members then... great.

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Fresh thoughts from Denmark's Monday Morning

I'm involved in Sitra's programme called "Elinvoima" and we recently visited Copenhagen, Denmark as a part of that. The Programme seeks to answer very important key questions in society like; what is "new work?" etc.

One of the interesting visits there was a Think Tank / Company called Monday Morning. They had some good fresh thoughts on how the welfare society in Denmark, and perhaps in Finland, could be developed towards something better. Here's a part of my take on that.

First off, they identified that a "new language" is needed in politics and in societal debate overall. They presented the following list:

10 IDEALS FOR POLITICAL COMMUNICATION

  1. Focus on the ball
  2. Respect disagreement
  3. Recognize change and development
  4. Be willing to explain and elaborate
  5. Separate what we know, what we believe, what we think
  6. Respect expert knowledge
  7. Put forward arguments
  8. Answer rebuttals and critical questions properly
  9. Present your point of view
  10. Engage the voters

(html formatting in this blog is crap, sorry about that)

In Finland we are pretty fraking far from these ideals in the level and quality of our political talk, as can be viewed here.

Focus on the ball: we just had parliamentary elections in Finland. Did anybody notice any of the parties really giving any detailed answers and plans on how we are going to create the required 200.000 entirely new jobs to support the current state services during the next 9 years? I didn't. Most of the focus went into vague political rhetoric about taxing "the rich" (who's that exactly in a country where the upper quadrant income is one of the most modest ones in the EU?) even more, and perhaps cutting way too little, way too late from government spending. And on speculation whether or not it would be beneficial for Finland to bail out Portugal (btw: to which my take is that there should not be government bailouts for anybody, for any reason, they distort more than they fix, and in this case it's about a transfer of income union from the producing countries to those that don't produce enough to cover what they spend).

Point number 5 is brilliant: separating what we know (for an objective fact), what we believe (our interpretation of reality), and what we think (our conclusions and projections of these facts and interpretations) would indeed be extremely useful. This is brilliant stuff. Similar communication is very useful if you are an executive, a startup CEO, scrum master, or anybody at all who needs to communicate between groups and teams of people who don't always observe the same facts and entirely agree on everything. This kind of 3 level separation gets people thinking more - and more than that, it gets them to commit to action more. It also facilitates learning.

For example: if a team of startup software engineers have just today somehow broken a product built that's due to ship tomorrow morning - what do you do as the manager? You can always go talk to them an offer your own conclusion right away, without explaining or separating any of your communication. Going there and ordering "you two, fix the broken build now!" will probably lead to some action; but how much did the team like this order? How much did they commit to that solution which was in fact your conclusion of the events and not theirs? Instead you could walk over and start with: "hi guys, my monitoring system there is telling me for a fact that the build is broken" and just pause. That might be the only thing you need to say: people with initiative will take it onwards from there and take care of it. They may even reply right away "yeah we know, it is already being fixed by Alberto there, while the rest of us figure out how we didn't catch that glitch in our tests". If the team waits for you to solve the issue for them, you can always challenge them a little more and continue with "I believe this is quite bad for us, as we are about to ship tomorrow morning. What are you planning to do about it?" and still at this point you have not offered your own conclusion to the team; they still get to form the conclusion and commit to resolving the issue themselves. You don't need to go as far as saying "I think you, Jenna, need to fix the build, while Alberto there gets me a cup of coffee", which would be you being a daft prick.

We see bad communication all the time in politics and certainly encounter it in management. Startup CEO's are no better; many of them are clueless on leadership and how to resolve team issues.

Monday Morning's 10 ideals in communication might as well be startup ideals in communication with the word "voters" replaced with "customers".

Another good sound bite from their list are numbers 7, 8 and 9; arguments and properly presented answers to critique.

I urge you very much to read through this list:

http://www.astunit.com/astrocrud/flaws.htm

It's an excellent list with 30 flaws in argumentation. Flaws like: error of fact, contradiction, deliberate distortion (or omission), irrelevant data, failure to specify, accepting hearsay as fact, wild speculation, non sequitur, argumentum ad hominem, appeal to widespread belief (non-fact), argument by analogy, appeal to authority etc..

Some of the names of flaws in argumentation are in latin; because the ancient Romans already in the days of Senatus Populusque Romanus taught argumentation in their highest educational level: the rhetoric school. One of the ancient leaders of this skill was Marcus Tullius Cicero. This art has been going downhill ever since; and is no longer taught in the Finnish school system at all. And thus we can observe the results of an entire nation who no longer knows how to form proper arguments..

