[{"slug": "644-piilaakson-kasvun-kaava-mickos-neuvottelija-362", "title": "Silicon Valley's Growth Formula | Mårten Mickos", "titleOriginal": "Piilaakson kasvun kaava | Mickos | #neuvottelija 362", "guest": "Mickos", "guestsCanonical": ["Mårten Mickos"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/marten-mickos/"], "episodeNumber": "362", "publishedAt": "2025-11-26", "duration": "01:05:39", "format": "full", "topics": ["saas_software", "leadership_governance"], "description": "Silicon Valley's growth formula | Mickos | #neuvottelija 362. Mårten Mickos on the core lessons from his book Kasvun kaava (The Growth Formula) for exponentially growing companies - why Silicon Valley succeeds again and again at creating explosive growth by focusing on immediate output, how a CEO can build category winners, and what Finns should do to get their economy growing.", "page": "https://www.neuvottelija.com/podcast/episodes/644-piilaakson-kasvun-kaava-mickos-neuvottelija-362/", "text": "[00:00] Alright, welcome to the Neuvottelija channel. My guest is Mårten Mickos. Welcome. Apparently, you're not coming from Silicon Valley this time directly. Not quite directly. I've been in Finland now this week. Yes. And this is being recorded just before the Slush week, and I've been listening to your book 'Kasvun kaava' (The Growth Formula), and I think it's an excellent book. I've read several similar ones, such as Jyri and Timo's Lifeline book, and then the story of the Wolt founders, and in all of them there's something good in their own way, but I think this was perhaps the best of those three, if I can say so. Yeah. So, this was concrete anyway and it answered that question you raised here about what the growth formula is. Yeah. And then you avoided the kind of thing where one could maybe sense a bit of negativity, but it still went through the positive instead. We looked for the growth formula instead of wallowing too much in why there is no growth. Sometimes you do have to think about why something doesn't work or why there's no growth, but when you start acting, you have to forget those things and just focus on opportunities. Even Peter [01:18] Drucker taught that all successful businesswomen and men, businesspeople, they focus on opportunities rather than problems and don't problems. They solve problems, but they focus on opportunities. Yeah. And then maybe my two, I read Steven Covey's Seven Habits of Highly Effective People a long time ago, and the lesson from that book that stuck with me was that, well, whenever you read a book, try to immediately write down what the interesting insights were. So I think this clock speed was like a very good insight. So, a small ad in between. I also went to Slush myself and ran into Slush's former CEO Marianne Vikkula there, here's a bit of the atmosphere. She has also visited Futucast. In that episode, the platform economy is discussed. What is the societal impact of the platform economy in this day and age? Where have we come from and where are we going? We can for example, consider that credit cards were the first platforms. What is the platform economy really then, and what all does it include? Do these companies create some new value, or is it just about existing value [02:27] redistribution? Go listen to the conversation between Wolt CEO Marianne Vikkula and LUT professor Paavo Ritala on Futucast. And back to the episode. Let's first go through that you noticed that in Silicon Valley there is a completely different clock speed than here in Europe. Yes, it is. Everything there is nimbler, faster, more immediate. And sometimes I have said it like this: in Europe, a million is a lot of money, but in Silicon Valley, an hour is a lot of time. Yeah. And explain why it's like this. You have this kind of exponential well, growth theory in it, that time is not just so when I think about it, that when I've tried to explain or like discuss with acquaintances who are in traditional business but then if you're not an entrepreneur, if we consider society, then of course understand what I mean? And then I realized that of course in many industries and society there's this linear behavior, that what exists, it might grow a couple of percent a year or 3%, but it grows steadily. There's a straight line that grows or shrinks or whatever, but it like changes linearly. But with digital in sectors and industries, changes are exponential, meaning compounding. And if something starts to rise, it starts to rise very rapidly. If it starts to fall, it falls sharply. And as we know, [03:54] pandemics follow this exact same pattern, where they can very quickly start to grow. And when business exhibits this kind of exponential behavior, it means that while in normal business a day's delay isn't visible anywhere because everything is linear, in a digital world like this even a single day's delay can be too much, because then competitors can overtake you, and if the number of users or customers doubles once a year, for example ...or once every six months, then these effects compound, meaning that that... the most valuable thing is time, so you have to move forward quickly because... otherwise these opportunities will have already gone to competitors or elsewhere. Yeah, I'm an investment banker, so in a way you see this in... investing, that all of you who haven't already invested, you have... lost a lot of time starting that accumulation from the beginning, where it is... like, really valuable, that you invest with, say, an 8% stock market... [04:55] yield in your portfolio. Yeah. So start today, so that even if... the cycle feels bad, you will then thank your maybe 10-year-older self... that the compounding effect, interest on interest, is like incredible. This same phenomenon, like in business, maybe I also started in IT, my career in computer science, so maybe this bit comparison is, I think, quite good, that if you have a linear series that increases by one, then well, the derivative then is like that one there, so it grows like one—from one comes two, which becomes three, then four, but then a binary series is 1, 2, 4, 8... and in a way, if you miss that one at the beginning, then that doubling gets delayed. Yeah. Like there's this saying or a riddle where there's a pond filling up with water lily leaves or something, and then it says that every day, uh, the number of these leaves doubles in 50 days the whole pond fills up. And then it's asked, how much is there after 49 days and it's like a one-day difference. It takes 50 days, but with a one-day difference, it [06:12] is half of that whole pond. Exactly. And it's, well, and another comparison is the inventor of the chessboard, who placed that one, like, well, grain of rice, and it then became like an impossible series. And these compounding things are such that you don't see them in everyday life, like in the kitchen when you're making food, it's not exponential but linear. We are all so used to linear formulas and and these, like, trends, that it's hard to remember that the digital world is exponential and compounding, and that's why speed is so valuable, or like, moving fast is so valuable, even so valuable that it's better to do things faster with mistakes than to do them slower perfectly. And it goes against all kinds of things we've learned from our mothers, when a mother says, that it's not the quantity, but the quality. And then they say that you have to do things well and always be proud of what you've done, and you should sleep on it and things like that. For our folk culture, like many folk cultures, guides us to think that it's better to do it perfectly now than to do something messy quickly, but in the digital world it's worth doing things messy quickly. That's how it is, and PAP Laaks is like a classic idiom, that mo move fast and break things and fail fast and then, for example, this 'Zero to One' [07:36] one lesson from the book, like, that it's worth being the pond where you have half of that market or even all of it. So in a way you end up in a dominant market position, which is of course awkward to say regarding competition law, but it is delicious if you are the industry winner. Yes. But when we repeat these truths like this, everyone says 'yeah, yeah, that's how it is'. But then it must be remembered in daily work. People don't remember it. And then they still revert to doing things slowly and 'let's think about it some more' and 'the meeting was today' and then only making the notes three days later or something, and time is constantly being lost, or meetings are held that are an hour long, when a 20-minute meeting would have been enough. So, like, this if you believe in this exponentiality and the importance of speed, then you have to also remember it in everything you do during the workday. Yeah. And related to this is my other, like, strong takeaway from listening to the book; it's very simple, but it was intriguing to me, meaning that since it's inevitably the case that time is not just money, but perhaps even exponential money, then in a way, cold-starting yourself is simply just taking the first step and then taking the second. I don't know if it used exactly these words, but [08:59] but this just occurred to me. Yes. So because it's so important that the time is like that, you just can't stay lying around like Sami grabbing you by the scruff of your neck and like, getting it in gear, one step and off it goes, and it's a bit like fooling yourself and cold starting, but our brains work in a certain way, so we get stuck in that analysis paralysis and and in a way if the whole environment in Finland is then such that it's celebrated and less is enough and happiness is important and downshifting, but if you're there in that reflection when you talked about happiness versus agility, well I don't believe in that. I believe that we can be, we have time to be happy when we handle work matters nimbly and quickly. So it's not like when I talk about the need to act fast, I don't want to stress everyone out, but I want it so that when we are doing something, we do it really fast. When we aren't, we can just take it easy and relax, and things can take their time. For example, we can do things very nimbly and immediately during the workday. Then we go to dinner, sit there for three or four hours and enjoy good food, good company, because there should definitely be plenty of those slow moments in life, but in business there shouldn't be any. [10:10] Yeah. And then partly this—I wrote a book myself—so then I noticed that when I listened to those conversations with, say, really smart people, for instance now with Risto Siilasmaa or BT Holmström, those couple of hours of recordings, so I thought that these should be published as they are, and this is what this long-form podcasting is, that you don't need to condense it to that TikTok lightning phase, but you can sort of savor those lines of thought. Yeah. And that is useful in itself. Sometimes it takes up some time, but that too is educational, when you see how people think, because there is also something in the brain that develops gradually. Like sometimes for me, I have some call, like I had a call three days ago. Then yesterday it occurred to me that only now do I understand what he meant. Mm. It took a long time before I realized that when he mentioned some things and I wondered why he was mentioning these, and then after a couple of days it dawned on me that this was probably what the core message truly was for me, and I wouldn't have been able to speed that up. No AI would have told me that immediately, but it required reflection and knowing the person and what they normally say and then knowing what they don't normally say, and [11:23] then one can evaluate what a sentence like this in this context means. Yeah, and I also believe that in the brain there is that kind of background process that also, even while sleeping or otherwise, builds those neural networks a bit more slowly, that they might then pop out from there. Yes. Sort of through the subconscious. Um, but yeah, so then when if we combine these two things, that you should always be taking those, well, nevertheless, those brisk steps in working life and in a way pulling yourself together, so that you don't just slack off or slump in that work community, then when Silicon Valley has this, like, shared perception of time, it sort of automatically, well, synchronizes you to that, like to that clock speed, that's true and then, well, in a way I think it was an interesting observation about these social encounters, that they too in a way follow that logic, that people are quite, in a way, goal-oriented when they meet people. really fast, and it's just a practical matter when you meet so an insane number of people, so basically I've been in Silicon Valley now uh 22 years, so during that time I met about 20,000 people, so many, that business cards were exchanged and names were known and so on. In a way [12:39] you have to somehow manage the processing of 20,000 new contacts. How you sort them, how you group them, and how you handle them, so it's then quite clear that you can't spend much time with everyone, but you have to occasionally state, now we've already shaken hands and that was it and nothing else needs to be done. M and Americans have learned it because when they're in a hurry and there are so many of them, everyone's in the same place and they're also the type who don't get angry about someone being in a hurry. In Europe, we have a bit of a habit of, like, getting angry if someone doesn't spend much time with us. But Americans don't think this way. They think that okay, 30 seconds is enough and it can still be useful and you can return to it later, and it makes, like, networking much, much more efficient when no one has to stay hanging onto something that doesn't feel right. Yeah. And then I think that Silicon Valley community comes across quite well, that there is still that, like, physical mass there, that people are in a small area and then there are many kinds of events where people bump into each other even physically and those encounters and team building and in a way new starts for experienced serial entrepreneurs and then in a way that cramming of smart people into a small space is then well that we have it maybe a bit too sparse here in Finland. [13:59] So the density of know-how is a very important thing. But then another thing is that in Silicon Valley, now that I reflect on it, in Silicon Valley everyone, almost everyone are doers, but in Finland and Europe there are many of those quibblers, commentators, questioners, ponderers, thinkers, writers, readers, so a lot of those who don't do, they just comment or reflect or criticize or something. They're like in a secondary role, and when there are too many of those in secondary roles, then this critical mass can't form. You can't have those really great conversations because there are too many people who just want to argue about something. And I think it's a particularly Finnish disease, that there are people—I don't know if they're always like that, but it feels like there are individuals who do nothing but negotiate and argue with everyone, but they themselves don't do anything. Yeah, yeah. And sometimes people just don't realize that's the case. I remember, uh, in my high school class there was this top a smart guy in the media industry like Roope Lehtinen, well, sometimes he got frustrated I can say, and he spoke a great truth, which I probably chewed on bitterly at first, that 'Sami, the point of a debate is not to disagree.' And in a way, I noticed that I had a bit of that, you know, where it's just great to always find flaws in someone else's argument. In my opinion, I think an argument should have [15:23] that quality, yes, but whether you are a doer yourself or in a supporting role. Yeah. And in Silicon Valley, what's so great there is that everyone is some level of doer, so they can have many opinions, they might debate and discuss, but almost all of them also genuinely build or produce something. Yeah. Yeah. And I find many such in Europe and especially in Finland places where there are only discussion clubs and the goal is only discussion. That the goal isn't to do something. The goal is only to discuss and then the most important part is left out, that something is genuinely being done. Yeah. And then, well, we now get to perhaps your, uh, first Silicon Valley, uh, well, big success, namely MySQL. There, Monty Widenius and then Swedish, well, database experts apparently found themselves there a bit before you, so you were sort of brought into it as CEO a bit later. Much later. These were the founders, they were [16:30] had already collaborated for 12 years, like doing IT projects together and they had already been developing MySQL for six years before it was made real. It had a little revenue, but it was made real. Such a commercial, operational company only in 2001, meaning six years after its founding, and that's when I joined as the CEO, and yeah, so clearly they didn't have a very tight clock speed; in a way, they were building great basic building blocks of the internet age in a fine way and with code and probably with open source as well, or was it open source in the beginning? it was originally closed source, then in 2000, we switched to the GPL license, but even though it took a long time to create it, they were indeed quick back then in what they were doing, and they had this design principle, so to speak, that MySQL must save the user's time. Meaning everything must be easy, fast, effortless. They had already realized that the web world has different [17:37] selection criteria, and previous databases were all complex, slow, the kind where it took like several days to install them and then came MySQL, where it took 15 minutes and everything was running and everything worked perfectly from the start. It was really their insight that enabled MySQL to then rise to be the world's to the top. But this isn't really understood either. I was listening to Lex Fridman's podcast, which featured the founder of Telegram, when he was leaving Russia—he's in France now—and started coding well, sort of, VKontakte and then later Telegram, so he had to tackle the fact that there was no such thing as a distributed database, so that was a massive shift that MySQL and sort of open-source databases brought and enabled social media, really, so it sort of—and then thanks to you, it became a billion-dollar company, meaning the Sun Microsystems acquisition, which then went even further from there. To Oracle, but tell me a bit about that, like in a way, a CEO comes into it then anyway, and then there was a seed round, real money, and later, well, in the B-round even, even a bit more money, so how did you kind of connect yourself and this money to that like, growth equation? Well, they called me—I'm not... they called me in December 2000 and said, 'Hey, we're sitting here in Monti's kitchen and we've been thinking that now we really need a CEO for this thing, and we thought that it could be you,' [19:06] so that's how they called me, and I yelled 'no' into the phone, because I had inklings of what it would be like to work with them. collaboration. But then everything started falling into place and I joined in, and in my opinion, there wasn't anything complicated about it. I thought, okay, I'm becoming the CEO. I need to make sure that we have, that we have a company established, because there wasn't one, and that we have all the contractual matters in order—copyrights, employment. Now funding is needed, we need to get that. Then we have to think about growth. We need to have a growth strategy. I have to think about what kind of key personnel are needed. And then I just started doing it, so I don't really have a memory of there being some brilliant plan other than that what a company like this needs, and as for me, having been chosen but not yet having officially started as CEO, my task was to organize all of it, and I was busy organizing it, but at that stage we didn't have a company or funding yet, so I was paid some kind of [20:09] compensation from another company, but I basically handled all of these on my own credit card and just made sure that things were sorted out. But was it still as a founder? Since you've listened to that Elon Musk, this Isaacson biography, well, in there they also discuss how when Elon Musk joined Tesla, he wants to call himself a founder, even though factually he joined an already established company, where was the operation, as a third wheel, but she like wants to think and and the world thinks she was like a founding partner, so did you feel anyway, that you were like a founding partner in this? Not at all. People often talk about me saying that when you founded Maias, I didn't found it, and I don't even want to be a founder. It's not, it's not important to me important, and what's more important to me is a kind of correctness, what my role is, that I am proud that I am that kind of mercenary who comes and builds. And I'm really good at that and I want, that, that I'm known for it and that I'm given credit for it and that's how it [21:14] has worked. I don't have any need for that, but but here is Elon Musk, who is an incredible entrepreneur, an entrepreneur, and has built absolutely massive, enormously great companies, well he certainly has an ego in a way that perhaps isn't in everyone, nor in me. And in my opinion, it's not just an advantage or it's certainly not an advantage, because then what happens is that when there is too much power and an ego, well, it's a really bad combination. Yeah. And then, using that power of an owner and CEO, making really drastic changes, and some of them may be brilliant and necessary, but they are indeed, like, really disruptive. So if you look at how he has stormed through Twitter, made it X, and then made that xAI, well, maybe it's been a good path. Maybe Twitter wouldn't have made it without it, but there is certainly like, a lot of jobs have also been destroyed and, in a way, business models along the way. Yeah, yeah. I'm maybe not so worried about that myself, because he has the right to act like this and it has worked, so even though it was a drastic change, it has produced exactly what he wanted to produce. I wouldn't have wanted to produce there, if I had been in that role, I would have wanted to produce something else, so I would have acted differently. But if you want to produce exactly what Twitter is now, then you definitely have to act that way. [22:34] Yeah, but I mean, for himself like, that the company's task is to bolster its owner. Yeah, but that's interesting. in a way, though, it has now become a billion-dollar company, a Unicorn, and in a way if you were already there founding the company, then shouldn't you have taken that 50 percent share as a founding partner then about how you ended up in the position where you are then still, with those credentials, more of a CEO than a founding partner. Well, that wasn't on my mind. I, yeah when I think about my life and how I make choices that relate to myself, my first rule is that I seek out circles with smart and kind people. Meaning people who are both. And then when I sought out those circles and then I started doing exciting adventures like business adventures, but exciting ones nonetheless, so they aren't just basic stuff, but rather doing something truly groundbreaking, new and disruptive and such. Those are the things I want to be involved in and that's how I make decisions and then I join them, and then in a way things happen as they happen and the terms are what they are. It's not a dealbreaker or difficult; it sounds very owner-friendly and well, maybe we'll start thinking, when then [24:01] the CEO nonetheless has positive power different from the owners, but still, in that way very significant in that, well, you have nonetheless used quite a firm type of authority over that management team, so tell me a bit about what lessons have come from that side. So, in a way, the CEO and management team dynamics between them and the building of that, well, the- well yeah, I have long been very interested in leadership. When I became a leader at a young age, I didn't think then that I would become a leader. I just did what I did. But then later I have reflected that it was quite an exciting sort of journey, how I learned in scouting and then in the navy and then as a student, how I learned to lead and, and then I started reading a lot about leadership and then I thought, hey, I have my own thoughts about leadership, and it all stems from when I was like a 12-year-old Boy Scout and what I learned then, and since then I've developed, and when building a management team, I thought about it like this, that in scouting you go somewhere to a camp or the woods or you go sailing on a sailboat, and then there is like a certain number of people, and maybe you've chosen them, but maybe you haven't chosen them. Maybe they wanted to be involved, maybe they have some motivation issues, maybe they have other interests too, so as a leader, you have to form that group into something better than what it [25:26] would otherwise be on its own, and I haven't always been able to choose these people, and in the management team it can also be that when you come in as a new CEO, of course you can change everyone, like I have quite often done, but still you are also given resources, people. You have to work well with them. So my leadership is the kind where I think about what we have here now, what we have at hand and how we get the best possible result from this group and and productivity with these exact methods, so there's no extra money, there are no new people, we go with these. And I think it's a good principle, even if there were resources, even if you could change managers and recruit new ones, that's the basic idea, that these... we have, and now, now we need to perform better than everyone else in this sector. We have to be the very best management team, the very best company, and maybe we can't afford to pay magnificent salaries or something like that. We'll go with what we have, but we still have the goal of being the best. And when building a management team with that, I think [26:35] you get a natural, um, sense of what is needed, and this doesn't have to be done alone; it can be done with the management team. So in my opinion, a leader can very well share these big questions with their management team. Okay, now we have this management team. How do we make ourselves into a really tough team? Mm. And that's when those kinds of suggestions arise, from there emerge leaders, they take more responsibility and then a strong team starts to form. Yeah. Then, well, regarding these—as you mentioned Drucker—then there was Collins's Good to Great. And in that, there is sort of—was it the fifth or sixth level, that humble leader, so I think there was an interesting contradiction there since you have still, well, used quite a lot of your own publicity in leading that company, so in a way, because in my opinion, Collins's model is a bit like that humble and withdrawn responsibility-taker who, as a coach, takes responsibility, but then doesn't come [27:35] to the forefront, but then again, you have practically, well, disrupted these business models by being an open-source database apostle, who speaks very aggressively, although I thought it was funny from um, so, like even this 'kela' from 9 to 3 slogan so, here comes a side note, but when I was applying for funding for MySQL and I always thought about how I could say something clever, because I like, I like those kinds of witticisms and crosswords and Fingerpori and all these, I like those sorts of things and then if I'm sitting on a plane, I'm thinking about how I could talk about this business of ours in some humorous way, so I'm always having these things go through my head. And then I met Ray Lane, who was A partner from Kleiner Perkins, and he was interested in Majesk, perhaps in investing in it, and I was at his, sort of, summer home, meaning in a magnificent villa, and we were sitting there somehow in the backyard, and he asked, 'Hey, tell me now why you are doing this.' Then I thought, what the hell do I say now? I should say something profound. [28:46] So then it came to mind, and I said, 'Ray, I'm working 9 to 3.' Meaning I work from nine to three, which sounds so lazy and horrible that it's shocking. He said, 'What are you saying?' And then I explained, that the database market back then was 9 billion dollars. And I said I'm working towards making that nine into a three. Meaning they would shrink to a third. and then I am the only survivor. I mean MySQL survives, but everyone else dies. And Ray Lane got incredibly excited about this, because he had been Oracle's Executive Vice President and he left there, not exactly, well, not exactly slamming the doors, or somehow there was some resentment left, so for him this opportunity that we would disrupt Oracle so that it wouldn't succeed anymore, it was like the best thing he had heard. So after that, he absolutely wanted to invest in MySQL. [29:46] Yeah. And it came from that remark when I said but it worked so well, because in America, if I say 'I'm working to 3', then everyone wants to know what on earth that idiot said. Yeah. But then I'll return to the fact that, in a way, you then have to fight against your partner's lawsuit, which in the US is always a matter of life and death, but even that you turned into a win through publicity. But in a way, I want to return to this CEO role and sort of being the manager of an aggressive public image. Later on, for example at HackerOne, you've written things yourself, like Reddit posts roughly about how bug bounties and others work. So, in a way, what you're explaining—reflect on this thought process a bit. Well, as a person, I’m the type who belongs on stage; I like to perform and speak, and to get people to join me through that public in a way that I am suited for the kind of companies, where that sort of CEO thrives. And these, and especially these disruptive companies, they actually need to explain and get others on board with that disruption. That's why it's good to have a CEO [30:52] who gets involved and dives into discussions without fear, like I do. In a way, it's only logical that whoever is looking for that kind of hired CEO for a disruptive firm, then of course they will come to me, because everyone knows I can do it; I go there and I can, like, amplify the theme into something much bigger than it was and get all kinds of people excited about this issue. So in my opinion, it's not relate to ego or anything else. Except that I have a natural ability and I have like, trained it and become b"}, {"slug": "633-translink-nordic-tech-stars-negotiator-356", "title": "Translink Nordic Tech Stars", "titleOriginal": "Translink Nordic Tech Stars | #negotiator 356", "guest": "Sami Miettinen", "guestsCanonical": [], "guestPages": [], "episodeNumber": "356", "publishedAt": "2025-10-20", "duration": "31:01", "format": "full", "topics": ["ma_exits", "saas_software"], "description": "Translink Nordic Tech Stars | #negotiator 356. Interviews with participants of the Translink Corporate Finance Nordic Tech Stars event in Helsinki, attended by leading investors and Nordic SaaS and technology companies. The event took place at Restaurant Savoy.", "page": "https://www.neuvottelija.com/podcast/episodes/633-translink-nordic-tech-stars-negotiator-356/", "text": "[00:00] Welcome to the Negotiator channel. My name is Sami Miettinen. I'm a Partner of Translink Corporate Finance in Finland and we arranged a very successful Nordic Tech Stars event at Savoy Helsinki and it was attended by premier Finnish high growth technology companies ranging from relatively young but super fast growing Inven to the established mega stars such as Supermetrics. The event was also attended by Marc Irisson, the head of TMT from Paris at Translink Corporate Finance and Elie Hodara from Infra Via Partners an exciting uh growth investor in the SAS space also from Paris. We had super interesting companies and u some of them were interviewed here. uh Petri Hollmen, our former client, a Vaaka portfolio company, CEO of Lyyti. We had Vastuu Group a very exciting business on the social responsibility company and ESG Pekka Vanne. We also discussed with Harry Brade from M&A Growth Partners. He has had amazing successes [01:23] with such mega stars from Finland such as Alpha Sense and Silo AI. Harry also participated on our fireside chat on the event which was very much appreciated. So welcome Marc Irisson the head of TMT in trans corporate facts. Right. Thank you for having me. You you're coming from Paris like coming from sunny Paris. Excellent. Let's keep the politics for today and focus on the business to business (B2B) and technology. That's something what you do. What are the trends in in that sector? It's it's obvious that if you look on a general perspective M&A is a bit in a in the middle of nowhere at the moment. The truth is that the market is very much polarized and TMT the tech space is no stranger to that. Um obviously when you look at the market right now you can still see a very decent amount of deals in tech. uh I mean the latest uh assassin index that we provided to the markets show that we're still having a very high uh volume deals across the globe in the US and Europe particularly and funny enough Europe is uh is is doing more deals than in in the US for the for the time being and it's way higher than the last 6 months six years [02:45] average so there's still a decent amount of deals um but if you look into the details you will see this very polarized market is also So the truth in the tech world. So what does it mean? It means that we've been saying so for a while now now but there's a very strong flight to quality. Uh we started seeing that in the 2023 Mhm. year and it just keeps on growing and the result is that you have those assets which are flagship assets that that would go for sale at crazy high multiples. uh with twin we're talking well above 20 times EBTA multiples we're talking about still the a 10 times ARR multiples and on the other end you have these still nice assets but they're not like super qualitative assets they're just okay assets and these one I've seen the valuation come down um and I'm not even talking about those assets that are like a bit in trouble or not delivering the right [03:46] SAS metrics which are not even selling anymore because there's such a mismatch between the expectations of the sellers what the buyers are ready to to offer that isn't what either processes are dragging into months not years many years or they just don't go through and they are stopped so the market is is is still active um I very much believe that it's full of opportunities right now and if your company has demonstrating strong SAS metrics strong SAS KPIs is it is still a very very good moment to go to the markets because on the other end if you look at the private equity side of things they still have a lot of money to invest the famous dry potter I mean the pilot is not is not reducing at the moment uh money is still there and they need to invest uh because at some point I mean the the ops have given them money and they need to invest them in companies so they can provide return so it's as always in this kind of situation opportunities to seize but you have to be at the right place at the right time. Yeah. And uh you coming from the France I I have to use Y analogy here. So that could be a could be a very good vintage because the there are parties [05:05] debate in investing. It could be a good vintage for exit because if you are quality uh and and you you have a high multicol and uh here at the trans link Nordic tech starts the companies all about our five million are have a fantastic rule of 40 metrics most of the time. So I think we will have a very good vintage of companies here. Yeah that's true. I mean I always amazed by the the quality of the SAS companies in the Nordics and in Felon especially. Uh I have to say that it's uh always very inspiring to to look at those companies because a lot of the trends and the initiatives and the new things are coming from Norics uh and from France uh which is rather rather large country uh it's always surprising and and quite compelling say well these guys have something very interesting and then well they are very nice metrics they managed to grow the business very fast and the question is how how [ __ ] can they take it uh how [ __ ] can they take it alone uh within the Nordics, outside of the Nordics and and maybe outside of of this job piece. So yeah, it's very interesting. Yeah. Uh that's so Mark uh Erson great to have you here and uh may I suggest uh we finish leave the wines to you in France and uh then we share the business s we can definitely [06:22] find a deal there. Let's go and meet the fantastic Nordic tech stars in our our event. Thank you Sam. So welcome uh Petri Hman from uh LUI a VA private port company. Welcome here to transync Nordic Techstar 7. Thank you. It's a pleasure to be here. You were the helpers to get us to the VA actually few years back. Good to have you here. I mean you recently posted on LinkedIn that your company a broker a number of important smetrics. What what were those? Well, I think the most important one is the rule of 40 and uh that one we we reached now in uh with the August numbers last 12 month uh numbers and um I don't know if they're s specific but customer satisfaction NPS and also ENPS they they are on a very very high level and I I mentioned those in my LinkedIn post because I think that of course in SAS business it's well it's not easy to reach the rule of 40. But [07:29] depending how how like committed customer base you have, it's always easier to adjust the costs. But then ENPS customer satisfaction uh and and uh NPS would suffer. So I wanted to really to highlight that we reached the rule of 40, but it's a kind of like a sustainable growth company taking care of the customers and and people as well. Yeah, great stuff. And uh also another while you broke this is uh what we arrange here subway Helsinki it's only for the companies who are broken the 5 million. So you know clearly passed that already. Yes that one we have passed. So it's uh above 8 million. Yeah. And revenue is nine. So very highly AR driven business. And uh yeah 5 million we I think we reached that already in 2020 or yes do great stuff. Uh but that's still quite exclusive. I mean as an investing banker uh I view the sort of the elite prof of the Finnish uh companies to be in the businessto business s is that still the sort of magic uh segmentation in Finland to be in the [08:38] business businessto business s um uh well depend on the business because of course we we work with the uh in the event management industry man management field so that's rather niche and that's why we have been going out from the Finland some from the very very ear early days as well and and currently about third of our uh revenue is outside of Finland. The B2B sauce um that's the place where I like to be and of course uh depending of the size of the industry you can you can live and prosper in Finland as well. Excellent. And uh the then about the Finnish uh business community, it's uh I mean you probably know many people here now but but it's a small world here and especially coming from Turo region. I think it's it's nice to visit the the current capital city of Finland. Uh we are still the original capital city of Finland. Uh but I think well looking from abroad you there's the say that Finland is not the country it's a country club and when you consider tu then it's is it like the living room of the country club or I don't maybe yeah back room backstage or something like that but yes it's uh um actually I've been thinking about it many many times that [10:04] in the beginning it's a very good thing to be kind of like the biggest fish in the pond. fund. So you get everybody knows you get recognized instead of like a very tiny fish in in a huge market and then then enter a big bigger market. So that has been our strategy. We last met trans corporate finance founder at Peron's birthday party. So it was fantastic party. It was fantastic party. I think it was organized with our shop. That's so it. So if you want to have a good event management, go for it. Thank you. Exactly. Thanks and thanks for the invitation. and uh let's go meet the other other guys. We do that. Excellent. Thank you. Like I'm Harry Brad. Is that the English pronunciation? Mm GP, right? Yeah, that's right. I mean Harra or Herobra, however you want to pronounce it, but NGP is our private uh entity where we invest in AI software IT companies. Very good. and you are kind of not a family office but uh really a GP and uh growth partners but uh uh some of your early success been have been truly spectacular. You have Alpha Sense and Silo [11:13] AI which are huge wigs. Uh tell me a little about those. Yeah, thanks Sammy. Uh yeah uh Alpha Sense first 2014 we entered uh we we met Jack Koko and he really made a great impression at that point of time. And the RR or annual recurring revenue was roughly a couple of million uh dollars. Now it's just broke yesterday $500 million and the last investment brow was valued at 4 billion. So really a great success story in vertical AI and then silo AI we entered the company in 2018 one year after it was founded. We knew data oya and we have to charm data. Sadly it took nearly 6 months to charm him and at that point of time the company was roughly at couple of million uh euros of sales. Uh still braving into black and and uh well uh the the outcome was quite different from what we first expected. Yeah. And uh sounds like you kind of have a AI in both of those. uh and uh but this who you we are now at Translink Nordic tech starters and our focus is that most of the companies here are uh B2B SAS companies with over 5 million AR rs is it uh is that the sweet spot for you guys or we're we're quite flexible uh so my partner Mikoleno I mean he used to work in Deva [12:34] Cohen's lab in the AI lab he's the most famous AI person in Finland and uh so we've had for 10 years we've operated we've had AI focused roughly twothirds of our of our our companies have that flavor uh but we are we can do anything from uh VC 100k uh tickets to larger tickets so we're quite flexible and we can compete with the largest funds here in Finland so to speak and some of them are truly spectacular 500 million are just mind models that's the sweetest level of success yeah yeah can say so so I It's great to see I mean looking at AI there's the the horizontal place but I what we really feel the value is is in the vertical place such as in finance and now alpha sense kind of taking full on board the gen AI kind of features in its platform has really kind of compounded and we believe it will IPO pretty soon so that will be something uh phenomenal also from a Finnish history perspective so to speak a good point I mean on transient corporate finance publishes this uh quarterly report on S and uh in the sort of a strict strictly businessto business s which is not doesn't necessarily use AI the vertical valuation is a little bit above five times a r and uh the horizontal uh arr multiple on the listic uh companies is a little bit below three so you [13:57] can see kind of a and they used to be in the same multiple and of course over 10 times in 2021 but uh you you clearly do a lot of segmentation analysis for where the value is exactly and then of course there are the outliers such as silo AI. So in that case I mean we were when when we entered the case and to be honest we were thinking first that if we would enter kind of a free two to three times EV sales so two to 3x to the sales that would be a good outcome like EDAN and fluid are kind of the so far the flagship cases uh in in Finnish value added resellers and so forth. But then we quickly realized you know the company was looking into something quite different and then uh when OKAI came on board. So then we quickly realized we had to spin off silo genen a product company because you cannot often operate a Perth company and a services company in the same company and there things led to one thing led to another and we really worked hard with Lumi. So the supercomputer here in Finland which A and B is really stacked with the hardware and there we get to the interesting discussion of what is more important the large language models or the pipes and the energy which are needed for that and there of course we all know history silo with $665 million US versus the roughly 20 million uh sales. So there we kind of the EV sales was much higher [15:18] than we first expected. Fantastic value creation. Could you have you har Brad here and uh let's let's go meet some of the Finnish death stars here in the trans event. Thank you Sam glad to be here great. So welcome Milo B the co-founder of Inman right? Yes. It's one of the fastest AIdriven uh platforms from Finland. Could could I call it also businessto business s? Yes business business s definitely uh we sell most of the private equities investment banks consultancies so businesses only. Yeah and trans corporate finance is also a proud user it and uh it's actually quite good in uh finding uh I mean you use market tech kind of tools to find companies and but you have taken it one step further. Exactly. So whenever you really want to find a good list of companies and analyze a set of companies were really good at bringing all of that data in there and enabling you to analyze it with Yeah. And I I'd use it also for platform building and this is for private equity or company. Exactly. Exactly. Whenever you want to analyze a market or a specific company that's when it really shines relatively new but you already done number of funding rounds. Yes. Unfortunately or or happily I don't know which way to put it but we started the company a bit over three and [16:39] a half years ago. I mean at the very beginning we raised like 125k. I don't know what to call like French Family Fool funding or something like that. Then after the kind of first year we raised our 1.5 series seed and now kind of beginning of this year we raised our series A bit over 10 million round. Yeah. And I noticed on your cap table one of my generations uh I by far the most intelligent guys Tom W is with through joint defects is also investor. Exactly. Yeah. And he's been investing more I think Shroud as well. So I think he's happy at least at the valuation growth. You also like more global and uh strong focus in the American market. Yeah, exactly. Around 60% of our AR comes from the US, 30% Europe, 10% rest of the world. It's a very global product. So really anywhere you want to analyze companies worth for Finnish company that's always good ambition. And uh one of the persons I interviewed here was Harra and he was talking about alafasense having already [17:42] 500 million AR. It's like a you're not quite there but you're growing very fast. So rule of 40 all the time. Yes. Well rule of 40 is kind of funky when you're rowing 700% a year. It doesn't work that well. It it becomes a funky funky equation. Rule of 700. Yeah. Something like that is closer to it. But uh eventually obviously as we continue rowing more and more it has to stabilize a bit and we'll afford it becomes more more relevant there and hopefully someday catching up to options in the growth rates as well. Your funding is uh is kind of the growth driven but also I guess capital management capital management I guess it's cost some money to generate a bank. Yeah well I mean we have to invest a lot into the product and it is a product company there's so much things that we can do with the product. So like investing more and more into it just makes a lot of sense and also obviously we were going so fast the customer acquisition wasn't very profitable. The customers weren't very happy with the results that they were getting. You are in the sweet spot where you use AI uh to try S. So I is that the sweet spot at the moment? I mean it is a compared to starting a different type of startup I'm very happy that we started a startup that's like a B2B SAS with an AI focus. It's a it's a good space to be definitely. I was yesterday in the Finnish uh Gina agentics network which was like a couple of weeks ago and already got like couple thousand [19:05] people and uh I did stuff you can do with like AI in a white code. It's also can be a disruption but if you born AI driven then you're kind of the one disrupting it from somebody else. So that's always good for you if you're on that side. This is a small community. uh we'll see a lot of friends in this event companies with high ARS and good metrics. Uh is the businessto business SAS community something that should still focus on? Definitely. I I'm a big believer in guess like B2B SAS and a bit of AI sprinkled on top of it. It's just a fundamentally really good business model. What I always find really funny about it is that like we let's say we sell to our customer and they buy our tool for€ 10,000 euros and we're actually very happy like we got 10,000 euros out of it. Uh but it's so amazing. They pay the 10,000 every year from that point on which is which is I'd be happy with the first 10,000 but they keep paying us as they continue to be happy. It's a it's an amazing business model and there 700% growth I guess some negative cash flow for the [20:08] growth so the profitability I guess in the in the face up phase but the net revenue retention and churn are still yeah you can get obviously leader from like net revenue retention churn figures you get a lot of indication of how how profitable the growth is actually but also things like CAC uh CA multiples and like customer acquisition costs and just you can look at the customer usage as well to get indications of like okay what's the gross margin going to be if there's like usage costs and that kind of things and uh do you have time to do like the key account management that that kind of growth you have to automate it. Yes. Well I mean historically we were really poor like uh if you think about the situation two years ago we didn't have anybody doing it but now it's you know six person team doing customer success and it's like a proper function but two years ago it was it was me. It's a inspiring story and uh you being um relatively young guy with with your co-founder because you have good chemistry with your partner team. Everything's been working really well with us. We have very simple structure where I do the commercial side, they do the product side and that has worked really well for us. Yeah, you you haven't started white coding yet. Yes, unfortunately there would be so many good features coming out so quickly but excellent. Good having you uh Neil and uh it's a good product and thank you for having me. Welcome uh Pekaban from Basto Group. Uh thank you. That's the you have over 20 million of revenues but what exactly do you [21:30] do? So we are a compliance uh services house uh offering various kinds of compliance as a service uh products. Uh our services help companies understand uh compliance requirements, show their own compliance and monitor their suppliers, customers or any other corporation partners uh compliance. Great to have you here. I think you are bought on by one of our favorite family over Capitalist. That's correct. Yes, we uh just did the deal with them on very early today. So So we love those guys. uh but uh it's uh this event where this is recorded is translink Nordic tech stars and uh a lot of the companies you you have make here on the software as a service business. Do you have that kind of a recurring revenue element in your business? We do. Yes, we we are almost 90% recurring revenue and strive to be maintain that ration also going forward. Okay. But you have a little bit of services. Some of our services were short consulting or let's say help to our customers in the beginning and not all all services uh renewed automatically but almost all. Are you not really a wreck tech? So sometimes people try to kind of lead into that space where the you have to do certain bureaucratic functions because you hate them you outsource it but uh you just need to do things right. Is it kind of the you should have the ESG joint driving your [22:56] business? Absolutely. Yeah. So, so what we do is we make uh socially responsible business as easy as it can be so that it actually happens in society. That's our mission to advance the responsible society. So, we want to free the particularly the midsized company from the headache of of compliance management so that they can focus on on serving their customers and what they're good at. Was you translate it? Was it means responsibility? So we we have coined the term we are the company carrying that name here in Finland. Do you use that probably when you go over Finland? Absolutely. And uh very proudly and and that's that's the main reason why most of our people actually work at West Group and where they where they stay. Yeah. It's it's it's good to be on the on the side of the good guys. Absolutely. And now at this uh Nordic Tech Stars, we have both investors and uh some of the leading Finnish companies here, but we also have a lot of international guests here. How is your internalization strategy? Well, so so we we are we we are a growth company. We want to be a growth company and uh we have a lot of opportunity still in Finland. Uh we want to broaden our service offering. Uh regulation keeps mounting up. We want to be there for our customers to solve the future needs. We can still expand to [24:11] uh some industries where we are underpenetrated. Um u but yes internation is something we're working thinking very hard about and uh we hope to see that in the coming years uh in the next stage. Yeah. uh would you entertain doing a bit of a mergers and acquisitions to get that going? Well, Vto Group did its first acquisition ever this spring. We inquired a company offering uh legal uh compliance services and uh it wasn't the last one we we entertain. That's yes. Yeah. But yes, acquisition could could be a way of starting an international side of our business. Excellent. Good to have you here in the among the rest of the native tech stars. And uh I think let's go ch that the people in this very thank you for having me here. Bonjouru Elliara Infra capital great to have you in Helsinki transl you coming from Paris I take it and can you tell a little bit about your company especially it's a s part of the fund. Sure. Uh so Infraia Capital Partners was [25:16] originally launched in 28 as an infrastructure investment firm. So we 14 investments in Europe so far. Two in the Nordics, one in Finland, one in Denmark. In Finland it's a company called one year that we did say PSG equity. Uh in terms of deal structure, we have very flexible. We invest as minority orders as well as majority holders. We are very flexible on that. The only nonflexibility we have is that we don't invest in consumer businesses. So it's pure B2B software. Uh we are 11 people sitting in Paris uh with asset managers and investors in the team and we are part of the global infrastructure partners platform which provides us uh and provide a company support in head hunting cyber security issues compliance legal issues during the holding period I would say free of char it's not it's completely free of charge. Yeah. Uh great focus. So uh uh we f at least from an industry banker's point of view are very good in businessto business SAS companies. Is that the kind of what are you looking and what kind of companies in that segment you would be looking here in Finland? I mean we are we have sector understanding in terms when it comes to SAS we like critical industries like cyber healthcare you name it but we we are very flexible and what we like with Finland and we have seen it with one click LCA and we the partners of the team that one of the department visiting in for instance he was he was at his previous film [26:39] uh what we see with this kind of of companies that they are very mature uh early uh because they they they understand that they need to go abroad quickly to capture the European markets. So they structure very early and they are very capital efficient from the beginning. So what we like is the mindset of the the Finnish entrepreneurs that are able to structure their team very quickly and very early and royal to capital efficient plan uh to to scale in Europe and maybe in the US afterwards. But that's what we are looking for. We are looking for entrepreneurs that are very um conscious of the of the of the scale they they need they need to achieve very conscious of the the support they need to to SC in Europe. So they they come to us and they say, \"Yeah, I need to to to grow in scan you up. How can you help me?