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US citizen who relocated to Finland ~4 years ago here! >[D]o you think the current economic difficulties are structural or just a temporary consequence of war?

US citizen who relocated to Finland ~4 years ago here! >[D]o you think the current economic difficulties are structural or just a temporary consequence of war? Definitely structural, but I am far from an expert, caveat emptor. The high unemployment rate even for highly educated workers in a country with such excellent English proficiency (== access to worldwide capital markets) is my main indicator. I really do think the heavy taxation structures at most levels of society here is driving out entrepreneurship in droves. This isn't the conclusion I was most hoping to reach before moving here; there's a world in which a robust safety net, paid for by such taxes, actually incentivizes entrepreneurship by cushioning the fall - but I just don't see the evidence for us living in that world, at least not here. The good news is that that means Finland's current problems are largely self-imposed. Lightening up this tax regime for a few decades will probably lead to an economic miracle for the country. Finland has many other factors in its favor and I'd love to see that happen. (I probably won't stick around for it, simply because I'm starting to get sick of working 50,000€ jobs that currently pay >$150,000 in the US. But a few decades of above average economic growth can work wonders, if the country decides to go in that direction, and I may well end up coming back for my twilight years.) >Are you concerned by the geopolitical situation, with an aggressive neighbor possibly escalating sometime in the mid term? Not at the moment, but that's very much because of NATO. The war actually broke out just a few months after I moved here, and the period between then and the NATO acceptance was probably the most terrified I have ever been in my life. War hits different when the aggressor actually shares a border with you. I don't think I realized quite how lucky the US was in that regard geographically until it actually happened. I had nightmares quite regularly during that time and it became a daily topic of conversation in my house with my then-fiancee, now-wife as to whether we should cut our losses now and move to the US, instead of waiting an unknown amount of time for my Irish passport to be granted to me. If NATO dissolves we are packing our bags and getting on the next flight to Boston, or at least Oslo or Dublin or something. That's not really "Finland's fault", of course, if anything Finnish-Russian diplomacy has been the eighth wonder of the modern world for the past 70 years or so.

capisce 2y ago
> This isn't the conclusion I was most hoping to reach before moving here; there's a world in which a robust safety net, paid for by such taxes, actually incentivizes entrepreneurship by cushioning the fall - but I just don't see the evidence for us living in that world, at least not here. This seems to be the case in Sweden. Very high taxes, but a robust safety net, and a very high startup activity per capita: https://www.business-sweden.com/about-us/media/press-releases/press-releases/2024/swedish-startups-have-doubled-in-value-in-the-last-five-years-with-impact-taking-center-stage/ https://www.business-sweden.com/about-us/media/press-release... So I'm not sure it's the taxation structures that are mainly to blame.
- hiAndrewQuinn 2y ago
  Well Sweden and Finland's GDP per capita are currently within only a few thousand dollars of one another, with Sweden slightly taking the lead. I found that out just now, actually, and find it mildly surprising, I thought Sweden was further ahead. So I would first claim that as grounds to say Sweden is mostly suffering under the same yoke. They would probably become a richer nation faster by cutting back on the taxes, same as Finland. In fact the fact that the GDPs are so unexpectedly close makes me more convinced their mostly similar taxation structures are to blame, not less. That being said: You are right, it's interesting that the combined worth of all Swedish startups appears to be very roughly 2-3x that of the combined population-scaled worth of all Finnish startups. What's the deal? A Gini coefficient comparison shows a mild but not overwhelming difference. Sweden's currently hovers around 0.30, while Finland is at 0.285. (The US Gini coefficient is a whopping 0.48 or so for scale.) I guess the only thing I could point to as a casual mechanism is that Sweden did in fact start quietly neoliberalizing out of some of its more distortionary taxes in the 1980s, in a way Finland hasn't seemed to yet. Sweden has abolished both its inheritance taxes and its gift taxes, for example, whereas Finland retains both (details vary a lot but you can ballpark 10-15% for both of them for ordinary folks). Maybe that has a disproportionate effect on the kinds of people who want to try their luck getting uber wealthy, so they can pass something down to their kids? I don't know, seems like it doesn't explain enough of the gulf. Maybe you can explain the $4k or so of extra GDP per capita through a confirmation of higher Gini, less tax distortion in certain areas, and being closer to the continental mainland. But that's a small enough difference that you could also feasibly call it due to the random walk of history. Both of these things are mysterious to me.

capisce 2y ago

> This isn't the conclusion I was most hoping to reach before moving here; there's a world in which a robust safety net, paid for by such taxes, actually incentivizes entrepreneurship by cushioning the fall - but I just don't see the evidence for us living in that world, at least not here. This seems to be the case in Sweden. Very high taxes, but a robust safety net, and a very high startup activity per capita: https://www.business-sweden.com/about-us/media/press-releases/press-releases/2024/swedish-startups-have-doubled-in-value-in-the-last-five-years-with-impact-taking-center-stage/ https://www.business-sweden.com/about-us/media/press-release... So I'm not sure it's the taxation structures that are mainly to blame.

hiAndrewQuinn 2y ago
Well Sweden and Finland's GDP per capita are currently within only a few thousand dollars of one another, with Sweden slightly taking the lead. I found that out just now, actually, and find it mildly surprising, I thought Sweden was further ahead. So I would first claim that as grounds to say Sweden is mostly suffering under the same yoke. They would probably become a richer nation faster by cutting back on the taxes, same as Finland. In fact the fact that the GDPs are so unexpectedly close makes me more convinced their mostly similar taxation structures are to blame, not less. That being said: You are right, it's interesting that the combined worth of all Swedish startups appears to be very roughly 2-3x that of the combined population-scaled worth of all Finnish startups. What's the deal? A Gini coefficient comparison shows a mild but not overwhelming difference. Sweden's currently hovers around 0.30, while Finland is at 0.285. (The US Gini coefficient is a whopping 0.48 or so for scale.) I guess the only thing I could point to as a casual mechanism is that Sweden did in fact start quietly neoliberalizing out of some of its more distortionary taxes in the 1980s, in a way Finland hasn't seemed to yet. Sweden has abolished both its inheritance taxes and its gift taxes, for example, whereas Finland retains both (details vary a lot but you can ballpark 10-15% for both of them for ordinary folks). Maybe that has a disproportionate effect on the kinds of people who want to try their luck getting uber wealthy, so they can pass something down to their kids? I don't know, seems like it doesn't explain enough of the gulf. Maybe you can explain the $4k or so of extra GDP per capita through a confirmation of higher Gini, less tax distortion in certain areas, and being closer to the continental mainland. But that's a small enough difference that you could also feasibly call it due to the random walk of history. Both of these things are mysterious to me.