How many of those flaws did you notice during the last electorial debate? I noticed all the ones I listed up there, many of them over and over again several times.

Why is it then that we are stuck with a shit-level of debate and populistic bullshit one-liners instead of actual intelligent political communication?

The answer might have something
to do with this. If people are so ignorant or fraked up in their brains that 69% of them can't even name the political parties in the cabinet correctly then you might think that perhaps we deserve this?

What about us other 31% that can name them, and actually have a clue about the surrounding reality then? Is it justified to lock us in here with folks to whom every day is a miracle as they somehow manage to survive it without accidentally suffocating on their own tongue?

Nah, people have the full right to be stupid and ignorant. We have to take responsibility in our actions as individuals ourselves; and if we are not happy with the situation we must work to change it. Being stupid, or being ignorant, is no reason to limit anybody's liberties and individual freedoms. Even if the person is so extremely stupid that he's a danger to himself. Not even then.

We can work towards these communication ideals. Let's hope they could someday shadow the real state of Finnish public debate.

---

Another suggestion by Monday Morning was;

We need a new mindset in society.

From To
Economic politics Innovation politics
Political reforms Organizational/institutional reforms
Public solutions Public-private partnerships
Extra hands New technology
Bureaucratic leadership Personal leadership
General solidarity Flexible solidarity
One-size-fits-all Customfit offers
Tax financed welfare Public-private financing
PUBLIC WELFARE CULTURE FLEXIBLE INNOVATION CULTURE

(this blog doesn't allow me to format a table with full html, sorry for the crappy looks of it).

Now some of this proposal is a bit too statist in my view.

Many of the most successful public-private partnerships have been the kind where the public (the state) understands to stay out of the way and let the private side and market mechanisms solve the common problem for us all. A public solution is often enough no solution at all. Government is monopoly by design and by fact; and is equally bad in serving its clients than any total monopoly is. This also applies to public-private partnerships.

At the current rate there's no change Finland could afford to maintain such massive welfare state services. Some people consider it to be "solidarity" to use force against other people and make them, whether they want to or not, by force, to help others. Using violence on others to force them to do charity against their will is not my idea of solidarity. The state should exists primarily for ensuring and guaranteeing individual liberties - which means guaranteeing very specifically that violence isn't used against anybody. A pacifistic world where the state guards its citizens against violence (even from the state itself, or from other states via defense forces) would be a much nicer place to live in than our current society, where too often people's rights and liberties are being trampled upon - often enough by the governments.

I often advocate personal responsibility in place of a forced non-optional collective responsibility (those kind often in fact become non-responsibilities as everybody resigns them; as in "I don't need to help the homeless, because the government does.. don't they have programs for that and shit?"). In Monday Morning's model this is perhaps the best part: championing for personal leadership, individual responsibility, and quite simply for being human. If you force people to do charity against their will; they are quite angry about it all the time. If they do the very same thing voluntarily they probably experience a great deal of personal reward, bliss and happiness from it. By forcing them, you take out the joy in giving. Think about that.

One of the central things on MM's model is flexibility: they have quite keenly realized that the world, day and age we live in can't continue in a happy state with the old slow moving non-flexible models. We need to be more like agile startups as a society: experimenting, failing fast, building models and structures that make us quick to adapt to change. Quick to reinvent and change ourselves, like Proteus of legend. Laying the foundations that allows us to weather an occasional tempest and stay firm in the mids of chaos and conflict.

Sense Amid Madness, Wit Amidst Folly.

Perhaps it would be time to abandon a lot of the old thinking and thought models in Finland as well? Perhaps take a few lessons from our Dane neighbors and see what as responsible individuals we could get done about the whole enchilada?

Or perhaps a better way to go about this entire thing would be to form a startup coutnry: www.seasteading.org is your answer there. The world needs startup nations and societies as much as it needs startup companies. Governments are monopolies, and the business of government is an entire industry with very little innovation and competition. We need Seasteads to offer us alternatives and come up with new models. That starts to have a great deal of appeal when you consider the alternative route of compromise upon compromise and slow incremental change.. doesn't it?

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Independence day politics and societal ideas

Today, 6th of December the Republic of Finland celebrates its 92nd Independence day. The year 2009 has also market the 70th anniversary for the beginning of Winter War. Finland held firm against vastly superior numbers of the Soviet forces, causing them massive losses in their illegal attack against Finland.


Finnish Winter War soldier with a machine gun
CC Attribution: Matti Mattila@Flickr

Some of that fighting spirit still remains and has recently seen itself realized in the middle of this economic crunch - perhaps most notably in the increased effort and more positive attitude towards entrepreneurship and grass root sources of economic well-being for Finland.