\" And we have people in the team that have connections and we can support in business development. So that's super helpful. Uh so that's that's what what we like and uh yeah, of course the Finnish uh market is is very very very deep. Uh and what I like is that it's not only located in Hzinki, but you have great companies in Ulu, you have great companies in Tere, in Tokyo. So it's a very very diverse and we spend a lot of time here in the team. We have a a Finnish guy that's called Ari Salonen. He's the former general manager of Bassware North America and he he's a Finnish guy and he founded a Finnish company Midaxo and yeah so we we kind of know the ecosystem and we like the environment and we want to keep [28:04] investing in this. This is the colors of my eyes. The final question I mean in Translink we published this quarterly SaaS valuation report and uh um rule of 40 is that something what do you use or is that just to play for you guys? We I mean we look at it uh but it's not like an investment criteria per se because depends on the the type of EBITDA first. So it's it means is it full cash EBITDA or are the expenses fully expensed. you you have a very very very negative EBITDA but a rule of 40 still below. So it's it's very difficult to say yeah I'm not investing in a business because it's below the 30. So it's it's a criteria that we look at but we try to it's a good proxy I would say but we try to um to to factor what's actually uh to be kept in that loop uh to make sure that we don't like we are not too aggressive uh on the uh on the judgment on on the company. Uh we we track it over the holding period but we are not the kind of fun that would say yeah it's below the 40 points so we are not looking at it. It's not what we walk. It's not how we work. Sorry. Uh but it's it's a good proxy. Uh but it's not the the basis built. Excellent. [29:17] And today uh you will with some of the best SaaS companies here in so uh maybe you have a had look on those profiles. So great to have you here in housing the early and infra capital. Thank you. Thank you for your time. Thank you. Thank you for watching this special episode of translars. And um if you are interested in the similar content on looking behind the investment banking day-to-day activities, let me know. Uh I could also do this in Finnish. And as you have listened this far, I would really appreciate if you could support channel by subscribing it. Please contact any of the translate finance experts. If you have a business which uh is in a similar field as as this companies mentioned here or you want to have a discussion on the valuation trends or interest banking products applicable to your your business we can be found at the www.translinkcf.com [30:20] or fi. Thanks. And the final thing you should also consider subscribing to uh Translink quarterly SaaS valuation analysis. It's a fact packed with valuation trends in the SaaS business and its constituents such as uh separate valuation for US markets, European markets and high growth companies and uh vertical and horizontal SaaS for example. Thanks for listening and watching and if you have listened thus far I would appreciate if you could subscribe to channel. Thank you. "}, {"slug": "723-why-banks-armies-and-ai-all-fall-into-the-same-trap-erik-ake", "title": "Why Banks, Armies and AI All Fall Into the Same Trap | Erik Åkesson, Elaine Stirling", "titleOriginal": "Why Banks, Armies and AI All Fall Into the Same Trap | Erik Åkesson Elaine Stirling | Negotiator 391", "guest": "Erik Åkesson, Elaine Stirling", "guestsCanonical": ["Erik Åkesson", "Elaine Stirling"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/erik-akesson/", "https://www.neuvottelija.com/podcast/guests/elaine-stirling/"], "episodeNumber": "db-723", "publishedAt": "2026-06-26", "duration": "01:16:45", "format": "full", "topics": ["ai_enterprise_tech", "leadership_governance"], "description": "Erik Åkesson and Elaine Stirling join Sami Miettinen to talk about legacy, the invisible inheritance of old systems, cultures and decisions that quietly shapes the choices an organization has left. Their book Calista's Paradox tells the story of a young jewelry designer who suddenly inherits a 120 year old gemstone company and every problem that comes with it, while a second layer turns the novella into a practical handbook on facing the past. The conversation moves from banking and aviation to the military, showing how a strong safety culture can spread too far and how the same legacy traps catch banks, armies and now artificial intelligence. Erik argues that the smartest move is rarely to burn down the old structure but to use new tools, including AI, to lift the value of everything already in place. Along the way they explore as is analysis, the hero's journey, the optimal rate of change and why risk aversion may be quietly strangling the Finnish economy.", "page": "https://www.neuvottelija.com/podcast/episodes/723-why-banks-armies-and-ai-all-fall-into-the-same-trap-erik-ake/", "text": "[00:00] This is an English language episode with Erik and Elaine, both of whom can speak some Finnish. However, the topic legacy and its problems is so important that we cover the episode in English. old Cobol software that still runs an investment bank. Things that we do out of habit, a fear we inherited from our parents or a 100-year-old family company that suddenly lands on your shoulders even though you never asked for it. That is what we call legacy. It is situation your history has placed you in and it shapes the choices you have left far more than we care to admit. And here lies the paradox. The past can be a chain that holds you in place, but it can also be a resource, weapon to fight with today. It all depends on whether we use it and whether we dare to look it in the eye. Do today's guests have built their lives work on exactly this. Erick [01:02] Åkesson is a Swede who lives in Finland. Behind him are 20 years in banking, captaining ships, military carrier, and constant reinvention of himself to the extent that he now lives here in Finland. Elaine Sterling is a second generation Finnish Canadian writer. She has published a dozen novels translated into 13 languages and spent years teaching executives to write with clarity. What brought them together was a coincidence and a bucket of blueberries. Together in just four months they wrote the book called Galista's Paradox. It is the story of a young woman who inherits a 100-year-old gemstone company problems and all and has to face everything the past has left behind. But beneath that runs something much larger. The book is also a handbook on these events. Some laws are universal. In a bank that has no choice but to be compliant. In an [02:07] airline where safety comes before everything else. In an army that fights today's wars with whatever equipment it happens to have. And in artificial intelligence which does not replace the old but fundamentally reshapes it. Today we talk about why the past is so hard to get to let go of. Why we are afraid of risk and how you move on from an old structure without burning the whole house to the ground. Welcome to the negotiator channel. I am Sami Metin. Let's begin. Okay. Welcome to the negotiator channel. Uh we have a guests from the west end in Finland. Uh Ericson. Hi there. Uh you're originally from uh Sweden, right? Yes. Uh and uh we have uh Ela Sterling from Canada. That's right. Uh where from Canada? Uh near Toronto, a city called Hamilton. Perfect. And uh nothing to do with the Hamilton the US uh uh treasurer. No, this guy was a loyalist from the from the UK. Oh, [03:13] okay. There we go. But that's good. Uh we are being recording this uh uh on the day after the Fins won yet another gold medal and uh Canada and Sweden did a bit less. [laughter] Yeah. But um this is about your book uh Kalista's uh paradox. Um but uh first if you can tell uh the audience a little bit more about yourself. Yeah, ladies first. Sure. Uh I have been a writer most of my adult life. I'm a second generation Finnish Canadian which didn't really seem relevant until very recently. Spent formative years in Central and South America and decided I would rather be Mexican than Canadian at the age of four. Um then as as an adult writer I wrote fiction um published 12 novels, a poetry collection and a business book and then the um what happened then there was co and I just sort of coasted until I met this fellow. Okay. And Eric. Yeah. So Eric uh I am Swedish. I live in Finland but uh I I have a couple of I have started off my careers a couple [04:18] of times. I did the army back in the day when Sweden still had an army. Then I moved to Norway and I have a captain's degree. So that's like the one only cool thing with me. I can actually drive all ships now no matter how big and anywhere in the world. Uh but key takeaway from these years was that that was not for me. I went back took a like a masters of finance and then I studied in some countries Germany, Switzerland and then I started in London. I worked in the big banks for six years HSBC and then Royal Bank of Scotland and then I was in Nordia that all Nordic people know what it is in Copenhagen. Then I moved to Sweden. I was in Dansky Bank in Denmark, Sweden and Finland. And that was 20 years of banking right there. So I dare say I know something about banking. That's fair to say. And then I did a startup myself. So I have done true startuping tech startup in the garage and then I have I moved from there to being a tech consultant. So that is I do three things at the moment. I work for bearing point which is a tech uh consulting firm where my job is to speak to sea level bank executives about their tech problems [05:19] and how we can help. Then the second thing I do is that I have Eric Ventures which is my own preed venture fund where I buy early day startups preferably fintech and three I am an author together with Elaine and we have just launched our first book and actually we will do a lot more books because we are becoming a publishing house. Perfect. And uh I have to I have to do this. So, so I get this as a a guest uh gift u so so a custom slogan uh and the front is of course branding but on the back it says um you don't get what you uh deserve you get what you negotiate which is my book's subtitle and talking about the books and their uh titles uh your book's name is Kalista's paradox but it doesn't actually say in the book what who is Kalista and who who is what what what is Kalista's paradox well it does say who Kalistas is but it doesn't specifically spell out what the paradox is. So, in terms of Kalistas, Elaine, why don't you? Yes. Kalista is a 26-year-old jewelry designer who has a fairly successful life in central Europe uh with account [06:27] as an account manager and her father suddenly dies and she inherits a 120-y old gemstone company. She didn't want the job. She knows nothing about being a CEO or a shareholder or a board member. And her first experience of the company is that it is larded with problems uh issues that just go on for centuries. And and I like to use the tagline of Dante meets Doctor Who in modern-day corporate because she takes some time travel trips to find out the origins of the legacy of uh the Gemstone Company, which legacy being Eric's. Yeah. Specialty. Uh yeah. So I have to correct myself. It's true. This is a a fiction uh about the lady called Kalista. But then uh the kind of the theme of the book kind of conjures like a Greek uh Kalista Sparatus is like the Pandora's book. So something something grand from the uh the uh Athens. Yes. So uh but this is uh actually about [07:29] a kind of a fiction book on the real situations people face when they are inheriting companies or getting thrust in the leadership positions. And I can tell you that the story of legacy which is the theme throughout and you have with you there some if you hold up the purple one. So for those of you that are interested in banking there was a purple three years ago we wrote a uh a white paper from bearing point where I work partly. uh it's about the Nordic bank in 2033 and how to get there. The interesting thing there it was a forward-looking piece on how bank technology is difficult and the feedback was that we met about 50 CEOs with that and the feedback was very pretty much the same. And they said, \"We would love to follow your advice, but we can't because there's so much legacy problems.\" And then it dawned on us that this legacy is something that we all knew, but we had never really articulated. And then we set out, me and the co-author of the first one, Miko Aub, previous CEO of Axia Bank. And we started to talk to people that we know. And then we wrote the next white paper there a year and a half ago about legacy. And we did that together [08:32] with a large group of very good people. I would dare say, you know, not maybe necessarily me, but at least everyone else is very good. So uh I am me I have 20 years of banking. I I know a lot about banking legacy problems. Miko has been CEO of a bank. He knows more about legacy problems in banks. And then we got Mikaskin the former CFO of Finire. He wrote a piece about aviation legacy. They have lots of similar but different problems. And then we got one of the Finnish top generals Yuri Ratasalo one lion general. He wrote about military legacy problematics. And we had I know Yusla a psychotherapist that is written about many books about inherited traumas. Inherited traumas are very interesting because they are someone else's you know it's an experience that you have had that's not yours and it still affects you and she has written books about that and that is your own personal psychological legacy situation. So that piece right there is very sort of dry in the tone and it targets seale executives. uh then we met more than 100 CEOs that's a lot during a year [09:37] and we then collected more and more war stories sort of examples and we enriched this story and the feedback was basically unanimous that guys this is really good you should do a book and then we decided to do a book and there were some hoops and loops and not every one of the co-authors previously had time for a book so uh I set out myself and then slightly randomly on the internet I came across Elaine That's a really funny story that you might tell your maybe. Yes. Yes. So, um, the algorithm being what it is on LinkedIn, you just get these random people and I happened to land on a photo of a young Syrian teenager holding a bucket of blueberries. And the the poster who the who was Eric said that uh this young man, he had sponsored him as a refugee and the poor fellow wasn't able to find work. could we please uh help him out by buying these this bucket of blueberries? And I had this it's not a deja vu I suppose a flashback or something something maybe legacy related but because I remembered that my four grandparents had come from Finland to [10:41] Canada in the 1920s and my father being an only child first generation u immigrant child his true joy was going into the bush of northern Ontario and picking blueberries. I looked at that and it's so odd that it's come full circle that now Finland is a receiving country of refugees. So I spontaneously posted and said if I lived closer I'd buy those blueberries. And Eric being one to act very quickly on on impulse connected with me and saw that I'd been a that I'm a writer and that I also had 18 years of teaching corporate executives how to write. He said, \"Uh, I I I see what your experience is and I'm looking to write a book. I wonder if you could give me some tips and pointers.\" Well, I did a lot more than that. Yeah. And uh the book is about um combining the facts with fiction and also teaching with the kind of a natural progression on the real case which is the Kalista paradox and kind of a transformative journey. Uh Ela you you mentioned you teach um people to write. I mean that kind of reminds something we discussed on the on our lunch and [11:46] u my favorite Canadian it is Keith Johnston and I did the master class with him in in London and uh um to is improvisation and uh part of the this journey and tell me a little bit about the Keith Johnston. Well Keith Johnston is the god of improv as you know and we are so proud that he lived in Canada. He was British to begin with, but uh uh he he taught theater first and realized that that the the joy of storytelling and spontaneity is is suppressed right out of us in in the uh education system. And he had he created uh systems that gets it back into our we get back into our spontaneous selves. So he created an entire foundation of of improvisation that is famous around the world. uh he had uh uh theater in Calgary until very recently he passed sadly but every person who has studied improv including myself we we all start with Keith Johnson and Violet Viola Spolan in [12:47] the states those were the two um masters so yeah and um so you need to combine also in my book on negotiation it's kind of a hero's journey so kind of a classic buildup story so is there something like a like bringing the arch types and kind of learning from the age-old wisdom you have which you have incorporated in the book very much so and I want to just uh circle back to the improv for a moment because what I've learned working working with improv is as you have as well it it works in every setting in life settings Eric is a very fast thinker and a fast talker and I learned through improv to just respond respond respond and it really got us through writing the book in a record time of four months did the complete book and then I have completely forgotten what was your next question Oh, the journey. Yes. So, Kalista was Kalista was originally a goddess. And so, I I used her name partly for the musicality. Um, but she also turned out to be a very misunderstood huntress. She was uh she was suppressed by the the gods and Zeus as they as they very often [13:52] were. But she was a survivor. And so, Kalista in our in our novella is very much a survivor as well. The archetypes are there. And uh I would I would add that it's magical realism. Some people don't know what that is. They confuse it with fantasy, but it's actually a very deeply rooted um archetype of particularly Latin America, which where I had spent some formative years. So yeah, I I can see see that the like well but but the Eric if you bring this back to the like the [clears throat] concrete things. Um what kind of a what are the most uh common legacy problems uh companies have? Well, so [clears throat] legacy can be defined in many ways. So you can have legacy sort of many departments or you can bucket them differently. The the one that is easiest to understand and it depends on who you ask. But first of all, if you ask the common man on the street, they would if they think about the word at all, they will usually talk about some king back in the day maybe conquered a lot of land and that will be his legacy. You will [14:53] be remembered for something. That's usually how people talk about work. For a consultant in tech, legacy is immediately the outdated tech stack. That's what you immediately hit. So bankers and and consultants. But legacy can also be cultural. you know all the structures we have in our mind and you can find process legacy this is the way we do it here and then people never question it so you can have quest and then you can have your own psychological legacy uh you know you're scared of something because of something that happened and now so you can't do certain things you know with the easiest one being you're afraid of spiders and so you cannot go and visit the zoo that's a legacy problem you have then so these are at least the four obvious legacy situation now uh the book that we have written here is it it there is three parts in the book. So, and it's very interesting because I have learned a lot and that's sort of maybe also a generic interesting thing about books. What is the main book buying audience? Uh it's actually younger women sort of 18 to 20 35. And that's [15:54] what Elaine said to me first, Eric, if we're going to do a book, we should write a book that somebody is going to buy. And the way is to get it on many different genres. So, it can be a management book, but it should be a novella. Otherwise you will send maximum 5,000 copies globally and we are obviously going to aim to sell at least a million books. So you know why not? So and then we need to target the so we we decided to have a a book that would be in many layers. So the that book there has three parts. The first is a novella and if you like nollas you can read novella and you can ignore the rest and you will still find it very enjoyable and then you will learn something about legacy but you will not explicitly think about it. But if you read the second part which you can also read in isolation if you are a fact student you don't want to read any nollas you can get a lot of out of that too but the real learning we believe if you read the first the story and in the story you will come ac you know this Kalista will has to tries to rescue the company she comes across many situations that they appear easy to solve at first but when she starts [16:55] to look at it the history is dragging this down and then when you read the second part of facts that will sort of look at the examples that so basically you can read the story and you will see the surface but then when you read the second part you will open the layers and you can maybe read it again and see it differently and then the third part is 14 very different point of view on legacy people that have had legacy problems people that managed to get out of them people that have seen somebody else in but 14 very different kind of people you should say some more about that yes well especially coming back to Keith Johnston because one of the contributing authors is Will Luera who is an American improv teacher well known around the world he's even taught the Saudi royal family and he specifically uses uh improv in his in his article as a means of overcoming legacy of of facing it and coming to coming to grips with it and bringing out new skills such as [17:55] curiosity and spontaneity that that really speaks to improv. Uh we also have film and TV people and and business people. There's one woman whose names withheld by request because her family legacy is so horrendous. Um a great variety of people who are brave enough to tell their story. M and then uh of course it's important to see how many ways 14 ways or or more you can uh get stuck in time but then you need to be um uh solution oriented and um I mean um um the first book Palanter gives to the new people is Keith Johnson's improent theater. I don't know if that's cute or worrying but Volunteer is one of the most successful uh consulting uh transformational companies with AI. So they go to company whether it's a military complex or whether it's a company and then they fix it from the legacy systems uh using AI. uh but uh you don't necessarily need to use artificial [18:58] intelligence but you you need to move from your uh legacy problems to uh it can be disruptive future but it can be also just fixing the systems how do you do that then what kind of guidance you give to how to fix yeah and that's of course very difficult but what the one important thing is this when you are a consultant like I am part-time is uh or partly so bearing point for example in any consulting firm They will come in and then they will do some sort of as is you know well first of all if a company has problems of any kind they will ask first themselves can we live with this situation and if the answer is yes we can live with it it's not optimal but then you live with it because there are so many other problems to fix but if the answer is we can't live with this well then you fix it yourself or you try to fix it yourself and if that doesn't work you basically ask yourself again but oh that was difficult but could we live with it anyway and if the answer is still no you get some help essentially That's when you call the consultants. So by definition, consultants will never be called in when things are good. So we will always come in and face [20:01] an elegancy situation of some of some kind. And the first thing is always and some sort of asis analysis. What is the current state that is usually very shallow and quick because people are eager to move on and sort of dwelling in the past will look counterproductive and uh and people believe you are up to no good and you're wasting their money for talking about stuff they already know. uh but an as is as is analysis will happen but it's in my experience way too shallow far more often and then there will be a target state people will say target state is the word you need to use a lot if you are a consultant you know the target state it basically means where you want to get to and then you will define they will spend you know you will have millions of dollars in consulting fees and hundreds of hours internally that are not built for that will go into this target state and then you will make a strategy which is essentially how how to get from here to there like a string of plans to get there and then you will make assumptions about the asis. Yeah, the asis analysis were probably right. So that's where we are and and then you move from there. The problem is that what if you only look at the symptoms of the illness but not at the illness itself. So it [21:04] turns out that you are not here, you are there. Well, the strategy that was supposed to take you from here to there will then take you there. And even if you are here but for different reasons, maybe you choose the wrong methods. So you end up only there and not all the way there. So what we are arguing uh is that when you set out on change journeys spend a bit more you know instead of spending 100 you know if you have 100 resources or money or whatever rather than spending 50 of it on target state and 50 on strategy and only sort of 0 point nothing on the asis analysis do 45 10 but upgrade the effort put on asis analysis properly so that you actually know where you are and why and we believe that is happening way too seldom. And that is a good advice on any change journey that we believe or I believe people do wrong. Yeah. Then on this Kalista's fictional story uh she was inheriting a family business on the on jewelry. I mean is um this inheritance and [22:05] getting generational responsibility and inheriting somebody with the power uh and and the jewelry uh do those two things carry specific weight in the book? They do very much. Yes. So the the gemstone business has uh environmental issues and and employment and indigenous issues that had not been dealt with and uh she is it's landed on her on her shoulders. So she seeks out the aid of a disillusioned consultant who has given up on corporate because he's been trying to instill new levels of knowledge in corporations that that have been resistant. And I'll use a specific example that he most admires military for their legacy and their their um willingness to take it on and recognize the limitations and the world is so resistant to listening to anything from military. We have such black and white perceptions of these extremes. But Kalista is the one person who [23:06] listens and that's all he's ever wanted is just one person to listen to what he believes is true. He has this mantra that the corporation that addresses legacy will outrun all competition. Trouble is he hasn't taken care of himself. He has a physical legacy and he may not live long enough to be able to give her the advice she needs and to see her through to the end of her journey. Yeah, that's also a personal theme. Eric, you mentioned um your past life and and health uh but also the the banking world where you were with a lot of kind of a legal legacy which is particularly toxic. uh can you talk about the health aspects and the banking legal problems? Yeah, there is one uh there's one chapter of the it goes under healthc care legacy and in the book we have a couple of examples. So I give a personal point of view of one individual's legacy situation. But then we have a health coach in Austin that writes it more on a systematic level. And then we have a guy called so we have Zach Rosenova. He is a health coach in Austin, Texas. Extremely good guy. [24:08] And he has written this about how people get stuck and why. And then we have Matias Fanul. He's doing his PhD now in health care public sort of public how to organize healthcare. And he looks at health care as a systematic ear error. How we actually treat health care as sick care. Essentially we spend now there you know there's a certain amount of tax money available for different things. Among that a slice goes to healthare but healthcare is sick care the way it is done now. We essentially wait for people to get ill and when they get real ill we put them into these factories for treating them. It's called hospitals and there we treat them expensively and then we rehab them expensively and we send them back as good taxpayers. But actually from a taxpayers point of view, we should really take some of that money out and put it into preventive care so people don't get as ill. And there is sort of consensus on that this is the right thing to do. But no politician can win any elections by saying I will shut some hospitals now down now and actually yes some people will die in the next decade but after that we will have far better health condition for [25:09] all of us because there will be less smoking, less drinking, more running but nobody can win an election like that. So that shift will not happen. uh in terms of if I look at that so these are the three pieces on the healthcare if I look at one example I have put in there myself is I used to be I'm 52 now and uh well it is what it is it's a sort of a numerical fact but I started off I did loads of sports when I was young ice hockey and football and this and that and tennis and handball and everything else and sailing and at some point I also did a lot of karate so full contact karate so really brutal stuff where you better know if you if you step in unfit you will literally be knocked out fully knocked out kicked to the head and you can really hurt yourself. So I was pure muscle only 76 kilos with virtually no fat because I had to be below 80 otherwise it was heavy weight and then you literally get killed. So it couldn't happen because 80 is unlimited. You can meet people at 120 30 kilos. So at that point I was extremely fit and I remember I got my first job in banking and I thought aha I'm a banker now. I bought an Armani suit. I remember it. Uh that suit fit for less than two weeks because I put on 10 kilos like that when I moved to London. [26:13] Uh because I started in corporate finance is like the worst place you can be in terms of hours. So uh I started as an M&A analyst in a big London bank and I worked insane hours sort of 16 18 hours every day including weekends and they made damn sure that you didn't sleep much and training and eating and everything fell apart immediately. So I put on 10 kilos immediately in the first few months and then I was in London for six years. I put on another 10 kilos. So I came back like 20 kilos heavier net and muscle mass mass dropped too. So probably 24 kilos of pure fat added really [snorts] bad. Uh and that combined with and also one of the reasons for that was that I moved from M&A to trade floor stuff for an exchange and commodity derivative sales trading structuring. So it's very very competitive environments where you have to be in at 6:00. You work sort of 12 hour days and you travel and that's that's the easy days because you're on the trade floor but half of the time you're traveling. Then you work 18our days where drinking is half of the job. So you put on you wreck your health totally with extreme amounts of calories, no training, [27:15] no sleep and loads of alcohol. That's extremely toxic combo. So I basically became quite fat and definitely very unfit and I had lots of problems with that. But you don't it happens gradually so you don't notice it. But then after some unfortunate events I decided I need to do something with this. And that's the journey that I described because I realized that I had sort of cornered myself in this physical personal legacy [ __ ] situation where I was in a hole that I just kept digging and I not only had to stop digging I had to find a way out and that's what this chapter describes how I was very deliberately observed my legacy and the interesting thing is that when I did that it's just around the time when I started to write the original legacy uh white paper [clears throat] so in the process when I see Now two years later writing a book I realized that what I did was that I had a legacy problem. I applied a very thorough legacy analysis. Without that I would not have been able have been able to find the right methodology and eventually this Zach Rosanova Austin Texas. I will can I do some ad for Zach Rosenova? Definitely. If you have a [28:21] health problem, uh, if you're fit and you want to be, if you are fat and you want to be fit and you work way too much and you're sort of 50 and you're willing to spend a bit of money on fixing it, find Zack Rosanova on LinkedIn and connect and say hi from me. Um, he will basically give you all the tools you need to have a datadriven approach to fix nutrition, sleep, training, stress levels, everything. So now I dropped 20 kilos in a year and put on lots of muscles and I am where I want to be. That could not have been Yeah. And um uh that's um also what I did between the marriages, get a personal trainer and get the get back in the business. Uh so I and and I also was in Craig Swiss and other banks. So I absolutely know what you're talking about and also get a bit of a weight myself there. Uh but then the other question was about the then the uh the legacy and banking. I mean you you done the corporate finance and derivatives but uh we all know I also been in the in in the RBS and Norda by the way and uh I I was in the RBS times when they had [29:22] already failed. So clearly they had some bad risk management on the M&A but then you have other type of uh legacy problems like you have a too eager uh regulator who prevents everything and wants just like admin and uh that's another thing. How how do you see the banking and risk management that and that's also and please Ela tell me if I forget something and you know do interrupt me the the um the the one interesting thing is this when we start to look at this you realize that these different sectors like banking and aviation and military they have their own legacy problems and situations and they solve th"}, {"slug": "131-putin-ja-venajan-strateginen-kulttuuri-martti-j-kari-neuvott", "title": "Putin and Russia's Strategic Culture | Martti J. Kari", "titleOriginal": "Putin ja Venäjän strateginen kulttuuri | Martti J. Kari | Neuvottelija 126", "guest": "Martti J. Kari", "guestsCanonical": ["Martti J. Kari"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/martti-j-kari/"], "episodeNumber": "126", "publishedAt": "2022-03-19", "duration": "55:18", "format": "full", "topics": ["geopolitics", "negotiation"], "description": "Retired colonel and intelligence researcher Martti J. Kari unpacks Russia's strategic culture and why it explains Putin's conduct in the war in Ukraine. Kari describes how today's thinking is built up in layers going back to the Mongol era: the autocrat makes no mistakes, power comes from God, and defeats are blamed on the boyars. The conversation covers the siloviki network around Putin's inner circle, the rivalry between the intelligence services, and why leaders are told what pleases them rather than the truth. Kari also examines Russia's long tradition of information influence operations, the concept of \"tactical truth,\" and the generational significance of Finland's NATO decision. Finally, they discuss the drafting of intelligence laws, Russia's decoupling from the global internet, and why being nice doesn't protect your neighbor.", "page": "https://www.neuvottelija.com/podcast/episodes/131-putin-ja-venajan-strateginen-kulttuuri-martti-j-kari-neuvott/", "text": "[00:00] Martti J Kari: when an American says fake news, do you know what it is in Russian? Sami: No. It's hybrid truth, so even there it's translated as truth but it's just hybrid truth, gibridnaya Pravda, so it tells about the Russian mindset, meaning tactical truth is a way to get out of an unpleasant situation, buy time, or mislead; that the autocrat receives his power from God, whereby if you challenge the autocrat, you challenge God. Even now, I'm not sure that Putin will be ousted. Russia does have this kind of palace coup culture. Yes, Khrushchev, for instance, he was sidelined, Brezhnev sidelined him, and he wasn't killed, his his predecessor Beria. When they fought for power after Stalin's death, Beria was shot. So basically they should have the ability to disconnect from the global internet now, meaning from the 15th onwards. Which means they have their own root server; they have the ability to cut connections to the West and so on, but they haven't implemented it, at least not yet. Alright, welcome to the Negotiator channel, my guest is Dr. Martti J. Kari. Welcome. Well, thank you. [01:25] Great, and the topic is Russian strategic culture. If I tease you a bit, can Vladimir Putin be blamed for mistakes made by the Mongols? Well, in principle, if we think about strategic culture So, if I were to tell you a bit about what strategic culture is—that is, strategic culture means that it describes how a state, in practice the state's leadership regards a threat directed at it and how it perceives that threat and how it responds to that threat, whether it is an internal or external threat, and how that country is structured, how the administration is structured—that is basically strategic culture. And if we start to break down Russia's current strategic culture, you can always find those layers, going all the way back to the era of Mongol rule; you find six to seven layers there, meaning part of that current Russian strategic culture is what the Mongols brought back then: cruelty, lying, torture, and so on. [02:28] still, they are still, in a way, there in the Russian strategic culture and they are of Mongol origin. Yes, well, let's put this here, so here multi-layered, like this strategic culture, you have one table, this has gone over a million views, that University of Jyväskylä's Studia Generalis lecture where you go through it, so let's start it playing, and here in your table there are several levels, and let's listen a bit, first you explain what happened in such a very short time when Boris Yeltsin was in power, when even NATO membership was considered, the West was no longer a threat, democracy, that democracy. Yes, and this remained, as you said in that video. So, and that you can't really distinguish on a timeline that this, this was Was it perhaps before the Mongols, was there possibly peace then, or was there because before the Mongols there was Kievan Rus, Kievan Rus, which was this kind of democratic, in a way, a bit like, a bit like Athens, meaning free, rich men chose a council like this that decided on matters, then this V, it was called a veche, and the V-bell was the kind of bell used to call people together to hold these meetings and such, meaning Kievan Rus was, in a way, this kind of similar type to Athens, [03:47] democratic; the Mongols came, the Mongols brought autocracy to Russia then, and it grew stronger from there, then, then Constantinople was won—no, no, no, no, Constantinople was conquered in the Eastern Roman Empire was destroyed, at which point the seat of the Eastern Roman church moved to Moscow, whereby this autocracy, in a way, merged with this ecclesiastical power, giving rise to a sort of concept that the autocrat receives their power from God, meaning that if you challenge the autocrat, you challenge God; and that transferred to communism as well, so that if you challenge the autocrat—if you challenge the party—you challenge Marxism, and you're in trouble, so in exactly the same way. And now it goes exactly the same way, even though there is no ideology anymore other than this Putinism, which is not an ideology, but in any case, there is that autocrat; if you challenge him, you are in trouble, as it has always been in Russian culture an infallible autocrat who has received their power from somewhere and where you challenge it in trouble There is also that Eastern like Rome or Orthodox church and wasn't there some kind of theory influencing there too Yes exactly I mean it is this this heavenly power and ecclesiastical power combining And [05:08] now Patriarch Kirill among others supports Putin very strongly in this war too because there they are fighting a war a war against this kind of degenerate West against where there are same-sex marriages and so on Yeah I laughed out loud by the way when there was that Rolex watch on Kirill's wrist 1200 Yeah it's the price of the watch those priests have pretty good salaries there Well but in the final part of this clip that was shown it already went into Putin's at the time, and not much changed there; that was interesting, by the way, when you said that Kyiv-led, well, the Great Russian historical land So is it, like, is Ukraine symbolic on this level too? For Putin, Ukraine is particularly important, like, militarily and politically, but also, yes, it's such an emotional thing too, but specifically, like, militarily, because the Russians have that strategic culture; there have been attacks; after the Mongols, Napoleon attacked there, and Hitler and so on, so the Russians feel that someone always [06:15] attacks, and if we look at the map, well, Poland's From Ukraine's western border begins the so-called Central Russian Upland, which is quite flat, divided only by a few rivers and the Pripet Marshes, so it is easy to attack with horses and tanks; thus, Russia feels that it is unprotected from the west, so it needs a buffer zone there. Before, the Warsaw Pact was the first buffer zone, and then the second zone was these Soviet republics: the Baltic states, Belarus, and Ukraine. Now the Soviet Union collapsed and the Warsaw Pact dissolved, so both of these buffer zones disappeared; they still have Belarus in their grip, but are extremely concerned about Ukraine because if Ukraine were to slide to the West, then the 'evil' NATO would be right there nearby; it's a bit like this. regarding strategic culture, it's a bit like the Borg in Star Trek which like, well, just assimilates everything and in a way it grows all the time until it like fills the whole universe. But I don't think it's quite about that here, that in a way, Russia, it's a bit like it has to be all the time in a sort of aggressive growth because otherwise it like shrinks, but it's not perhaps total dominance however, but more like in a way just causing a ruckus on the borders. Yes, Nicholas I said that small wars in the border regions keep the nation disciplined and, well, and [07:41] Russia doesn't have the strength to do these Borg things, but well, it would gladly do them, and this has now been practiced in smaller countries before Ukraine and it has been quite successful, I had Pekka Toveri who mentioned that there were indeed these, er, Chechen wars and it was sort of then there was, one could also say that, er, the conquest of Crimea was a certain kind of, like, easy war, er, but are these kinds of easy wars enough, or was this now then like, a miscalculation? I mean, I personally, my own, when I teach intelligence at the university and we actually have this kind of, like, lecture on intelligence failure where we talk about how Israeli intelligence failed in the Yom Kippur War, the '73 war. So it went so that when Israel beat the Arab countries in the '67 war, they developed a kind of, like, sense of superiority, so wasn't it the Six-Day War or something? In the Six-Day War, a certain kind of the sense of superiority that the Arabs are no match, and then this sense of superiority combined with the fact they didn't understand what Egypt's political will was, meaning they thought Egypt intended to reconquer the entire Sinai region back after having lost it in the '67 war, whereas Anwar Sadat's goal was merely to get one soldier, to [09:01] caricature it, one soldier to the eastern side of the Suez Canal, to the Sinai side so they could set the political process for returning Sinai to Egypt back in motion, and Israel didn't understand this; so here are like two mistakes: this political misjudgment of why the war is happening, and then this operational misjudgment: they are not capable of anything against us. And here is the same thing has probably happened regarding Ukraine, meaning... Putin or the intelligence services that produced this information, they... had a wrong concept on which they built the analysis, or then they... evaluated this situation incorrectly as well. This military performance has also been abysmal, which feels strange, as you'd think they would have been able to... gather intelligence on what would happen. Yes, but they probably thought it would go as easily as in Crimea. You mentioned these intelligence officers, so this was also very intriguing, this kind of matryoshka doll around the strong narrative or god-like being. So could you tell us a bit about these layers, what kind of levels there are, or Putin's... [10:11] around [him] and how they fit into this strategic culture framework, because there... There are the guys around him; there's Patrushev, Bortnikov, and Naryshkin. Yes, they've been around him. Are they siloviks? Yes, so they are... former KGB members from the 70s from Leningrad, and then Sergei Ivanov... ...was part of that group as well, but he was put in charge of environmental affairs. So apparently the problem there was that Ivanov disagreed... ...about the use of force in the Donbas region and such, so he was put... ...to manage environmental affairs, which is basically... ...getting fired, and the problem is that these guys are all the same. A so-called confirmation bias occurs, meaning no one challenges the idea, no. this kind of... is used, as we are taught once again there at the university, this devil's advocate, meaning there is some guy who challenges that thinking, saying it's not like this, it's not like this, it's not like this, and then furthermore, if we think about these intelligence services that push that report and analysis to those leaders, there are three services; there is the FSB, which is responsible for domestic security, but when Putin [11:24] came to power, he added to the FSB's structure this kind of foreign intelligence department that handles the so-called near abroad, meaning the former Soviet parts, meaning the Baltic states, Belarus, and Ukraine. So we have Inside the FSB, there is its own intelligence department, and then we have the SVR foreign intelligence service, Naryshkin, who got a bit of a grilling then on February 22nd in that session, the Security Council session, because he didn't know what was being talked about. We have Naryshkin, but Naryshkin handles like the far abroad, not the near abroad. And then we have the GRU, which is the military intelligence service, which as its name suggests, directs its intelligence toward military targets plus creates conditions for the implementation of Russian security policy. Like in Crimea, that was a GRU operation, and now these, these, these services compete with each other, and when they compete with each other over turf and resources, then it is wise to tell not objective information for the superior, but the kind of information he wants to hear because on average, a person would rather hear the kind of information that pleases him rather than what challenges his worldview; so this has likely [12:47] happened here. So, regarding these circles, there were also these boyars, but these siloviki are not—they are not like boyars—they are all, I mean they are all boyars; it has like, it has three components: it has the tsar who never makes mistakes, princes from whom a tsar might grow, and then there are these boyars surrounding them—so there are administrative boyars and military boyars and siloviki boyars and so on; they are the, they are the layer that is between the tsar and the people, and they make those mistakes; will they then be refined from those princes? Or they can already evolve from them... Yeah, and there's probably quite a power struggle there now intensely. Churchill said—and I think it's well put—he said that when watching Russia's internal political struggle, it's like watching a fight of bulldogs under a rug; you just see the rug moving, but you don't know who's winning until someone crawls out as the winner, and then the people who seem surprisingly fatalistic in this framework, having been like conditioned to endure suffering and corruption. Oh no, no, they can't help it. [13:52] What can they do? Well, in a way, there was that short illusion of democracy where they at least learned perhaps to communicate; in fact, even that democracy was a dirty word, that was that '90s-style robber capitalism, that when they were given those privatization coupons, then these oligarchs sort of took those coupons and and and took over those former state production facilities and the oil and so forth, so the common people were left empty-handed, meaning they have a very, very poor image of that 1990s; they talk about robber capitalism and a time of chaos. Are these oligarchs then—they didn't really rise to that 'inner circle' at least; are they sort of on the outer rim after all? Well, these, I mean the first wave of oligarchs were these kinds of businessmen, Khodorkovsky, Berezovsky and others. Well, he's not Putin's friend, no, neither of them are, but I mean, they were the guys who realized that now is the time to make money. and they made, Abramovich and so on, they made, like, they made money, and the deal was that you don't interfere in politics. Well, and what happened? [15:01] Khodorkovsky interfered in politics, Berezovsky started doing politics Khodorkovsky is alive but in exile, Berezovsky was found hanged in 'quotes' in London, and so on, so in a way this first-wave oligarchs, who were like these money-oligarchs, well they have been almost cleared out or they have left Russia because it's so hard for them to be there. These second-generation oligarchs are then silovik oligarchs and, so, because the Russian system works in a way that that when you reach a certain position in the structures of government administration, you have a right to a certain amount of corruption, and the higher you go, the more you get of that corruption, and when you are up there at the boyar level, then you have, well, we're talking about massive corruption in the millions, which you don't actually own, but the Tsar, as it were, owns your right of possession, so you can basically lose everything in a single night and it works like that—it's a system to keep you loyal to the Tsar, because you have the right of possession to everything you have, but in principle no right of ownership, including your own life; that is, by the way, really interesting information; I mean, I only remember a couple of years ago myself [16:21] René Nyberg had this 'Patriarchs and Oligarchs,' so in his book, there was this point that at some stage during Yeltsin's weak period, it was close to ownership rights being given to the people, but then it was taken away, and it was apparently part of this— like, privatization vouchers were distributed to the people, but an elderly woman doesn't understand when she's given that voucher and she's hungry and someone comes, one of those racketeer types, a guy in a leather jacket with a shaved head, comes and says, 'Here's a cabbage for you, and you give me that voucher.' Of course she gives it. Then ownership of forest and land is still, like, dependent on the state's hand, yes, but that's interesting, and then about the situation in Ukraine, there were many more questions. from a negotiation perspective, now that Putin has, in a way, lost face at the very least because he has failed operationally and also as a wise story, so how fast could the wave be with which such a failure is wiped away by force or otherwise—look, Putin hasn't failed; the Tsar does not fail the Tsar does not make mistakes; instead, they have now started looking for those [17:31] those boyar-culprits, boyar-culprits, and they found them now that I mentioned that the FSB handles the near abroad, so last Friday, if I recall correctly, there was a raid at the FSB involving the FSO, which is the president's security guard—so the FSB boys and then one of the FSB's directorates, which is internal security, they conducted a raid there at the Lubyanka, meaning the FSB headquarters, and at 20 other locations, and they raided and shook things up, and there there, the head of the FSB's Fifth Directorate, meaning the foreign service, director Beseda and his first deputy Bolukh, they were both put under house arrest and were accused of both providing false information to Putin and the misappropriation of state funds Yes, because their task was to use those state funds to bribe those pro-Russian individuals, organizations, and parties in Ukraine, so they had apparently stolen that money, but it's not really a reason because if they hadn't given false information [18:50] to Putin, or if Putin hadn't just, like, or even if they had given correct information to Putin, but the story goes that they gave false information because the Tsar is infallible, but if they had given correct information and this kind of mistake hadn't happened where many Russians are dying now, then the fact that they have stolen the money wouldn't have mattered. Well, the boyars can be thrown under the bus, but is it enough that at some point, Medvedev was still allowed to be president for a while, and Yeltsin and even Gorbachev weren't killed, so they could, like, retire to a dacha; nowadays they— Yeah, would there be an exit card for Putin after all? I mean, I'm still not sure. about Putin being ousted; after all, Russia has this kind of palace coup culture. Yes, Khrushchev, for instance, he was sidelined; Brezhnev sidelined him in '64 and he wasn't killed. His predecessor Beria—when they fought for power after Stalin's death, well, Beria was shot; the armed forces essentially went over to Khrushchev's side under Zhukov's [19:57] leadership, and then a certain general shot Beria with his own hands, so there is a bit of both cultures. And then when Gorbachev was set aside in '91, he wasn't shot, and at that point the armed forces were somewhat on the sidelines; they were watching what was actually happening, and there was humiliation involved. I interviewed Esko Aho about that year '91, and he said that there at the stage when it was shown how Yeltsin basically forced Gorbachev, dictating to him, 'Sign your name here, buddy.' So it was quite clear that a change of power was happening, but Yeltsin was a weak, weak leader and in a way took Putin, a bit of a protégé, under his wing. Was Yeltsin also part of that St. Petersburg gang? No, he is—well, he's from the Urals, but isn't there a bit of a... or like, since everyone in Putin's inner circle is from St. Petersburg, doesn't it always go like that—a regional group, a judo gang, is put in charge? No, but rather, Yeltsin actually chose Putin as his successor for that reason, or actually there are two factors: one is that Putin was seen as strong enough that he [21:03] is able to guarantee immunity for the Yeltsin clan, and on the other hand Putin was seen as so weak that the oligarchs imagined they would be able to control Putin, so there are essentially two different views here that both supported Putin's rise to power, because these Berezovskys and they supported Putin at the beginning, and Berezovsky imagined he was some kind of kingmaker still, or imagined so until he—in quotation marks— hanged himself; until then, he thought he was some kind of kingmaker. Well, you teach there in the master's program at the University of Jyväskylä, what was it? Intelligence—it is the Security and Strategic Analysis master's program, and I teach intelligence analysis there, and applications are open, and they are groups of about a hundred people... uh, meaning the applicants, or, or the age group that... Well, we had just under 300 applicants last year, of which we took fi... Okay. And then our master's phase is divided into two years; the first year [22:06] is one where the basics of intelligence are covered, and it's the kind that interests quite a lot of people, so the stre... the course strength is 120, and then the strengths of these second-year intelligence analysis courses are about 30; they are like our own, these security and strategic master's program's, well, students who are studying, like, that analysis, and then we have, among others, well, students from security authorities who are not doing master's studies, but just studying, for example, the intelligence analysis courses already, but that like the big one, that first year is bulk, there's a lot, lot, lot studied all over the university, and then this second year is like this targeted one, so there are only about 30 people, and there you can probably open up—since you have a background here, I was holding back in case someone doesn't know—so you are a colonel (ret.), so you have a background here in the army and [23:06] intelligence forces, so yeah, I served in military intelligence from 88 to the year 2017, so what does that make, 30 years, but my dream as a young man was to be a humanist after all, so I was supposed to be a history teacher, but then I went to paratrooper school as a conscript, like in our... we went from the scout troop if we just could, and then then I, well it was actually fun, I thought. It was nice to parachute at night with a blackened face and learn how to blow up a bridge or blow up railway tracks or whatever was needed, and wow, this is quite nice, and I liked it, and then I stayed there for the summer to work and I've been on that path ever since. Have you seen that French series like 'The Bureau' on Yle, for example. Is it this, I mean this, this where there are these spies, where they use this Tintin codename Yeah it is, it's good. Yeah, is it a depiction, how close is it in your opinion? No, I mean, no. I mean, I was in signal intelligence, signal intellig- quite boring, it's a bit like sitting there with headphones on, hoping something catches it hits? Well, aren't they even throwing around a code name so that well, what about signals intelligence, now there is of course [24:16] hybrid analysis and data flows in communication networks, you already presented back then if I recall correctly, that sensational theory that Russia has like partially peeled itself even from the internet, so... Yeah, now they, now there, I mean now there, on the 11th, or at the beginning of March, an order was given to the state agency to prepare for disconnecting from the internet by the 11th or to prepare to create the capability to disconnect from the internet by 11.3. and that capa- capa- capability must be reported by 15.3., which means they should in principle have the capability to disconnect from the global internet now, meaning Starting from the 15th, which means that they have their own root server, they have the ability to cut connections to the West and so on, but they haven't put that into practice, at least not yet. And now, of course, they could just cut those cables, one of which goes to Finland, or just shut it down, but surely now, for example, a lot of data comes via satellite and mobile phones, so and then again, global name servers—outside of those, I don't think they can shut it down completely. They have their own, they have their own name server, so in the world there are 13 DNS name servers, these root servers, but the Russians have built their own root server, so they have their own root server that they, like, intend to use. That's what they use. [25:41] when their Russian segment is isolated from the rest of the internet Well, Elon Musk's Starlink might use some proprietary protocol but it probably won't be quite legal to use them there soon. Yeah, they are probably looking for them all the time, VPNs all the time and so on. You also participated in legislative drafting; I myself was, by the way, invited by the Ministry of Finance and the Ministry of Justice, I did this, participated as a permanent expert on the Act on Bondholders, which passed. It was quite a 'sausage factory' process. I don't know how you experienced the legislative drafting process. Was it interesting? It was really, you see, I was supposed to retire in '15 when I turned 55, the retirement age for a colonel, or Yeah, or rather, when you become a colonel, you sign a paper saying you'll retire at 55, even though by law a colonel serves until 60, but that's where it's usually seen whether you'll become a general or not, whether a path opens, if you are in such a time window that a general's position opens up before you, and well, for me it didn't open up, but I was kept for two years to work on those laws and asked to stay for another two years to work on these laws and see if a window opens there, then you'll take it, and then I said sure, I can stay of course since I don't have any other work and I don't [27:05] really want to stay home yet just waiting to die, so then I I worked on those laws for two years, and it was certainly an interesting project all in all; I saw, you see, the parliamentary preparation and then I saw the legal preparation and then I saw the operational preparation, so so it was an extremely interesting whole, especially as I was involved in both the military law and military intelligence law working group, the civilian intelligence law working group, and also the intelligence oversight at the Ministry of Justice, plus then also outlining the new operational role of the Security Intelligence Service, in Päivi Nerg's working group, plus the parliamentary monitoring group, plus the Ministry of Defence's working group that wrote the military intelligence law line by line, I basically just spent two years on laws. Yeah. as a tactical observation itself, it was just that, a bit earlier, Stubb had failed with that administrative register law. And there was the famous '90% support' and then actually they didn't support it, so I personally felt those statements coming in were very important, so that that they are supportive. And so in this law of mine, it was that were there any interesting statements given there, by the way, like [28:18] from the private sector? Yeah, we had involved in that law drafting, We had a lawyer from the University of Helsinki, and then we had from the EK, the Confederation of Finnish Industries. We had a representative with us, and then from the Association of Finnish Lawyers, so we had, I mean it was quite, like, it had operational people and then there were these: EK, the Association of Finnish Lawyers, University of Helsinki and so on. So it was quite a, quite a broad group that prepared it, those laws, and then we had both public hearings and then we took in feedback from time to time, so it really was like, interesting, an interesting process. Did a good law come out of it in your opinion? You're biased of course. Well, I'm biased but yes, I mean, now, from what I have read, for example, the Information or Intelligence Ombudsman's and the Intelligence Oversight Committee's statements then the law is good, yes, and I mean it could a bit To put it in concrete terms: does it make it possible, for instance, if I'm suspected of... [29:20] ...being a foreign agent, for my WhatsApp messages, for example, to be read? Well, in principle, yes. So there are certain triggers, and... For instance, Section 4 of the Military Intelligence Act... ...states what military intelligence can be used for. It includes intelligence or espionage directed at the Defense Forces; so if it is suspected... ...that you are carrying out espionage against the Defense Forces, then on that basis, a court order can be sought to subject you to surveillance, and... the court then assesses if this is important, whether the information can be obtained... by any other means, and so on, and after that, you can be monitored. Yes. but it's not like that, that someone just starts following you because we are a democracy and there are many, like, steps, steps in a way before the whole thing happens, and then earlier there was a stir about Prime Minister Sanna Marin's, like, personal phone and the government phone, so in that it sounded a bit like her, like, personal phone is quite like a basic iPhone, and then the government phone is like [containing] a bit more robust security technology, so, how big of a threat do you [30:33] see that, for example—meaning the eavesdropping on our decision-makers' phones? Well, surely someone is trying to listen in, but I want to emphasize again that because you are Finnish and if you communicate so that the other end of the communication is in Finland, then the court does not grant that collection permit; if the other end of the communication is abroad, then the collection permit can be granted for that traffic, but communication occurring domestically does not get a permit. Were there levels like this? I remembered this I am not a big fan of the current Prosecutor General myself, but one of her possibly honorable charges was when Helsingin Sanomat leaked—was it the intelligence center? No, the Signal Intelligence Center's location and information about it, so did this type of legal text come into it for these matters, like [31:33] That happened much later; it was, it was in the autumn of 2017, was it 2017. In December, there was this Signals Intelligence Center leak, and these law"}, {"slug": "18-negotiating-eta-acquisition-gautam-basu-mikko-jarvinen-negot", "title": "Negotiating ETA Acquisition | Gautam Basu, Mikko Järvinen", "titleOriginal": "Negotiating ETA Acquisition Gautam Basu Mikko Järvinen #negotiator 14", "guest": "Gautam Basu, Mikko Järvinen", "guestsCanonical": ["Gautam Basu", "Mikko Järvinen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/gautam-basu/", "https://www.neuvottelija.com/podcast/guests/mikko-jarvinen/"], "episodeNumber": "14", "publishedAt": "2020-04-13", "duration": "30:16", "format": "full", "topics": ["ma_exits", "negotiation"], "description": "Sami Miettinen teaches negotiation skills pro-bono in True North Entrepreneurship Through Acquisition program with Gautam Basu and Mikko Järvinen.\n\nThis first part of the training goes through relative valuation basics such as EV/EBITDA multiples in engineering sector, and covid-19 impact on valuation levels. The win-win vs. no deal mindset of ETA is contrasted to win-lose and compromise strategies of average negotiators, whose failing arc of negotiation is shown as a cautionary example. After this, information discovery and management is discussed. The extreme signaling techniques of Nalle Wahlroos and Elon Musk's are demonstrated.", "page": "https://www.neuvottelija.com/podcast/episodes/18-negotiating-eta-acquisition-gautam-basu-mikko-jarvinen-negot/", "text": "[00:00] This is essentially where the aspiring entrepreneurs get to put their management skills [unclear], so as CEOs of these acquired businesses they will be trying proliferation activities, increasing operational efficiency. One would think that it's always good to buy sort of a highly valued and high growing companies and be the CEO and owner of a unicorn or highly skilled technology value, or software as a service. However, this is not what the program is about. You actually, the speed [unclear] is more in the boring end of things, so you want to have a company which is relatively inexpensive, in addition to this, potential like-so-on effects of the of the market in general. Hello, this is Sami Miettinen. I run this channel called Neuvottelija, or Negotiator, and in this [01:01] episode I show how to negotiate an acquisition in a TrueNorth program, entrepreneurship through acquisition. My hosts Gautam Basu and Mikko Järvinen, who will first explain the ETA concept, and then I will demonstrate how negotiations can be used to acquire company at the reasonable price, especially taking advantage the change circumstances in the current corporate finance market. will go through a couple of basics in negotiation, first showing an evaluation and relative price work and how a weak negotiation arc is formed, then I will go through a couple of information gathering tactics and how to signal in negotiations. This will be later on followed up with the rest of the training, where people have the opportunity to ask me questions. [02:09] some negotiations. If you're listening to this podcast, I would certainly recommend you watch also the YouTube version of it, because of the slide I will be using throughout. Welcome to the first ever TrueNorth Search webinar. My name is Gautam Basu and I'm the managing partner at True North Search. We originally planned to hold this event at the Aalto Business School, but due to the COVID-19 situation we decided to leverage the principles of agility and adaptability in business operations, and we quickly adapted to the remote online format, which I think many of you have already started doing, but that being said, I don't think this will detract from the value we'll get today because we have an exciting presentation by Mr. Sami Miettinen from Translink Corporate Finance on the topic of negotiation for acquisition entrepreneurs. Negotiation is one of the key [03:12] skills to develop if one wants to be successful in entrepreneurship through acquisition, from negotiating a transitional service agreement with the seller, to negotiating the final purchase price of a transaction. The art and skill of negotiation is a core competency for this career path, so we're thrilled to have Sami present for us this evening, but before we dive into this exciting presentation, a couple of ground rules. So number one, everyone on this call, please mute yourself so we minimize all background noise, and number two is, if you have a question for the presenter, then please use the chat function in Zoom to ask your question, and I will monitor the chat area during the presentation, and then we can ask the presenter in a timely manner. With that being said, I'd like to turn it over to my associate Mikko Järvinen, will give us a quick review of the ETA model for those of [04:13] you that may not be familiar with that, and once he's completed, then we'll turn it over to Sami. So Mikko, the floor is yours. Thank you, Gautam. Just a moment, I will be sharing my screen for you, and I think I have now accomplished that successfully. You see my screen, right? Excellent, good. So for you that are first-time attending these, our events in general, or new to the entrepreneurship through acquisition model, I have just a couple of slides to actually explain what all this is about. So, uh, essentially entrepreneurship through acquisition isn't something very new. Businesses have been traded probably for as long as there has been people around, but this specific approach, this specific model of entrepreneurship through acquisition, acquisition [05:13] has originally developed in the US by a gentleman called [unclear] in the Stanford University in mid-80s. Essentially, we see it as a career path where an aspiring entrepreneur can search for, acquire, lead, operate, and grow an existing business. So essentially, an alternative to your startup path, where businesses are created from basically zero. Maybe the one key aspect of the ETA model is three main principles it has. So essentially, there are the jockey, the horse, and trainer. Jockey being the aspiring entrepreneur starting the search to acquire an established target business. The horse being an established business that is acquired, and the trainer, that can be an investor, advisor, or an accelerator that is supporting the jockey of the journey. Traditionally, the jockeys have [06:16] come from, have been a freshly graduated MBAs, but more recently we have seen people more experienced people taking this role, typically people with a long management experience, and maybe looking for an alternative to the corporate life. The horses are typically companies that have already existing revenues, cash flow, customer, suppliers, so something very different to your startup world, and the trainer can be an investor, advisor, or in the case of TrueNorth Search, an accelerator, which is there to actually support the jockey in order to fight them through the pool horse and have a, what we would call, a good jockey-horse fit, to move on, develop that business. So the four key steps of the ETA process. So as you can see, the timeline on the top row, the whole duration for the ETA process is estimated to be something in between five [07:18] years to 10 years, and to get this started there are actually three main variations. There is the [unclear] variation, where aspiring entrepreneur essentially raises funding for these [unclear] and acquisition stage, so essentially project funding for the duration of 12 to 8 months, to search and find an ideal target. Second option is the self-funded search, where the searcher covers those costs out of his or her pocket, and thirdly there is the option of partnering up with an accelerator, which can essentially help upon some of the resources that are needed for this stage. A certain acquisition stage, that is something very, I would say, unique for the Entrepreneurship through acquisition process, so what the searcher will do in this stage is that he or she will screen around 500 potential targets, meet sellers, conduct due diligence, arrange finance, negotiating approaches, [08:22] and acquires only one target out of those 500 potential ones, and the fourth stage's operating [unclear]. This is essentially where the aspiring entrepreneurs get to put their management skills in use, so as CEOs of these acquired businesses they will be trying proliferation activities, increasing operational efficiency, and grow the revenue of the business, and finally there is the exit stage. Typically some type of liquidity event happens in four to seven years from the acquisition, and there are essentially two paths that can happen. The company can be acquired by a third party, or if the entrepreneur decides, he can choose the path of recapitalisation, where he essentially buys the investors out at this stage and may continue running the business for the rest of his life, if that is what — what the entrepreneur is actually looking for. So I guess this sums up [09:23] pretty much the four steps of the ETA process, and I guess if you have some questions, please put them on the chat, and maybe we'll come back to that the latter part of the presentation, but having said this, I think I would be happy to hand over the presentation. [unclear] So we'll — you can see, what — the share again? No — yes — presentation. There we go, very good, thanks for inviting here. So I'm doing this pro bono, and my background is, I'm investment banker. I spent half of my career in London, 13 years in Credit Suisse and CB, and [unclear] Capital, [10:30] and then I have worked in [unclear] banking and corporate finance in in Finland, in various institutions. Then, that's the sort of side [unclear] step I have. I have been the CEO of Nordic Trustee, which [unclear] bondholders' rights in the Finnish bond structures. I have [unclear] from Aalto, and have an MBA from USA, and why I'm here talking about the negotiation is because I have, together with [unclear], published the book — oh, you know, [unclear] — which is because it's a quite a short, a small market, it's the market leader in that negotiation literature in Finland, and here are my [unclear], if you want to reach me out. So I was asked to discuss a couple of key concepts in negotiation and how they tie up to this ETA model of acquiring business and becoming the CEO. First of all, my day job is, I'm a corporate financier, and TransLink [11:38] Corporate Finance does mostly sell-side. There, many businesses, so we would typically be on the selling side, whereas the participants in this ETA program would be buying, but from time to time we do buy-side advisory, so I know the process and how the financing ties to it. So those are the two areas of investment banking services which are relevant to the ETA program, the buy-side M&A advisory and sell-side advisory, and if we go on to how those two services applied to the ETA, first we have to look at the outside, the environment, and that's of course pretty grim. So this is a timeline of the fear index of weeks, and this measures the implied volatility and the options in the Chicago Board of Options, and we have passed the previous all-time high peak at 2008, when the Lehman Brothers collapsed. So this is a similar-magnitude event we are witnessing, [12:43] COVID-19, and that's of course pretty bad news for most of the humanity, but this could actually be a pretty good [unclear] point in time to look at this ETA model, because asset valuations are down, and at some point they will obviously go up, so it's a good, good point to start. And if we, in general, one would think that it's always good to buy sort of a highly valued and high-growing companies and be the CEO and owner of a unicorn or highly skilled technology value, or software as a service. However, this is not what the program is about. You actually, the speed spot of acquiring companies is more in the boring end of things, so you want to have a company which is relatively inexpensive, in addition to this potential like-so-on effects of the of the [13:47] market in general, and you might also want to push down the price with these levers, which discount the price further: illiquidity, no control, lack of governance, and value leakage, and the other [unclear] so if you do this right you can have the possibility of getting into the business at the low point, at the discount, and then you can exit at the more [unclear] times, utilizing the premiums available in the, when the market recovers, but just as a reminder if you're looking to do this program to buy the next Supercell, this is probably not for you, and I, an example how people value companies. They look at the enterprise value over EBITDA. This is [unclear], [unclear] a multiple, which means that how many times the value of the acquired business is [14:48] a multiple of your current cash flow, and as we can see in this picture, in the engineering sector, of big blue-chip engineering companies in the Nordic area, the [unclear] typical multiple has been something like 10 times or even over it, and now it has collapsed here, in the, in the current environment, and this is quite important, because this determines your entry point. If you end at the low multiple and exit in the high multiple, that's good, otherwise then you have to, of course, improve the profitability to fight against this, the dropping multiple, so it's a good time to do deals, probably pretty soon. Of course, if the market keeps going down, then that's, that's still bad timing, but we don't know really, and here's the data, as a part of this program you would be looking at the numbers like this, and in the engineer sector you would look at not only [15:49] the relative valuations, but you would look at the sales growth of the sector, the profitability of the sector, and then you would look at the sort of a smaller, much smaller than this actually, of the market, not the big ones. This is the enterprise value, Atlas Copco has an enterprise value of [unclear] thirty-four billion euros. Obviously this program is not looking after by Atlas Copco, and it's not even looking at the [unclear], but they're small, much smaller companies. I think, Gautam, you mentioned that this [unclear], something like a couple of million euros to twenty million euros, if that's right? — That's correct. And then you look at these discounts, which I mentioned in the previous slide, to sort of enhance your entry point, buy low, sell high. Okay, now we move to the negotiations, so this is a negotiation theory. My fear is that amateurs operate in sort of a narrow corridor of giving up. This would mean that you're basically a too-nice guy, you give up [16:54] anything that the other guy does, and then if you are then a tough guy, you go for competition mode and try to sort of capture all, all evaluate yourself, and leave nothing to the other, poor, guy. And then you might hug all, and yet go something in the middle, but that's bad, that's, that's an even negotiation, a sort of master negotiator looks at this completely differently. Say, you either do this classic win-win, so both parties win big, or, which is equally important, you do 'no deal', and both look for a better deal elsewhere. Of course, it's provided time-appropriate to these outcomes, but as a mindset you shall try to structure a mutually satisfactory deal, or then you pretty quickly look for options outside the theater, had the play, and as a sort of, if you're [17:55] interested in how this is done, on the exit market, there's a pretty good Finnish book, 'Exit', which has 15 stories, or half, successful entrepreneurs who have sold their companies, or listed them, or otherwise exited. Incidentally, three of the deals are TransLink Corporate Finance deals, shown here, and also both authors have actually exited their businesses, [unclear] and the [unclear] group, with our help. Then, if you look at how a typical bad negotiator works, this is the sort of caricature of negotiation, and when you don't know how to negotiate, you first look at what to do before you enter the negotiation, at off the table, we call it the dialogue-planning phase, and you are aided positively, the trust is here, positive, and distrust, this negative. You are aided [19:00] by your reputation, the references, hopefully you have good ones, they could be bad as well, if you have a bad reputation, and then there's of course some kind of pre-meeting resistance, because people don't know you necessarily before the meeting, you enter the negotiation without agenda, you somehow scrape till a deal, you start doing the transaction, and you can see here it will go badly, and what happens is, you, to first, called first impression, or you skip that altogether, you're being rude, you try to then build a relationship and perhaps exceed to push the positive energy up, then you perhaps go to this bargaining model like I showed in the previous slide, and then you maybe have a high moment where there, the parties misunderstand the agreement and think they have a good deal, but then that was all a fake, then time is running out, that's quite important, negotiation, you have approaching panic, and you maybe want to do a deal anyway, pretty lousy deal, and once you [20:05] do a lousy deal, you have a declined trust carry-forward, but you essentially ruin your reputation, the references, and you start from the bad foot when you do the deal, that's party again, or with the sort of close circle of people, because people do tell about this, bad experiences, so don't do this. Okay, what do you, what should you do then? You should first do a bit, like the previous slide, no agenda, that's, that's bad, so do your agenda. Then you, you should obviously at some time, wisely, so you should look at what you're looking at here. If you take the ETA program goals here, you are probably looking to buy your company cheaply and buy a good one where you enjoy working. You look at what the other party is looking at, they maybe want to get cash or some of the other benefit, to continue, good new owner. [21:07] Then you look at this win-win deal, like if you can do the combined deals where everybody wins, and then you do quite a lot of this, like, if you have to walk away, what would be the new [unclear]? Well, then this ETA program you actually do a lot of this, so you create a lot of walk-away options, you look at the many, many new-partner options, so, so you sort of repeat this circle with the ETA, and that from time to time you do this, compromises, that's a deal, but often people don't do this, and the beauty of the ETA is you do create a lot of backup options, because you keep repeating this process with the many companies. Then a couple of concepts I'm going to talk about up later on, on this presentation. We defined four levers of negotiation, their power, analytics, interaction, and principles, and here we define them, in the form of first splitting [22:10] the pie in the context, so if this is your pie, or cake, you have to split it, like, who gets the benefit, added value of the deal, hopefully you'll get more of it, and this is your, just, power tricks to, and negotiation handles, to achieve this. Then you have the analytical skills, you make a bigger pie, you add elements to the deal which are not obvious, if you're smart and clever, and once you have achieved this, pick up, how you deliver in negotiation, so the other party, even if they get a smaller pie, they feel good about it, because here you are handling the social interactions well, and then, of course, the reputation follows all through this. So if you're just doing this mechanically, and then trying to sort of secure the other party than they are, you're not doing it right, so you had to have consistent principles, how you negotiate, and how you build a reputation over time, so that this cake-baking business is for the long term, not just one-off, and on these concepts, we have tons [23:19] of these concepts in our book, and in a negotiation training, we get through this ETA, but if we pick up on it, there's quite a lot of power elements, by the way, I'm not going to cover them here today, but you could use studies, ranges, and archetypes in negotiation, and you can use indirect power and direct power to, to get forced decisions and walk away, but here we're mostly talking about the analytics, so you have the time management is quite key, like how you handle the time element. I touched upon the price earlier on, but there's a whole lot of stuff on the game theory and how to, how to sort of find the best value in the deal. Then the interaction, I'm gonna talk a bit more about that, so how you deliver your message, this is done through a process called signaling and sharing the information, and then what's very, very important is the negotiation-team composition, and [24:19] with the ETA, you cannot get the benefit of the team, because we will be coaching, coaching, you and this, this program, and then these principles, in the long term you need to have a reputation, and trust and ethics and even algorithms, how you do things in a clever way. Okay, so if you look at the signaling, so if you, you have to sort of get in the negotiation, you had to acquire information, and you have to deliver information to the other party. So if you use the analogy of Texas Hold'em, you have five open cards eventually, and then you have two in reserve, and it's nice that they're aces, so you maybe win this one, but then there was an American, this is, this is a foreign minister, I think Donald Rumsfeld, and he had this fantastically misunderstood saying of the, 'no-no's', unknown unknowns, and basically that's actually a very smart speech [25:24] he had. So when you tried to figure information, there are things you know that you know, your basic facts, there are things you know that you don't know, and then there are this Black Swan territory, they're unknown ones, those things you don't even know, don't know that you don't know them, and if you can uncover this Black Swan type of information, then that can be hugely powerful, they can be like key negotiation levers. So if you know, for example, if you're trying to buy a company, and then you, through method or through luck, you learn that then there is a certain need for them to sell within a month, the business, and it's not obvious to everybody, this is, there's this thing, by a kind of time pressure, then that's, that's an example of a Black Swan event which you can use to your advantage. So, but then you signal that, this sort of open cards, in this ETA program, [26:28] you would say, be pretty open about that you want to acquire a company, you want a good one with which grows and it's profitable and can disrupt the competition, and you, you want to partner for a long term, so it's perfectly all right. [Music] Openly talk about this. What you don't want to do, let's say this company's in the lovely city of Pori, but you, you and your family are in Helsinki, so you don't want to move to Pori. You don't, you shouldn't be rude and tell that, it's not, doesn't going to help anybody. Then if this is a really terrific company, you shouldn't necessarily say that this is like the best of my options, and let's say that you have wasted your time in this TrueNorth program and used your one year for doing nothing, and you have three months left, then you should maybe tell that you have a time pressure of your own, but some people do this much more aggressively, and just to give it, two guys who do this in the extreme here, [unclear] [27:36] [unclear], who's sold his bank, the Danish guys, didn't skimp on, for over, by signaling that he wants to sell it for over 3.5 billion, and he got 4.1 billion just by saying that this is his walk-away price. Elon Musk famously tweeted, well, why he was higher, or something, that this Tesla's worth $420, your, $1 per share, and he, 'funding secured', for his arrogance, he was, he was kicked out as chairman, [unclear], but you can, you're gonna make [unclear], do this even with the public-listed companies, which [unclear]. So if you are a really powerful guy, you can play outside this book, sometimes it's fails, and how to get the information actually, trick is not to be a smart know-it-all. This [unclear] anybody, except, like, middle-aged guys [28:38] like me, know who this guy is, but it's Mr. Columbo, and beautiful candor, Columbo was a popular TV series back in, like, ages ago, and the tactic of this detective was to play a really stupid guy who just had a last question, who, it's completely nailed the criminal in the, in the show. So to get the information, it's very good to actually ask questions, then, and say that you don't actually understand this business, and you would appreciate any information they can give, and that's often actually true. Hello there, my name is Sami Miettinen, and this was the excerpt from TrueNorth Search ETA program, where I described, together with my hosts, Gautam Basu and Mikko Järvinen, a number of topics on acquisition process. I will do a follow-up podcast which will cover such things [29:43] as team tactics, the optimal arc of negotiation, and how to close the deal. I will also answer a number of audience questions. If you have been listening to this, I would strongly recommend you will subscribe to my YouTube channel, Sami Miettinen, Neuvottelija, or search 'Negotiator'. Thank you. "}, {"slug": "398-yrityskauppakasvu-ipon-jalkeen-mikko-keskinen-jari-lauriala", "title": "M&A Growth After an IPO: Tamtron's Story | Mikko Keskinen, Jari Lauriala", "titleOriginal": "Yrityskauppakasvu IPOn jälkeen Mikko Keskinen Jari Lauriala #neuvottelija 276", "guest": "Mikko Keskinen, Jari Lauriala", "guestsCanonical": ["Mikko Keskinen", "Jari Lauriala"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/mikko-keskinen/", "https://www.neuvottelija.com/podcast/guests/jari-lauriala/"], "episodeNumber": "276", "publishedAt": "2024-10-16", "duration": "50:52", "format": "full", "topics": ["ma_exits", "ownership_capital_tax"], "description": "Tamtron CEO Mikko Keskinen and Translink Managing Partner Jari Lauriala explain how Tamtron's IPO has worked well as an enabler of M&A-driven growth. Acquisitions are an unfairly overlooked way to grow, and Finnish companies can execute them successfully with the right strategy. Tamtron's weighing solutions developed rapidly just months after its December 2022 IPO, when it acquired Lahti Precision. Its subscription-based software service (SaaS), mScales, is also a growth driver as more customers use it to record weighing and regulatory data. Jari describes the Approved Adviser's two roles — financial adviser for the IPO, and ongoing support with the company's disclosure and listing obligations as Approved Adviser. The episode does not give investment recommendations. Although capital is scarce in Finland, Tamtron has attracted Ensto Invest and Hannu Kytölä, as well as Mika Heikkilä's Proprius Partners, as investors, after the company delivered on its IPO growth targets through profitable, acquisition-driven growth.", "page": "https://www.neuvottelija.com/podcast/episodes/398-yrityskauppakasvu-ipon-jalkeen-mikko-keskinen-jari-lauriala/", "text": "[00:00] Listing is, in a way, a tool for a company in its lifecycle; it is not an endpoint for anything. So, no one sold shares? No, so it's not a cash-out opportunity, but rather a way to handle the current situation and enable future growth, including acquisitions, and it continues, as it was a milestone. Now we move forward towards the next growth leaps. Perhaps a main listing will be relevant at some point; the company is evolving. We also see that we, Translink Corporate Finance, don't get involved in projects where it sounds a bit like it's just meant to last until the listing and then surprises start appearing, or there are some other goals that aren't long-term. Interests must be aligned with the investor who joins during the listing, so that's important to us. In our financial targets at the time of the listing, if I remember correctly, we defined that about 44 million of that growth would come from acquisitions. And it's clear that those will still be needed and will likely be done, but on the other hand, I still have a feeling that many companies, when they list, always state that the raised funds will be used for acquisitions, but how many actually follow through? For us, we've actually done dozens even before the listing. We have [01:24] experience with them, and this was of course our largest yet, Lahti Precision in the spring of 2023. Alright, welcome to the Neuvottelija channel. I have Tamtron's CEO Mikko Keskinen as my guest. Hello! Greetings. You've come by train from Tampere? Yes, that's correct. And then my colleague from Translink Corporate Finance, Jari Lauriala - you probably walked from our office? Yes, that's what happened. Hi, nice to be here and finally! Indeed, and you're one of Translink's founding partners with Tero Nummenpää, who has been here so many times, so it's great to have you here. It was a good topic, so it's nice to be here for this. Yes, and the Neuvottelija channel is actually overtaking Inderes TV, so we thought we'd do a company presentation here, and this is where I'm a bit on thin ice, as Translink Corporate Finance carried out Tamtron's IPO in 2022. We are, or Jari specifically is, the Certified Adviser for the company. Tamtron provides [02:33] weighing solutions. What was your slogan again? It was 'Weigh to Know'. Translated as 'Punnittua Tietoa'. Yeah, it's really annoying that the 't' isn't there in 'way', but it's a pun. But why is weighing the most important thing in the world? Well, it's actually the most common way to measure in industry - it's weight data, and Tamtron is a world leader in its own niche industry here. companies and, well, I think we're now in Europe among the top three, if I don't remember it completely wrong, so we have grown strongly in recent years and the product offering has expanded through acquisitions and we've gained more market share that way too, but for the general public of course we are a bit of an unknown company, even though we've had great recognition and visibility, for example through this listing, but anyway indeed our solutions, or we provide solutions for mass-based material flow management. I personally like this definition, which includes specifically for industry these weighing devices, weighing systems, dosing systems, conveyors, and related software, cloud services, and then life cycle services, so these are a quite [03:59] critical part of our customers' processes, which is why there's also a lot of maintenance and repair activity, verification services. So when you said that these are important to the customer, it can be said for many companies that all their purchases and sales, that data goes through our devices and systems and through that all the way to invoicing, which then of course leads to the fact that we also work quite a bit with regulation, statutory metrology, measuring instruments, there's a lot of this sort of compliance, starting from the requirements of EU directives, and those Tamtron of course applies here and yeah, so, like, also taxes and customs statistics and all that, top-notch, and nothing like estimated by eye; it's very precise work. Yes, and well, this kind of work investment banking is too, though I think, Jari, there's quite a bit of artistry involved in this investment banking business, but those two roles were mentioned so could you perhaps explain a bit what— Yeah, so indeed, at Translink I act in listings as, well, a financial advisor and a Certified Advisor. So this first-mentioned means that we are involved in these offerings as an advisor and ensure that we get sufficient anchor investor demand, meaning getting institutional investors involved and, well, then we have a partner in this case Nordnet, who then handled this this retail side, meaning marketing then to consumer customers, and we [05:26] were then, well, we handled sort of the stage preceding that and ensured that the project reaches the finish line, and then this second role, meaning the so-called Certified Advisor, so this is this kind of stock exchange system, an institution in a way, which then ensures for these target companies that they fulfill the continuous disclosure obligation, so first the stock exchange criteria must be met to get onto the exchange, we assist the company in that, and after that monitor that these obligations are fulfilled. So there are sort of two themes, one being this sort of legislative upcoming, which FIN-FSA supervises as the authority, and then there's this self-regulation side, meaning the exchange's own rulebook, and both of these must line up so that you can be on the exchange. And this is a very good system in my opinion, what they have in First North, that if you compare it to main list companies, for example, there's no equivalent there and there have been quite a few challenges with reporting for many large companies, which you don't see in First North. But perhaps our big role is, however, this role of a financial advisor, ensuring that the deal gets finalized there on the exchange. Meaning getting investors to invest in the company and the company [06:47] listed. Yes, and it's not... I've been quite critical myself of how hard it is specifically to find these anchor investors, but in this case Translink's December 2022, well, there we found the rich Miettinens, so greetings to Tero Luoma and Marjo Miettinen and Ensto Invest, dear greetings there, and so we got this kind of Serious Capital involved, but before this call, I called Mika Heikkilä from Proprius Partners, and he hadn't yet set up the fund, so he couldn't participate then, but this first capital in the listing is quite important, but then the Lahti Precision acquisition was also made right after, and these were two slightly different mechanisms, right Jari? Yes, I can start with that, then you can tell a bit about the deal and its benefits, but basically, it was this kind of seller-driven process, so Lahti Precision had a private equity fund as its main owner, which then started this kind of sales process with their advisor, and this happened right after Toni's listing, so we had to react to that situation, knowing that all the other buyers had been contacted, and then we had to really seriously consider how to approach this, and the company was well known, and then [08:11] basically it required us to arrange additional financing for the company, the deal was doable, and it was done so that then, once we had reached an agreement on the commercial terms with the seller and the seller's representatives, then the company's main owners, meaning in this case, Pentti Asiakainen and then Ensto Invest, gave subscription commitments in a way that the deal could be financed, and after that, the company's main owners made a smart decision that they still wanted to open this opportunity to the public to participate in this follow-on offering, so what was done there was that the current owner was given this kind of guaranteed allocation, but for the part they didn't like subscribed for shares then like completely outsiders were able to get in on that offering and I think this was like a good sort of intermediate model between a rights issue and and this kind of like overnight directed offering so so it surely left everyone with a good taste in their mouths that it wasn't done really like overnight and and at a discount then relative to the current market value especially since the company was still quite young after all and it met the goals in that deal meaning meaning the seller was able to ensure that the financing is not a problem and we got like a clean exit then because there was a private equity investor as a seller so it sort of [09:36] like we were able to carry it through in a very short time then then and deal certainty was high there like towards the seller and Mikko can tell more about these Yes so so I mean you can demonstrably get capital from the stock market quite quickly even after an IPO and for acquisitions but well wasn't it quite a good deal that in a way practically like didn't quite double the turnover but significant Yeah yeah not quite indeed in that year we were at ten but but nearly 20 million then came in that so a big big growth leap of course for us and about 100 100 people new colleagues here in the home country and of course the significance of this IPO here as Jari says was was like essential that of course Tamtron's IPO was carried out to implement our growth strategy and and these kinds of leaps wouldn't have been possible of course without the fact that that the funds raised from these which we then of course used Now this came quite quite indeed quickly this opportunity for this this Precision deal but of course when we had been competitors partly in the home country in certain product groups for a long time we've we've followed the company we knew we knew well their solutions and and well also there was new offering certain technologies in these dosing solutions on the automation side which Tamtron didn't [10:57] have before In a way that in-factory measurement and and weighing so it was like actually for us such a perfect addition meaning meaning market share and growth were gained but also new technologies that we can now in this Tamtron world then take to our country companies sales channels and support then this organic growth further through that not to mention we got the two best Finnish cities Meaning well Tampere and Lahti so I was b- born so well and grown up in Tampere a completely winner combination maybe the big biggest challenge for a couple of years has been this this well playoff league finals must be careful what you say as a Tamperelan in that so as not to offend anyone's feelings Yeah maybe let's return to that on the insider side but well it's great that an acquisition succeeds and then I mean this isn't in any way an easy job to promise like growth leaps in an IPO and then in a way also implement it it was quite clear it has to be acquisition-driven You can't get there quite organically, but it's really great after a few months... [12:05] ...after getting that big one, and then you probably wondered if the synergies would work and... ...if we paid too much, but overall, it went quite well, yes. Yes, and actually, this was a bit of a different kind of... ...integration process for us. Previously, we've often bought... ...companies from abroad, but now we were at home and partly with competitors, but... ...we were able to carry out that integration process quite efficiently and... ...immediately after the closing, within a month or two, we had... ...a new organizational model and roles in the organization, and... ...tasks were defined, and we could continue. And actually, we had... ...our most important internal goal was that for the customers and business... ...there shouldn't be any interruptions or disturbances, and we succeeded really well. So the year '23 was a record year for this acquisition target, Precision LeKi... ...everything went really well. And now we've been moving forward... ...continuously, and these technologies and solutions from Lahti have... [13:09] ...become more and more familiar to the local subsidiaries, and with Tamtron's... ...internal cooperation in sales and product management, I believe that... ...we'll see even more of these synergies on the top line in the coming years. Yes. And regarding the IPO promises, by the way, about this... ...acquisition of Lahti Precision, wasn't one of the IPO promises this... ...lifting the recurring billing software component into SaaS? Didn't it come specifically from that end? Are we talking... ...with Lahti's... S? Yes, exactly. So in this, you could say... ...in our industry, Finns have been pioneers, meaning... ...we've started thinking in a new way about how to deliver these solutions... ...to customers and modernize their processes, utilizing digitalization. You still see very old operating models out there in the world... ...but now with digitalization, cloud services can replace a lot of... [14:10] ...that old hardware with mobile devices that drivers can use, and... ...Precision brought this mScales service to the market... ...a couple of years before Tamtron. Tamtron had a similar... ...cloud service, and then after the acquisition was completed, we of course evaluated... ...which platform to continue on as a shared one, and mScales was chosen. At that point, and indeed, it's a SaaS service as the name implies, and... ...it has this monthly recurring billing model. The revenue stream comes from that, whereas previously in these weighing solutions... ...software in the old world was sold like how you used to buy... ...a package for your own computer. That has also shifted to this monthly... ...subscription model. It's the same ideology here, of course, and it brings... ...that recurring revenue stream, and of course, it's also there when... [15:14] it scales, so that will then also bring improvements to the bottom line and profitability and we can talk a bit more about Anni's goals, there were others too, but Jari, this SaaS is one of Translink's strong areas We have this Translink SaaS quadrant, so there the SaaS business is the best right now even though the industry is considered at a low number, like a 3.5 or 3.6 revenue multiple, so this is like valuable business, so there's hidden value here in this Tamtron, I mean, I'm not giving recommendations in this episode but inevitably it comes to mind that at the time of the IPO multiples were... this company has done what it promised, meaning scale has grown, so roughly the revenue multiple was 1.15 and then a bit under 10 was the IPO EBITDA multiple, so from both of those in a way, with this increase in scale, these multiples have become cheaper, so now it feels like there might be some value on offer here, but Jari, is this kind of valuation... was there a bit of breakup spirit here or multiples or how did you see it? We tried to communicate that, and some people did buy into it, of course the share was still relatively small at that IPO stage, but it's clear [16:39] that it's so scalable that when you can basically sell the software to competitors' hardware too, so it's not limited just to your own installed base, and on the other hand, I don't know what your churn is right now, but with software like this, very few entrepreneurs will start changing it when there are practically no competing solutions Yes, and the data keeps coming in from that hardware. And Mikko, isn't it that some AI dust is settling there too? Yes, absolutely, of course Tamtron aims to maintain its technological leadership as well and this year the first AI-based solutions and features for this mSaaS service went into production after the summer for the first customers, so through that, and maybe it's even that there are many modules like this, for example the transfer document that came with the waste law reform, meaning in hazardous waste transport, these transfer documents must be prepared and then sent to the authority's database. So our mSaaS service does that, then you can take these AI features as packages and pick the suitable ones, and of course they are all priced as additional services, which also increases the monthly price. You could think that you're not that sorry if a kind of stiff [18:03] bureaucrat says that now there must be this and that requirement, so yes, of course, there's a lot related specifically to these measuring devices and everything related to waste management around it and related to the circular economy and such, it's clear that these regulatory requirements are constantly increasing, and in that sense, demand for these solutions of ours is, of course, in good shape, and there is a regulatory need, in a way, to look at the raw tons coming in and out, and VAT in, and this kind of fiscal perspective. But then there's also this slightly criticized ESG, meaning that when you want to measure good things, and not just some kind of fluff, but quite measurable things, absolutely, if we think about, for example, something easy for everyone to understand, like recycling plants or circular economy, things are measured in tons or weight there, and processed, and then they leave eventually in some form. So the entire material flow management, incoming and outgoing flows at the sorting center, is based on these weighing devices and the data collected with them, and then indeed, our cloud service, there are of course integrations from there to the customers' own ERP systems and other [19:24] back-end systems, and maybe also, as you pointed out, customer retention comes through that—it's such a central system, and when everything works, the customers are long-term. Yeah. Do you remember, Jari, if this IPO—I mean, on First North you can get by with this company description? Isn't the limit two million? But here we decided to do exactly that, since we went over it, it was then this EU Growth Prospectus, so