Over the past months and weeks I have had many good conversations among friends, professionals and with people that care deeply about the state of this nation and its future. Those conversations have sparked a few radical and highly idealistic ideas I'll open up for discussions and debate here.

The problems

Problems are always a decent starting point. After all if there are no painful symptoms the cure is less likely to get developed. Finland today is experiencing at least these symptoms:

  • Short-sighted politics is hindering true long term sustainable change and development.

  • Politicians are always waiting for "the next elections" and frequently using that as an excuse for inaction. Most recently this precise excuse has been cited as a rationale to do nothing about innovation policy and esociety issues.

  • Finland in 2009 seems to be a country of little strong opinion, little true action and truly getting things done. We seem to be about writing plans, memos and organizing committees that have very poor net impact on reality. Lots of movement and hazzle, but very little measured net change towards the better.

  • There seems to be very little true transparency and accountability, especially in politics, but also in our courts and different areas of public service.

  • Our politicians create more, and more complex, laws all the time; yet the problems they are aimed to fix seem to grown and linger in there. Doesn't this make the effect of laws quite questionable in the current system? What exactly are they good for if they don't solve the problems they were supposed to solve?

  • Finland has a few taxes that arguably cost more to administer, oversee and inspect than they actually produce in tax revenue. Apart from being just plain stupid; this is also a problem that hinders growth and prosperity.

  • There are additionally even more taxes that place such a heavy tax burden on various activities that it starts to limit overall growth; so instead of producing more tax revenue for the state (which should be the idea), they actually produce less.

  • The sources that would create more wealth and prosperity; like growing companies, new ideas, innovation, entrepreneurship, are not currently truly supported and are not seen as champions of society; instead they are something that Finland in 2009 over-regulates, inspects, taxes to death, and apparently tries to make sure that no success would be possible.

  • There are numerous areas of over-regulation where the jungle of rules and intervening by society is absurd and starts to sound "pretty Kafka".

  • Is the role of government to maximize its involvement in everything? Stick its costly and official fingers in every pie it can find? Or should the role of government to let those societal elements more eager to grow, change, prosper and radiate well-being around them to do so freely? Stay out of their way and get involved in as little as possible?
  • Radical ideas

    Idea Number 1

    Let's get rid of using "the next elections" as an excuse forever. Here's how we can do it:


    Finnish Parliament House.
    CC Attribution: Miemo@Flickr

    Currently Finland has 200 members in the parliament. They are elected every 4 years for an unlimited number of terms. Changing this naturally would require changing the constitution, but let's ignore that hurdle for now.

    200 parliament members can stay. They get elected 100 members at a time every 5 years for a term of 10 years. Nobody can ever get elected for a second term. Ever. No exceptions. The first 100 to go would be selected by their parties (or alternatively: at random) after the constitutional change.

    This would create a parliament that has a "junior" group and a "senior" group. The seniors will always head out permanently after their unique and one-time-only term of 10 years. There would be some serious circulation in key posts like Speaker of the parliament, chairmen of different committees etc.

    Nobody could ever again use "the next elections are coming" as an excuse, because there would not be re-election, not for them anyways. Also in combination with this unique 10 year term each parliament member would be required to state their objectives and goals in getting things done for each year. This would mean answering: what positive things they want to get done for Finland? What kind of end result they desire to achieve that benefits the nation? Do note that "increasing taxes" is an invalid objective; as it doesn't necessarily lead to anything, and increased taxes can result in less tax-revenue (not more). These would be goals, desired outcomes and true end-objectives, not the means, mechanisms or petty ways of getting there. Strategy, not tactics. Vision, not micro-management.

    They would have a scorecard and each year they would be evaluated by an independent party (not answerable to the parliament) on how they did. After the term of 10 years is up the permanently ousted politician would receive a permanent final evaluation on how successfully the objectives were completed in reality: and since this is a unique term, the politician would have a one time chance to get things done, and if that doesn't happen then its going to show on a permanent irrevocable record. Ineffective and useless politicians that get nothing done can currently just "weasel out" the backdoor and there's nothing to really hold them accountable in our society. This would force plenty of things to be transparent and the success of each parliament member would be on permanent public record.

    Additionally the scorecards would exists for each political party: the successes and accomplishments of their members would be summed up, evaluated as a group, and published as a permanent public record. This would make the performance and ability to get things done transparent between parties; and I'm sure the most successful ones would increase their fan-base, while those who get nothing done year after year would be weeded out like the useless bladders of hot air that they are - and political groups that can actually contribute to the success of this nation would replace them.