strictly according to regulation. It's no longer just according to exchange rules, but it comes directly from the law, what kind of prospectus it must be, it's the more extensive version, and we were doing that with the bank at the time, and of course it goes for regulatory review. Yeah, they were really scrutinizing them there, they really do read it, as they should, so there were good comments, and of course we wanted to keep the quality high ourselves too, because it forms a sort of foundation for the future, and we don't want there to be things that are incorrect or misleading. Yeah. And my favorite term is 'circulation,' meaning these accountants there are actually drawing circles, like, 'yes, this figure is from the correct source.' So this is precise work. Even now, I think I can challenge any listener or viewer who wants to read the offering documents— I think we can still stand behind them quite proudly, [20:50] as it doesn't always go this way. In a listing, they might promise all kinds of fluff, but then the implementation is whatever. Maybe our philosophy starts from the idea that the listing is sort of like a tool for the company, that in a firm's lifecycle, it's not the endpoint. at all, so in this case as well, no one sold any shares so it wasn't like a cash-out opportunity, but rather a way to handle the current situation and enable future growth, including acquisitions, and it continues—it was an intermediate milestone. Now we're moving forward toward the next growth leaps, maybe listing on the main market will be relevant at some point; the company is developing. We also ensure that we at Translink don't get involved in projects like this where it sounds a bit like it's just a thing that lasts until the listing and then surprises start appearing, or there are some other goals that aren't long-term. Interests must be aligned with the investor who joins during the IPO; for us, that is important. Yes, regarding these offering goals, wasn't there talk [22:00] about staff commitment? That has progressed well, yes yes, and back then in that first original offering, it was really great to see how extensively our own staff got involved and subscribed for shares. I think it's a certain kind of confirmation that even inside the house, our own people believe and want to be owners in the company, so it was a really great signal, and of course other benefits of listing, if you think about it, then of course now in the summer, a share-based incentive scheme was introduced, so we can continue that. Of course, the company has grown a lot; through acquisitions, more people have joined, and we can now expand it to the team and get the management and key personnel's interests aligned with shareholder value creation too. I think it was a really great thing. And of course, you see in many cases that this kind of awareness and visibility is hard to get through earned media. Of course that's possible too, but this has brought many benefits to recruitment; when you think about it, we have a lot of information available about the company, and when people look into us, they can check interim reports and our company presentation and so on, so there's a lot of [23:23] positive stuff that comes with it. Of course, the workload shouldn't be underestimated, as Jari mentioned, for example, producing the prospectus and everything else, but you shouldn't be afraid of it either; those tasks get done. Yeah, and Jari, you invited me there; you had this event that I think you could call a Capital Markets Day, a sort of main market event. I thought it was fun. There were those R&D developer types, and they had fun visions, I think. I believe it's worth attending these to always learn about the firm and how you do things. Was it useful? Absolutely, and it's nice when you think about the communication side and [24:50] Yeah, I remember specifically that AI development and in a certain way, combining that weighing system with machine vision so that it seems like a winning concept, that you check and verify the actual weighing result with that image too. Yeah, and in that we're essentially at the core of this kind of AI or image recognition or whatever, because after all we get that data with cameras and other devices, and there used to be these load inspectors who take photos there, maybe a bit more advanced ones with phones, of what was brought on the platform, and all this can be automated. And now, with AI, it can be done quite efficiently, meaning we get this kind of efficiency in customer processes and added value, and no one has to do things manually there anymore, so yeah. We had one image processing case, Jari, was it Visy or whatever it was, it feels like in these cases Finns are quite strong in this kind of logistics management and in machine vision, in a way. Yes, and this measuring is great. I see Ponsse proudly putting that Tamtron logo on their systems. Yeah, but the core for us is still that [26:13] measurement technology and these force-based measurement solutions, and let's just say Ponsse chose us too. Thanks for the trust, but there are years of development work behind it and a lot of testing, iterating, and developing these measuring devices too, like for the forwarder, they have them there and of course it's great with these OEM customers that often the development work is done together for a while, and they have the machines and the real operating environment, and we get to test there, so that is also worth its weight in gold. What's the scale? I mean aren't we talking about kilograms and tons in your line of work? Well, it's practically tons, not kilos. When we're in industrial processes, the display shows tons not kilos for the operator. But then, of course for a Ponsse harvester, there is indeed in that grapple, yeah, it's in the grapple. So, of course, when you think those big wheel loaders can quickly have 5-8 tons in the bucket [27:29] of load, and of course, not to mention train scales, then we're talking about really heavy loads being measured. Yeah, and this Lahti Precision was like a rare domestic deal, at least Jari, we've noticed that this cross-border deal volume is becoming quite dominant, even though it's almost standard fare in acquisitions these days. In a way, for us, if If we think about our typical case, we usually have, well, being on the sell-side, maybe those cases are sought out where there is international demand, and often the situation is that we're in an industry where, to enter Finland, it's practically necessary through an acquisition, meaning it's not possible to set up a greenfield, or maybe it's been tried and it failed, and then it's been concluded that this is the only way, which then sort of might be that company's Nordic strategy, the final missing piece is Finland, and then they head there, so in a situation like this, where there's a very strong synergistic buyer who then wants the target, they are ready to pay quite a large premium, and then maybe these domestic buyers are at a bit of a disadvantage there if there aren't such large synergies, or if it's a [28:52] private equity target, then the PE firm still needs to get it bought cheap so they can sell high at the end of the investment period, so in that race, it often happens that the foreigner wins. Yeah, about those acquisitions still, didn't you have goals where this Lahti Precision helps quite a lot in this growth, but practically with just organic growth you can't manage, you should be able to... Yeah, in our financial targets back at the time of the listing, if I remember correctly, it was defined that about 4 million of that growth would come from acquisitions, and it's clear that they'll be needed in the future and will likely be done, but on the other hand, I still have a feeling that many companies, when they list, they always state that the raised funds will be used for acquisitions among other things, and how many actually do them? For us, however, they've actually been done dozens of times even before the listing, so we do have experience with them and this was of course the largest in history, this Lahti Precision, in spring 2023. Yeah, and it's good that you're doing it, there's a bit of... [30:09] Of course, some mess them up, like buying some Consolidated Papers or Unipers, but we always talk about them as responsible actions, and those synergy analyses are done properly, and we don't pay too high multiples, and we follow the playbook, so you really do get value from them, yeah, yeah, yeah, and growth, because organically it's harder to grind out, so in a way, this kind of vertical, or buying market share, is quite low-risk anyway. Yeah, and then in a sense, if you think about the smaller there, so there aren't necessarily many other buyers out there then, on the move, so that's obviously a good advantage for a buyer like Tamtron. It is in a way a good home for an entrepreneur who's leaving or, well, wants to step away from the business to retire or something else. Yeah, and if you recall these machines and Konecranes and Metsos, well, decades ago, they headed out into the service business and global expansion with exactly these—so, a bit like the same steps are being taken here, yeah, yeah, definitely. And it's of course been the case previously, before this listing, that with acquisitions, we naturally initiated many of those discussions ourselves and contacted selected companies, but now, of course, since it's quite public that acquisitions are part of our [31:35] growth strategy, and as things are being reported and announced, they are visible to everyone, so you notice that we've also started to be approached, so when industry companies reach that stage, it's of course also quite nice that those openings come our way and we can then evaluate if we want to go for it. Yeah, this could be done... if I only knew how to say it, since it still bothers me that all potential targets would hear about you even better. In a way, maybe Tamtron has probably looked at the domestic market here; you could find anything still, if you start expanding this a bit, but didn't you have those acquisitions quite a lot over there in Eastern Europe? Wasn't it? Well, Eastern Europe, yeah. Actually, regarding the Precision acquisition, well, there we carried out an acquisition in Denmark a year earlier, and the year before that in Norway, so these actually complemented our Nordic presence—the other way around than you just described, where Finland was the last one, so we got some really good, companies from there. And yeah, Eastern Europe—Tamtron is now in nine European [32:50] countries, so besides the Nordics, there's Germany, Poland, Czechia, Slovakia, Estonia, and, well, in Europe we still have, I'd say, interesting countries; of course, there are large economies like France and the UK, where we aren't yet, though we are there through dealers. We actually have exports to 50 countries outside of these home markets, through an extensive network of partners and dealers. And many of these Tamtron companies are former dealers, so it's quite a natural path; we get to know each other, and then the exit might become timely for the old owners as retirement begins to loom. So, this has been a good path for us, and I'd say one reason we've succeeded, I'd say, is that we've always known the target company quite well, and of course, they've known us, and we know that... The cooperation works so that there's like these resale acquisitions of dealers, perhaps. Isn't your system set up so smartly that competing weighing solutions can be plugged in there, into your Lahti Precision system perfectly, and then of course customers learn it's worth using quality hardware and buying from you. Yeah, that's right. Indeed, with these gateway devices, we're able [34:14] to connect devices from other manufacturers, which obviously makes adopting the cloud service easier; we wanted to make it flexible and e"}, {"slug": "628-yrityskaupan-sudenkuopat-ervasti-miettinen-neuvottelija-353", "title": "M&A Pitfalls: The Investment Banker in the Interview Seat | Eemeli Ervasti, Sami Miettinen", "titleOriginal": "Yrityskaupan sudenkuopat | Ervasti Miettinen | #neuvottelija 353", "guest": "Ervasti, Miettinen", "guestsCanonical": ["Eemeli Ervasti"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/eemeli-ervasti/"], "episodeNumber": "353", "publishedAt": "2025-09-30", "duration": "01:04:11", "format": "full", "topics": ["ma_exits", "negotiation"], "description": "In the interview seat: the 'wicked investment banker' Sami Miettinen | #neuvottelija 353. Eemeli Ervasti flips the script and interviews Sami Miettinen of Translink. The episode digs into the M&A process, ownership, buyer profiles, Translink's pricing and recruitment, AI's impact on investment banking work, and the entrepreneur's path to exit.", "page": "https://www.neuvottelija.com/podcast/episodes/628-yrityskaupan-sudenkuopat-ervasti-miettinen-neuvottelija-353/", "text": "[00:00] Eemeli Ervasti: All right, welcome to the Neuvottelija channel. Today our guest is Sami Miettinen, the mean investment banker. Great, it's a bit scary being on this side of the camera. Luckily we get to edit this episode together, so we can crop this prosperity belly of mine out of frame. Yes, today we have a so-called special episode. I've prepared a few questions for Sami, and the idea came from me thinking I need Translink's consulting services but can't afford to pay for them. So then I suggested, with a bit of an ulterior motive, that I'd interview you for the podcast and get to learn something myself at the same time. So yeah — tell us again who you are, in a few elevator-pitch words. Sure — I'm Eemeli Ervasti, a business administration student at Haaga-Helia University of Applied Sciences, and an entrepreneur. I'm active here too, and a silver medalist in a business competition, something like that. Yes, exactly. And that's why I need your services. [01:00] So, it was Europe's largest youth entrepreneurship competition, and there, with my business partner and classmate, we won silver. That's the background — just this summer. All right. Yeah, it's funny — when I came to your studio for the first time, you said, 'well, I'm just wearing a sweater,' so of course, as a good host, you offered me a blazer too, but I didn't take you up on it this time. Luckily it's not a sweater today, though. Yes. So, I've got three topics lined up, specifically related to your expertise and work — I know you co-wrote the book Neuvotteluvalta (Negotiation Power) with Juhana Torkki, and you also work at Translink. Right, so three topics. The first is how M&A works behind the scenes, plus some things from your clients' perspective. [02:07] Want to comment at this point? Sure, let's just dive in — maybe we don't need to explain the whole agenda up front, let's go piece by piece instead. So, Translink Corporate Finance is an international group that provides corporate restructuring services in over 30 countries. Often, for example, the company gets sold, or it's listed on the stock exchange, or it goes through an equity round or some other recapitalization, and often clients come to us with one of these needs — or really, it could be any of them, because the client doesn't necessarily know exactly what they want, they just want some kind of change in ownership. I'll start philosophically here: ownership is a scarce commodity in Finland, and in a way we provide solutions to ownership-related problems. One of those can be the need to find a new owner and change the current form of ownership, or even convert its value into cash. [03:12] Meaning making a so-called exit. Right. And just before we started filming, you said there's usually a common misconception about company sales. Mm-hmm. So do you want to elaborate on that here as well? Yeah, well, it's difficult, because what's being sold and transferred is ownership, and the company's current owner might actually be the best owner for it. They might also have a very close relationship with it — like, they work there themselves, or... an active owner who's constantly creating value — take them out, and it actually reduces the company's added value. And if that's the case, then that person is a big part of the company's value, and in a way we get into the question of whether this owner should then go on to work for the new owner and possibly reinvest in the company. This often happens, for instance, when the buyer is a private equity firm. But there's really so much to it — people might think it's just like selling a used car, that you're selling 'used shares,' but it's really not like that. Ownership itself is difficult, and so the transfer of that ownership is difficult too, precisely because of that. And then, well, potential owners are a scarce commodity, at least in Finland. Abroad there's plenty of capital, [04:37] so if the company is good enough, owning it can be easier to arrange abroad. Which brings us to Translink — we're also able to find potential foreign owners for a company. So what different owner profiles are there? Right, so a financial owner is, in a way, private equity — because private equity specializes in ownership. It buys these ownership stakes in companies, and then typically ties in the management team — for example with share incentives — to build the company together with them. into an international giant in its field, growing it and continuing to grow it — but then again, they too have the goal of selling that ownership eventually, say after seven years. This is the most professional type of buyer, and often in Translink deals, a good exit partner as well. So that's one type. The second type of buyer, for example, is a family-owned company, a family [05:46] office. For example, Translink arranged a deal for a SaaS service in HR and accounting management, where Hartwall Capital — a Finnish family investment office — bought the ownership and is now growing the company. So that's a private equity investor, and then there's this kind of family office. Then there's also the stock exchange — so all of us could soon invest in, say, Posti, the Finnish state postal company, instead of the state owning it entirely on its own. So in that case the pool of potential owners is very diverse. That's the third type. Then there can also be wealthy private individuals, or professionals in the field, who could be owners. And then, as maybe the last category, another company in the same field — usually a larger company that wants to buy a smaller one. So those are the kinds of categories out there. What other opportunities and threats are there in a potential Posti listing? Well, the state tends to be a poor owner in general, and the postal sector as an industry — these logistics services are quite challenging, and letter mail, which sits alongside those logistics services, is basically a dying product. So the business has been disrupted. And how well they've managed the transition from traditional mail to logistics services, [07:12] whether the state, as an owner, has botched that value or not, remains to be seen. It looks like there's now profitability and scale there. But this is also a question of price — anything can be sold if it's cheap enough, and once the price is low enough, there'll be demand. So the pricing risk is definitely interesting — whether the right value can be found for it, at least to the point where I'd actually bother investing. I'm a bit cynical myself about IPOs, so I don't invest in them very often, but you also run IPOs. Yes. And that's exactly the point — you have to think about the fact that the world is full of cynical people, and you have to build the process, the company description, and the valuation so it's a fair deal for everyone. For example, in our latest listing, this excellent Tampere-based company called Tamtron makes these kinds of weighing solutions, and they're really strong in that space. Since the IPO they've grown quite a lot through acquisitions, creating shareholder value, and along the way they've had, for instance, Mika Heikkilä of Proprius Partners as a kind of co-investor, alongside Ensto. Sounds interesting. I believe [08:34] this is going to be a long episode, as long as the content stays interesting. I've got a whole battery of questions here, so let's run through the topics — what really happens behind the scenes. Beyond that, I'm interested in your view of the future; as a 22-year-old, that's especially interesting to me. And then at the end, advice for owners — meaning buyers and sellers in this context — on building a business and being an owner, tips for that as well. Yes. So let's start with what happens behind the scenes — the 'mean investment banker.' When a client reaches out to you, how does the process start moving? Often we get new clients through recommendations from former clients, which is the most natural way, because they talk among themselves, without us, about how the Translink team handled things, and whether [09:37] we kept our promises — and they sort of pass on the trust from the previous successful deal to the new client. That's quite good, because then they already know what they're getting into, and they've heard that we're reliable, sensible, and a good negotiating partner. Sometimes people come along who don't know anything about us and just reach out. 'Ah, these guys probably handle corporate restructurings' — and the worst kind is when a group sends a letter to, say, ten advisors, saying 'you're hereby cordially invited to make a very cheap bid on our process.' We often don't bother with those if that's the category they fall into. Yeah, this is interesting — Juhana Torkki, in Tarinan valtakirja (The Power of Story), makes the claim that a company has two ways to create its own story. And I've been thinking about this from a marketing angle — the fact that customers tell the story themselves, in other words recommend you onward, versus the company doing its own marketing and saying 'this is who we are, these are the services we offer.' So, a question related to that: have you noticed a difference between clients who come through a recommendation [11:00] versus through your own marketing? So is there a clear difference between those clients? There is, yes. The one who comes through a recommendation is immediately warmer, because they're usually fine with us talking to the person who recommended us. And the recommender will often say — 'you went through the process with us, so just share your own story, tell them what it was like' — subject to the non-disclosure agreement and the limits of what can be disclosed, share your experience and maybe some tips, so trust plays a big role. There's this 'trust account' concept in the book, where you draw on the trust built up in a previous client's successful deal, so the new relationship starts with, say, a few dozen units already in the account. Whereas if someone comes in completely cold, say through inbound marketing, that trust might be based on nothing more than nice pictures and convincing references. Though we do have written references too, like from all those deals, where clients praise our professionalism and highlight certain things — but it's still a colder relationship. In general, building that kind of confidential space matters in almost every transaction, and it's especially important in M&A, and it includes meeting each other as human beings. Even though during COVID deals did get made where [12:26] nobody ever met in person, that's still pretty rare. Have you made a conscious decision to focus specifically on customer satisfaction, and treat that as your marketing? Yes — this kind of reference marketing. I remember going through this mandatory 'guru phase' once, where we went through these... Brian Tracy books and others, and there was this one... referral marketing guru, and I somehow became convinced that... it's by far the best. A... recommendation from a previous customer in the same industry, doing the same kind of deal, is completely superior — at least in this case, since... investment banking work is such a significant, or in a way such an intimate, thing that it requires... that. Whereas with something more generic — say if you're selling phone plans — you don't necessarily need to collect that many references from previous... Elisa customers. [13:27] So there's a spectrum here, but in this kind of demanding, expensive, small-team, high-stress process — investment banking or similar fields like strategy consulting — reference marketing simply wins out. Do you have any specific criteria for not taking on certain types of clients? Yes. Right now — for the past couple of years — we've focused on recurring-revenue B2B software services, or B2B SaaS as the industry calls it, typically with an enterprise value somewhere between 20 and 50 million euros. So it's quite a specific strategy, and those deals make up by far the majority of our transactions. So it's a bit like — if it's outside that segment, there needs to be almost a special reason for us to take it on. So maybe adjacent areas like software, AI, e-commerce, or media — if it's close enough to our focus, that's fine, but we really are very, very focused. And then if it's something like [14:44] a deal completely outside that focus, then there'd have to be, say, a years-long personal relationship — which does happen — where we want to do it simply because we're such good friends that we'll take on the deal anyway. Some people really do take on just about anything that comes their way, but I think that's a bad strategy, because you inevitably end up doing bad deals. Are these usually buyers, or sellers who come to you? So sometimes we have acquisitions specifically with our international partners in the group, and there can be really massive chains of acquisitions. Like the Swedish company Miss Group, which is owned by the private equity firm Perwyn — they've made dozens of acquisitions with us globally, around 30 as I recall, and some of them here in Finland too. So there are those exceptions, but then there's also Smartvatten, which does this kind of water management — alarm and early-warning services for properties — and we've done buy-side acquisitions for them as well. One last question on the [16:00] transaction side — how are your services priced, and why exactly like that? Yes, well, I can't give you an exact figure, but the price is in the hundreds of thousands of euros, so there's really no point hiring our team unless you're prepared to pay hundreds of thousands for it. And it's paid out of the purchase price — if the company sells for, say, 25 million and someone pays 25 million for it, the fee is paid out of that money. If no new money is actually coming in, it's much harder to pay, because then it would have to come out of individuals' own pockets, or the company's — and those kinds of sums usually aren't sitting in individuals' pockets — or out of the current owners' pockets. Which is why it requires an actual transaction where money changes hands, out of which the fee can be paid. So is it purely a commission, or is there also a fixed component? There is a fixed component — we have what you could call a materials fee. We don't do the retainer model. Many competitors do — a rolling monthly fee paid continuously for ongoing work. We instead have these milestone fees [17:23] for preparing the materials — once we've got all the info memos (information memorandums) and the preliminary data room and so on set up, a certain fee is paid for that. Then for the signing of the LOI (letter of intent), there's another milestone fee, you could say. So those are fixed fees, not commissions, but they're still tied to a clear milestone. But then the hundreds of thousands comes from the success fee — that's only paid if the deal actually closes, and it's fair in the sense that if there's no transaction, nothing gets paid. So in terms of opportunity cost, it can end up being a really expensive project for us — we might have a team working on it for over half a year and end up empty-handed. Yes, those sound like large sums, and I'm also interested in the team side — what kind of people succeed in this industry. [18:23] Yes. For example, we've got an 11-person team here at Translink's Finnish office. It includes partners like me, and also Tero Nummenpää and Jari Lauriala, for instance. At this level, we're usually the ones holding client responsibility, and in a way acting as the lead negotiator on the deal. Then there are the younger academic interns. There might be another partner involved as well, doing the project work and the day-to-day client work, and then there's the analyst level, and then we often have what we call 'analyst interims.' They're students near the end of their studies who, in a way, sacrifice half a year of their studies to not do any studying, and instead work a fixed-term, half-year stint with us, [19:25] and get a proper monthly salary for it. We often have people like that on these projects, and for them it's a total jackpot — they get to learn about real deals, real things, so it's really meaningful, and the positions are highly competitive. But our permanent team is 11 people, and with that we close about five to ten transactions a year, in total. You said it's a jackpot, this kind of internship — so when the applications come in, what exactly do you look for? Yes, we have a very structured process. There are a lot of well-thought-out processes in investment banking work too, along with ready-made templates and standard operating procedures. But for this recruitment, we have a system where first we announce the position through student associations. There's a deadline a few weeks out, applicants send in their CV and transcript of records, we go through them, and then we invite about ten of them — sometimes more — to do a case study, [20:45] where we give them a real company and say, 'value this.' We also have them describe the company's industry and competition, and then they do the work and present it. Based on that, we're already pretty close to a decision — like, if... it's been done well, then there might be very good chances... to get in based on that, but then there's still another... discussion, where all the possible partners, for example, get... to join that discussion, and then based on that, usually... about four people per year are chosen for these... interim roles. Yes. Now we'll move on to a slightly... future-oriented topic. So, how has AI changed your work so far? Yes, it has. This week I founded the Translink Corporate Finance vibe coding... society. So, this isn't a joke — we now have this, [21:47] for example, GitHub, which is like a repository where you save code, and this week, while filming this, we've actually been vibe-coding real programs in Python. I mean, this is partly just playing around, but we also use, for example, the paid version of ChatGPT for everyone at the firm, with the security settings configured so that customer data isn't used as training material. Everyone knows how to use it — it just got this code block feature that lets you run Python code directly like that. So you don't need local environments or anything like that if you want to vibe code. That's what I mean by the vibe coding part. Then, I've also used it myself, for example in video production — I use Adobe's Firefly image AI. So when I edit images, I use AI quite a lot. Then I've got all these LLM models, like Gemini and Grok. Then there's Perplexity, and I've built quite a bit on that. Three weeks ago I switched to Comet as my main browser — the Perplexity thing that's got Jeff Bezos's money behind it. [22:59] And it has this feature where every window you open in the browser is its own AI instance, which is absolutely wonderful — you can basically delegate tasks left and right, and it's like a small miracle when it actually gets things done. when you look at it. We also have various experimental systems in use — for example HubSpot has its own AI assistant now. Pretty much every CRM or customer data system these days is getting some kind of AI built in. We also have Microsoft Copilot, but it's so bad that almost nobody uses it. So we're quite picky about quality. Then various service providers pitch us things too. We had one AI tool meant for building infrastructure, but it was so bad that I half-joked we should just code a better one ourselves. So yes, AI is used very extensively, and in a sense we're AI natives — our people actually know how to direct the [24:09] AI properly. It's not just 'here's a PDF, summarize it' — we do these small custom tasks. I myself, for example, coded a better OCR tool last year when I had a magazine article with bad print quality that Adobe couldn't read properly, so I ran it through an OCR library in Python instead of typing it out by hand. We're not exactly professional coders, but we're smart people, so we make these kinds of small fixes using AI. Does it come into play in the deals themselves — anything concrete, like processes getting automated, or something similar? Well, you do have to be a bit careful with data security. There are cases, for example, once the data room comes in — meaning the company's entire set of data — where you could run it all through these AIs. But you have to be careful that the company's confidential data doesn't leak into the LLM, so you have to, well, [25:12] we have strict bans on that. But document summarization and translation, that we do — if there's a Finnish-language source document, for instance, that's done with AI nowadays. So those are the kinds of things. Then there's tracking down buyer candidates — yes, that's done too, like saying 'these six have been identified as likely buyers, so suggest similar ones' in these particular countries — that gets done. And then, well, some people do format their emails using AI. Personally I don't really bother with that sort of email automation, because I don't want to put much effort into email anymore, it just feels so old-fashioned, email. And I think in terms of interface, we've had Slack, for example, as a common discussion platform for five years, both within Translink and with clients, so these old-world tools started to feel really stiff by comparison. So what would a dream world look like, where, when you're running a deal, what else could you use AI for? Well, plenty could certainly be automated, and some of it already is. This manual work won't disappear though, because this transfer of ownership is so extremely confidential and personal that [26:36] you don't want it to leak under any circumstances. These are processes that take place under non-disclosure agreements, and it's not a desired situation for them to be discussed openly. But if there was a slightly more cynical owner who didn't care that everyone would know they're looking to exit, you could pretty much just dump this into every database out there, saying it's available and people can get in touch, and maybe put out media, the kind of content that would let people know this asset is for sale. So that kind of thing — boosting the probability of a sale event, so to speak — could be automated by sharing information about the asset quite openly. Then, of course, you could actually try to automate the process itself, so you could see a future where AIs negotiate a sale and purchase agreement among themselves, without an investment bank or lawyers being needed. [27:42] Do you really see that as the future? Well, in a sense you can model anything — you could take, say, 100 real M&A deals and their negotiation processes step by step, and model that. Then the bots just talk to each other while you watch from the sidelines. But then things can go wrong, and that's where the delegation problem comes in — and this is actually interesting, how much you want or dare to delegate to AI, and whether you still want a human check on top of it. An M&A deal is just — pretty much every single thing has to have the right decision-maker specifically sign off that this is how we're proceeding. So that kind of 'close your eyes and hope for the best' while process agents talk to each other is still quite far off. But there can be something like bringing everyone to the same level of information. In an acquisition, the current owner usually has very good information about the target being sold, and for the buyer it's like [28:53] peeling an onion. First you give them teasers and info memos and management presentations, then comes the data room, and finally — in principle — you give all the information the buyer wants to know. And once the buyer and seller reach nearly the same level of information, trust is in a sense maximized, and when the deal is made, the current owner's entire know-how is transferred to the new owner, so you don't have to pay a kind of risk premium for the possibility that something was hidden. So this is generally the philosophy behind a company sale — that you really try to share as much as possible about the business to reach that same level, so there's no need to discount the price for the potential risk that the seller pulls a scam or withholds information. Mm-hmm. The same principle applies to, for example, real estate deals or car sales — in principle, a good car salesman or real estate agent lets you take test drives or actively tells you about the flaws, so there won't be a dispute later. You mentioned that you specifically sell SaaS companies, so how do you see the future of SaaS software developers yourself? [30:13] Yeah, well, that's probably Finland's strongest area of expertise right now — B2B SaaS, meaning software for a specific need, like specialized payroll processing software, for example. as a software module of its own — or it could be something like Profinder, run by Ilkka Oja, which provides this kind of business information — you can look up a company's revenue, decision-makers, profitability, and other data, and compare across industries. They collect data and then, through some kind of user interface, it's used for specific functional purposes. Some of these use cases are, in a sense, easier to disrupt than others, and we produce this kind of quarterly report, the Translink Index, for SaaS companies, and there's a sort of two-way split — a horizontal [31:28] SaaS and a vertical SaaS. Horizontal means you have a specific function, like payroll or ERP or accounting, or some other sales database like HubSpot. Vertical means it's for a specific industry — for example Admicom, a listed company that focuses on software services for the construction industry, and in a way it sits in that construction vertical. And these vertical SaaS companies — their valuation multiple is currently about five times ARR (annual recurring revenue), while the valuations of these horizontal SaaS companies have actually dropped, to just over three times recurring revenue. So already from that you can see — and these used to be roughly the same figure for a long time — so from that you can already see that it's better to be in a focused vertical than in a generic horizontal SaaS. That's one clear trend this year. Then there's this AI disruption — you can take pretty much any piece of software nowadays and reverse-engineer it with AI. So if I, an old investment banker uncle, can whip up code [32:54] reasonably well based on my thirty-year-old programming skills, then imagine what a real software developer could do with AI — take a program that's making good money and think, 'let's sell this same thing, but usage-based instead of a monthly fee, so you pay for what you actually use.' And as an extreme example, Elon Musk announced that he's founded a company called Macrohard, whose job is to disrupt Microsoft. So, well, Microsoft is the world's most valuable SaaS company — it gives each of us email, PowerPoint, Excel, and so on. Well, Elon Musk's rather wicked vision is that these kinds of services could be bought on a usage basis from this AI-built Macrohard instead. Is this some kind of new trend? It's this kind of raw disruption — the idea of the SaaS model is that you're charged a monthly fee for a service, plus usage on top. So if you worked for me, I'd have to buy you Gmail, and then Microsoft and OneDrive so we could share files — and Microsoft's bill might, say, go up by 1.5 times once you start working there. Whereas in this Macrohard model, we'd just buy you usage-based service — so if you only use it maybe once a month, [34:15] to send that one file, then it would only cost something like 15 cents that month instead of a full tenner. So this is a trend that's bound to break through at some point. But doesn't this sound really risky — a big risk? Sure, but there's opportunity in it too, coming out of the software side. Well, but then it comes down to focus, and that kind of specialization is always sort of like the kind of thing where you don't have the energy for every single industry or language market — even a giant's payroll management, say, since nobody really wants to deal with Finland's ridiculous labor regulations, cooked up by a bunch of old-timers, to the point where even AI starts smoking at the ears trying to handle it, so they just leave it to the humans. So there are these 'moated' niches, like culture, language, special legislation, and that whole 'we're doing this exactly according to working hours and collective agreement terms' approach — the collective agreement appendices have to be in order, and people can't be bothered to deal with those. There can be industries that are quite unique in that way, so they won't really get disrupted. But this kind of disruption, or flipping [35:36] an industry's prevailing business model — you can do that with a quick, vibe-coded minimum viable product, test whether it starts selling, and only then put real resources behind it. It's actually a great time for this, because these dinosaurs can fall — suddenly a giant like Microsoft or SAP or whoever is no longer protected. When did these things first start to emerge? Well, it's this AI that's been around the whole time. So, as I said, even though Translink has also been using AI — ChatGPT 3.5 — for over two years now, it has to be done smartly, because a lot of people wasted a ton of money last year building their own fine-tuned language models, which now looks completely pointless. We never went down that money-wasting road, that [36:40] it needs to serve a real, practical purpose, a bit like an app. Those are being built all the time, and Finns have been a bit slow on this front. But, for example, I had Mikko Alasaarela here as a guest — he founded Agentics Finland, which pulled in about a thousand people in a single day, a group of people in Finland who are a"}, {"slug": "482-200iq-tekoaly-ohi-ihmisen-alasaarela-neuvottelija-307", "title": "AI Smarter Than Humans Within Two Years? | Mikko Alasaarela", "titleOriginal": "200IQ Tekoäly ohi ihmisen | Alasaarela | #neuvottelija 307", "guest": "Alasaarela", "guestsCanonical": ["Mikko Alasaarela"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/mikko-alasaarela/"], "episodeNumber": "307", "publishedAt": "2025-02-20", "duration": "52:15", "format": "full", "topics": ["ai_enterprise_tech"], "description": "AI development will overtake human thinking capacity within two years at the latest, according to Anthropic's Dario Amodei (Claude) and OpenAI's Sam Altman (ChatGPT). AI model performance keeps improving through specialization, better reasoning, more efficient processor use (thanks to models like DeepSeek), and expanding memory and context windows. Mikko Alasaarela spent the turn of the year obsessively testing the latest AI models, an experience that convinced him that AI smarter than humans now looks almost inevitable and left him thinking about how that will affect us — one horsepower isn't good for much, so what use is a single human intellect? Sami adds prompting AI to his 3D model (delete, delegate, do) as a critical skill alongside rhetoric, leadership and negotiation. The members-only segment discusses human-AI collaboration, including from young people's perspective.", "page": "https://www.neuvottelija.com/podcast/episodes/482-200iq-tekoaly-ohi-ihmisen-alasaarela-neuvottelija-307/", "text": "[00:01] Horsepower is an old-fashioned unit of power cars produce hundreds of horsepower My guest is Mikko Alasaarela I wonder what the unit for human intelligence could be that's what we have to think about now that AI is approaching that one and you can't do anything with one horsepower! And then these cars have gears that allow for acceleration you can't do anything with a horse but one idea is that this kind of general AI that would reach human thinking power could be one human power unit so we are in a situation where researchers decided to build a test called Humanity's Last Exam humanity's last test We are so close to the point where AI or human capabilities that they came to the conclusion that let's make this kind of final test once this is passed there will be very few arguments left that AI wouldn't be better than humans Where are we at the moment with the officially available models Well o3 which is this ChatGPT's [01:20] newest model and it's at 13% in this test but they already announced that in their internal tests they have already reached 35% So we got from the moment the test was launched to the point where a third has already been solved basically in a month so it probably won't take much longer Yeah some talk about a year that then this general AI would also be in use Yeah so Dario Amodei and Sam Altman have both said now who are the founder of Anthropic and then the founder of OpenAI they both announced that according to the current mathematical modeling the AGI moment is in 2026 which is next year Well then but horses surely have some aesthetic and athletic value so I guess we humans also have something, we need to rethink our role in this world and the universe quite a bit over the next years, one of Elon Musk's, well, sci-fi writer role models has been Iain M. Banks, who has this Culture culture where these AIs are benevolent and we are sort of like their Labrador retrievers and they tolerate us and well if we don't [02:43] get in their faces too much. Yeah, let's hope that we can adapt in some way, our societies and we as humans can adapt to this new reality where this kind of intelligence use in problem solving and such shifts from us to other parties. Actually, I've had this big change over the last year in my own thinking that I no longer try to solve any difficult problems in my head, but I try to build these systems and frameworks, models with which I can solve the problems I want to solve better than I could myself with AI and this is a really new way of thinking for me and this has been really fascinating in some way an addictive way to use AI. I was listening last night to Osmo Soininvaara's memoirs, since he is this statistician and he was a six-time 'laudatur' recipient and he tells there something about himself that feels a bit like me, that whenever he studied mathematics, he wanted to get that kind of glimmer of certainty that he understands this comprehensively and intuitively correctly and I've thought sometimes that I used to do that quite a lot, so now I'm a bit like, if I don't really understand [04:06] something, then I just prompt the AI more to, like, explain better so that I get an intuitive flash that this is now true. Yeah, but we're also heading toward a point where we can solve bigger problems, faster and on a much larger scale than before, so I've also given up on the idea that I should even understand every single detail of the problem; instead, I need to understand the whole problem in the big picture well enough so that I solve it the right way. But a good example of this was, for instance, my Christmas exercise when I tried putting all possible AI tools into coding assistance to see where I can get right now. And I realized quite quickly that the human role in that coding side is shifting at a very fast pace from actual coding to architectures and this kind of higher-level problem-solving, since when I produce hundreds of thousands of lines of code alone, there's no chance for me to remember every single line and every statement and every command and every module and so on in that whole entity. So it inevitably leads to me having to understand the big picture and I must have some kind of mechanism to measure what it's doing so that I can analyze whether it's doing what I wanted it to do. And from here we get to the kind of thinking that, for [05:31] example, these front-line AI hackers use this term called pseudocode, and pseudocode basically means that you first build a model of how the code should work, if you think about what the inputs are, what the outputs are and what the logic is in between, and then you build that model of the whole architecture and then it's implemented as code, but you can give return to that pseudocode like with those tests and all the others about how like how this works and if it works and implement that pseudocode then you can then regenerate it like to match the one used by OpenAI and other common language models in a way we throw these Floating Point operator floating point operations with the best possible circuits so much that we build better and better and bigger and bigger well these neural network entities so this kind of flipped when there the Chinese had this FLOPS power removed through processor exports so then they had to develop in my opinion kind of maybe a new angle meaning meaning they brought this like reasoning what what is this term I mean reasoning reasoning into it so isn't isn't here like the idea that we rise from there like the neural network level kind of like to a higher level well what DeepSeek did they practically distilled meaning they like used these big models that for example OpenAI had [06:56] developed to build these quantizations meaning they like had with smaller bit counts you can think of it like if you remember like a computer screen so you have now some kind of 4K screen where you don't see those pixels but some years ago when we played with Sami on our own our own gaming computers as kids they had some maybe 320 x 200 resolution oh awful already but it was like it felt cool that there were some eight bit colors yeah exactly but like in a way we we we still see what is happening there and we understand what is happening there so quantization is a bit the same thing that we go a bit less precisely but still sufficiently like we can like still understand what is happening we get the model into a much smaller size and this quantization is like surprisingly little It lowers, like, the quality of the result in relation to how much the amount of data that needs to be processed shrinks, and now we also at the same time have events like what DeepSeek did; besides this quantization, they made it so that you practically have, like, expert models; this is called Mixture of Experts, and, well, division of labor, so instead of trying to build this kind of world's smartest single generalist model for all fields that always fetches all answers from the entire data mass, we say, 'Hey, I just have this model here that receives questions and directs them to the right expert, and then that expert provides the [08:23] answer; so we suddenly get the same thing handled much more efficiently than before, and we achieved really big leaps in efficiency with these kinds of approaches, where first the resolution was dropped a bit in this case and then it was directed to experts, and because the results were practically, thanks to this chain of thought, so close to what was being achieved with those large models, this woke the world up to the fact that even smaller players can still catch up to these big ones when they utilize these kinds of similar approaches, and that became this like, big shock to the whole market. Yeah, but you can still use that sort of horsepower, meaning the floating-point operation capacity, to run with those better processors, so you just run the model a bit harder, meaning those better Nvidia processors are still valuable, so you can run many more of those models there, and because as the cost of using this AI decreases, so does its utility in various problems increases and along with it, its use is growing exponentially; we aren't yet at the point where every person in the world would use AI daily, but that day is coming, like, quite quickly because it's just so affordable now to adopt and utilize in all situations, so it naturally spreads through the whole market. You can think about this— well, Kahneman has this dual model, which now [09:49] are always, like, distortions of reality, but in the human mind too there's this intuition, a fast process, and then this slow, reflective process, so well, you could think that intuition is some kind of general, like, encoded model from which that vibration comes— 'this is true' and a fast answer—whereas then the reflection vector is, with our processing power, ruthlessly slow digging, but from there comes the more correct answer; so then AI— well, since it can do this— especially this reflection channel—infinitely much faster than us, and since our intuition is quite, quite crappy—well, a poorly encoded, well, general language model anyway—so I guess we have lost this game; so yes, simulating human thinking—we now see it in practice as these models show us how the AI model thinks, like, in different steps in that reasoning chain—so the single biggest deficiency we've had regarding AI being able to, like, start autonomously doing things in the long term is this context window, and the context window in these models has been limited since it originally started back then with, like, the first GPTs, so it might have been just some, well, a few hundred characters, like, what you can put in, something really small, but then it has been growing constantly; currently in these large models, the typical size is 8,000 tokens, which is in practice [11:12] about maybe 100,000 words and and it Well it's already quite long You can do quite many things with it already but it's still a bit like if you had a grandmother like this who has, well, a poor poor memory and she remembers like your conversation for three minutes or five minutes or maybe ten minutes then after that everything that's been said starts to fall out the other end and you have to start from scratch and since we now have these chat windows remaining like this short, then the AI can't make any long-term strategies there because like it forgets everything as the conversation goes along Well in Google's Gemini advanced at the moment which has now also been announced for public use so it has two million tokens and and the biggest model that exists right now is the Chinese MiniMax it has a ten million token like window and now what like this year everyone is trying to solve is how we build such a like ability to take the best and most important pieces of those conversations you have and and save it there for the AI's long-term memory so that it gets the ability to think long term strategically Yeah and a human's working memory is at least well only a few bits if you think about it like we process it visually for example quite large sets of bits and they are tossed around inside the head but so you could also think about this one human intelligence if we go back [12:35] to this horsepower comparison then well well since you mentioned these well low resolution games so well Doom so well it runs just about anywhere nowadays that I don't really know that joke that you can run it on absolutely any device nowadays so so well that at some point this like one human intelligence so so can be packed probably into quite quite like depressingly small devices so Well exactly That Doom is running on a USB cable right now. It feels quite funny indeed as an idea, but on the other hand, that same, well, processor power with which Doom runs was also the processor with which humans were sent to the moon in the 60s, so well, you can make quite incredible weapons in a small kit once these are available for better or worse, maybe in a year's time already these human intelligences. So then there is still some kind of salvation, I guess, in that these first language models were trained on so-called quite clean data, humanity's like bona fide or like scientific knowledge created without hidden agendas, and of course it always had some fake stuff and like propaganda on top of it. But aren't we starting to walk in the mud now? Yeah, regarding that training data on the internet [13:57] so we are at a point where like about two-thirds of the internet's content and traffic is like bots, so you have like AI-produced content as the majority of the internet's content currently, and the majority of the traffic moving there is also bots and the forecast currently is that the level would be about 90% by the end of this year, and it's easy to see why it's going that way, that currently a huge part of all content on the internet is already produced by AI. And and this dev- isn't exactly beneficial for humans in the sense that think how much easier it is to produce content there for an AI than for human labor and and this like forces us to rethink the role of the entire internet, like previously when you went to the internet, websites were built there, for example, where the purpose was to guide humans to behave in a certain way following some specific information hierarchy, like if you go to Amazon, for instance online store you're clicking some buttons there and then some recommendations come and you're like influenced by them or on social media for example you look at the feed and then it's optimized just for you a personal feed that produces those emotional experiences that keep you hooked on social media so think about it like if now at the end of the year if we follow this trend that's already been predicted that [15:22] 90 percent of it is like bots then it won't matter anymore like the whole internet designed for humans is basically useless and we could start thinking at this stage about how this internet should work so that it would work as well as possible with other bots and it's a very different-looking internet than this which is designed for humans that's right and the level of sludge that's there if you go there with human power with your own little eyes then you won't see anything there you need like an AI partner who sees the real data through that sludge so this game is lost already a bit even in terms of sensory channels here yes indeed and this is one of those new situations where human behavior shifts from searching for some website on Google and then scrolling to see which of these thousand options is actually my page m-hm so we go much more easily now to that bot to ask like hey tell me a summary of this thing I was interested in because we get an answer to our question directly then and all these kinds of internet commercial models and such will change as a result of this like very strongly um what is like the challenge in today's AI development is of course exactly what you're saying that if you now you go and scrape that internet like for training data. And it is actually full of content from older AI models, trained data that is full of all sorts of hallucinations and other [16:48] problems, so if you use that as training data for your new model, it is worse than the old one, practically speaking, and now we should think about how we can move forward from here. Yeah, well, they are trained with something, so we can take this philosophy of science or philosophical angle that back in the day we had Descartes, who said, like, the biggest difference of rationalism was that 'I think, therefore I am,' and then came these empiricists, and in a way, if you can no longer trust your senses empirically, then I guess you should go towards rationality, so maybe one solution is these AIs just start making their own logic and thinking a bit mathematically and don't care about the data created by our human senses. Well, that's already visible currently in this AI training model, that most of the AI training material is produced by other AIs, and and that involves certain filtering processes and others by which the quality is then measured and checked too, and human thinking is also used there, meaning that now lots of people around the world have been hired, like, to analyze the results of AI outputs and such, so that human insight is also [17:52] included. But, but it's quite clear that future AIs will be the kind that learn from their own operations, meaning this kind of ability to learn from the environment and the ability to store that learning into their own operations has grown. I just read a scientific article like that, which came out yesterday or the day before... very fresh so so Chinese researchers had succeeded in making a model where they could with 817 question-answer pairs, so well, fine-tune, meaning like in a way improve the existing base AI model to a level it can create these chains of reasoning, so they can add with a very, very small adapter like this uh, the AI's ability to do chains of reasoning and I think this is a good example of how we are constantly inventing more efficient better ways to train these models too, and this basically means that in the future well I am quite sure that most AI will be able to train from all that conversation you have with it, an adapter that [19:11] acts as a lens for the data that you use with that AI. It can like in practice put itself in your position better in every situation and this will be such that every person has like their own, own, well, like these kinds of behavioral memories with these AIs and it makes them, of course, then we can build empathy, like, for your situation, taking things into account and other things for the AI and other such things that make them certainly more interesting conversation partners than other people. Yes, but then if you think, if you again remove these senses, then well, for example, how a bat thinks or how it like senses the world with sonar, but how can we understand when we don't have sonar, how a bat's world is formed, of course we both live in the same place as the bats and our too then so your experience, like, of the color of these curtains might be encoded differently in your brain than mine, but, I mean, in a way, does it then sort of start forming for these AIs that are more intelligent than humans some like, completely their own way, like, a bit of a totally alien way of thinking. Like, a bit like that bat, the bat there, they have some sonar with which they sense and then communicate with each other, for instance. Well, I mean, an AI neural network is hardly a direct copy of the human brain, so fundamentally it already works differently. Of course, it's true that because it's currently trained [20:39] mainly on thinking produced by humans, so the symbolism and such currently stem from humans. But we've also seen these models where we've been able to build entirely new pseudo-languages and ways to communicate that are even better and more efficient than these current human sym- bols for various needs, so we don't have any kind of certain path or such a known model here with which we could ensure that AI would remain a human-like thinker as it develops to be better than us, and in fact, if we want to build real super-intelligences that are, say, a thousand times better than humans, then it's very, very likely that they work very differently than the human brain by default. Yeah, about this, in a way, it wasn't really augmented reality, but sort of on a different band, a bit like light, infrared light or sonar, or like they're completely different spectra and we sense in different ways. So, here I interviewed for my book, 'New Negotiating Power', this guy Honkela, 'The AI Researcher's Testament,' and he had this theory that, well, like, these AIs converse well, um, like, they change people's, well, like, needs and meanings and [22:04] like, shaking hands with bricks, aggregating people's, well, needs and demands and sort of like a bit of a separate transaction layer there in the background, so could we humans be, like, involved in the development of that, so, I mean, it would be great if we succeeded in using AI to create world peace, for example, as an anecdote, one Canadian acquaintance of mine just yesterday did a test with that, well, Deep Research, which is like this ChatGPT's latest thing and the one included in that more expensive subscription, like, the deep research model, and he asked it to build a world peace concept and shared its results, which were quite interesting, like fundamentally, yes, here people are probably at least trying to find these kinds of paths in this regard, though we are now seeing in practice the fact that the scary aspects of AI development are now very much on the surface because our pace is so fast that no society or, like, we humans—I personally have always been at the forefront of technologies and such, and even at this moment I'm going, I'm involved in international AI hacker circles for the very reason that I want to be right there at the forefront of the forefront, and I try [23:23] everything as soon as they come out, and in this position, the biggest challenge I have now, compared to maybe before, is that I might get many ideas a day about what new problems could be solved with AI or couldn't be solved before, then the next day even that is already disrupted when yet another even better idea has come along that works even better, and this, like, this pace is so incredibly fast at this at the moment it's hard work to keep yourself like on track with everything that is happening and even harder work is like to come up with anything that wouldn't be outdated by the day after tomorrow and that's the pace we're going at there on the front line but then among the common people we still know that you can chat with ChatGPT with AI so it's like a quite different reality but when I think about how quickly it moves, that reality from the front line into practice and if we think about this, uh, predicted timeline that this kind of general AI is practically like probably like a mathematically provable thing in 2026, then what does it mean for our societies and what does it mean for how we should organize ourselves in the future as humanity, then it's the kind of thing we haven't prepared for, we don't even have the ability to prepare on this schedule, the point where we will surpass like human beings in AI capability like before we have any clue what we what we'll do after that and and some exciting times will come [24:46] inevitably because of that yeah so that difference between cutting and bleeding edge that well there at cutting edge you just like cut the wind but then at bleeding edge blood is there and body parts are flying and this is now well if I take this Bostrom's urn analogy for humanity, well, the collective if there are like jars of always white well marble balls and then they are picked out these new technologies and developments and then there are a few black balls which are that kind of existential like destruction and and well here then well hop- dodging those balls here yeah and it's true that like OpenAI's original mission was was well that the good guys would cross the line first in this well AI's turning into superintelligence and then they themselves turned practically into just a purely commercial business where the 'good guy' element was completely left out. I don't know if anyone is currently pushing for it anymore, like, is this just a case where we can't do anything about it, that the market economy works how it works. And when you need enough money to do something, then ultimately that money is power, and if we look at the US like 500 billion investment they plan to make in AI processing over the next, was it [26:10] three years, then those are just massive investments. Then at the same time, it was proudly announced that Europe has now made this kind of AI program to respond to the American challenge and its budget was 56 million. Then I thought, 500 billion is 10,000 times more money than what we Europeans are putting into this, so I don't really see any chance for Europe in this race. That's how it is. As a teen I read Isaac Asimov's, well, those Foundations. But he had this Invincible book where this kind of, like, the best killer of space technology came to Earth and then it lost to these, in a way, nanobots. So this was the story then, that maybe here is this DeepSeek story possibility, that those American, well, 'invincibles' will fall to these kind of DeepSeek-level things. And then, as an existential crisis, I mean someone could decide to get rid of those Russians again with these small nanobot armies, and let's hope they don't then come up with other ideas. [27:13] So yeah, we can't prevent that either, that as long as wars are fought, war-related technologies are also developed. And the level of autonomy there has already risen and, well, it's a scary scenario. I still see this societal disruption with this at the moment, like, in the short term, as a much bigger risk than some drone nanobot army attacking and destroying us all, so we have that bigger risk right now that we as societies can't respond to this change and then we drift into chaos as a result, if you look at the ongoing chaos in the States, well, on the other hand, it will be everyday life in Europe next year if we don't do anything about it, yeah and they have the resources, however, with which they can burn a few, you know, inefficient hours there, at least for some people, we don't have that condensed time, meaning money, very much here, especially in Finland, but maybe that transformation of work, so in a way probably some kind of AI butler should be trained now pretty quickly by everyone, so that, you know, you can somehow lift your head in that AI sludge and I'll put one of my Negotiator Channel thought loops here, that when these new models are trained, well, they can't learn anything from that AI-internet sludge, but when there's this kind of curated Negotiator Channel that's visible on all six platforms with hundreds of hours of only [28:40] quality guests, well, that's where they'll quickly look, this data that looks right shines through on all platforms, let's take some training material from here, so you business leaders who think that some Google Ad search or your websites matter, just come here for cooperation, did we get a deal, so from this we get to the fact that in those AI hacker circles they talk a lot about human prompting, and yeah, well humans can be prompted too, and actually if we think about, say, social media as a platform, they are constantly creating these kinds of triggers like behavioral triggers such as that creating this state of mind where you go and like something or comment on something and and and this algorithmic and emotional triggering has been one way like using AI to guide human behavior and at the moment of course in those hacker circles then they are looking at where this like this new AI world is leading here that if we think about for example DeepSeek then DeepSeek also has other agendas than just like in a way destroying the argument from Americans that this game is won with money this has been like one part of that argumentation but but like behind it also the Communist Party's propaganda which is like baked into that model and then when at the same time they put the cheapest servers to run that DeepSeek [30:05] in China like where where it is and all the data goes there now so they get all that data from people's DeepSeek usage for China's use as training material which is like a huge benefit for them it is also funny that they say quite explicitly that this data from the West doesn't go to China and then someone had just put a dongle in between to see if it goes there to China of course it went there you shouldn't like even think that it wouldn't go of course it goes when you have these actors like Perplexity as a good example which started using DeepSeek which has in a way removed the propaganda layer from it then like on top of DeepSeek and put it on US servers so in these use cases it is safe yeah because it is an open-source model so it can be modified and you can host it yourself so that it doesn't go that data to China and and of course in this case we get the benefits to use these kinds of new breakthroughs without us having to give up, but the situation is still that most of the DeepSeek usage is on those Chinese servers because they are the cheapest and easiest for people to use, so this is kind of like the TikTok of the AI era, so we got that layer in there, but I'm thinking how clever this model is, that DeepSeek immediately became the most affordable way to code, and now you have millions of coders who use AI-assisted coding tools, and now in those [31:29] AI tools, they have, for example, environment files that they are using and such, which those AI models get direct access to, including all API keys and passwords and everything else right from the developers' desks, which isn't visible to a normal user anywhere, of course, but for the developers, they are visible there, and they're only visible on their own machines, but now that AI can read them and send them to China, so I'm thinking that we might still see all kinds of crazy things because people happened to use it in some coding job or didn't think it through that, wait a minute, here was a model that just read my passwords from here and threw them to China. Yeah, the risks are high, like there might be some crypto attacks. Isn't this also, in a way, cybersecurity is now one battleground for language models and generative AI, so that there well, the Mikko Hyppönens are now sorting through those viruses still, but you can't really react in time anymore when such an AI-coordinate"}, {"slug": "5-ankkurointi-asuntoa-myydessa-sami-miettinen-neuvottelija-1", "title": "Anchoring When Selling an Apartment", "titleOriginal": "Ankkurointi asuntoa myydessä Sami Miettinen #neuvottelija 1", "guest": "Sami Miettinen", "guestsCanonical": [], "guestPages": [], "episodeNumber": "1", "publishedAt": "2020-01-18", "duration": "04:39", "format": "short", "topics": ["negotiation", "investing_markets"], "description": "Anchoring when selling an apartment | Sami Miettinen #neuvottelija 1. I demonstrate the #anchoring technique using the 00180 Helsinki postal code, a 100 m2 apartment, and Reaktor's AI pricing engine.\nMethod: Anchor first, anchor credibly, use a reference value, and comment on synergies.\nCreate options, signal freedom of decision and lack of urgency.\nSource: Matti \"Kelis\" Keloharju\n\nDo you agree? Like, share, comment. Leave your questions for the Petri Roininen interview.", "page": "https://www.neuvottelija.com/podcast/episodes/5-ankkurointi-asuntoa-myydessa-sami-miettinen-neuvottelija-1/", "text": "[00:00] Hey! Sami Miettinen, negotiator. Let's take this anchoring concept in negotiation as an example. I'm here on my home turf, in the background is the restaurant Kannas. You can get a good hunter's cutlet there. The postal code is 00180 Helsinki. And let's use that information to anchor the price of my apartment. Okay, we've made it inside now. In the background, by the way, is a brand-new balcony, this lovely one and a half square meters, absolutely shockingly expensive stuff. But one reason, besides the fact that I can now drink a latte here with my wife in the mornings, is that it flipped this apartment's square meterage over the hundred-and-four mark. That has psychological value, so it was worth taking, even though it was a bit expensive. On top of that, I like using options in negotiations. [01:01] It's really important to build options. If I hadn't taken the balcony now, I would never have gotten it either. Okay, so let's go and sell this hundred-plus square meters. So I looked at Reaktor's AI thing. The guys had coded it up sort of as a practice project, where the latest sales are pulled from public data and an average is calculated. Well, it says that right now the fair price would be 7,148.04 euros. So how do I start anchoring then? Well, there's a really important rule in anchoring. So I'd sum it up like this. Anchor first, anchor credibly, anchor using a reference price, and don't round. This has also been studied academically, I talked about this at length with Matti Keloharju, or 'Kelis' as we called him back in our student days, and probably still do. [02:03] And he had a lot of great data on this based on the stock markets. Okay, so let's go and sell. Hey, here we have just over a hundred square meters, and that makes things easy. I looked and the average price would be 7,148 euros per square meter. But when we were talking there, you said it's really important to you that your daughter and son get into a good school and daycare, well right there you'd have excellent chances of getting into exactly those. This is the best school in the area, this school district here. And then you'd get into that daycare too. And I can actually help you get those applications underway. And here now there's been a pretty major pipe renovation done. Bought that balcony there and renovated the inside. Changed, for example, the layout of the rooms. [03:03] There's no sense in me leaving this place. So this could be sold now for 785,000 euros. So what did I just do there. I used and shared data that the negotiating counterpart can easily verify just by googling it. And then I created these kinds of synergies, which were also tailored specifically to this buyer. and then I also signaled that I don't have to make this deal. And I threw out that high anchor first, and from there it's much, much easier to go on and negotiate, than if you were to sit and wait for the buyer's price offer, which then turns out to be some crazy number, minus ten percent or whatever they come up with. So that's how this anchoring goes. This is one topic I'm going to talk about with Petri Roininen, who is the CEO of Investors House, [04:04] and chairman of the Finnish Growth Entrepreneurs. So put your questions to me, hey, what would you like me to ask Petri, so we can really get this apartment negotiation and growth entrepreneurship properly nailed down. So thanks by the way for the comments so far. Some have asked for a fun jingle, meaning music for the start and end there. That's in the works, and this is all a bit of a practice run. So thanks for watching, and if you haven't subscribed yet, hit that subscribe button. Thanks, bye for now! "}, {"slug": "594-claude-in-powerpoint-sami-miettinen-neuvottelija", "title": "Claude in PowerPoint: An AI-Powered Brand Refresh", "titleOriginal": "Claude in PowerPoint | Sami Miettinen | Neuvottelija +", "guest": "Sami Miettinen", "guestsCanonical": [], "guestPages": [], "episodeNumber": "db-594", "publishedAt": "2026-02-15", "duration": "11:45", "format": "full", "topics": ["ai_enterprise_tech", "saas_software"], "description": "Claude in PowerPoint | Sami Miettinen | Neuvottelija + Anthropic's Claude Code Max does office work, carrying out both a brand refresh and a Claude PowerPoint workflow. \n\nSami Miettinen demos Neuvottelija's visuals and analyzes his 10,000-person LinkedIn network live with Claude. The software refreshed the thumbnail images, commercial partnership packages and workflows using Claude in PowerPoint, Claude Cowork and Claude Code. The video shows how graphics are added to PowerPoint and how the brand look is refreshed step by step.", "page": "https://www.neuvottelija.com/podcast/episodes/594-claude-in-powerpoint-sami-miettinen-neuvottelija/", "text": "[00:01] Alright, hey there. This introduction to Anthropic's Claude family continues. I have here this Claude PowerPoint, so the good old Microsoft workhorse now gets this kind of currently world's best AI interface. Here you can have it do these Microsoft's OpenAI gadgets too. So, um, let's put here for example this summary in the background and you can prompt it. But this is a bit of that OpenAI-style thinking, that this isn't very strong. This whole Neuvottelija deck is actually made, updated, from my old visual material from a commercial partnership, and indeed at the same time I did this whole, like, visual identity change, and there, actually, is my, um, thumbnail image, so it's still the old color scheme. That'll probably need updating too then. So if you're now not completely in love with it, then I'll maybe keep it. And this was, I did [01:04] this in the final stage of the demo, so I asked this AI to make me new thumbnails for these, for YouTube, and also then, like, on these fancier channels it's always been on too, so Spotify, these little square ones too. And this took a while. Then I asked the AI to actually run this Claude in PowerPoint, even though you could run this in plain Claude Code or from wherever else, this network analysis, that I have about 10,000 LinkedIn followers and 7,835 first-degree contacts. And I was a bit surprised. I actually have the most CTOs, that is, check officers CEOs there are almost as many too, 1,976, board chairs 335, and CFTA only 177, though there now the finance directors aren't included, so that would, like, spread out from there, and likewise the strategy directors and then there are already other nice people in there too, HR bosses, and then there's general [02:05] professional board members, of which I surely have hundreds and so on, but this I did, um, with plain PowerPoint. Claude's PowerPoint. Then this episode world here, this used to be my kind of, like, episode carousel, that is, these thumbnails, but this then PowerPoint — in Claude's PowerPoint's opinion something like this would be, like, more stylish textually. Then here's this commercial partner Kanatu, a marvel topic pricier than diamond, and a bit like how those were carried out. So, in practice, so in about three weeks, maybe even two, weeks you can get from the decision to do this kind of long commercial partnership with me out the door. And then the other one is Fortum, this was really fun, this in-between thing there, with whom I then also went, like, as a private individual, over to Omaha to watch Warren Buffett. Then here's this general slide, it hasn't changed that much, but why people usually order these commercial partnerships and so on, well of course [03:08] you get really good visibility in Finland and on really many platforms. And then these key figures, that is, 40,000 subscribers, on Tube and podcast, and 7 million now across all platforms at least this stuff has been watched. Then, um, the partnership, this — this was actually funny, this kind of, um, kind of like a starter package, that is, basic, that is this kind of ad. There's actually an error, by the way, should be to- 500 grand. Let's fix that then, there. And then indeed there this premium package is this, this, um, then commercial partnership in a long episode and strategic partnership. These now aren't there yet, but, um, I could very well do them. Yes. Then here it is like this. This should be changed into logos. Here, by the way, I noticed that this isn't very good at handling logos or images. So it likes for them to be, like, [04:08] dropped in there yourself, at least at this stage, so you have to, like, look into some kind of system, since these could, like, for example into a separate folder drop these logos with some script and then do it. But this is a pretty snappy revamp. Right, right, so let's go and show how this was carried out. Yeah, so here's my old visual identity, which I think is pretty nice, but here you can, like, see this typical old-guy kind of thing. Now I put in the prompt here, that is, make this better and modern, and then, um, I didn't give much context on in what way better, and then there earlier you saw that this Claude Cowork, which is now, um, the workhorse here, so I had to choose, um, one file folder for it, where it's allowed to save these intermediate files, and quite messy stuff. And now cut from this a bit of time, so it has created these first pages, and it cheated a little in that, it picked out, um, pages that needed images. And [05:13] here we'll see later why, because in this version of Claude PowerPoint the image handling is a bit weak. So you have to separately over there go do it in Claude Code or Claude Cowork instead, but a pretty nice basic layout. Then let's go over to the, um, Claude Code side, and here actually Claude made with chat this kind of so-called MD file, Markdown file, in which I asked it to think a bit more deeply about what kind of this Sami Miettinen Neuvottelija brand could be, and what it's then like for example this visual identity, these shades of purple that I've now here used over the years. And then it kind of, um, thought, thought then about this what kind of setup there is, and went through all those episodes of mine. Here I've done this one with Hoxhunt's Markus Hav, when we talked about AI. Top-level, there is of these, my old layout. And then I noticed that, well, these should [06:13] actually be given as color codes, hex codes, these colors of mine, and I asked it to then dig them out from my samiettinenskills.md, where I've defined these color palettes, and from there it then digs them out and then recommends this kind of, um, a certain kind of, um, scripting for how I could make these images. And now we get to this, um, deck, that was made there earlier, so now I asked it to change these color tones to that, like, official one, and then, um, then I asked it to download from that, um, files, and I also attached them. And here you then notice that this isn't acceptable to Claude PowerPoint at this stage. So it — it doesn't like them being put into that chat. And then here I approve, adding slides, and dangerously always allow — so this is exactly the kind of thing you shouldn't do as, like, a beginner. So then if it were to ask later whether to add slides, then [07:16] it wouldn't ask me for any permissions. Well, this isn't very dangerous, this kind of adding a slide. It now adds to this, without me asking, thumbnails from these last three episodes, and then I also dropped this LinkedIn data in there, that is, um, 7,800 first-degree connections, and then I have 10,000 of these followers. And now then, um, these images at this stage have to, like, be dropped in here, like, to be used in this PowerPoint space, so then it can make them. I, like, thought that I could myself, like, embed them into this myself, but it didn't go like that, even though it kind of hints at that. Don't do it like this. I just noticed that I can, like, drop these images here on top, like, and say, put them in there yourself. And from this now a bit of credit is due, because it had to, um, check which image goes where and put it in the right place. So here, um, here on the left side of the screen are these YouTube icons, and then there's the Spotify icons. These kind of [08:20] squares, which I then decided, let's start making those too since, like, big channels, because earlier I couldn't be bothered to add them manually, but they get created there, like, semi-automatically. And indeed now this LinkedIn contact list of mine has also been analyzed, and excitingly I have the most CTOs, that is, Chief Technology Officers, 1,024, in this first-degree network of mine. Then I noticed that, well, I can here edit — edit it myself at the same time as this Claude PowerPoint is working, so of course you can do other stuff in the meantime too, like walk the dog or something, but, um, this doesn't like, break as such, if you edit it yourself at the same time. Of course you can like, be doing the same thing that this Claude PowerPoint is doing, then it might get in the way. Right. Well but now then there came about, it first misunderstood, that this Martin Paasi episode was the newest, so then I had to, um, then tell it, that I read the new titles and stuff off the images, and then, um, the episode [09:24] numbers and texts the same way — indeed I myself manually move them over there like, lower down, I think it looks a bit nicer, that left edge, and like this this then came about, and then this does these kind of, like, green checkmarks so that what — what succeeded and whether it went, went, like, into the goal. Pretty nice, nice I think. Um, and then indeed when you look at this, I'm quite satisfied with this — this basically took, like, only a day. There the logos are missing from the last page, and indeed those should then, like, be pasted in separately here, or otherwise put programmatically into some folder and pushed in from there. Maybe I'll do that then um, as a finger exercise, um, later. Quite a nice, um, system. Yeah. So I think, um, we can, like, wrap up here. So I think I'm [10:25] a pretty savvy user of this kind of AI. All these Office tools from Anthropic, that is, Claude Cowork, runs nicely on Mac with certain databases. Claude PowerPoint, which I've been demoing here, and Claude Excel, and then of course Claude Code and Perplexity and Antigravity from Google, and all the, like, possible, um, coding platforms are already getting pretty well under control. And indeed I here at Translink Corporate Finance am an investment banker, so there if you're, like, interested in selling a company especially, my colleagues handle that, um, process-wise, but through me you can definitely get in touch with them. Awesome that you've spent time watching this or listening. Send feedback, my contact info is right there. I like WhatsApp messages, and then yeah, it'll help if you subscribe to this rebranded Neuvottelija channel. [11:25] So google Sami Miettinen, or Neuvottelija, and you'll find the hundreds of episodes there. Thanks, and feel free to send in suggestions on what else you'd like to learn about the AI world or anything else really. Thanks. Bye "}, {"slug": "649-osakkeiden-pakkolunastus-wist-neuvottelija-363", "title": "Share Redemption Law: Finland's Supreme Court Rulings | Tarja Wist", "titleOriginal": "Osakkeiden (pakko)lunastus | Wist | #neuvottelija 363", "guest": "Wist", "guestsCanonical": ["Tarja Wist"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/tarja-wist/"], "episodeNumber": "363", "publishedAt": "2025-12-02", "duration": "43:12", "format": "full", "topics": ["ownership_capital_tax", "ma_exits"], "description": "Share (forced) redemption | Wist | #neuvottelija 363. Finnish case law on share redemptions is testing new boundaries. Tarja Wist unpacks recent Supreme Court (KKO) rulings. A share's value can be negative — as in the \"golf share\" case (KKO:2020:99) — and the fair value used to set a minority shareholder's redemption price can rise significantly above the original tender offer, as in the Ahlstrom-Munksjö case (KKO:2025:94).", "page": "https://www.neuvottelija.com/podcast/episodes/649-osakkeiden-pakkolunastus-wist-neuvottelija-363/", "text": "[00:00] All right, welcome to the Negotiator channel. Joining me is Tarja Wist, a legal expert. I always get these mixed up—can I say lawyer, or what, how should I address you? I'm perfectly happy to be a lawyer. Yes, and an attorney. Great. And here at Fisken på Disken, an excellent restaurant, we agreed on the topic for this episode: the fair value of a share in legal terms. So, surprisingly enough, the share price fluctuates on the stock exchange or otherwise, but then in certain special situations, such as public tender offers or redemptions, the price is frozen, and then it matters a great deal whether you are a majority owner or a minority shareholder, and the Supreme Court has handed down two very intriguing judgments on these, so let's delve into these, namely the Ahlstrom-Munksjö case and then this kind of golf share redeemed at a negative price share. But perhaps to start, Tarja Wist, tell us a bit about your background. I know you for having been in major law firms, usually always [01:11] the last Wist, probably for alphabetical reasons. Well, or because I was the youngest, but anyway, yes, indeed, I I graduated from law school at the very end of the 80s as a young ambitious woman and just at the same time as the first, Finland's first Securities Market Act also came into force and it contained the first of these redemption or these, like, takeover clauses, and well, I had been involved in drafting that law as a student at the Ministry of Justice, so it was like a good start for my career, and after that, it kind of then defined my career, in terms of what I did, so that I got to do quite a lot of securities market law. And then I was also involved when well, even though I was practicing as an attorney, I was a part-time secretary for this working group at the Ministry of Justice, [02:12] which implemented the entire European Union securities market legislation into Finnish law when Finland joined the European Union, or first the EEA, and well, and then in 2006, when the new Takeover Directive was also implemented into Finnish law and that's when specifically these redemption clauses were changed, so I was in that working group, and also in 2012 when the whole big securities market reform happened. So I've had, like, one foot in, or let's say I've been doing these transactions as an attorney, but then I've had, like, maybe a pinky finger in that legislative work. It's great that you've been able to develop this legislation, but that exciting part, that, well, Rosch- Mr. Rosch- so Roschier Holmberg Waselius then found Wist there as a dynamic team member and this string of names has shortened and now you've ended up in this, well, your own firm, so yes, I indeed started as a young person in a law firm that was called Roschier-Holmberg at the time [03:20] Waselius, and then Waselius left and Waselius & Wist was founded in the year 97. But wasn't it in that group of four? were you at Wist for a little while? No. Yeah ah okay. Well now of course we can look at it this way. Then Waselius & Wist was founded in '97 and from there I then left. It has been six years now, six years ago, and I then founded Wist Attorneys, so yeah, that's it now pure gold has been panned to the bottom of the gold pan. Good thing. but with extensive experience in both legislative work, the development of regulation, and in the actual practical implementation. Now let's start examining these cases. The Ahlstrom-Munksjö redemption, where the fair value was determined even in the Supreme Court at a price that was clearly higher than in the original tender offer. Let's perhaps leave that for last. Let's start with this uh, also a Supreme Court case, the golf share case. I remember you wrote a short blog post about it, that now redemptions are being made at a negative [04:35] value, so tell us a bit about the background of this. Yeah, it is—it's a really interesting case. Well, uh, in that there worked—worked... Well, uh, so these redemption cases, they go... so that first we have an arbitration court and then if... the parties are not satisfied with the arbitration court's ruling, then the parties can... appeal first to the district court and then, if they get leave to appeal, to a higher... court. And in this case, because it was a small company, only one... arbitrator was chosen. In larger ones there are three, even though the issue was this difficult. And, and... this arbitrator was Professor Seppo Villa, and I've told Seppo many times... that I would have resolved that differently, and, well, I know that others—someone else too... in the city agrees with me, but I've changed my mind. I'm capable of that too. So, well, because, I mean, like, I strongly thought, and still think, that the minimum price of a limited company is zero. Because shareholders are not liable for, like, the company's debts, and you can always get rid of a limited company when it's put into bankruptcy, right? So then you don't have to pay more, so then you [05:46] just lose what you've put in there—limited liability. So, actually limited liability, but well, but then again it is so that, uh, then a limited company also allows for the shareholder's liability to be increased from this; we have, for example, these Mankala companies, where shareholders are responsible for all costs and pay, like, for those... Yeah, and in England there are these Lloyd's syndicates, which sort of were responsible in the past, and maybe still, with their entire wealth for the liabilities of insurance companies. Well, yeah. Well, that's maybe a slightly different thing, but anyway, we have these, and then of course we have housing cooperatives, where each of us who owns a share in a housing cooperative. Yes. Kvein Miettinen from Kalevankatu, yes, but we have to pay a maintenance fee for these, and this Gumböle Golf was similar, as is often the case in golf companies, so there was a provision in the articles of association that the shareholders must pay a maintenance fee to cover the costs, and then a loan had been taken out there for renovating the field. I don't remember exactly for what, but anyway there was [06:56] also quite a lot of debt. There was also a debt share, as in housing companies there often is. And well, as I was then somewhat challenging Seppo Villa, the professor, as to why he made such a decision, I said they could have filed for bankruptcy at any time. Then Seppo looked at me and said, 'Yes, but they didn't,' and as I started thinking about that, then that is perhaps what made me change my mind about the fact that in that case the Supreme Court then confirmed that the share value was negative. So those who wanted their shares to be redeemed, the minority shareholders had to pay 11 for it 000 euros per share. Yes. And the reasoning stated that, since the trading had been a bit sluggish, but had nonetheless been conducted at a one-euro price, this price should have been positive. And then it was probably a rather harsh surprise that, instead of one euro, you had to put in 11 grand there, so the shareholders tried to get out of this payment obligation and then get there was also such a funny structure, where the majority of the shares were apparently owned by some association, and that's why there was this 90% shareholder, and if 90% is in the same hands, then [08:19] minority shares, over 90% in the same hands, then the minor- a minority shareholder has the right to demand redemption, and here these minority shareholders then demanded redemption and referred to the fact that since these were once sold for one euro, this is now the market price and at this price they can transfer these and get rid of their debt liabilities, but that was not accepted by the arbitral tribunal nor the Supreme Court; they held that since they had purchased these shares, they had committed to the liability for these debts and the payment obligation under the articles of association. Yeah, there was this financial charge to Aktia Bank here, and then here now however, one could think that you cannot be, like, forever, liable for cumulative interest or year by year, because this bankruptcy decision could probably be made every year; in principle, it could be made every day, but one could think that one year could be a reasonable time for this bankruptcy clock to reset, so it wouldn't [09:26] likely be reasonable to demand that these minority shareholders remain liable forever here, just like, the bankruptcy will really occur later on, but if they forced this redemption themselves, then they in a way also forced this process to begin. Well yes, of course, but maybe it wasn't decisive here after all. Yes it probably maybe could have and well, maybe it did. It looked, looked a bit kind of ugly, this case from their perspective, but for me, for me it wasn't decisive after all. remember, what was decisive here was that that, well, if considering this theoretically, how I myself justify it to myself, why it's thought of this way is that if you are a shareholder in a company, if you are a minority shareholder, then the majority shareholders and the board make decisions mm that you cannot influence. So they can make business decisions that are good, or they can make business decisions that are bad, and well, you just as a minority a shareholder can influence them and those decisions affect the value of your share, right? Well, in this case the majority shareholders had decided that the company would not be put into bankruptcy, and that affected your share's [10:35] value, so if they had made a different decision, if they had put it into bankruptcy and liquidation proceedings were pending—it requires two- thirds of the shares behind it—then your situation might be different, yeah, in a way this is a bit of 'caveat emptor,' or buyer beware, meaning that, generally speaking, with share structures, you have to look at who the other owners are and especially who the active parties exercising the shareholder's voice are, so And so then for such a somewhat relaxed Sunday golfer, who is only looking to obtain this kind of golf right of use, they got a bit of a cold shower here, or if you had perhaps inherited such a share, even more so, that it's easy to dig up these kinds of injustices here. Well yeah, but I mean, it's very unusual that a limited liability financial instrument called a share can also have a negative value. So instead of taking that paper there to be torn up, you have to give another 11 thousand on top of it, so in that sense an interesting theoretical case, and this is how it's been interpreted, and because it is the Supreme Court's interpretation, so apparently this is now the national way to interpret similar situations in the future as well. [11:50] That’s right. That’s right. Which immediately brings to mind that it’s perhaps a bit daunting to start owning units in remote areas in housing companies with various pending pipe renovations and units with financial charges. Exactly. Precisely. So it might be that, well, this single case probably won't have a major impact on the price divergence in the Finnish market, but at least it crystallizes the risk. Meaning, uh, the divergence of prices for apartments in the capital region. from the provinces. So maybe it's worth it for viewers and listeners to now look a bit critically at whether they themselves or possibly the estate of a deceased person might be facing these, so that ownership is not just a game of positive opportunities, but sometimes there are these kinds of fees or obligations. The owner has obligations. Yes. Well, then of course one [12:53] solution is to aim for that ownership group and start fixing these problems, but then you get to enjoy the responsibility of a majority owner. I suppose that's not easy either, especially in these crisis situations. I should actually invite Lauri Ratia here myself. He has written this kind of 'savior book' about these sorts of shareholder cases that have been in Finland. Good. Well, maybe that's enough background for this golf share case, and now we'll delve into this a bit more as business types, like, how many people's toes we'll step on in this second part. So, the Supreme Court reached a decision in Case Arston Monk. If I set this up in layman's terms, then correct me if the terminology is wrong, so the Supreme Court concluded that this Ars Mun consortium, which had made a public tender offer at a premium for AS For Munin's shares at a clear premium, well, then when it ends up using this—after exceeding 90%— [14:02] redemption right after certain stages, the fair value for this share price was no longer the original tender offer's cash consideration. So, how did this happen? That's a good question. Can I start from a bit further back? Well, before the year—was it 2006—when this European Union takeover directive was implemented into Finnish law, this often happened to us. We very often had a few of these 'usual suspects', professional investors who never accepted a public tender offer. the offer, but instead stayed in the redemption phase and then started to practically extort. Well, my apologies to all these usual suspects, if they are still listening to this, but well, it was basically practically like extorting more money for themselves and, well, usually it was then cheaper for the company to pay them off than to go through long disputes and [15:08] and wait, wait for like half a year to get them redeemed and be able to develop the company, so they did—it was good business that quite a few of these professional investors made, but well, but then when this Takeover Directive was implemented into Finnish law, then they introduced ...a default provision in the Companies Act, according to which, well, this public tender offer price is the redemption price, if there are no special reasons. And this was, this was extremely important, because well, it took away these tricksters' business, but well, it also brought a great deal of predictability to this whole process and, and well, I, I, I was actually involved in the working group that brought this, this law, and, and well, I'm like completely of the opinion that it was a brilliant, very good, good, good well, decision, but well, in this case, in this Ahlstrom-Munksjö case, it was then considered that there were these special reasons why then the public tender offer the price ended up not being the same as what was considered the fair market value in the redemption situation. Mm. [16:29] And there were quite a few of these various reasons. I can't quite say, which of these was then the most important, but there were several of them. Yeah. That's how it is. Maybe if I throw in one at the start, well this process started off on the wrong foot. That is, one group of the Åströms made an offer themselves to the other shareholders and remained themselves, in a way, to take the upside from this deal then as part of this kind of international consortium and in a way, that offering to yourself a bit is kind of slightly recursive activity. So, indeed, in this case, this buyer consor- one party then made an exchange offer to the family. The family got to reinvest in the company, and almost everyone accepted this. There are like two sides, two legal questions in my opinion, related to this. Almost everyone accepted it, whereby then a huge amount of shares were consolidated for this buyer consortium. So, on the market, the rest, who accepted the cash offer, well, during the actual offer period, it was maybe 13%. So, when the whole takeover, of this, like, the idea, the idea of this takeover directive in it [17:50] the reason why we use this public tender offer in redemption, well, the tender offer price, the principle or philosophy behind it is, hey, if 90% have accepted this price, then it is indeed a fair price and the rest must accept it too, but we weren't in that situation, instead the number of people who accepted the cash offer was really small. Mm. And then another thing related to this exchange offer is of course the pricing of this exchange offer. Was it the same? Was this actually more valuable? If almost everyone accepted it, while this other cash offer was not accepted by very many, it certainly raises some questions about whether this was, you know, fair equal, like the same price. Yeah. This was a bit of a timing issue, then problematic. Meaning if the market stayed stable and the company's performance stable or if it had even decreased, then there might not have been a problem, but then the company's earnings performance improved. Then the surrounding [19:03] world recovered from COVID quite quickly. So the peer companies' relative value started to rise. So there was this so-called multiple expansion effect, meaning that you had better peer multiples and then you had, well, a better result than when the offer was made. And then, as I understand it, the company's public guidance was not as optimistic for the shareholder as then to banks and other creditors. So maybe with a figure like this in mind, these were then somehow, in some way, also like factors contributing to the fair price improving over time. So, if a lawyer were to analyze it, first a decision was made that there were special reasons to deviate from the price of this public tender offer, and then they began to investigate what that price is. And as for these special reasons, well, there were, in addition to what was discussed, another one was that since not very many had accepted this offer and they didn't directly exceed 90%, the offer period was then extended, and during that extended offer period a notice for a general meeting was then announced, [20:21] which included an authorization for the board to like issue a huge number of new shares. It was justified by the need to make acquisitions and everything else like how they are justified, but I guess it was perceived as a kind of poison pill. Meaning, if you don't agree during this extended offer period to sell your shares, then their value will drop when more shares are issued. I don't know, but but this was at least the minority's argument and on these grounds then probably the Supreme Court didn't take a stand on it anymore, that well, what were the reasons why this was deviated from? so in a way, the big thing was that this link was broken between fair value—like share-based market pricing—and fair value and then it was up to the Supreme Court to determine what that level would be, or actually, that the link broke between the price in the public tender offer and this redemption price. Yes. And the Supreme Court stated that it had already broken, so they would no longer look at it, and then they started defining that fair price [21:34] and there was this interesting thing, that they did not give any weight to the stock market price. Yeah. And then there's, substance value was looked at, but it's a bit artificial, but book value per share, but it's, well, old school old school, back when these substance values were tossed around. I had my first boss Petter Fagernes here, and well, he recalled in the beginning of his book this merger of KOP and SYP, where back in the day when they were in a way, Finland was emerging in the early 90s from a really bad recession, so balance sheets and results were a bit all over the place, and then those SYP and KOP prices were then settled in that merger back then, so that then substance for one and yield value for the other, but well, that substance is not very significant now, but in a way the fact that from that market price, i.e., the share price, was sort of deviated from, so that was perhaps the big, big decision. And then we found, interestingly in my view, DCF, Discounted Cash Flow, which is like this investment banker's, you know, [22:39] pet peeve or favorite, i.e., the model for discounting free cash flows to the present discounting model. And then it was found, if I now interpreted the papers correctly, that there were even three experts of my type, investment bankers. I've performed several valuations at Translink Corporate Finance with colleagues, and then three parties were found, and if I understood correctly, one of those parties was then judged as not credible, and then these two other corporate finance houses or valuators, then from the prices they provided this final 21 euro fair value is found, but well, I don't know if you see it roughly like that yourself from what you read so, yeah, well, as a lawyer of course I often also act as an arbitrator in these and well, determine the price, but we lawyers don't really actually determine the price, nor does the Supreme Court here like independently take a stand on the price determination. They just, or well of course they do take it, but it largely stems from whether they believe or don't believe these experts, right? Like what you and your colleagues now then they present there what is credible. And now they believed those experts, who... Yeah. One of them, by the way, was my old old firm. Greetings to Sisu Partners and its manager Juha