    Idea Number 2

    Taxes should increase the size of "the pie" for us all. Optimize and maximize the whole; maximum prosperity, maximum well-being, maximum wealth, maximum happiness for us all. Taxes should not crunch and limit the size of "the pie", cut growth, increase complex administration at the price of everything else etc.

    So why not instate an all-governing tax law that contains a mechanism that ensures successful taxation?

    Here's how we could do it:

    Removing any tax would require 50% simple majority in the parliament.

    Establishing any new tax would require 2/3 majority.

    Every expense, account, cost, etc that is spent by the government to administer, oversee, inspect, analyze, etc any tax would be mandatory to get accounted to every tax in our nation. This would include all imaginable costs: including the costs of the parliament creating a tax, down to the cost of maintaining statistical information related to a tax. All costs would have to be accounted and assigned to all taxes: so we would know at all times exactly how much each of our taxes costs to upkeep and how much tax-revenue it produces.

    Creating this report of costs vs tax-revenue per tax would be run every quarter, or alternatively every 6 months. If any tax would be on the red (it costs more to maintain than it produces) for two periods it would automatically get cancelled and nullified forever. The costs associated with it would have to be assigned to burden other taxes; or the officials would need to get rid of them all together.

    This way our society would never stubbornly upkeep irrational taxes that produce less than it costs to have them in the first place. Also a public high quality statistic on all taxes made in this manner would open up taxation to more political debate and the bad taxes that clearly don't work would get taken down pretty quick. Exposing the upkeep cost of each tax would also incentivize discovering more efficient ways to keep the system running.

    Additional means to chop down bad taxation would include giving the president a strike-option-veto on tax laws. This would mean that the president could approve tax laws only partially. He/she would have the power to overstrike any useless text from the new tax law, and approve only what's left there. If the parliament would not like this, they would always be able to easily cancel the law (with 50% attending majority in a simple vote, on an ordinary day).

    Idea Number 3

    When something gets created as a law the politicians and officials have a clear objective in mind; "what's this law trying to solve?". When the process rolls onward is there a mechanism that would check in retrospect did the law actually yield the intended result? There isn't. No checks and balances, no followup. Just more laws piling up.

    Each law should have an inbuilt set of metrics when it gets created. Surely each time our officials and politicians know for certain why they are creating the law in the first place, right? The objectives should be apparent in each case. Laws are typically there to protect society, citizens, to fix a problem, to accelerate or limit, etc.

    Creating a set of metrics for laws should not be all that complicated. Following up on how did the law actually impact those metrics - that's very complicated. However gradually changing the entire system towards this kind of accountability should surface more reliable and realistic objective ways to make this kind of assessments. Perhaps we could indeed check if a law is leading to results it was intended to accomplish.

    If a law would successfully reach less than 25% of it's metrics it would get automatically cancelled forever. Written into history as a failed law, and added into the public record of all the politicians who created it - linking the accountability for creating bad laws to the people that decided to pass them anyways. LexKarpela and LexNokia anyone? Who's accountable for those piles of manure?

    If a law would fulfill more than 25% of it's metrics, but less than 75% it would automatically go for a second iteration round. The law would re-enter the parliament and it would be obligatory to fine-tune it to be better, and fulfill its set of metrics more successfully.

    Also there could be a system that would followup the net effectiveness of laws all the time; and when the world changes (as it so often does, with absolute certainty), the laws that would start to loose their effectiveness would get flagged, become visible, and would get iterated with less resistance to change.

    Trust me, Finland does not need laws that don't function as they are intended. Laws that don't produce the desired good outcome for us all. Laws that exists only to complicate, cause problems and slow us all down. There needs to be transparent accountability and scientific validation of the theory that creating laws actually matters and changes things towards the better. We have all the science to do this if we want to, its just a matter of willingness to be accountable and transparent.

    ---

    Getting rid of short-sighted politics always waiting for "the next elections". Automatically getting rid of taxes that produce negative results and of laws that don't work as intended would be great. It would open up society to highly develop in its ability to adapt, compete, and cope with the inevitable change. Perhaps even a society that cares more about optimizing the whole, reaching very beneficial goals and ideals - and cares less about the petty politics and things of small importance.

    For example: it is far less important that a paper factory worker gets to keep his job stubbornly forever, no matter how much the world has changed around him - and far more important that he is allowed every fair change in society, gets to live a healthy fulfilling life with plenty of opportunities to do something else besides just slack around in a paper factory.

    ..Perhaps ideas are not quite dead yet. What do you think?

    Happy Independence day Finland!



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