Karttunen, that it was certainly fun, [24:05] but well, uh, yeah, so that, but then indeed, they don't really, the lawyers don't start doing the DCF themselves, so they have to rely on the reports made by the expert, and it's funny in itself that this WACC came up there, the weighted average cost of capital, which is this kind of investment banker's bread and butter, to keep this like the capital structure weighted after-tax, you know, familiar requirement, so it's great that it ends up right in the Supreme Court papers then, well, as one important criterion. So good. There have been skilled lawyers who have managed to present it this well. Yeah, and quite a game once it would have been rolled out there. I should go to those types of things sometimes myself, to see a bit how the proceedings go, because I'm a complete amateur in legal matters myself, but of course, having done hundreds of transactions, you learn out of necessity to see what you do there yourselves. By the way, as a side note, I was drafting a special act with the Ministry of Finance and the Ministry of Justice, this law for bondholders and representatives and on the rights of the security agent in Finland. A great separate law was enacted, so I got to [25:17] look into the legal side a bit, and I thought it was amusing that there were then Professor Tepora and a ton of experts providing the law's grounds. There were certainly enough. There were plenty of them, and it was quite a curious law. Some clauses were slipped in there about things that didn't quite fall under the heading. At the time, I was representing Nordic Trust here in Finland, and I think exactly the things that were supposed to be there went in quite nicely from the perspective of a strong agent. I didn't do the work myself, but since my bread was being paid for by such a party, well, I was particularly pleased with this specific law, and I suppose no great harm was done there. After all, we had somewhat too strong shareholders for this, so that in a way, this creditor's right to well, defend their own interests, in my opinion, was left a bit weak, as it was a bit like managing a flock of chickens; so now this bondholder representative and security agent got their very own little law to exercise rights. I mean, it was quite brilliant, because it also made lawyers' work easier. When looking at a legal opinion on these questions, what I was referring to related to how there were slipped in some things concerning syndicated loans as well, which Well, not quite into that, well, a competent one like that... [26:38] a security agent runs those as well; they do run them, and usually they really do. Yes, yeah, but, yeah, but it was—it is, well, that... the... doing legislative work is actually quite a meaningful task. In Finland, it works quite nicely because here... they listen and really, like, often at least listen to... market participants in those matters, so, yeah, how about something like a securities market act reform, so, how does a project like that really work, I mean, you probably have a million experts to be heard there, and then you have to churn out—well, then the directives might help a bit, directives help. Yeah, it makes it into a kind of patchwork quilt. Yeah, but it works in such a way that the minister appoints a working group and the working group starts working on it, but the 2012 comprehensive reform of the securities market legislation, which wasn't just the Securities Market Act but all the other laws as well, was a massive undertaking, so there were sub-working groups and a million experts and a large number of those civil servants, so what you could de facto influence yourself was actually quite limited. Yeah, so I—well, then on the market there's [27:58] also the SMA, or the Securities Market Act, where some self-regulation is allowed. So, one case example where I myself Then I came across, well, there was this Helsinki Takeover Code, and you've probably got to work with it yourself a bit, but the idea was originally that it's only for these large ones, meaning listed companies, and even there, sort of for those self-regulating. Here are now these best practices of what's done, where 'comply or explain' was, I think, the principle, that you either follow this or then explain why you don't use such wonderful rules. Then I found myself at Nordic ID, well, uh, as a financial advisor, with Kristel Finne, she as a legal advisor at Fondia, and then this law, or sorry, this self-regulation package, the Helsinki Takeover The Code didn't apply to us after all, and Finland's first public cash tender offer came along, so then Kristal and I decided that maybe now for reasons of caution, it's better to follow that Helsinki Takeover Code, even if perhaps this 'comply or explain' duty didn't directly apply to us, but is that world familiar to you? It is, of course, and [29:20] you acted wisely when you followed it, because it did reflect market practice, didn't it? And if there had been a major deviation from it, then— Well, there was no market practice. We created it. Exactly. But this Takeover Code spoke more broadly about the market code, regarding what... was considered good practice in the market. And I think you can get some guidance for M&A as well when thinking about what is good practice, for example, if you think about what types of break clauses the board can agree to and so on. There's all kinds of useful stuff like that for other things too. Like these break fees that are paid if the acquisition doesn't actually go through. Who pays, how much, and what is reasonable. Yeah, it was—with a non-lawyer's brain— I did struggle with it a bit, because I then had to explain this to Americans in a different time window and also implement it, so... an investment banker would certainly break a bit of a sweat on their forehead at a few points, but I thought it was really good, I mean it was—it's just brilliant that we got this kind of takeover code, so that good practices were basically recorded and, most of all at least as I saw it, where it was most useful was like how it guided the actions of the target's board, [30:41] that, for example, things like these takeover proposals should be discussed within the board and not just a dominant chairman saying no, nothing will be accepted a board working group can—the board can find a working group from among itself that mainly promotes this matter, so that Well yeah, but maybe it needs to be handled first. Well, that's how it is already committee later, so, and but then exactly these questions like, can we commit to taking part of the costs if this doesn't go forward, and how it's justified, and and how due diligence, when can it be started, what information can be given, these were like very good practices which I think one can seek guidance from there also, also like for other corporate acquisitions. Yeah, and after that, well, well, colleague is probably the wrong word, but well, competitor Jan Ollah there, then later formed this working group, which then codified this also for this Yes, for the poor little First North companies. I have since then, even though I've gone through it myself and considered it a reasonably healthy learning process to do it, well, I've just started to pity these tiny First North companies. Maybe it's a bit too harsh, and perhaps those takeover-level requirements could be loosened a bit for them, in my opinion, so it could be. [32:02] Yeah, in Sweden I think they manage with slightly lighter paperwork, so then it becomes too expensive. And now, combined with this main topic of our discussion, that if you're left with a justified doubt about the fair value of the redemption price, whether it is your, well, like the offer consideration spiced with a premium, so this might involve quite a lot of costs. So it might prevent healthy M&A deals for public tender offers for First North companies, because there is just now, in addition to the rigidity of the process, also some legal risk, or what do you think it adds to the situation? I mean, of course, I think it mainly brings these practices, but where do you see the risk there? I find that interesting. well, for instance, in a way, the documentation is quite a lot lighter, like there are even these basic information brochures made back in the day in Sweden and elsewhere, so it quite a heavy prospectus and, in a way, then, well, everything committing to everything might be quite tough and for a small First North [33:14] company, quite, quite difficult and also legally expensive. So it comes then actually from the legislation, these, like, these, these, well prospectus requirements, so they don't come directly then, no Yeah, yeah, they are, actually, should, well, they have evolved a bit here, here, well it came, like, wasn't it already a year ag"}, {"slug": "653-piilaakson-aika-vs-hidas-suomi-marten-mickos-piilaakson-kasv", "title": "Silicon Valley Time vs. Slow Finland | Mårten Mickos", "titleOriginal": "Piilaakson aika vs hidas Suomi Mårten Mickos. Piilaakson kasvun kaava | Mickos | #neuvottelija 362.", "guest": "Mårten Mickos", "guestsCanonical": ["Mårten Mickos"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/marten-mickos/"], "episodeNumber": "db-653", "publishedAt": "2025-12-23", "duration": "00:53", "format": "short", "topics": ["saas_software", "leadership_governance"], "description": "Silicon Valley time vs. slow Finland: Mårten Mickos. Silicon Valley's growth formula | Mickos | #neuvottelija 362. Mårten Mickos on the core lessons from his book \"Kasvun kaava\" (\"The Growth Formula\") for building exponentially growing companies. Why Silicon Valley succeeds again and again at creating explosive growth by focusing on immediate output. How a CEO can build category winners. What Finns should do to get the economy growing.", "page": "https://www.neuvottelija.com/podcast/episodes/653-piilaakson-aika-vs-hidas-suomi-marten-mickos-piilaakson-kasv/", "text": "[00:00] Sami Miettinen: You notice that Silicon Valley has a completely different clock speed than here in Europe. Mårten Mickos: Yes, it is. Everything there is nimbler, faster, more immediate. And sometimes I've said it like this: in Europe, a million is a lot of money, but in Silicon Valley, an hour is a lot of time. And then I realized that of course in many industries and societies, there is this linear behavior, where what exists might grow by a couple of percent a year, or 3%, but it grows steadily. It's a straight line that grows or shrinks or whatever, but it changes linearly. But in digital sectors and industrial fields, changes are exponential, meaning they compound. And if something starts to take off, it takes off really fast. If it starts to decline, it declines sharply. And that is why moving fast is so valuable. So valuable, in fact, that it is better to act faster imperfectly than to act slower perfectly. "}, {"slug": "659-reipasta-suomikuvaa-ulkomaille-mickos-neuvottelija-sisapiiri", "title": "Boosting Finland's Image Abroad Through Humane Leadership | Mårten Mickos", "titleOriginal": "Reipasta Suomikuvaa ulkomaille | Mickos | #neuvottelija Sisäpiiri 131", "guest": "Mårten Mickos", "guestsCanonical": ["Mårten Mickos"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/marten-mickos/"], "episodeNumber": "131", "publishedAt": "2026-01-25", "duration": "08:34", "format": "full", "topics": ["leadership_governance", "saas_software"], "description": "Boost Finland's Image Abroad | Mickos | #neuvottelija Sisäpiiri 131. Mårten Mickos and the importance of humane leadership. Mårten Mickos shares his experiences as a Finnish leader in Silicon Valley and tells how unconventional methods such as schnapps songs and having his hair shaved over a bet can build a strong company culture. Mickos emphasizes the importance of a leader's humanity and being able to laugh at himself as part of developing the work community and achieving shared goals.", "page": "https://www.neuvottelija.com/podcast/episodes/659-reipasta-suomikuvaa-ulkomaille-mickos-neuvottelija-sisapiiri/", "text": "[00:00] On the Sisäpiiri side we continue with Mårten Mickos. So you were just apparently this kind of crazy Finn out there abroad, that is, that is a CEO there. So then you've, um, kind of played this game a bit, so that have you played it heavy, or what have you done out there, huh? Well, in a way when I left for abroad and for Silicon Valley, I thought that you shouldn't, like, emphasize too much where you're from or anything. That we're just there doing business and need to, like, advance that. But every now and then there'd be an opportunity where people would ask, tell me now about this, like what is the Nordic leadership style, or like people wanted to know, and employees wanted to know, and many came to work for us because they valued this kind of Nordic value — value base. And a nice example is at MySQL, when I was there as CEO, we had employees, 30 in two countries, and once a month we decided that we'd hold a town-hall-type meeting, where everyone takes part and gets to listen to [01:01] the CEO's updates and the latest information. So everyone would call in into a kind of call center back then, because there weren't yet video conferences. And then, and then they'd listen to me for about an hour, as I talked about the business and gave these kinds of updates, the latest reports. So, so we gave this thing the name Radio Sakila. Sakila was the name of our logo's dolphin, so I thought that Radio Sakila was a nice name for this meeting, and when we held it for the first time and I'd gone through the whole program, then at the end our Bulgarian developer [unclear] wrote in our IRC channel. That was the way to communicate back. They put, um, that you can't call this radio unless there's music in it. That radio must always have music. And then I replied that, well that's true, that no, no, it's not radio unless there's music. And then I couldn't think of any other music at that moment, as I was sitting at home somewhere in Silicon Valley. [02:01] I didn't have anything else besides what you'd have, like a desk and a microphone. So then I thought, okay, that now I'll sing you a song. And since I don't know very many songs, but I do know a lot of schnapps songs, drinking songs, so I sang the Helan Går song yesterday, because it's the first thing that comes to mind. Then I sang it and said this is this kind of Nordic-style drinking song, like take it or leave it, and everyone cheered and liked it. Then a month passed and it was this same format again, and I again gave the business updates, how things had gone and what we were doing. And then at the end they were like, Mårten, what are you singing today? And then I thought damn, that I've now gotten hooked, or they've hooked me, that now I can't, can't back out of this. So then, what the hell do I sing now, and then I thought, well but I do know drinking songs, and then I sang the next one and then it became a tradition that I never sang the same song, but I always sang a drinking song for them. And I sang Norwegian, Danish, [03:01] Swedish, German, Finnish songs, and that lasted probably two to three years, once a month, and always the CEO alone sang the song and they loved it. Mm. And I didn't realize back then yet that in a way it, like, softened this CEO role, and they realized that I too am just an ordinary person and can be, like, can laugh at myself, be a bit, like, silly, so that it had a very significant, um, function in developing the company culture, even though it was, as it were, just a coincidence and I just went along with it. But that's certainly true. I mean I myself also always, even now there's that so I'd play, like, some LAN games with some Quake, and I had this theory that they always, like, my subordinates would, like, attack me and got, um, psychological satisfaction from killing me first, but yeah, it like, probably the work community, and like this kind of, like, the boss's voluntary humbling is, I think, like, really a very important skill, in that it, like, [04:04] humanizes the organization and then removes that micromanaging from the organization too. Yeah, at Eucalyptus we then had another thing, where we just, like, couldn't get the software to work at all, or it worked, but it kept crashing, was difficult, stuff like that. And I said, now we absolutely need to produce a version that's genuinely easy to use and efficient and functional. And then it kept developing, it kept getting pushed back, the deadline, and they'd say, no, not now, but in two months. Two months from now. Then finally I said, no, this company can't take this anymore, that you're not getting it done. So now, now there's a new date. Was it February fifth or something, I said if you get it done by then then, well, first I said that I'd, I'd run naked through Santa Barbara, because that's where our office was, and then, don't make me do that, well I wouldn't actually do that, but I said, you can, say, cut my hair off my head if you pull it off, and I just threw that out like that, and of course that's what happened, they got the software done, it was in top shape, so we had an absolutely great version then, and then they came and said, now, we [05:07] did what we, like, promised, and now go out to the backyard, we've got a chair for you, and then I went and sat there, and then they got out the electric — what is this is this, this is, um, [unclear] anyway, yeah, and they started to cut my hair off, and then I had no hair left at all except this, this test engineer Kyo, who did it — he was really skilled with his hands and then he, like, drew, or left on the back of my head, our company's logo — he, like, skillfully left hair uncut in a way that from it came out something almost like, like, a tattoo, but an image and it was our logo. So, so, so from the front I just looked bald, like a bald man, and that was new to me, but from behind I looked like some mafia boss, since I had this kind of, some dangerous-looking tattoo, well, if you have a big tattoo on the back of your head — but, but that also brought about this feeling for everyone that, okay, now we're doing this together. Mm. the CEO demanded this, but he also committed himself, and he paid, like, [06:08] with his own, own hair for this great version, and we got a lot of like, public attention too from that, as I went around San Francisco and looked totally different than before, and people asked what had happened and then I'd explain this story, and it became internally and externally just a great, great thing. That's by the way, I mean, a public bet I'm using that too now. I have a bet this year that I'm almost certainly going to lose. My partner, um, colleague Tero Nummenpää, well, um, he has to do six pull-ups with 20 kg of extra weight. He can already do that now, um, with his 10-year-old son hanging from his legs, and I'm supposed to manage, unassisted, to get Sanna Marin matched, that is, six pull-ups, and it's not looking good, that it'll go to video, but I've made it public, so, um, but it's, like, in a way there's something fun in that, like, in a public bet, if you, you are willing to, like, humiliate yourself, so — yeah, I guess we'll then probably do that video when I come, or I still have a small, small chance here, I haven't given up yet, the year isn't over yet, um [07:08] maybe by then to the Kräftskiva, so, um, I've also been in Nordic organizations, and I was maybe a bit of a, like, non-Swedish-speaking Finn, but I've like, learned to appreciate it. Even now at Translink we always go, like, in turn — last time we were at a Kräftskiva in Stockholm. So yeah, I then performed there, in front of the stunned Swedes: Det glider in, Det glider in, det glider in i må igen! Vi ska kämpa vi ska ge, allt som vi ha, vi ska ta guld igen! but it, um, was just fun there, the old Swedes didn't care because they have 20 golds, so one, one Finnish, um, championship doesn't mean anything but then one younger woman said, was that some hockey song or yeah, but I thought, I thought it's, like, there's something great in that, in those traditions, yeah, um, and it does resonate, though it's a bit of a shame for those crayfish, that we should come up with some, some, um, new festive food for that table, but [08:10] otherwise, well, someone could come up with some new one. Yeah, yeah, maybe some vegetarian alternative so they eat something, I don't know, some artichokes or something there, but I'm still willing to, like, murder those crayfish, but at some point it'll then get um, get, um, difficult, and great, thanks for this, and if you came in through this way, then check out our main episode on, um, the growth formula thanks, thank you "}, {"slug": "665-claude-in-excel-sami-miettinen-neuvottelija", "title": "Claude in Excel: Valuation Metrics From a Nordnet Portfolio", "titleOriginal": "Claude in Excel | Sami Miettinen | Neuvottelija +", "guest": "Sami Miettinen", "guestsCanonical": [], "guestPages": [], "episodeNumber": "db-665", "publishedAt": "2026-02-10", "duration": "07:38", "format": "full", "topics": ["ai_enterprise_tech", "investing_markets"], "description": "Claude in Excel | Sami Miettinen | Neuvottelija +. Sami Miettinen demos how an equity savings account (OST) is converted from a Nordnet portfolio into Excel format. He also calculates the key relative valuation figures EV/EBITDA, EV/Sales and EV/Capital Employed.", "page": "https://www.neuvottelija.com/podcast/episodes/665-claude-in-excel-sami-miettinen-neuvottelija/", "text": "[00:00] Alright, you wanted to see, among these AI tools, this Claude Excel. So in a way this now makes Excel users either really efficient, or it makes mediocre types really good. I'll put a portfolio on the line here, so this is this Nordnet equity savings account. It now has a market value of 87,735 euros. Originally 50 grand was put into it, and sure there's a good return here, but there have been some illogical moves made. I mean I've been buying way too many US stocks. They have of course performed very well. There you see Alphabet and Shopify, so 180 percent. But I mean, tax-efficiently it wouldn't make sense to invest only in British and Finnish stocks, because those US stocks carry a 12 percent withholding tax that doesn't get refunded in this equity savings account. I could actually code this too, then, um, into Claude Excel here, as a suggestion to sell those tax-inefficient stocks. [01:10] Now let's go over to the Excel side. Let's open this Claude in Excel, and this is installed as an Excel add-on. And now I'll put in here to copy the attached portfolio so that the euro-denominated amount is correct. And the companies' tickers can also be found from external sources. Pay attention to the exchange rates, Euro, GBP, and USD. Alright, then let's get this moving. Then we'll just watch as Claude gets to work. [02:12] So it now notices those exchange rates and starts digging into them. Here, by the way, this Unilever has split these off into that Magnum Ice Cream Company, and it's been such a small investment that I hadn't even noticed, but that's how these are going now. And then here it is, it starts calculating these portfolio values, and since this Nordnet portfolio report doesn't have quite all the information, for example about the original acquisition cost, it has to, in a way, calculate those itself from that return change there. And then when this exchange rate is still being fixed here, it then has to take that into account too. From there it's now digging up these figures, and in quite the right direction, [03:15] and yeah, and from there it ended up with nearly the same amount, there, I mean, it could be that there's that exchange rate rounding, that is, 87,488, wasn't quite the same as that starting value there, Or then, well, the share prices are only to two decimal places, let's see. I could go ahead and instruct it there to arrive at exactly the right figure. Yeah, well, it actually noticed it itself, so — yes, thanks. I'm used to being polite to this AI, so I said yes, thank you. And that thanks needed to be added here. Then the calculations run. There, we arrived at that exact figure. Awesome. Well, then that's a bit of an ugly table. In a way the logic is that the totals are just in black, well, it is what it is. [04:16] Let's ask it to also add this classic — add a relative valuation table below. Calculate EV/EBITDA, EV/Sales, EV/Capital Employed for each stock using the 2025 consensus forecast. There we go, it starts doing that too now. So this Claude and Microsoft alliance also includes the use of these external data sources, which is absolutely amazing. Here in Translink's databases we now have, for example, something like S&P Capital IQ, so it could pull these ticker values from there too, which would be a fun demo as well. [05:22] But here now it's from its own sources, and one of them, among others, is Bloomberg, so it starts calculating these multiples. This is, in investment and investment-banking terms, relative valuation — if this multiple is high, then it may possibly be an expensive stock, and vice versa. Of course you pay for quality, so since here we have some of the world's best companies, like Alphabet, Shopify, Microsoft and Apple, they do deserve higher multiples than, say, our Nokia or Mandatum or Sampo, not to mention Neste. But this now starts calculating these multiples and then also adds the source and then the median and the average then calculates that for it. Pretty expensive stuff I've got, so here as the median [06:23] 4.5 times sales, and 16.2 times EBITDA. This is now this kind of thing, I've indeed had this kind of wild portfolio, since in principle the idea of this equity savings account is that in it you could take a bit more risk, and because the gain there then isn't taxed before it's withdrawn, so like that — and it moves on and then asks these kinds of whether to add, like, reasonable assumptions, that is whether to add price-to-earnings multiples, so let's put those in, with a yes, thanks, once again — no need to keep thanking it, but I've been polite about this. Well but this is Claude in Excel, an absolutely great thing. This indeed gets installed as an add-on here in Excel. And then you need to have this — a Claude license, Pro is enough, but I of course have Max, so there are enough tokens to then do both coding and this kind of Excel work. [07:26] Alright, send feedback and also subscribe to the Neuvottelija channel. Thanks. "}, {"slug": "716-tama-kaytos-oli-80-luvulla-luonnehairio-liisa-keltikangas-ja", "title": "Yesterday's Personality Disorder Is Today's Normal | Liisa Keltikangas-Järvinen", "titleOriginal": "Tämä käytös oli 80-luvulla luonnehäiriö | Liisa Keltikangas-Järvinen | Neuvottelija 389", "guest": "Liisa Keltikangas-Järvinen", "guestsCanonical": ["Liisa Keltikangas-Järvinen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/liisa-keltikangas-jarvinen/"], "episodeNumber": "389", "publishedAt": "2026-06-12", "duration": "01:09:46", "format": "full", "topics": ["leadership_governance"], "description": "Finland's best-known temperament researcher, Liisa Keltikangas-Järvinen, explains why behavior that would have earned a personality-disorder diagnosis in the 1980s is now our cultural norm. The conversation unpacks the difference between selfishness and independence, 'curling parenting' (parents who smooth every obstacle from a child's path), the disappearance of childhood, and why Finland is a global outlier in how young people relate to their parents. Keltikangas-Järvinen delivers sharp criticism of recruitment practices built on personality tests, and explains why a culture centered on talking about feelings has driven an explosive rise in anxiety. Finally, they discuss whether schools and early childhood education are systematically raising children to be selfish, and what could be done about it.", "page": "https://www.neuvottelija.com/podcast/episodes/716-tama-kaytos-oli-80-luvulla-luonnehairio-liisa-keltikangas-ja/", "text": "[00:00] All right, welcome to the Neuvottelija channel. My guest today is Liisa Keltikangas-Järvinen. Hi there. Hi. We just had lunch, and your book The Age of Selfishness has been hugely popular. Are we selfish? I suppose we're a bit selfish. If you judge it by how much discussion this book has stirred up, then yeah, we're probably a bit selfish. But have we ever - was there ever a time when we weren't selfish? There has been, but these things vary. The ways people live vary. We've had selfish eras before too, and these cultural shifts don't move forward in a straight line - you could say that, in the end, people never really invent anything new; it truly just spins like a wheel and starts all over again. [01:01] Throughout history there have been many earlier periods when selfishness gained the upper hand. We're talking about phenomena like Machiavellianism. What's different now is the globality of it - the fact that with these digital tools and the ability to interact, we've gotten a completely different kind of... ...unified culture in this sense - because when you look back at these periods of individualism in history, they've always been small isolated pockets, and they've never spread across an entire culture the way it does now. Mm. I was thinking about this a bit through attachment theory - sometimes that gets pushed on me too - like, isn't it still, as my daughter once put it, that if you convince yourself you're this independent person, couldn't there still be [unclear] ...something good in that. Selfishness and independence are two completely different things. [02:01] Yes, they really are different things. [clears throat] It's hard to see anything good in selfishness at all. We talk about healthy narcissism, or we attach good-sounding words to disorders, but individuality is one thing, psychic strength and ego strength are another, and then selfishness - which stops a person from noticing other people - is something else again. And that's exactly where the difference lies: a person absolutely can be highly individual, and still value other people, and still be able to share common goals and be altruistic. So we don't really have such a thing as healthy selfishness. We have healthy trust in ourselves, and then we have selfishness. Right. Now, this is a scholarly book, but as you say yourself, you don't drag the reader through footnotes - I was really drawn, back in the day, to this [unclear] developmental theory, and a lot of this is really about how a child becomes a healthy individual - someone who isn't selfish, but is still independent and part of a community. So is narcissism specifically tied to that? Not narcissism as such, exactly, because [03:18] narcissism is a disorder. [scoffs] I used narcissism to describe the fact that a real change has taken place - so that it doesn't stay at the level of me just claiming, 'I believe this.' Because if I tell you that this kind of behavior, this kind of value system, would still have gotten you a diagnosis of a character disorder in the 1980s, then that wakes people up. That's when it hits home that a real change really has happened. [scoffs] This is also useful in the sense that raising narcissism as this kind of example works quite well, because in a child's development there's a developmental task. Psychology talks about developmental tasks - we could just as well call them developmental stages, but a developmental task means the point at which the brain is ready for learning something. The brain, in a sense, hands the person a task to develop in that area. That's why we talk about developmental tasks. [04:22] [scoffs] We have a developmental stage that's called primary narcissism, where it's all me, me - hedonism is the starting point for everything, and your own needs, and everything gets looked at through the lens of what's in it for me - and the whole point is to grow out of that into an adult. So in that sense, narcissism gives us even more tools for understanding the change that's happened in our culture. Right. My friend, back in psychology class in high school, used to joke about this - when we were studying the blank-slate theory - about how much is built-in biological machinery in a person, which just blossoms on its own through the different developmental stages, and how much is the influence of upbringing and community - nature versus nurture, so to speak. So in a way, at some point the individual becomes mature enough that they start changing themselves. So how much of this developmental arc is down to the parents' credit or fault? That kind of thinking - crediting or blaming the parents - isn't presented that way anymore. It was presented that way when I was a student; they even gave percentages, this much is hereditary, this much is the parents. We're completely away from that now, because [scoffs] it's very hard to see the line between what's [05:42] hereditary and what's cultural. When we talk about a person's character, the further research goes, the more we understand the biological significance of it, and the more strongly it comes through. But there's another thing I wanted to bring out in this book, which is that I'm not actually talking about human beings changing. And that's - even though I emphasize it in lectures, I notice it's not that easy to get across - people haven't changed at all, and these laws of human development haven't either; but a person has a certain strength that can also turn into a weakness, namely that we don't have a species-typical way of living. Instead, how we interact with each other - well, to some extent we do, but it's considerably less species-driven than it is in other animals. And in that sense, how we express ourselves, how we relate to other people, and how we live this life - we live according to whatever we're told is good for us. And we can change our way of living very quickly if we're told this is good for us. If we're told everywhere, on every side, that a person is happy when they don't think about themselves, but [07:07] think about others and are altruistic - then we act that way, and we're satisfied. If we're told that a person's duty is to make a project out of themselves and constantly think about their own well-being, then it clicks - 'oh, right, of course' - and they live that way, and they're satisfied. And that's the message of the book - that I'm not talking about how the environment or biology directs people, but specifically about the power culture has to tell us, 'this is how you should live.' Right. But then, on the parents' role and how they shape character and behavior - you said that nowadays narcissistic behavior, or selfish behavior, which would earlier have been classified as a conduct disorder, is now completely normal in society - so does that come from this helicopter-parenting phenomenon, breaking down the natural growth processes where a person learns to tolerate uncertainty and disappointment, and instead we're always offering alternatives and boosting this sense of independent agency? That's certainly one factor in this [08:22] whole picture, because on one hand upbringing shapes culture, and on the other hand culture tells parenting - tells you how parenting has to happen. What's interesting here is that I'm not out to find fault with the parents - to some extent, yes, some blame - because parents have never invented a single parenting model themselves; it's always been handed to them by professional educators, psychologists, through the voice of the culture in one way or another, saying 'this is the good way,' and they've gone off and put it into practice. And right now, in our parenting ideology - in how parents are guided to raise children - there are plenty of elements you could describe this way: they're guiding people to raise children into selfishness. But that's not the parents' own invention - it's just one manifestation of this selfish culture of ours. You mentioned helicopter parenting there. That's actually not so much a problem specific to Finnish culture, because helicopter parenting means helping the child too much for their age, hovering around them like a helicopter, and doing things for them. And [09:43] this isn't our parenting problem - our parenting problem is that we're losing childhood. We no longer grasp what a child actually is and what a child needs. [scoffs] Psychology, after all, brought about a revolution when it introduced into general thinking what childhood actually is. And that happened clearly back in the 1920s, when people started saying that a child can't work in mines, can't take responsibility for their own upkeep, and so on. Work was done on that front, and now we find ourselves in a situation where, especially in Finland, we again have to spell out what a child's brain is actually capable of, what childhood is. And the fact that we so gladly embrace this - helicopter parenting is, again, part of our culture, where we think a child has to manage earlier. Then there's another concept: curling parenting, and that's a problem for us - curling parenting means giving the child the decision-making power so that they won't be disappointed. You constantly ask the child what they want, and you sort of soften everything, do everything [11:02] for them that way - you cushion every disappointment and setback, and as a result they never develop this thing that's now being loudly demanded of them: resilience. Right. And I got the impression that maybe emotion isn't your favorite word - that you'd rather talk about temperament. Well, it's true that emotions aren't tolerated, especially negative emotions, and people just want to shovel them away so everything stays idyllic and so on - and that surely breaks down the self. It does break down the self a bit, but it breaks it down in a way that I'd like to clarify a little - I said a moment ago that childhood is disappearing, and, well, our conception of childhood has never actually matched what research tells us about childhood - it has always been shaped according to adults' needs. In other words, depending on how the child burdens or benefits an adult's life, accordingly [12:12] a certain conception of the child gets built. And I'd argue that in the 1980s, our cultural conception of the child was closest of all to what science tells us a child actually is. Back then people understood what a three-year-old can do, what you can expect from a four-year-old. And since then, as we've moved forward with these various ideologies, we've drifted further and further away. And as we've drifted further away, we've also lost our grip on what a child is. And it's quite interesting now - how this has actually happened - as we lose our grasp of childhood, it's happened largely by our giving the child adult rights: self-determination and decision-making power over many things. We've started emphasizing children's rights - that they have the same rights as adults. But we haven't stopped to think that this conception of the human being, this conception of the child, of course also has to include adult obligations. And we've already smuggled a lot of that in, and in doing so we've chipped away at childhood - the child ends up having to decide on things they're nowhere near ready to decide on. We talk a great deal about how we need to lower the age of criminal responsibility. We're already building something like a [13:36] halfway house between a placement home and a detention facility, with somewhat different rules. We've already let in - crept in - this flip side of the coin: if a child is actually capable of deciding their own affairs, then they can also be held responsible for those affairs. This is exactly what psychology set out to change a hundred years ago. Right. And, in passing, referring to this Jonathan Haidt book, The Anxious Generation - I suppose we'll get to the differences between girls and boys later, which are large, and to social media - but there was a bit at the end, some recommendations, and it sort of sounded like the old-fashioned Finnish way of doing things: create a genuinely safe space where the child gets to take risks and fail, and sort of experiment and search for those limits - somehow that sounded really nice, so isn't your solution kind of a return to these methods that at least used to work at some point? Well, yes, methods that worked at some point, but I'd rather put it this way: methods in line with the newest knowledge - because then we wouldn't just be going back, as it happens, to methods that were common before, but we'd be going back to what today's brain research tells us about a child's brain, what it's capable of, and what [15:00] you can expect from it - so it's really the same return, and it can also be justified with the very latest research findings. Right. And then, I've never really been a fan of temperament, or these personality-profiling things, because I always figured it's kind of an individual's own choice to shape those and be different depending on the situation - like even the idea of extrovert versus introvert feels a bit artificial to me, because I'm an extrovert in some situations and an introvert in others. But you had quite a lot to say about introversion and extraversion, and how that too has shifted over the ages - specifically at the expense of introversion. Well now, this - [clears throat] - you just mentioned that a person can change, and they can vary, and so on. This is exactly the idea that temperament is the biological part of a person's personality that comes ready-made. And this comes from the current understanding, or what research shows, that a child isn't born a blank slate. Everyone knows that little babies are different. Anyone who's seen babies knows there are huge differences among them right from the start. And then the environment starts responding to those differences, and gradually a personality emerges from that. [16:16] So these temperament traits are, you could say, neuro- - neurochemical behavioral responses. A person can't change them. But this idea that 'sometimes I'm introverted, sometimes I'm extroverted' - that's actually in line with the theory. It doesn't contradict the introvert-extrovert way of thinking at all. First of all, there's an error in it - there's no such thing as 'an introvert' and 'an extrovert' as fixed types. That's a misunderstanding. It's not on/off - rather, there's just one single continuum, and all these temperament traits form a distribution, and we all have exactly the same temperament traits, it's just their strength that varies. And extraversion is one continuum, where at one end are the traits we consider to belong to extraversion, and at the other end is the absence of those traits, and that absence has come to be called introversion. And that means that, since this distribution follows a bell curve across the population, most people are neither one nor the other - they're somewhere in between. [17:25] Ambiverts. [clears throat] Well, that's a perfectly good word, even though people have sometimes laughed that we always have to invent new words - but it captures exactly this: that people who are clearly introverts, those extreme cases, are extremely rare, just as the bell curve shows. But then, once a person starts actually behaving, their behavior always adapts to the situation, so that they behave in a more introverted style in some situations and more extroverted in others - that's exactly what the theory predicts happens. Right. And here's a follow-up question - there used to be this idea of the tragedy of the gifted child, there's even a book by that name, where sort of a well-behaved child, fighting their own inner demons, overachieves and does well in school precisely because they behave so well and properly and introvertedly. Whereas nowadays the ideal is this great all-rounder who scores maximally on the Big Five across every good trait. And society rewards that latter type these days, apparently, with better grades in school and in working life, and better pay - so I got the impression you don't think that's fair. Well, actually, fairness isn't really my point - it's that it's simply against the research entirely. And right now, in the US, there's already been a shift of thinking on this in economic matters too, and also on these [18:49] psychological matters - there's a discussion now that once you get this kind of valuation model, like the one we now have, where certain personality traits are considered better than others, completely regardless of whether they actually produce the outcomes we assume, or whether they correlate at all with competence, ability, and so on - the question is now being raised of what connection these have to poor economic performance, to bad hiring decisions. That's the real question - because sure, there's also a fairness angle to this, but honestly, that doesn't concern me all that much. What I care about specifically is: if we end up with this completely delusional idea about something, and society starts acting on that delusional stereotype, then what are the consequences? Right. Well, let's come back to that - it's actually interesting too - I think the most interesting finding in the comparative research was that Finns, apparently of all countries in the world, are the least likely to try to earn their parents' respect or pride for themselves - did I phrase that right - but that just sort of sounded true to me, that we really don't try to please our parents. [20:11] Right, that was quite striking. It was this World Values Survey - this kind of [deep breath] research report where you can find almost anything you could think to look for, about how countries around the world differ from each other. There's one page in particular where you have Europe broken down, then the Middle East, then the Global South, the North African states, and there was a question that was put to young people - thousands of young people in every country - a statement like, 'my greatest goal, or an important motivation for me, would be to make my parents proud' - that was the statement. And once you got outside Europe, 100% of young people responded that yes, this is a major, important motivation, 'I want to act this way.' Then when you get to Europe, in Southern Europe it's something like 90%, and then it dips a bit as you move up to the Nordic countries, or further north, but it still stays around 70%. And then there's one complete outlier: Finland - it was 24% in Finland, when the next-lowest jumps straight to 60%. That's a result that really makes you think. Right, a couple of thoughts came to mind. One [21:33] is - since I'm a bit of a right-winger at heart - that socialism has gone too far here, that the state has taken over the parents' role, so to speak, and as a result no value at all is placed on this kind of tribal or parental dependency, because the social-welfare cushion is such a nice substitute for a parent. [scoffs] We certainly have to go looking for something like that behind it, at least, because it doesn't seem to work in our culture the same way it does elsewhere, supporting the bond between parents and children - and I'd say we have more of this attitude that when something bad happens, we call for the parents to be blamed, saying, look how parents just aren't raising their children - but we should be asking what kind of support is actually given to parents, and I don't mean financial support. I mean, how important are parents seen to be in a child's life - and the answer is, not very important, because there's this constant talk about how at risk a child is if they don't get to be raised by proper professional educators, as opposed to being stuck with their own parents for far too many years in childhood. [22:42] Right, it almost sounds infantile, in a way - like the shame of embarrassing parents has become stuck at this infantile level. Or maybe, on the other hand, the parents themselves want their child to become the bird that flies the coop and never looks back, soaring off like an eagle, independent and self-sufficient out there in the world. I don't know, but personally I don't think that's necessarily a good thing. It's not necessarily good, no, because it's already been shown to have all sorts of consequences, because these parent-child relationships are still the foundation of one's sense of self, the foundation of identity, the longest-lasting relationships in life - and if they're given no significance at all, it's not easy to find substitute relationships for them. So we really are building a world of lonely people, and then we act surprised that loneliness has become such a huge problem. Right. And going back to that Anxious Generation book - there was a lot in there about this collapse of psychological well-being, that quite simply something has broken in us - at the very least, our emotions, our selfishness, and our ability to function as part of a group. [23:47] And of course we might sound like terrible pessimists here, but at the very least we can say that there's never been a time before in our written history where psychological problems have been this massive - at least the reported ones. In that Haidt book, it said that people now openly declare themselves to have all sorts of disorders, and it's even worn as a badge of pride - 'I've got a touch of ADHD,' on the milder end, and then full-on autism at the other end, or whatever - so in a way there's probably a diagnostic problem baked into this too, that maybe the measurement and the self-perceived state get a bit mixed up. Well, that's often how it's put, and there's probably some truth to that problem too - but given that it has consequences, does it really matter? Whether it's 'real' - because if the consequences are still burnout, sick leave, broken relationships, does it really matter all that much whether it's real in air quotes, or whether it's just something manufactured, when the consequences are already visible? Well, sure - but one consequence could be that we change the culture, so someone isn't stuck moping in bed instead of coming to work, that this [25:05] isn't some kind of excuse for not showing up to work on a Monday. This [laughs] - this is interesting, exactly this: what does the culture reinforce? Does the culture reinforce victimhood, or does it reinforce pushing through problems regardless? That's really the core question. Right. And this idea of victimhood as something positive, I think that's just awful - I really don't like this trend of somehow rewarding it. [scoffs] I think being a victim can be - I mean, if you're genuinely a victim, that has to be respected, but this kind of self-appointed victimhood put up on a pedestal just sounds really pathetic to me. [scoffs] It's quite interesting, actually - we've now turned what you might call gritting your teeth and getting through it, the old way, into - well, of course you still have to grit your teeth and get through it, but it's been turned into something negative these days, and then the question becomes more about how society functions further down the line, and then this [26:05] thing that Freud emphasized back in his day - even back then you find this same emphasis on what constitutes a person's mental health. That the person is capable of functioning. That they're able to work. Freud famously defined it this way: being able to love and to work. Being able to form relationships and being able to do work. And what's interesting is, if people back then were able to work and were able to form relationships, then on what grounds can we claim that they - if they didn't shout all their feelings out loud - that they gritted their teeth and got through life. That's the interesting question to me: how boldly we go looking for faults in previous generations' way of life, simply because we imagine we've now invented something new. And yet, if we think, say, about Freud's definition, these people of the past - even if they gritted their teeth - by that [27:13] definition, were actually healthier. Right. And then, given that the rate of mental-health diagnoses has now risen - correlation isn't causation, of course, but it has risen in some kind of correlation with the rise of smartphones and social media - so let's get into girls and boys and smartphones - how much of this is actually the phone's fault, or social media's fault? Well, there is causation in there too, as well. We've had social media around long enough now that we can get these before-and-after setups where you can actually see the causal link show up. Now the question becomes: would social media have had this big an effect, would it have turned into this, if we hadn't already had this culture - this individualistic culture that polarizes people, that gives room for intolerance, that feeds all this? So in that sense, we're blaming social media wrongly, in that social media was the thing that detonated these problems and, above all, provided the opportunity. [28:23] But if we'd had a culture where norms of good behavior prevail, and respect for other people prevails, and shared goals, the common good prevail, would this impact have been this large? Mm. And then this comes back to - is a child just a small adult? More and more, even to younger and younger kids, we say, go ahead and surf wherever you are, even if you're on TikTok for seven hours a day, and the content there just isn't remotely suitable, especially for a young girl. And then I guess we get into these differences between the sexes, where boys can take a hit from social media too, but if it's directed toward things like gaming and porn, that's less dangerous than girls' sort of total collapse of their social networks, and bullying. There are, well, there are shared effects that are independent of gender, and one is this erosion of social skills, and that's been such a surprising finding that people in the US are now genuinely worried about it. Here, we're really not - if anything we still encourage this kind of social [29:35] -skills weakness. We still have this culture where you have to go looking for problems in people, and if they're not exactly the way I want them, sharing exactly my values, then, well, tough luck, satisfy every single one of my demands, full stop, end of discussion. We don't have that kind of culture where we're worried that people simply can't get along with each other anymore and that normal relationships have become a burden. In the US they're already worried about this, and social media has had quite a large effect on this erosion of social skills too - but then there are certain things where this gender difference shows up. For example, in things like at what age these effects are the biggest, and then there's also been shown that for girls, this comparison with others increases anxiety and increases depression. Boys don't show the same thing. For boys - or to a much smaller extent - it can be shown that social media increases anxiety less than it does for girls, but for boys there are instead these other negative phenomena. It's been shown that they identify more strongly with these kinds of, you know, truly [30:54] negative idols, negative role models. Violent behavior. A completely distorted view of sexuality. [unclear] and sexuality get tangled together, and then this kind of contemptuous attitude toward the other gender - all of that negative posturing. This has been shown - shown specifically as a risk factor, a risk trajectory, for boys aged around fourteen to fifteen who spend a lot of time on social media. Right - I personally think that when -the biological need for variance in men is, after all, because sperm cells number in the millions while there are only so many egg cells, so biologically it makes sense for the carrier of the cheaper sex cell to take on more risk and seek out more variation, and also to be found more at the extremes of that distribution - whereas for the female sex, risk-avoidance and social acceptance become more important instead. So maybe this is just [31:58] some kind of a repeat of this same phenomenon. You certainly can't deny that - if you go back through history, we've had these power structures pretty firmly taken for granted, where power belongs to men. You can't deny that at all. And equality, gender equality, sure hasn't come about on its own - it's come about through work. And if these arrangements have been this firmly entrenched for so long, then of course there's some kind of - well, there's some kind of biological readiness that we're then working against with civilization. Right. Personally, I - well, some people argue that the internet and smartphones were just a preliminary stage for the age of AI, that it trained us into this kind of compulsive bonding with, or merging into, machines, and that that same mechanism is now underway with AI. Personally, I really like using AI, but I train it kind of like you'd train a junior employee, or even a child - I build it a memory, good practices, tell it 'no, that's not a good source,' and 'since you got that wrong, next time answer like this' - and I keep building these routines into it, and to me that feels a lot healthier than doom-scrolling Instagram or TikTok in this totally monotonous way, just chasing that dopamine hit [33:26] - I don't know if you've had the chance to look into this AI impact yet, or whether researchers in general have. Yes, yes, researchers have gotten into it - and just when was it, actually, yesterday probably, I was looking for - asking for suggestions from some AI, necessarily - well, AI of course raises a great many moral and ethical questions, but this idea that a person could gradually be replaced by some kind of robot - which has been raised as one fear, [laughs] - well, we do have to remember that humans are pack animals, humans have the b"}, {"slug": "734-verojuristi-perintovero-ajaa-varakkaat-pois-suomesta-janne-j", "title": "How Inheritance Tax Drives Wealth Out of Finland | Janne Juusela", "titleOriginal": "Verojuristi: perintövero ajaa varakkaat pois Suomesta | Janne Juusela | Neuvottelija 395", "guest": "Janne Juusela", "guestsCanonical": ["Janne Juusela"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/janne-juusela/"], "episodeNumber": "395", "publishedAt": "2026-07-14", "duration": "59:59", "format": "full", "topics": ["ownership_capital_tax", "finnish_economy_policy"], "description": "Tax lawyer and Doctor of Laws Janne Juusela and Sami Miettinen assess the tax decisions of the Orpo government from the perspectives of a top lawyer and an investment banker. The cut in the marginal tax rate to 52 percent, the streamlining of the transfer tax and the reform of share exchanges earn praise, but Juusela sees the biggest downside as the government's failure to dare abolish inheritance tax along the Swedish model. The episode covers the 'massimuijapykälä', dividend taxation of unlisted companies, the cut in corporate tax to 18 percent, and the reform of stock option taxation, under which tax is paid only when the shares are sold. Finally, they discuss legal-protection problems in taxation, the need for a constitutional court, and how AI is changing the work of lawyers.", "page": "https://www.neuvottelija.com/podcast/episodes/734-verojuristi-perintovero-ajaa-varakkaat-pois-suomesta-janne-j/", "text": "[00:00] All right, welcome to the Neuvottelija channel. Welcome, Janne Juusela, one of Finland's toughest tax lawyers, actually a doctor of law. And I remember back in 2014, when we wrote the Libera book How Finland Can Be Saved, it had this concept called the Juusela model. So you're kind of a legend in these tax matters. Welcome. Thanks for the invite. Yeah, and actually that Juusela model, people don't talk about it that much, but I remember there were these kinds of, uh, insights, that for example, like, inflation shouldn't be taxed, I mean, uh, generally at all, you shouldn't tax, like, cash, and not like dreams or the tax authority's greed, and these kinds of principles I would respect and hope that the tax authority and the politicians too would bring to the table. Yeah, I do need to clarify one thing, that it was actually for the elinkeinoelämän valtuuskunta (EVA), when I did this in 2014, this thing, where this Juusela model was, but I've also done a lot with Libera, various studies and other things, so [01:00] yeah, this was, because it was at the same time — I was writing, well, a book for Libera, so we borrowed that content fresh and then modified it a bit, because it wasn't quite perfect after all. Yeah, but, uh, let's start now with this right-wing government's structural changes, especially the decisions related to taxation, and I'm actually quite glad, there's sort of, like, investment banking background here, his client base has nevertheless been tried to be understood here like this over these three years and, hasn't, hasn't, uh, these have here mainly been good, what's come out of it? Well yeah, if you think about this tax policy here, here then yes, a lot, a lot of, uh, good things have been done, and quite significant things. Probably the most important, the most important thing is that, uh, earned income taxation could be eased, and especially that progressivity, which has been the biggest, biggest problem in that earned income taxation. That is, that extra work is taxed very harshly. In Finland, internationally, it hasn't been — if you look at [02:03] the taxation of low earners or middle earners, then our taxation hasn't been all that, that harsh after all. But then already at middle income levels or even below middle income levels, then that, that taxing of extra work, that is that progressivity has been internationally sky-high. And now, now the Orpo government made a really significant, significant, uh, decision and lowered the highest marginal tax rates now to 52%, which is, which is definitely, like, a hat-worthy achievement. That's right. So, worthy [laughter] also hat-worthy. So, uh, that, from 59 to like 52, that was like a significant move. Of course you should aim to get below 50, but this was like, for once, they dared to do it, and, and that's good. Then on the capital side a lot of good things have been done. I mean, like I said at the start, you shouldn't estimate tax — you shouldn't, uh, tax in advance, and you shouldn't like that by taxing things that you actually want more of, than, say, capital or wealth or, or work, and this isn't, like, [03:05] understood. So let's take one example now, that this, uh, quite like the stamp duty, uh, on that share transaction, before this right-wing government, was taxed like a bit in advance, the whole purchase sum was taxed, especially in advance, with that fairly small 1.5% tax, but still a bit, assuming that, yes, these, say, additional purchase prices from here will come, so let's just take it upfront to be safe. Mm. Let's go through that, so how did this change, so that it has, has, has been changed now so that, that only once, uh, finally the amount of the additional purchase price is confirmed, only at that point then is the additional purchase price taxed. Up to, up to now it's been a bit like a gray area, and the taxpayer has been required to provide various reports and other things, and quite often it's actually been taxed already before there was full certainty whether that additional purchase price would materialize. This is, this is a welcome reform, as such it sounds like a fairly small technical reform, [04:09] but it creates clarity and predictability, and specifically, like you said, so, so it follows that principle, that taxation only happens at the point when it flows into the cash and is realized. Yeah. So so it's the ability-to-pay principle. That's right. Now, for example, if there's been agreed that there's a company sale, that comes to, say, 10 million as the base purchase price in cash at closing, and then there can be, say, a variation, that five times next year's, uh, EBITDA, the portion exceeding a certain level, so that can be like a range, so then previously you've had to kind of estimate whether it's [laughter] now, then, what will materialize from that, and take that view in advance and pay tax on it as well. Now it's such that if from that range, say, 5 million comes out, then on those five million, that, uh, tax is paid. And not on the random stuff, if nothing comes at all, then you don't pay any tax at all, so this is, in my opinion, a really sensible principle, and it also encourages a bit, uh, creating also that kind of structure, where both parties' interests are taken into account even though I'm not really a fan of it as such, but it's often, like, [05:13] a good way to share that future uncertainty's risk. Yes, yes, yes, it is nevertheless a really common mechanism and understandable. It really does help, like, getting deals done. So, so, uh, there's this kind of mechanism, with which you can then make sure that that business is in that, that kind of condition, and, and also that future turns out to be the kind that was envisioned back at the time of the deal at the time of the deal. Yeah, that's right, and let's continue with this theme, namely share acquisition. This now is legal jargon, sometimes it goes a little wrong anyway, so always correct me if it does, uh, since you you know the exact terms, and I as an investment banker always tend a bit to just wing it in that direction sometimes. This is, by the way, a common division of labor generally in company sales, that I get forgiven if I use the wrong legal term, but you get forgiven less. So, so, uh, share acqui- — that is the other way then, uh, to get into the same boat, that if you have, say, [06:15] a current owner, who sells the firm to another, and then, say, they want to combine them, or they just want, otherwise, this current owner's group to continue, then in this old model, wasn't it the case that you had to actually break off this share acquisition, take the money, pay as much as 34% to the tax authority, this capital gains tax, then, uh, on the original acquisition price or other, uh, computed price's difference, and then with that like drastically shrunken net, uh, money, buy then those new shares — so this was again sensibly reformed here. Mm. Mm. So do you mean this share exchange? Share exchange. Yeah, yeah. Well yeah. It, it was reformed exactly so that, that for example the cash consideration limit was then raised, but even so there still is, is, that it was raised to 50%, but it's calculated from the share's nominal value. So it doesn't necessarily always, always bring, still, still, uh, [07:16] relief to these, these situations, but, uh, the share exchange provision was also changed at the same time, same time, so that, that it was made possible, that a party to a share exchange can also be non-EU companies or individuals. So, so, so in that way, the share exchange's application was expanded, although then, the same, the engine here in this reform was this, this massimuija massimuija, uh, provision, with which it was inten- -ded, or the intention was to prevent that, that, that a limited company's, like, net assets could be inflated by doing a share exchange with an operating business company. So, so, that, that the operating business company is transferred there, there under the new holding company, in which case if the operating company's fair value can be shown to be clearly higher than the taxable value, then, then [08:17] into that new holding company you could get, get the highest net assets, and through that you could then distribute, distribute tax-free dividends. So this was, this this, this, uh, this massi- massim- [cut off] massimuija idea. But in that connection, indeed, the share exchange rules were also otherwise changed ah, I thought that, that these were, or there could also be other motivations. I just remember, uh, once I did — I was on the Metso team at SCB, we were uh, [scoff] we made, uh, a share exchange offer for that Tamfelt, so then we had to calculate like crazy, whether that 10%, uh, would be enough for those cents, that you then need, like, for those divisions, and this kind of, like, total nonsense, so okay, so if now this, uh, it's still book-value, uh, that 50 percent, not 10 percent, but then at least, like, these kinds of, like, completely ridiculous, uh Yeah, yeah. or micro-calculations, like, disappear. That's true. Yeah. I mean, yes, in many worlds there might be, uh, there might then be, uh, that it's accepted, like, quite, quite outright [09:20] just, like, entirely, like, a share exchange as such, one hundred percent a rollover, for as long as until cash comes in. Yeah, and this, in my opinion, uh, would be, that, that would be the sensible principle, that then, like, you do those deals against money, and not, like, settle this, like, sort of, greed. I — in my opinion this is sort of also a general I mean, kind of like a media and left-wing delusion, that people might have, like, quite, quite, uh, with a straight face, these kinds of claims, that, uh, there is, is, like, this kind of unrealized income, that now should every year, always, like, somehow get, like, cashed in. And there is, like, some sense to it, that then some, some, like, endless jackpot might remain, like, completely unclaimed, and then, uh, the person in question just walks off, say, elsewhere, and then, uh, you're left outside Finland's borders. So even, I mean, in that silly exit-tax thinking there's like some grain of sense, but usually this is based just on, like, trying to, like, milk it in advance, that uh, the golden eggs, uh, my — or I don't know if you can milk those geese. Yeah [10:20] [laughter] yeah, in my opinion an important feature of a good tax system is, that, that only realized appreciation in value is taxed, and it follows, like, the ability-to-pay principle. So, so only once it's realized as cash money, then it should be taxed, like, as a main rule, that it's in my opinion a sound principle as the main rule in taxation. Yeah. Yeah. But then that massimuija provision, I mean, as such, uh, the background to it is that [clears throat] a bad-faith interpretation isn't, like, any particular operational reason to, like, increase that share substance's, uh, mathematically calculated value, so that this, this, like, is then used as the basis for a low dividend payment. So isn't it like that, 8% of that substance, which, uh, leads at most to that substance which is 150,000, like, in dividends, so is it now then something like 1.6 million and change, so uh, you've then been able to pay it at the 7.5% dividend tax rate, then the idea has been [11:24] been a bit like that, well even though the company's, like, real value doesn't like, require it, so this kind of calculation is made, that this, this substance is brought up to that 1.6 million and change. Dividends can be paid, so this is now what's being tried to be solved here, and as a side effect then all kinds of other, other ripples come then, legal order — as such, in that, these social media influencers have acted, as such, quite in line with the system in force, and those, the operating company's shares have as such been valued correctly, and the tax authority too has often accepted that. It's a matter of the system having structural flaws, and now, now this one symptom is what they wanted to address, that the clearest thing would be that uh, the dividend tax system would be reformed to be simpler and more neutral, and then there would never have been any need to do anything like trying with share exchanges to get, get net assets increased. Yeah. This actually goes back, uh, at one time uh, I once went to [unclear] business school, and there was [12:27] this kind of, uh, homecoming day, and, uh, professor emeritus Niskakangas was there, so I went right, like, to see him, like, in person, just so that I could get to tease him about this, uh, avoir fiscal change, that this now goes back into ancient history, but back in the day we did have this kind of really good and easygoing system called avoir fiscal, in which, uh, this personal and corporate taxation were combined into this kind of seamless pipeline, which then maximized the incentives both for the company to make a profit, and for the shareholder to bring this taxable capital income to the state's coffers and into their own pocket, and then this was broken, and for mysterious reasons, and then, uh, this kind of artificial split was made, which I don't know if it exists much elsewhere in the world, that there's like listed and unlisted companies, so this is, in my opinion, like, quite a really strange structure, that, like, haunts us in the background. And but not worth breaking it in a way that, like, it gets crapped up like, toward maximum benefit. The model that I've actually proposed [13:28] already back in 2014, or even before that in some contexts, is specifically this, that you'd simulate the same end result as avoir fiscal, but much more simply. So the end result would be that, that the total tax rate on distributed profit is always the same as the capital income tax rate. Mm, 30% m and, and, uh, and then also, also all companies would be treated the same way, there'd be no difference between a listed and unlisted company. And this, well, this discussion has been just about that, quite many, I mean, really widely support a neutral and simple model as such, but then the differences there — my view is that it should be neutral and simple, but it also has to be competitive and encourage growth, that kind of model. So I'm talking about that total tax rate of 30. In many circles, though, they talk about it, that it should be at the level where the total tax rate on listed dividends is currently above, [14:29] clearly above 40. So, so this is the, the reason why somehow reform projects have apparently, like, stalled. This kind of, I mean, neutral, simple dividend tax model, well, recently, for example, many business organizations have supported it, but, but then, the political debate apparently concerns, clearly concerns that, that, like, the level — what, what, what that total tax rate should then be. Yeah. And then [sigh] [deep breath] this kind of, uh, some European Tax Foundation, uh, according to a comparison, this 34% top tax rate on capital is, uh, Europe's — and probably also the world's third highest, so in a way there's this kind of, like, left-wing delusion, that because we've gotten used to those 59 and 52 now, marginal tax rates, on the labor side somehow nobody, like, looks at all at how these other countries in the world tax this capital, and, well, we do have a really tight tax base — in many countries there are nominal, like, tax rates, but then [15:30] a lot of exceptions and tax exemptions, for example after certain holding periods. So and compared to wage income [deep breath] with wage income there isn't that kind of inflation effect, the way, the way the same way as with capital income, especially, like, capital gains, that if you've owned, owned, uh, held for several years, and under these kinds of normal conditions, when we also have inflation in the economy, then then indeed that kind of taxation really tightens up very, very harshly at some 34% nominal tax rate. Yeah, that's right, you can understand that wages are always paid for that current month's work, and, and, like, but then like, the main portion might have inflation adjustments made to wages. That's how it is, and, but I mean then with investing there might be, say, a 30- year delay, in which case then that money from 30 years ago is, like, uh, if it's taxed like entirely on that increase in between, which is purely inflation, then it, well, it could, say, in real terms be [16:32] zero profit or even a loss, but still, still, still, uh, then the nominal profit can be, be significantly large. Yeah. Then, uh, in Europe's more successful capital market, that is Sweden, there's then also been made a long time ago, uh, in 2004, this kind of reform, that inheritance and gift taxes are, uh, subject to capital income tax, and not, not, uh this kind of separate inheritance-gift tax's, uh, wealth-tax valuation. So those receipts can be left uninterrupted, uh, so that, and because of that people's, like, holding periods are, like, considerably longer, and longer than in Finland. And then somewhat older gentlemen and ladies have, like, an incentive still to invest, because it's not, like, so obvious that that holding gets cut off like, at the heir's neck by cash-payable inheritance taxes. Yeah. Right, right, this, this is, in my opinion, the same phenomenon, that we maybe haven't understood. This debate that we're having around here is really naive around it. Yeah, yeah. Yes, it was, like, my [17:33] opinion, like, this government's biggest minus was that, in tax policy, that that, that inheritance and gift taxation, then, wasn't dared to be abolished. There's still so much evidence from our neighboring country, Sweden, that, uh, that it back then had practically only positive effects, also on total tax revenue. Of course, after a small, small, uh, initial dip, but — and how much it has has, has, like, strengthened that, like, ownership, and increased Sweden's competitiveness, and for its part also increased this kind of, like, [scoff] blue-and-yellow capitalism — these knock-on effects are, like, significant. At that event was the Chamber of Commerce's CEO Juho Romakkanen, mind — this was being deliberated, so I then, uh, improvised on the fly this kind of thing, that now Riikka Purra and her associates surely won't bother to reopen this, the inheritance tax, that there's that 7.5-thousand, like, tax-free portion, and then there's that 30-thousand, uh, [18:37] inheritance tax's, like, tax-free portion for this gift tax and inheritance tax, but I say that now you could, uh, get some jingling money into the state's coffers, by doing like, on the portion exceeding these, like, uh, to that gift tax, that with a stamp duty you could then, uh, top it up, say, for relatives then, uh, for direct heirs then, uh, say with that half-percent, that gift tax, and from that you'd immediately get more tax into the state's coffers, that [scoff] right, right, this could still be done within this government's term. It wouldn't be such a huge deal, since, if somehow it feels like the inheritance tax is now like a taboo during this government term, then this kind of small technical tax change could then [clears throat] bring, um, that, in a way, also that, like, circulation of capital. Because then it remains like, from individual people it could there, for others then, already a bit in advance, so that you don't have to then, there, on the other side, the other side of the grave make all those capital transfers, which then might — the dying person's, uh, risk profile, like, changes, and their cognition worsens, so maybe not even [19:40] AI could help there. So this, this, this would be, like, useful. But this kind of amazing proposal. I don't know if there's political hope for it now, but if Riikka Purra, if you're listening here, then that half-percent, uh, gift tax top-up tax, still bring it into use here. Yeah, on that topic still, inheritance and gift taxation, so it's been quite a strange feature [scoff] in this Finnish debate, that, that it's gained a significant position, like, as an argument, that if inheritance and gift taxation is abolished, then in some situations this, this heir's uh, taxation might actually increase. I mean, if, if you then sell quickly after that, that this, of course, always when you make changes to the tax system, then of course these kinds of situations can come up, but, but the essential thing is, that it is — it's in the heir's [scoff] like own hands. Because of taxes, you don't need to, because of the inheritance tax, no one has to sell, because it wouldn't exist anymore. And then if you do sell, then you get cash in hand, with which you can then pay that capital gains tax, so yeah, that's right. And then we could also [20:45] push for a transition period for these, these current, uh, exceptions, say that 30 thousand, if that then bothers people. But I mean, that was like, even that, uh, Wat's paper was like just outrageously bad, because it didn't deal with like [scoff] business ownership at all. It focused on something like real estate, and, uh, and then, again, what I just remember from it is uh, the then chief economist of Suomen Yrittäjät then made exactly that calculation, that compared — assumed that at the moment of death everyone would sell with this new system immediately, uh, at the capital income tax rate, and tax would result, whereas you often have, like, those, uh, tax-free thresholds, so, and then ended up then with this rather strange, like, statement, that, um, uh, for entrepreneurs, that inheritance tax change was harmful, even though here there are two different tax subjects. That's the deceased entrepreneur, and then their heirs, but yeah. But this was like just hallucination, this whole debate. I don't know how much, I mean, this kind of like, as a doctor of law, do you see this debate as absurd, or [21:48] do you have this kind of gentle view of these people, that, that everyone is trying to understand these things from their own point of view. Well yeah. I mean, yes, I of course, all arguments, uh, they need to be, as such, appreciated and evaluated, like, like, quite with a clean slate. What I see, like, right in my work is that from Finland's point of view this is a worrying situation, that, that, uh, so many wealthy individuals and families are leaving Finland, and of course there are, are other reasons too, but yes, this inheritance and gift taxation is, I would dare say, the biggest single reason why, why people move, move away, uh, from Finland, so, so because of that — and that's not the only reason to — inheritance and gift taxation should be abolished, by no means. In my opinion, problems also arise quite among ordinary people, who get, get, uh, inheritances or gifts [22:51] and, and, uh, those inheritances and gifts often aren't any cash money, but the tax still has to be paid regardless. So, uh, there's both this kind of like, fairness and ability-to-pay problem, and then also a competitive- competitiveness problem. That's right. And then, once again, that like, scrambling around with the tax, like, you can see it from the fact that the estate has to right away draw up the estate inventory, and it has to immediately pay up to the tax authority, and then be divided. And whereas then, say, in the Swedish model, that, like, in a way, it isn't isn't such an acute thing, that it's — you can, like, look at it and calmly, like, not, not panic, and then make a sensible plan, whether to sell something, or over time, and then, uh, against that you get cash flows when you sell, and then you pay the taxes. This is, like, in many ways much calmer and sensible, and likewise then, uh, you don't need to panic — that, uh, dying person, that they, like, in advance have to, like, stress about what this now, uh, bomb — if, say, they're, like, an unlisted company's owner, where then, uh, both the ownership and, uh, the taxes go off [23:53] then, uh, and the children have, like, no idea about it, so it can end up being a really stressful situation, and then you'd suddenly need to get some company sale done, and even there, then, there's, like, uh, maybe no understanding that those are long processes. And then, in a way, for the same reason, rich people in Finland tend to be older people, so often it would then be this kind of wishful thinking, that some other old person buys your old person's ownership, but what sense does that make, they know a lot less about it than you do. M, so it should be some kind of institutional structure, or some, some like, this kind of, uh, owner, who's able to take the reins from it and develop that business, so then it's no wonder that people then leave out into the world, and then structures get made where all these, like, problems go off right in your own and your family's face. Mm. And you can now note that then, when — if you look at generational transfers, like, in companies, so when those relief provisions apply, then the total tax burden is moderate. With that, surely many can live, but in very many situations they don't apply, and then, then, uh, it's a very serious and [24:56] difficult situation, both, of course, for these companies — they have to prepare and put, in a way, like, funds aside for a rainy day, but also, also, like, for Finnish society, and for companies', companies', like, dynamics. Yeah, yeah. On this, the family-business association calculated, that that stashed-away fund would already be quite in the neighborhood of, say, 5.5 billion, and then again, Swedish studies have shown that it has brought a lot of long-term steadiness, and those companies grow more, and since that reform, and take more risk, and Sweden is this kind of, like, small-capitalist's dream right now, that there's capital to be found there, and the stock market is really strong, and, and there's that capital turnover happening, and circulation and risk-taking, and, by the way, we have this, this Samuli Knyfril, uh, of Trans Corporate Finance too, put out a report on that back in [20]15, so he has done really good research on this, specifically on unlisted, uh, [scoff] owner-companies and their, like, capital pool, that they are, compared to others, great research work. I don't know how much you follow this, [25:56] actually the doctor's hat, and dive into this, like, industry research, that for example, just these Swedish studies, or studies. Yes, I do, like, follow follow, that [clears throat], of course, like, as my main job it's, it's quite like on the advisory side over there, but yes, I do I also, in that sense, from old memory, have a researcher's hat on, that yes, I do now follow, follow to some extent, some extent, also, like, research and various discussion, in a way even academic discussion and about tax policy. I'd suggest, that, well, later we go to the insider side, and talk a bit more about this, that I myself, uh, was on a separate-law like, drafting working group as a permanent expert. Back then I was Nordic Trust's managing director, so we made this kind of separate law, uh, on bond holders', uh, representative and security agent. Absolutely great stuff, but that's, in a way, on my end, that legal side. And then not these other reforms that haven't come yet, uh, but they are very strongly in preparation, and, like, the sure one, the law, is this, uh, corporate tax [27:01] moderation to 18, that in my opinion it's already now, like, guiding investments, growth, and risk-taking, because when people see that, then from those future profits they'll get to keep more. Yeah, it's definitely, it's, it's an important, important, uh, component of corporate taxation, that is, that, uh, supports then supports growth and making investments in Finland, and, uh, also ownership. So, so, yes, it is, it is an important, important measure, and, and that what's of course worrying is that, that in some circles it's been announced that it would be, be reversed, or something along those lines, but hopefully it won't come to that. What I of course also have to remember is that the corporate tax rate isn't, isn't of course the only thing. It's perhaps the most important component, of course, but not the only one in corporate taxation. So then there are [28:02] a lot, a lot of different factors, where, where uh, Finland's, Finland's tax system should, like, be improved, and, and brought to a more competitive level, which, which then hasn't, hasn't, uh, hasn't, hasn't for one reason or another, like, been implemented. Just, as examples, one could mention for example, that we have, we have this kind of, like, share disposal tax exemption, that is, these fixed-asset shares, so so there, like, little by little, these interpretations, and also through case law, have tightened, tightened so significantly that, that, uh, it is, it in a way it's no longer this kind of, like, internationally-modeled participation exemption, which is what it was originally meant to be. Originally it was enacted back in 2004. Mm. So, for example, this kind of fixing it — that, that is a genuine harm to competitiveness, because, because for example, a corporate group would rather set up some, some structure with some intermediate companies or holding companies invest, say, rather in Sweden than in Finland. M [29:03] so, and it causes a lot, a lot of tax risk in Finland, and interpretive uncertainty, and so on. Then we have, for example, like, a disproportionately broad application practice with this kind of general anti-avoidance provision, which causes a considerable amount of uncertainty in many situations, and, and also then, also then various disputes, which weaken, like, Finland's system's predictability and, and reliability significantly. Yeah. On that, EVA's Emiliina Kujanpää, who has also been here, wrote, in my opinion, exactly about these problems, like, a commendable report, that that [scoff] tax risk"}, {"slug": "4-ensimmainen-jakso-miettinen-neuvottelija-1", "title": "Introducing the Neuvottelija Channel", "titleOriginal": "Ensimmäinen jakso | Miettinen | #neuvottelija 1", "guest": "Sami Miettinen", "guestsCanonical": [], "guestPages": [], "episodeNumber": "1", "publishedAt": "2020-01-16", "duration": "02:14", "format": "short", "topics": ["negotiation"], "description": "An introduction to the #neuvottelija (Negotiator) channel by Sami Miettinen. On this channel, Sami will interview Finland's top negotiators as well as people who negotiate professionally. He will also share negotiation advice and tips drawn from his own experience, from literature and research, and from his book Uusi neuvotteluvalta (WSOY), co-written with Juhana Torkki. Parties mentioned on the channel include Translink Corporate Finance (translinkcf.fi) and Credit Suisse, as well as Bengt Holmström, Risto Siilasmaa, Lauri Lyly, Elina Lepomäki, Matias Mäenpää and Anssi Kiviranta, along with the book EXIT.", "page": "https://www.neuvottelija.com/podcast/episodes/4-ensimmainen-jakso-miettinen-neuvottelija-1/", "text": "[00:00] Alright then, hello there. I’m Sami Miettinen, a negotiator. I work professionally in an international M&A network called TransLink Corporate Finance, which has 600 experts. We carry out around 35 corporate transactions annually in the Nordic countries. I myself graduated from a business school, and I spent 13 years in London, in the City of London. And now I’ve been back here in my home country, Finland, for several years, both in large banks like Credit Suisse and then in smaller ones. And indeed, I’m now a partner here at Translink. We do these corporate transactions, share issues, and similar arrangements. And a good overview of this field is provided by Exit by Matias Mäenpää and Anssi Kiviranta, which includes 15 entrepreneur-owner exits or share issues, or other arrangements, three of which were executed by us. In fact, both gentlemen’s transactions were carried out by us. [01:10] Then perhaps regarding my own competence in this area, I interviewed dozens of top Finnish executives for a book called Uusi neuvotteluvalta (The New Negotiation Power), which was published by WSOY in the autumn of 2019. And in it, we went from Martti Ahtisaari to Bengt Holmström, all the way to Elina Lepomäki and Lauri Lyly in these cases, and interviewed all of them. And what I now intend to do on this YouTube channel is to interview similarly interesting negotiators, experts, and people who work professionally with negotiation situations. Please subscribe to the channel, thank you, and let’s see what we can accomplish here. Thank you. "}, {"slug": "6-kiinteisto-ja-kasvuyritysneuvottelut-roininen-neuvottelija-2", "title": "Real Estate and Growth Company Negotiations | Petri Roininen", "titleOriginal": "Kiinteistö- ja kasvuyritysneuvottelut | Roininen | #neuvottelija 2", "guest": "Petri Roininen", "guestsCanonical": ["Petri Roininen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/petri-roininen/"], "episodeNumber": "2", "publishedAt": "2020-01-22", "duration": "51:16", "format": "full", "topics": ["negotiation", "investing_markets"], "description": "Real Estate and Growth Company Negotiations | Roininen | #neuvottelija 2. Sami's first guest!\nHe talks with Petri Roininen, CEO of Investors House and chairman of Finland's growth entrepreneurs. The topic is negotiations both in the real estate industry and among growth companies.\n\nSami was one of the trainers in the \"365 Päivässä Pörssiin\" (365 Days to the Stock Exchange) program founded by Petri, which coached the board chairmen and CEOs of 34 growth companies in preparing for an IPO.", "page": "https://www.neuvottelija.com/podcast/episodes/6-kiinteisto-ja-kasvuyritysneuvottelut-roininen-neuvottelija-2/", "text": "[00:00] That negotiation lasted about three minutes, and it was, among other things, a matter of short versus long. I'm Sami Miettinen, the Negotiator. Today my guest is Petri Roininen, who is the CEO of Investors House. Before this episode I posted a short video where [unclear] I sold a [unclear] apartment using the anchoring technique. In it, I anchored it to the price per square meter. But let's move from this negotiation technique into the real estate world, so let's meander a bit here - maybe you, Petri, could tell us what your background is and what kinds of negotiations you've had. Yeah, thanks. I have to say first, regarding your background video - sometimes it happens that investment banking work starts to become boring. I think Finland's real estate sector - welcome, gladly, into it. [unclear] Yes. I have an engineering degree, have been in business for 30 years, of which about ten years in the finance sector, and then some twenty years in real estate and construction in many different roles, and currently I'm CEO of the publicly listed company Investors House, which is a real estate investment company, and also chairman of the board of another residential investment company, [unclear]. [01:28] And actually we got to know each other through that latter one. Back then it was still called Orava, and I was at the time with Nordic Trust's bondholder representatives' company's CEO, and then when it felt like there might be [unclear] here and the board was about to change even before that, I thought I'd [unclear] Petri, so I'd know on behalf of the bond investors what might be going on there and whether there was any need to do anything regarding the bond. Nothing much came of it after that, but that's probably where it started, this collaboration of ours. Yeah, that's where it started, and then we've also worked together around these growth-company matters. Yeah, we'll get back to that too - real estate. There's also the growth business, but Nasdaq, meaning the stock exchange, Finnvera, and especially the Finnish Entrepreneurs association launched last year a [unclear] 360-day IPO program, where 34 growth entrepreneurs were coached. By the way, how did you pitch to get those 34 entrepreneurs on board? [02:37] I found it interesting, this whole IPO coaching program - it's thinking about this kind of... negotiation theme. Here it was important to find two things: Finland's best coaches for it, and then on the other hand companies that are interested in growing and, at some point, would like to [unclear] list their company. This first one was, in that sense, a pretty simple matter. The question posed was that 'I represent 115,000 companies, would you be interested in cooperating' - so in a way that opportunity is quite big, and that's why there was interest, and actually I'm really glad that everyone who was asked joined this effort. It's done somewhat in a pro bono spirit, and a really strong group there, and then 34 companies and entrepreneurs were found for it quite quickly, and last year we then held this kind of seven-day coaching session, and I strongly believe that we'll see somewhere between five and ten of the participating companies listed within the next few years, and now of course the plan is to run a new program again this year, 2020, which is then even... [03:57] and hopefully more advanced, building forward from last year's lessons. That was good, and hopefully TransLink at least will be one of those listing, but we'll see. That was fun, and maybe let's move to that anchoring theme, since it was brought up at the start here, there were some questions about it too - that you have quite a lot of followers in the real estate sector. There were various questions about that - this price per square meter in general, it's almost the only [metric] for a private individual and what they look at. In that video I said that the price per square meter in the Kamppi area happens to be, according to Reaktor's AI [unclear], 7,148 euros per square meter, and I explained that from there you could try to anchor upward if you don't need to sell - as I wouldn't, because I'm happy with my apartment - and I tried to demonstrate how you create added value. But that price per square meter is quite individual, what... and how does a professional negotiator draw out something other than the price per square meter? [04:59] That probably depends a bit on what the purpose of use is. The price per square meter is probably what we're used to comparing them by when selling homes. That's a perfectly valid approach. It's been affected somewhat recently by the fact that apartments are perhaps getting smaller. 38-square-meter units, 29-square-meter units, average price per square meter, the investment world. In Finland there are a quarter of a million private residential investors. They're of course interested in the price per square meter, but above all they're interested in the yield - what it returns, whether it yields three, five, or eight or more percent net yield, and what the corresponding risk is. And then of course this professional investment market, where entire buildings are involved, has a very diverse anchoring landscape. [06:05] There you have yield levels, risks, financing structures and so on, so it becomes, in a way, more complex. Yeah, and work-wise, Investors House goes through the whole value chain. There's both real estate and ownership, then services. The real estate value chain is formed in such a way that first there has to be land, and then it has to be zoned in urban planning, and then a building has to be designed for it, built or developed, then it can be rented out and owned, it can be traded, and then perhaps a fund can be made out of it. and this creates a value chain from that land all the way to an investment product, and what we try to do at Investors House is to be specifically a part of this entire chain, and we have separate companies at different points along it, and then, at best, we carry this whole chain through at the project level [07:07] and in that process the value, in a way, gets refined into it Right, and sometimes you just take perhaps the best piece, or whatever the resources allow. You have the campus project, and there you quite creatively broke it up into [unclear]. Yeah, so that kind of structure and ownership-financing arrangements are one element in this, but the value chain can in principle be built from six to seven different revenue logics or ways of earning and if you could combine them creatively, it could result in a good [unclear] and a profitable company. Yeah, maybe if we go back to that anchoring theme once more, I made a claim there that's based on research, that you should anchor first, anchor aggressively, use reference values, and don't round off. and this way you get a good anchor in place - high if you're selling, and low if you're buying. [08:12] But I was asked about that - well, but since there are often buyers, sellers, and then both of their advisors and then all sorts of price estimates, and they're all skewed, and at worst in different directions. How does the pulling and throwing of multiple anchors go? How do you line them up? What is the truth? That's a really interesting question. What is the truth? In real estate there's an old saying that a deal happens when the buyer and seller agree on the price but disagree on the value. and this is hugely telling. Then, in a way, through what kind of process and work does such a [unclear] outcome come about, so let me take two such extremes. On the timeline of deals I've been involved in, the shortest one - if we're talking about deals for entire buildings or portfolios - the shortest was a situation where both the buyer and the seller knew the property insanely well, equally well, and both knew the market insanely well, and also knew who the potential buyers for it were and how they think, so that conversation lasted about three minutes, [09:37] by the short or the long [unclear]? Well, by the short [unclear]. Does this work? No, not that. Okay, let's split that one in half. The question was nevertheless about a big transaction, but both knew exactly what it was about. Well then, the other extreme is one where which might, during the negotiation phase, involve as many as 450 people, each of whom has their own angle. I probably have, as the longest one, a completed nine-month process, which was a full-blown M&A process. Then of course there are many that don't get completed and just remain a stage, but so many perspectives come up there that first you discuss exactly that, whether it anchors, so to speak, to the yield level or to the price per square meter, or wherever each side is seeking its own gold. Then next come certain risk allocations, payment arrangements and so on. Finally come the due diligences and their findings, and you try to work them one way or another. [10:39] and then when there are experts from different fields involved, from Finland and perhaps elsewhere, and some know market practices or the applicable laws of the land better and some less, then there's really a lot to discuss. That's a really good observation, indeed. different values, but the same price. Risto Siilasmaa - when I provoked him a bit, asking whether he felt [unclear] about it, since in a way he tricked Microsoft into buying the mobile business at an overprice and then later [unclear] it - he said that's not how it went, that we actually had the same level of information at the end of the process, we just interpreted it differently. and that's exactly really important, and Bengt Holmström, [unclear], this whole information-withholding philosophy entirely, saying that if the other party knows or suspects that you... are cheating or withholding information, then they won't take part in the negotiation. Or then you have to somehow prove otherwise that there is trust here. [11:47] Then maybe one more point about that - you don't always have to tell everything, but it's good that everyone involved is told the same amount. Then probably just this perspective, given that in the end both sides had the same information - certainly at the start the situation is that the seller has overwhelming information, and as things move forward it converges, and in a way during that convergence it's hugely important not to turn negative, which, conversely, means that those things also have to be communicated at some level early on. [unclear] That's actually really common, from when I myself used to do those M&A deals for a living. There's especially, among owner-entrepreneurs, some dark secret. And then they always have some shareholder-agreement complication, or some deal on hold, or something like that. So then I always joke that you always have some skeleton in the closet. Just tell it, so everyone gets time to deal with it. [12:49] the advisor gets to keep this hidden, it doesn't get resolved, and the process can die if this skeleton is brought out at the last minute, when it could have been brought out in a fully controlled and managed way during the process. That's probably exactly right - that those things too, exactly in this controlled way, need to be out in the open, and even so, in a way, those dealbreakers don't show up later on, and there's wisdom in that. Yeah, maybe then about that time dimension. In your negotiation [unclear] book you indeed said that the Excel models started to work when there was a long time span and the payment terms were a bit different, and in a way financing came into play there too. These kinds of synergies and different time preferences are hugely important, and then from that I picked up on the fact that apparently foreign real estate investors have now arrived, and they have, in a way, an entirely different reference point of their own. looking somewhere at the yields of Europe's major cities, which have been pushed down, and [13:50] then in Finland you might find better yields, but you're in the same euros. Maybe some reflection on those - time, financing, and foreign investors versus [unclear] domestic ones? Yeah, there are probably a few perspectives there - if you don't lock in that time window, then, according to the old saying, time is money. [unclear] the payment timings were shifted by two years, but the rental income transferred immediately, so that, in a way, solved this question, which means that this time dimension is a truly central negotiation dimension. And then again on this international perspective and the Finnish real estate market - the Finnish real estate market actually started integrating with the international market in 2002, with the Itäkeskus [unclear]. [15:02] The phenomenon is this recent, though. Back then it happened first on the commercial real estate side, and now, in the last decade, during the 2010s, it came to the residential side. Then the benchmark changes quite fundamentally. Then you don't think about whether Tampere and Turku have the same price per square meter, but instead you might think about a question like whether Kuopio's return-risk ratio is better or worse than the return-risk ratio of Germany's thirtieth-largest city. Because that's how it is from the buyer's perspective. And again, of course, we ourselves should understand where this integration is heading and what it affects. Maybe then one anchoring point that irritates me, since I am something of a patriot after all, is that when the real estate [unclear] comes up enough for us, someone buys it at NAV, [unclear] asset [unclear] away, so here we've had Sponda and Technopolis, and now even care-home real estate is finally going that way too. [16:07] And in a way, what seems to be there is this net asset value of its own. that somehow they tend to trade below it, at a discount to it and then they get picked up at [unclear] valuation, but then again we get back to those valuations - whether their value is then the absolute truth But how do you see this, on the other hand - this net asset value gap, or the plundering raid of international firms then in Finland? In Finland - whether there are, like, some dimensions to it that you yourself see. Well then, 'plundering raid' is a strong word - in practice it's, like, there too. It's market economy, of course. Bringing capital to Finland and the real estate still being preserved - that hasn't been such a bad thing. No, no, no. But, and then, sort of, sort of, this kind of appraiser tries to determine the value of those properties at any given moment, [17:08] [unclear] for instance if it referred to the world of listed real estate companies, then it's probably been the case that, typically, the Finnish real estate sector has traded below its NAV - net asset value - yeah, Stockholm has perhaps been closer to that net asset value, and then there are these individual deals, of which you mentioned the care-home case last, where the share value clearly exceeded that NAV - so it can be affected by so many [unclear] factors then - future outlook, again the company's earnings capacity, and so on. And then one such thing can also be this Finnish taxation, which in a listed real estate company first, in a way, applies corporate tax and then dividend tax for the shareholders. [18:20] and that may create a fairly significant wedge compared to an unlisted one. That may be one reason why the number of listed companies has decreased recently in the real estate sector for us. Does some real estate sector [unclear] leave anyway? know-how, since public-company governance leaves from there anyway - or is it actually quite thin? Yes, I think the headquarters and its location definitely matter. It guides where that capital gets allocated [unclear]. Although as a general rule I see it as really positive that the Finnish real estate market has become international, it has brought liquidity to the market, capital, opportunity, and various strategies, so that the market isn't homogeneous but also withstands cycles better. Of course it's a bit [unclear] then, because in terms of investing I think the stock exchange is unbeatable. [19:22] We don't have that many real estate companies there anymore, I think there might be four on the main list. Yes, yes. Maybe about that time dimension, and then about why some... ...values are of better quality than others - aren't those long-term customer contracts hugely valuable? If you have, say, 15-year care-facility contracts with reliable parties, where there's ongoing use, they are more valuable than, to put it bluntly, a very specific industrial-town property. and then in between are those buildings filled with people, where they can either work or live. Maybe actually a quick question about that - they're being mixed now, right, living and working - or at least there's a wish that they could be combined. Yeah, probably so. That's of course how it is. value is formed, in the end, from cash-flow projections, and the longer the contracts are, the easier they are to forecast. [20:26] Then this, what it refers to - hybrid buildings - I think they've been built for a long time in various major cities, and they've generated income, and they've been part of the development of city districts and urban development. For us they've now started making their entrance, with the Kamppi Center perhaps being among the first where retail space, offices, and housing came together in a single complex. Now when you look at the development of Pasila, you're witnessing this same phenomenon [unclear] - the emergence of hybrids is living urban development. Then there's also probably a phenomenon where, when you build tall buildings, and if hundreds of apartments come into it, the pre-bookings for them can, in a way, be [unclear]. In a country the size of Finland it's difficult to get, say, three to four hundred apartments [unclear], so there's also a pragmatic starting point that hybrids come in there with apartments around them. Right, and it's no longer the street-level shops that get the sales - isn't street-level retail a bit dying out, with shopping centers grabbing that space? [21:35] It's a bit of a shame - actually, close to where I live, it's actually quite good that there isn't a shopping center there. Yeah, it's of course a bit of a shame, since those street-level shops create, like, small-scale entrepreneurship, and they create, like, vibrancy but we wouldn't quite, like, declare it entirely dead, because we also have, like, phenomena where some operators have, like, been trying to get, for example, grocery retail closer to people bringing back the corner shop and the neighborhood store, and the needle can, so to speak, swing a bit either way. How about then B2B negotiation, B2C negotiation - meaning Business to Business and Business to Customer, but then B2G, meaning the zoning authority - is the zoning authority a bit more reasonable now? Have they, in a way, become wiser on their own, or are there still flying squirrels and parking-space minimums and other such hassle to be found? [22:36] The traditional setup is that there's the money-hungry builder, and the zoning authority that looks at broader urban development. and both have their own justified points of view. Within the RAKLI industry association I've done a lot of work around this topic and tried to gather this together, and I was chairman of a community-infrastructure steering group for about four years, and during that time we produced discussion papers together with a large group that includes zoning authorities, investors, and builders, and tried to find, for example, questions like, the cost impacts of zoning requirements, quantitative material, and ways of how they can be handled. if you want to build a lot of parking spaces into a building and be able to price them, how much do they affect the rent? [23:38] Or if you want large clubrooms or intricate facades, what effect do they have on your price or rent? Is it customer-driven, resident-driven - does anyone actually want to pay for those - trying to find this kind of discussion where both the building's features and the costs are on the table together? What about when urbanization proceeds really unequally - there's 'congestion Finland' and the metropolitan areas that Finland has, and then there's, in a way, a dying and aging Finland, has the zoning authority's behavior changed there, in a way, in that 'falling knife' area, where the price per square meter might drop and stay down? um, apartments standing empty, and they get demolished. I mean, like, the challenge is completely, like, the opposite. Okay. If we're, like, in the capital region, or, um, then last autumn there was an opportunity to go meet, like, the municipal directors of six municipalities in one somewhat declining area, so [24:40] those challenges are as totally different as they can be, and there's no single same solution for them, but for them you should really go looking for a solution from that place's own characteristics, but then if we're in a locality where, if I put it a bit bluntly, there are more summer cottages than people, and summer cottages aren't quite as mainstream anymore as they used to be, then the equation isn't easy - in the long run it can't be based on anything other than that some kind of [unclear] needs to emerge there for it, entrepreneurship. Nothing else lifts that area. Efforts there should be aimed at those things. This is then in places like Helsinki and the capital region, which has grown faster and where the number of single-person households has grown faster than ever believed. Here, the focus should instead be on getting zoned plot land out as quickly as possible, so that housing supply can get out. [25:48] Those challenges are very different. Public authority is also behind everything, partly. There are certain kinds of liabilities that can be triggered, and then there's housing benefit and so on, and, in a way, this state liability tied to the real estate stock. Some have even half-seriously floated the idea that the state should step in, so there'd be a price floor for apartments, which right now is pure [unclear]. But isn't there still, after all, this kind of potential bomb that could go off? Yeah, if we go into this role of the state, this is somehow such a quintessentially Finnish way - that when there's some problem somewhere, the solution is that someone plugs it up. It's like, if you carry it all the way through, it's an endless [unclear]. [26:49] Nothing can withstand that. And now, Finnish rental apartments. We have 800,000 rental apartments. Half of them are apartments built with state interest-subsidized loans, which are mainly owned by, that is, municipally owned companies. That creates a peculiar situation - if we start again from the plot, the municipality, meaning us as taxpayers, hand over a plot at half price to someone, so that's the first subsidy Then when construction starts, the state throws in a start-up grant, that's the second subsidy Then it's financed almost entirely with a state-guaranteed loan, that's the third subsidy Then when tenants eventually move in, municipal housing benefit or the equivalent comes into that role, that's the fourth subsidy Then when it needs to be renovated, a renovation grant comes in, that's the fifth subsidy [27:51] and, in a way, this This leads to there being a massively large body of housing where the risk of ownership and enterprise has actually shifted to municipalities and the state. And I think that if you add up all these subsidies and then look at putting them on top of the cost of that subsidized housing, it might turn out to be the most expensive housing of all. The City of Helsinki should, for example, immediately sell half of the apartments it owns onto the market and use that money for something completely different instead. The City of Helsinki is, after the state, Finland's biggest residential investor. Yeah, as long as it's not at least put toward [unclear] expenses. Well, into something - say half into [unclear] expenses and half into something else. That too, in a way - whether you're on a city leasehold plot versus your own plot - there's become quite a big game around that in Helsinki, wanting to monetize that leasehold plot a bit. That probably changes these Excel models quite a lot. [29:02] I think it's entirely right that the city tries to get fair compensation when it transfers its property. That is, market-based compensation. It would be good in the sense that it would apply across the board. No one should be favored. No one should be favored this way, whether in the transfer of plots or in selling zoning-designated commercial premises to someone. There are a lot of these hidden elements in it. Yeah. Then a bit more about that time value. I was - not the most glorious period in my career, but I was at Royal Bank of Scotland for a time. It owned a [unclear], probably still owns it, which Nordea used to own at one time. There I sometimes looked at the structures that were offered, in a way, as financing for some headquarters-type properties. [unclear] The DNA headquarters, for example, was financed with something like that. [30:05] What stuck with me was that first there was this kind of triple-net structure, where, in a way, there was the tenant in the property arranged all its services itself. But then what I found really interesting there was the residual value, because there were two philosophies to it. One is, in a way, that you just do - whether it's now a [unclear] or you sell the property to that bank or financier, and then there's that [unclear] view among different players regarding that end value, and with that some take that too. [31:06] A pessimistic view of who could come into it after that. Yeah, that's, in a way, exactly about that cash flow and the arrangement of that risk, in that in traditional leasing, if I'm the landlord and you're the tenant, you pay me rent, but I handle everything related to it. The upkeep costs - if something needs fixing, I handle it, and then I also carry the risk that if you one day leave, then what do I do with that building. Finland's growth company, property development, tenant, property development, tenant, investor Then it's fairly cheap that it still works, but... Then it's more a question of whether I can get cheaper financing in this case than [unclear]. [32:14] But when you've watched those - some headquarters is supposedly sold and later it gets pulled off again at an even bigger price to renew it - so somehow that residual value too can be a good play for those tenants. Residual value is hugely important in hard-nosed calculations, because even by the old rule of thumb, even if you take ten years of cash flows, there's still about half of the total value left as residual value. How that's handled is [unclear]. Yeah, that's generally, in a way, a negotiation technique too - that you have, in a way, a service period, say you lease some device, three years for a laptop say, and then a lot of people don't actually return that laptop to the seller but continue with that service agreement, and that's maybe already factored in, that the provider is calculating it as fully amortized, so again if you flip the game around, that time value is hugely important there and Maybe then, quickly going back to the private individual's side - what kinds of tricks, in a way, can now be used to get that apartment's price or value up - are there any general rules of mine just for that, so that if someone watching this is now thinking about selling their apartment, or an apartment purchase, what holds its value, would there be some wisdom on that? [33:36] I'll actually dodge this question by recommending you watch Sami's Helsinki apartment presentation video, in which he anchored to certain price levels and created certain added value and smoothed the deal-making with various process promises. Yeah, I'll put a link to that video so you can go watch it. That was really like the talk of a professional. Yeah, thanks. Then maybe, moving to those negotiation challenges for growth entrepreneurs. briefly, the stock market wants companies that grow and then become profitable, or at least turn into that, and then in this growth-entrepreneur program many had this kind of problem, at least it seemed to be, that you have to sell - this ownership, at least partly, first - in order to put it on the exchange, so fairly similar challenges for pretty much everyone, but if we just jumped straight into this IPO listing, [34:47] and their listing was done quite innovatively, wasn't it - tell us first how Investors House became a listed company. Investors House has two roots. One is the Investors House founded in 2009, which started developing residential apartment buildings and offering them to investors. The other root is SSK, Suomen Säästäjien Kiinteistöt, which was listed in 1898. it turned a full 30 years, and in 2004-2001 a group of the three of us acquired a majority in this SSK, we started developing its operations, expanding it, and as one part then merged this with the Investors House I had founded operations, in 2015, into this SSK, and in that connection its name was also changed to Investors House. [35:47] Since the start of 2015 we've now grown very strongly and taken this combined entity forward in such a way that its results - and again it has grown a great deal. And then now we have this whole value spectrum, so this is our stock-market story. On the other hand, we have thirty years of stock-market history, but then through this merger five years ago, we started a kind of new phase. Is that, by the way, a wordplay - 'House Investors' backwards - or where did it come from? Well, the name Investors House originally came about in the summer of 2009 - we were thinking about this business idea, which we had tested a couple of times before, bu"}, {"slug": "639-vibe-koodaus-mikkonen-juntunen-neuvottelija-359", "title": "Vibe Coding in Practice | Lasse Mikkonen, Harri Juntunen", "titleOriginal": "Vibe-koodaus | Mikkonen Juntunen | #neuvottelija 359", "guest": "Mikkonen, Juntunen", "guestsCanonical": ["Lasse Mikkonen", "Harri Juntunen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/lasse-mikkonen/", "https://www.neuvottelija.com/podcast/guests/harri-juntunen/"], "episodeNumber": "359", "publishedAt": "2025-11-11", "duration": "01:01:35", "format": "full", "topics": ["ai_enterprise_tech", "saas_software"], "description": "Vibe coding | Mikkonen, Juntunen | #neuvottelija 359. AI Kanava's Lasse Mikkonen and its regular guest Harri Juntunen talk with Sami about vibe coding in practice. The episode covers the key themes of AI-driven software development and how no-code and low-code tools are now within almost everyone's reach.", "page": "https://www.neuvottelija.com/podcast/episodes/639-vibe-koodaus-mikkonen-juntunen-neuvottelija-359/", "text": "[00:00] Alright, welcome to Neuvottelijanava. We are visiting with the main host of the AI channel and practically the master database administrator Lasse Mikkonen and then regular guest Harri Juntunen. Hello. Hi. Hi. This was a bit of a failed joke here well, regarding information technology, or ATK. ATK is actually a great Finnish word for automatic data processing. And we have just discussed for an hour on your channel, where I was a guest, so we turned the tables. And today's topic is something like 'vibe coding' and in a way this world of coding and how right now in 2025, even ordinary people have discovered the coder within themselves, so Could you, Lasse and Harri, provide a bit of background on what kind of backgrounds you have? Yes. So Lasse Mikkonen is the name, and I've been for 25 years a software industry consultant. From day one when I graduated, I became a consultant, and so I haven't really done real work but have always been helping companies to create better products, better services, and then for the last maybe four [01:14] years now I've focused on AI matters around this same theme and indeed I also seriously engage in this kind of investment activity and I have some angel investments myself and I also participate in some of these startups quite actively, and then there's involved there, uh, not in a full-time capacity of course, but in an advisor role, and we are also setting up a fund. So with this kind of combination, and you could say that the software development work culminated when Eficode merged with our own company, Contribyte. There I really got to properly dive into the DevOps world, and that was when AI also started coming into play. Meaning how to automate the entire delivery pipeline, everything that happens after hitting enter while coding—how that code is then safely delivered to production and the services kept running. So this is essentially the field where I've been active. Yeah, and at this point, So, uh, like this, in real life, we met there at the main investor's... [02:24] annual meetings, where we founded the main investor's coding society. So all you listeners and viewers who are members of the private equity... association, please just get in touch with us if... you're interested in making small code snippets to make life easier. Yeah. And then we already managed to open source a platform like this, a platform that can be used to analyze investment documentation, so with that, the FVCA coding subcommittee can get off to a good start, and we can also share it in a locally executable form. So, well, it was installed on my machine so that it runs without... this kind of, you know, cloud cloud model, where it just sends an API call to that Open works well. Yeah. Alright, so how do we match this? Well, maybe Lasse and I have known each other for maybe 25 years—well, not quite, but 20 years. A product development professional, me, and on the other hand, I've worked as a management consultant for a long time, and that's where Lasse and I started with requirements management and creating test cases and things like that, so my maybe the big picture here in my own professional [03:36] professional sense is, well, product lifecycle management, so what it's like then, how you get, like, vibe coding like, the life cycle could maybe be here, but like, a bit something even bigger, because products live on the market, services live on the market, they need to be maintained, even that breaks. About this, we've discussed with Lasse on the AI channel, how the hell it can break, that software, when it’s just ones and zeros in a row going through a process. But anyway, from this perspective now and then AI has been on my agenda for about ten years now, how AI appears in these different kinds of places, what kind of sensible uses there can be in different parts of this cycle, and then with Lasse I think Lasse did some really concrete work on this, really well, like demonstrations of how AI works, and that's how it somehow started, so yeah, subscribe to the AI channel. Specifically, there will be quite fresh test cases coming out, like when someone has released [04:57] a new feature from one of these large LL models, like a Google Gemini extension, and you guys pretty quickly put it into 'production' so to speak, showing how it can be used. Yeah. And we try to explain it in plain language and show with a demo how it works, so anyone can then benefit from them. Yeah. But anyway, our discussion on your channel is definitely worth go ahead and smash that subscribe button there, so you can join the ranks of the big channels, and it's great that you're doing that. Well, let's start with this like vibe or wipe coding. So, indeed as some of my listeners and viewers already know, I spent a year at a technical university studying CS, and then I became a finance guy and actually forgot forgot that whole world of coding, and in Excel I used the macros that were there, but when they introduced Visual Basic, even though I know Basic quite well, I thought that I couldn't be bothered to grind out any of those kinds of macros anymore. But then this year, I somehow woke up [05:59] again. Now this no-code low-code stuff has come so far that now, now it's worth bringing Sami's teen version back from the grave, and it's been really fun. So, right now I'm mostly using this Swedish wonder called Lovable, which really is like a no- code tool. So you can just prompt. In practice, I made for example a website in an hour, which I had just earlier this year spent about six months struggling with a couple of students using HTML and WordPress there and writing them and trying to manage with some subroutine libraries there, so in Lovable I wrote that here is a template, change the format a bit, make it a bit punchier but copy those and those functional parts, then tap tap tap tap tap, a little I didn't have to look into this Google API call to see how those YouTube playlists are called through Google's protocol via it, but Dania, this is like such an easy case, this kind of frontend homepage, but if you were to translate this into professional language, what was I operating in when I created this kind of functional homepage, or what style did you use to make it? [07:15] Well, yeah, it goes like that, Lovable especially is a good example of this 'vibe coding' tool but you could generalize it as this kind of agentic coding aid; there are many others, like Cursor for example, I think. ...be also Swedish, as you were able to say, and then I've used one like... Cline, it's also very similar to Cursor, so they are again those kinds of... ...that I think can be found as web interfaces for both, but they are implemented differently... ...then in Visual Code and then, or rather in VS Code, and... ...then I personally use GitHub Copilot the most, which is also a Visual... VS Code extension. Its special feature is that you can put it... into a sort of query mode or agent mode. If you put it... into agent mode, it becomes this kind of vibe coding tool. As an extra bonus, you can also change the model there. So sometimes or... [08:19] I'm actually testing things all the time, maybe in the spirit of the AI channel. I'm working on a video theme to present exactly the differences between the different language models in the background, like Claude's Sonnet 4.5 versus Codex GPT 5 or Grok, as these three are, in my opinion, competing pretty much head-to-head. Sometimes it feels like Codex works the best, and then it suddenly gets stuck. Then you can continue from that same point by switching the model to Grok, for example, and then you can move forward. So it's kind of hard to even say which of them is the best for what, but it can be said that Loveable is a fairly safe bet when building a user interface, and it has its own database, but the components are sort of pre-selected, what what it then utilizes, but in turn it provides quite solid output and works quite reliably in their environment. Whereas [09:20] then these other tools, and especially working through GitHub Copilot, then you can choose the language, databases, everything just by prompting and yeah, there, uh, Harri, when I then returned to this when that, uh, Chat GPT 3.5 came out, so I set it up with VS Code, so that I ran it there on Windows, that text editor and with it, like, the lines of code are there and Python is a fairly simple, like, interpreted language, which, well, was already developed back in the 80s. Yeah, so then I learned there that there's this API call, which you can like use to call the AI, but then it was too hard and there were too many errors, and since there weren't any 'training wheels' back then, well then I got fed up and only returned to it this year. But that's also kind of interesting, that it hasn't actually changed all that much. There's just been this kind of assistance added alongside it. Yeah. And, I mean, you typically have some reason why you want to build, say, a website or some software, so this gap from mind to matter has, in my opinion, radically shrunk now; as you described, a hundred-hour job might now be like an hour of work, and you're already like doing things, you're selling the product on some website and stuff like that, so I don't think that at this [10:48] moment it's quite understood yet how much this, like in this prototyping phase, this radical product development, like time spent on product development versus market need, so how much it ultimately affects things. But it is like an incredible opportunity right now. And especially, well let's think about just some sales situation, where you would do a sales meeting and spend an hour making a PowerPoint, well now you spend an hour and make a working prototype. You go with that So, or at the sales event, you're already coding directly whether this is the kind of thing you want to buy, so to speak, so you get—there are no static presentations anymore; instead, they are more like, 'Hey, let's pull these features together for this,' so all that specification work and such can be present right there in the situation, and then once everyone agrees—especially the customer: 'this is what I want to buy'—then you can go straight to production. Of course, there are many other things in the background that need to be handled, like data security and such, but this whole prototyping aspect has, in my opinion, changed really radically now. And what I personally understood here... [11:59] then there, when I was sort of using that 3.5 two years ago, running a couple of simple Python programs on my own machine, which also made some API calls, and then I realized why I went to Bubble, so that the database was right there, as I don't want to run on my own machine, I want to run in the cloud, but I don't want to start setting up any Azure or AWS instances, so Bubble solves that too. So it has the databases and the front end and back end and security, so they come from there. Okay. They are provided for a monthly fee, so my credit card is kind of stuck there as long as I'm running that system. But you don't have to do any of that. They take care of it. everything and then they force it to be quite simple. I would have actually wanted to do it with WordPress and PHP, the database like the, no wait, the homepage like the old one, and they said we don't do these, are these my tools okay, and then I said well let's go with that then. Yeah, exactly. And it's not expensive compared to if you ran it in Azure, the same thing, so you'd have to be quite a wizard to get it for that same monthly price, yeah running there. And then that demoing is interesting, that in a way I can now also make like a minimal viable product MVP for like certain use cases. For example So here we are now, headed to Slush together with Lasse, and I tried something for that too, because with all due love, Slush's [13:16] UX, or user interface, is a bit, well, stiff, so I made something so I can analyze who I'm meeting there and others myself, and I ran a database of it there and built this with you a bit, like how we can enrich this data, like LinkedIn profiles and such, and it's again much easier than hammering through the Slush user interface to find if some guy is there, so I can click it myself, or see what the description of the guy and the company is like. Mm. And that took four days now, so it wasn't hours, but it wasn't like just incredible, like, well, this—or for me it's just like absolutely amazing, that you can even do this. So, so, so, so and eventually if we think about, like, the graphical user interface, so when it becomes this sort of generative user interface, then you don't need those menus or analyses, so you just have like sweet data, like, like you just have like data there and then the app is generated for your needs there for instance, and it enriches it enriches it and, and somehow that you don't need to like program the, like, interface anymore that is meaningful to a human, but instead you are directly somehow with that data, in which case your purpose, those questions, Why do you want to be there at Slush, who do you want to talk to? [14:35] And why, so in a way it's no longer that kind of, like, clicking work, but the analytics come from there and you are able to, like, optimize the experience in that way. Yes. Yes, but that also required some vision, that through roughly that kind of HubSpot-style user interface it should come, and it maybe guides a bit too much, meaning what others have done before. But then I started thinking, since I'm a partner at Translink Corporate Finance, so for example, we produce this kind of SaaS company valuation report, so it's the kind of thing where younger colleagues do a lot of work for them to start gathering data into some Excel that creates graphs from it. So just for fun, I reached out to Standard Capital IQ and asked if I could get the API calls directly, because I wanted to see if I could sort of automate the creation of this report, and I was apparently the first person to suggest this globally, and they said it's an interesting idea, but that is also kind of like, taking this data source from here and that one from there, then creating your own analysis, and then the system sort of builds it, and then [15:41] you can even build the user interface for it yourself, or like... Yeah, a really interesting world. Yeah, exactly. And so, what do they say over there on the standard side then? Well, they say that, well, now we mainly have these like coder types. Great that some, well, investment is closely connected, that we're still thinking about that. At the moment, our policy is that they go through like, via the Cloud, and then I said, I haven't yet opened the credit card for that Cloud, so I have to think if I can be bothered to go there. But then someone immediately started on this, but they were interested and didn't say absolutely no, and then they said, well ... that Excel first, and I'll look at it on this end, so that, well, that how it goes then. Great, great. Of course they have, well they naturally have, as they are a global data integrator, so they don't want me to, like, do too much, because they want the features I create to perhaps be taken through them, through their user interface and shared with third parties and Deutsche Bank and so they aren't just Translink's tinkering, so here of course the data owner probably, and for good reason, suspects that people might kind of steal their data. But it's perfectly fine to process it with Excel and [16:51] make your own report. In my opinion, there's no difference to the fact, that now you're not just using Excel, but you're using Lavaboli, you're coding With JavaScript and HTML. I'll have to present this to them then, but but like in a way, I find this mindset interesting, because up until now I've been kind of a slave to the user interface, so if I don't know how to use some Slack features or these specific Hubspot database functionalities or, for example, the Statistics Finland data series user interface, then I just don't use it or then I'll learn from some videos how these work now and from where to find that and how to combine these, but in this new world, you can like, via AI or maybe even with API calls, these kinds of like data request calls, which are like AI-shaped. Isn't an API call also—I mean, if it were explained, so what is it actually? Well, it's maybe a general term for it. It's like Application Programming Interface, so there can be many types of those as well, many types, but the most commonly used nowadays is REST, so it is a web-protocol-style call. So you basically provide a short, human-readable message, usually in JSON format or XML [18:13] format, and you call some endpoint or function there, let's say it's called from a CRM, for example, that the customer company's data is the call, and then it returns the address, name, phone number, and for example, a list of what has been sold to them. So it's like In its simplicity, one API call. It's a programmable interface, as in a... ...interface in the Finnish language. I might take this even further... ...by saying that I think software has always been... ...a giant brake and friction between the question, the idea, and the data. So... ...now this friction is rapidly melting away, so you can... ...actually be in direct interaction with that data. Yeah, and then I just noticed... ...there that you do have to understand a bit how... ...computer logic works. So, in this Lavapoli, I had this thing where... ...I turned security on, and then... [19:13] ...well, Lavaboli thought it improved security that one... the database is like locked for me as a user so that it's then not written to, and it was really stupid because it was like just a basic database of those investors, so then I thought the program somehow went broken when I could no longer update that investor database. I started changing the code, like change this now and copy that and try this and then it was like accidentally revealed to me that it had just locked this with this security feature. So, but then in a way since I now had still a bit of this architectural view that even this kind of thing is possible, so I haven't like sent a fifth call anymore saying, fix it better now. So the cause was approached from somewhere else. Yeah. Yeah, yeah. I mean, of course, the basic pattern needs to be there, but semantics, ontologies, all these kinds of things are always linked to data, and above all the valuable questions you want to know, so we can get a handle on these much faster now. Yeah. And then, well, that's sort of this hallucination architecture, since in a way JSON is just this kind of text format. And often these are like really old protocols, it's just been decided that there's this kind of text format where text structures are sent, and that's how everything travels now, but but it's sort of like a free-text format can be for the AI, but sometimes it results in the kind of hallucination where it interprets inaccurately and can once return a slightly different thing than another. So, here we have this kind of [20:41] tackling of this problem seems to be underway. Yes, and at least that ChatGPT or OpenAI API that I have used most in Ohmoni, you can turn on a setting there so it always responds in JSON format, or even follow that schema, but there's always the probability of hallucination where even the schema goes wrong, because of bad luck and the language model decides to choose that solution as the best. Yeah, yeah. But I mean, surely those the quality of the outputs can be measured in many ways, as it stands currently, so even though the model's internal operation might be a neural network such that we can't quite see everything in there, still the outputs can be verified, and then we can perform completely deterministic checks that are not done by the language model, but rather this kind of evaluation-type schema is already quite advanced. And if you combine that with asking for the answer again, it will likely work in your favor, and the fact that you don't have to get it in one shot right away, right, but you can do, like, multiple iterations and the fact-checking can be done from, say, any trusted database. [22:02] Mm. Which is then brought into, for example, that response then. Yeah. And then there are these like, you know, this GAN model, where in a way another AI can be this kind of monitor, a quality controller. In fact, isn't it the case here—I mean, since I know Eficode, it's also because my study mate Juha Borsos owns this kind of, or is like a general partner in this Bootti, which was, like, a significant investor in Eficode before, so they have this kind of DevOps philosophy and self- As an investment banker, I was helping Nitore, a leading Finnish agile software development firm, find some new owners, so I think code development has changed a bit in this regard, but DevOps is probably also changing; explain a bit what DevOps is and what the philosophy is, briefly; I've explained it, or if one explains it briefly, it could actually be this: everything that happens after a coder has pressed enter or actually performed a git push, i.e., pushed the code into version control, then automation takes over and it goes through, possibly depending on security and other levels of ambition, it goes through looks at the code to see if, for example, good coding practices are followed, [23:24] formatting, and whether there are security issues, and then runs automated tests, creates an installation package—it depends on the language; if it's a web application that is then deployed to another server, it might create a Docker container or an image out of it, and then proceeds to move it to the next development or test environment and finally to production. So it's automation around the production of that code, but in a broader scope, even before coding there is DevOps. For example, definition work, its documentation management, and perhaps standards there. even standards, and then especially the change management around it. So how we track and first analyze a bug report, for example, see everything it affects, what we need to change. Then perhaps people manage the workflow with some Kanban or Scrum process or any project management method. And then all of these are like DevOps on a broad scale, meaning the software—the [24:32] support functions around software development, you could say, if the very core is what the coder or agent writes there. That is probably a pitfall for this 'vibe coding'. I mean, when I was fighting that one database update bug, well I had to, like, in terms of version control, I then went to a version that worked. I tried to bring code from there, but the copied code didn't work. So, because the error was at a different level, meaning in the write permissions, it didn't help, but I had to struggle with that. But then I, like, tried to look at those versions a bit. My brain wasn't enough to, like, analyze the code at that level, but this is maybe a problem with this vibe coding, that when it might come up with some solution, it could be any kind of messy code that is totally different from the previous version, so the development history can be very random. Yeah. And then, like, it happens really often to me too, that there's a bug or the code doesn't work the way you want it to. Then you give it some sample data, saying that this should now [25:33] pass, but then the error is actually in your input and you ask time after time for the AI to change the code, and it does change the code, so that like 150 lines have been rewritten and the error finally reveals that your original request was wrong. And then if you try to ask to go back to the original, it writes even more code, supposedly returning to it. And yeah. But I, I, I'll maybe throw in. I found this maybe a month ago, something like, called Bllizle service. Yeah. Where we have sort of gotten rid of these human worries, that you can put into that Bllizle service and pay 100k a month or something ridiculous, but you can throw in there say, a bank's COBOL mainframe code, which has all that, and it comes back in a week, like, I've refactored this thing. So now in this AI era, we've noticed that these software development metrics and methods don't necessarily measure the way humans develop software, nor how we could develop software with AI, because because you don't have that, it's not found on GitHub The kind of task like refactoring the Goldman Sachs COBOL system. [26:50] But for AI it's possible, and this is an absurd task for a human. Yeah. And then in a way, that inhuman machine like coding logic might emerge, so it's not just like some code snippet trial-and-error copying and merging, or it could be that the machine could even invent its own code. So in a way the machine could learn and crunch that code and optimize it like Yeah. But now we have decided to do it this way, so it runs there on Git. And actually this is like maybe good to explain, that for me even that is like developed by Torvalds So, like a repository. You have, in a sense, a standardized way to store code in the cloud. So couldn't you say that G— Let's look at it closely. So Linus Torvalds created a version control system called Git, and its original idea was that we can actually, in a distributed manner, develop and distribute code among developers located somewhat randomly anywhere. And it is actually based on the fact that you always have a local repository. The entire code is local to every developer, and then from there, those deltas, meaning changes, can be shared from one coder to another. And now, these GitHub, GitLab, and all other centralized or these kinds of central-server-based systems Git-based version control systems, which go slightly against that original distributed [28:16] idea, but they are made so that we have one master repo, which is now there on GitHub's server, and it also has web interfaces. That's where the big help came in, because originally Git didn't have any interfaces. Being able to go look at code and download it via a git clone address— nothing like that existed. So these have brought usability to it and the idea that a main master repository exists somewhere in the first place. Yeah, and that was it for me when I started writing that Python code with VS Code, it really annoyed me that ChatGPT's codex said that I goddamn have to go there myself, to like, well, there to the command line to do some git stuff, that's where my patience ends, like okay. I have a bit of an opposite experience. It's like that, well, I'm a passionate vibe coder. I know how to do like Hello World in Java and then with Python, but nothing more than that. [29:18] B- but but now that these like Claude's toughest features, they are damn good at it, so it starts suggesting, the AI from there, that do you want to install a python package here that handles version control for you, and then you just click ok. OK. And then when you have the architecture in your head, what this should be roughly it, and it's actually surpri- I mean I'm getting working software done without me knowing how to code, so it doesn't really yet fit right into Git. You were talking about a slightly different thing. Well, well, it could be, but I just mean that in that version control and everything else, the AI suggests to me to create this kind of GitHub and create this kind of version control and all that. So I could still return to that for a bit, to what it changes in the DevOps world. Now we were talking about how coding changes and design changes. when we remember that DevOps included all these, so there's now clearly one thing I've done myself quite concretely because these In DevOps tools, especially GitHub and GitLab, there's a lot of talk about how automation is built with these Actions or like pipelines. So when the code goes into a certain branch, then those Actions start to happen, and they are practically scripts that are then run in a Linux environment. Whether it's [30:41] virtual or local and so on, creating these scripts used to be quite laborious and required specialized expertise, because you need to understand so many different layers: those individual Linux/Unix level scripts and then their automation in GitHub's language or GitLab's language and then possibly Docker containers or Kubernetes environments, like infrastructure as code, these pieces need to be made to work together, and now creating those seems to be, for AI, really child's play, because they are practically scripts of a few dozen lines at most. They might be just two or three line scripts, but from small pieces, a pipeline description like that is assembled, so these can be made in a way that you can automate it and then you can also generate the test cases. Whereas before it was said that testing is always a compromise, that we can only test 20% of features because no one has the time to write test cases. Well, that's no longer true. Now we get 100% test cases. Of course, those are written by AI. [31:53] So if a person spent their time going through the ready-made test cases and looking at which ones are current and which are not, then we'd reach a completely different level in quality assurance and also in automation. You no longer need to wait for the DevOps team to come and write those automation scripts. They are obtained by requesting the code's continuation. Yes, this is exactly what I was trying to say, that since I don't know how to code, then AI quickly coded everything for me that was in the catalog. Yeah. Maybe then regarding this tech stack, sort of like a full-stack coder has always been the god of the coding world who knows everything and runs all sorts of things. So back when I was coding, everything kind of boiled down to the hardware you have. So, I myself"}, {"slug": "650-tekoaly-kuplassa-tolvanen-savolainen-neuvottelija-364", "title": "Is AI in a Bubble? | Ville Tolvanen, Timo Savolainen", "titleOriginal": "Tekoäly kuplassa | Tolvanen Savolainen | #neuvottelija 364", "guest": "Tolvanen, Savolainen", "guestsCanonical": ["Ville Tolvanen", "Timo Savolainen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/ville-tolvanen/", "https://www.neuvottelija.com/podcast/guests/timo-savolainen/"], "episodeNumber": "364", "publishedAt": "2025-12-08", "duration": "01:04:17", "format": "full", "topics": ["ai_enterprise_tech", "investing_markets"], "description": "AI in a bubble | Tolvanen & Savolainen | #neuvottelija 364. This conversation rides the crest of the AI bubble wave. Talk about AI — and investing in it — echoes the tech and dot-com bubble of 2000. A decade after that bubble burst, Ville Tolvanen founded the Digitalist movement, and Timo Savolainen has worked alongside Sami on the rise of Agentics Finland. Who does the AI wave sink, and who does it lift?", "page": "https://www.neuvottelija.com/podcast/episodes/650-tekoaly-kuplassa-tolvanen-savolainen-neuvottelija-364/", "text": "[00:00] Alright, welcome to the Negotiator channel, and our guest is Ville Tolvanen Via Piedmont to Slush, here at the negotiator studio, and I must say a little detail, that when I was just arriving at the Apollo nightclub's like, Singa party, the guy was already leaving, so what happened to your endurance. That's how it went, a long week. Thanks for the invitation. Great to be here again. Yeah, and your original merit, meaning this kind of building of the Digitalist movement, where once again everything changed on the IT side especially, and we can think about whether AI is then a bit like this digitalist movement, and then I also have Timo Savolainen and a multi-published author. Here is the book on AI's competitive advantage and then we met at Mikko Alasaarela's Agents Finland event, where you were a speaker in that second seminar. I missed the third seminar. [01:00] We'll get to that soon. I was at Google's DeepMind Lord Boat in exclusive company drinking champagne there, so number three will be skipped, but if you could give an update on what was being discussed in Agent Cosmos 3 regarding the AI field. But which one should we start with? Maybe since he's the senior gentleman, Ville gets to reminisce about this Digitalist? It's terrible when you've reached this 'old man' category. I am, after all, the oldest guy here. The young challenger has reached the end of the road. Actually, I'll start from even further back. So, 25 years since the dot-com boom, the future is calling. the future calling. From another direction, yeah, so the first well, the first tech booms have been happening since the mid-nineties, but the first tech boom of our generation was at the end of the 20th century, with those 3G licenses and dot-com companies that had no revenue at all but huge valuations. And '99 was such a hot year, when stock prices were rising and everyone—all [02:11] companies that were hiring people received a huge valuation, and back then I was at Radiolinja in charge of WAP services. as a manager, as a young man, and we created IOBox, IOBX, and various companies. At that time, Radiolinja's most popular SMS service was Noppa. So when you sent the word 'noppa' via text message, it returned a number from one to six, and it was used quite a lot, and then when the dot-com bubble burst and Nasdaq fell something like 89%, so we thought, luckily we have this mobile internet, meaning these mobile phone value-added services won't collapse. Well, by the time we reached 2002-03, there was quite an 'internet winter' in Finland, and Finns pretty much wanted to give up on the whole internet. It's interesting, and the reason why I'm telling this is that now, at the end of 2025—it is November—there are many of the same features as in '99. It's explained differently. Now they say, 'hey, these companies have massive revenues, this is profitable business, and there is a future,' but there is the exact same euphoria, over-excitement, and [03:28] concentration on certain stocks on the exchanges and then these shady and strange acquisitions. I recall from the year '99 when Time Warner AOL operator, a landline operator, bought for cash Time Warner, which was over 100 years old, a big Hollywood company and publisher. So, in technology there are these phases, where we tend to, like, overreact and over-imagine the change in the world. We reinvent the steam engine and then sort of under-react and in the long run, it can now be said that all the dot-com boom's prophecies have actually come true. Everything that could be done then. Well, fast-forward from that to 2012, in Finland there was a huge, depressing, sort of current-like mood, apathy. Finland hadn't recovered from the financial crisis and I read then Fast Company and Wired, where they talked about e-commerce and the death of department stores and this kind of structural change. Uber and others were starting and, well, then I looked for from an Oxford professor's presentation material or like from a presentation from lecture material I found online somehow, I think it was Slide Share service, which had slides, and I dug up a word like digitalist. And well, that a digitalist in those [04:55] materials is a person who has a positive attitude towards technology's possibilities and promotes its utilization. And from that was born this kind of Digitalist network, the Digitalists, where they organized various events, things and more. And we had such a counterforce, which was of course familiar from the Apple story, because Apple's developers were underdogs and there's this old Apple vs PC confrontation. So we had like Digitalists versus Analogists, where Timo too as a young rowdy man was involved and well, and back then digitalization was promoted through these kinds of cases and examples and through international speakers and well, there wasn't this kind of prestige bubble, but in a way Finland is quite slow to adopt And I remember when I started Digitalist, in Finland they said that no, you can't sell shoes online because you can't try them on, and the retail chains really said no, we won't do e-commerce because then people will return them and so on. Come here to Pukimo, and quite a lot has happened in ten years, but now it may be that AI is a totally awesome thing, especially for the user, but it could be that we have this kind of bubble here that will burst one day. [06:12] I've always said, or I've said in a few places, that January 2026 will start, like, with beach parties on a volcano island. Hey, but come on, yeah, but a little reflection before I throw to Timo the hopefully optimistic torch, so... In '99, my subordinate and friend Henry Eilert went to iobox and then it succeeded—no, no, he really does live in Finland still, a Swedish guy, a really, really great angel investor and so on, but well, Henri, so then iobox was sold to Telefonica, meaning this to a similar one like Warner, well, to that Spanish phone giant like, for a massive sum and then Henri served his time there, in Madrid for a few years and well, hardly suffered too much, but then with money in his pocket, he was able to return as a Swedish, well, London-based investment banker to improve the Finnish tech scene and has made quite significant investments here, so these criticized tech deals, so maybe [07:21] Telefonica made a bit of a loss here and an error in judgment, but for us Finns it was some kind of blessing anyway, that from there Sonera's Zed and Plaza world conquest, massive investments, billion-dollar deals, well, Tuomioja could indeed have not blocked the sale of Sonera to Telefonica, and then we would have paid off all the national debt with it, but these leftist politicians don't really know how. Well yeah, a side note like this, but now we get to Timo. So well, you've heard that the flood is coming and then a new rise. So what did you think about this? Well, I brought that surfboard then. Right there so that like I don't know where the towels and swimwear are. It doesn't seem to be in the specs, but but I'm bringing it as a surprise, like hey surprise, that well the deluge is coming. So this is a bit like a matter of faith, that that what Ville set in motion back then and thanks for that. Back then we did a guerrilla marketing campaign I brought that that first book there to Sami's desk. By the way, it's a great color, I mean [08:26] digital transformation. You were ahead of your time and indeed and and this is sort of like that now comes the big bad and it wasn't dan but specifically digitalization came back then back in the day. But then if you still look at that one from my childhood, that that wine-red landline phone and yeah I had one like it or I mean sorry my family had the same color, so well the future is calling yeah and and well this is like you just said well Sami, how these young people do they even know how to use this rotary dial and and well, it's not even a joke, it's actually true that if there are now listeners and viewers here, that's how it goes, you have to take the number from there and well, it was the time when I was a child and then when we said hello and the phone rang, you had no idea who was calling, so a Savonian answered, and then there's this question about what happened when modems arrived. I'm from that generation, that I remember when we had a landline, the first PC arrived and then that then from there and then you knew that okay, now some line has to be closed since there was only one landline and so on. But let's fast-forward this image, so to speak, forward and I—I always say here that I'm from the island of Säynätsalo originally, and that's why this board is a really important element overall, so many people know Säykki because it has Alvar Aalto's town hall and and people come from all over Asia to see it, because it's like a huge, huge, fine structure overall. But then how this [09:52] it relates to this whole digitalization, so in my childhood this is a community of 5,000 people, 16 km from the center of Jyväskylä, so there on the island there were three shops, two banks, a post office, a health clinic, and a factory. Logs were brought to the factory along Lake Päijänne, they were floated. Then logs also arrived along the rails as well. Young boys were jumping there on top of the log piles. And now fast forward, 40 years ago I went there with my own children during the autumn break. What was left there? They had just shut the door of the health center and put up a note. That services are now found at the Central Finland Hospital 16 km away and, well, only one shop was left and this town hall. Mm. So this creative destruction here, this is, this won the Nobel Prize this year. So if we look at economic history, creative destruction happens. It's one of these technology waves. Are we going to surf it or do we pick up that landline phone and hope for the best? Yes. So now this Agentix network, well, it's quite massive wave. I mean, I think it's very similar to this digital movement by Ville Tolvanen, which, by the way, as a side note, Ville's idea was the Negotiators community, in the Stockmann cafe, that legendary meeting where Ville basically said roughly, 'steal from this', meaning 'copy this owners community', and I did, I did a good job, and I think everyone should create some kind of platform or [11:16] ecosystem. Actually, I just came across ecosystem thinking in many contexts; it was talked about a lot 10 years ago. It's a bit like it's been forgotten that the web originally connected computers, linking computers between universities, but it's a network of networks and in the sense that you kind of spread out like you do multi-channel via audio, YouTube, Facebook groups, communities, your guests spread the word, so it's like a kind of digital era way of sharing information, of spreading information. Yeah. And Agentics Finland, they have this massive WhatsApp, well, the discussion group Saari, where I'm quite active, and since I am also a coder, I am also active in that Coding Agents group, so well, I've found this vibe coder in myself, who, who and your previous episode is worth listening to, but I listened to it like that. It was a good episode about vibe coding, but at this point I could ask you, because you also talk about these communities that are important [12:16] in this era, and quite big ones too, thousands of people involved, so they have their own role, sort of like we said sharing is caring, meaning sharing is caring as a knowledge sharer, and in that way promoting things within communities, but I'm interested, for the basis of this AI discussion, how you use AI: what does it mean to you? Yeah, well, AI LAN parties, meaning uncles or daddies sitting side by side and sharing via laptop, like, 'I do it this way. What do you do?' This is like my primary way of learning. So you use it for learning and you've now chosen coding. Do you use it for anything else, like investing or Yeah, yeah, well, I have this agentic perspective, which then from there has become Agentix Finland. So, for example, browsers are agentic control tools for me, more than just these Google browsers used to reach some homepage. So they perform this active user interface access to various data sources and then run poor user interfaces. It's like really common. So for me, this, uh, like before with these modems and phones you would call somewhere like Napster or web browsers, so in a way this web browser experience has changed to be agentic for me. So I use it in a way that I give work [13:45] instructions to that browser's AI. As a dialogue, the browser internet was still this kind of mouse-clicking for browsers and it was actually, the mouse is a completely artificial invention, meaning humans don't move a ball-like object on a table anywhere in the jungle or nature and that's why adapting to it was harder, but now you can talk. or it's like interaction, it's dialogue, Timo Suni so I thought that since we don't always agree on everything, then these are just completely wrong questions, that in a way, are we asking like, well, 'do you use AI?' when we should be asking 'why don't you use it?' and well, I know that we are pioneers in this, in a way Ville has already been sure like, like there was already this whole Digitalist movement and what Sami is referring to, this Agentiksi community, basically those who have seen that, hey, the tsunami is coming now, that wave is there on the horizon, it's actually already here, and in a way, like whatever comes to these, like, agents, this is just so true. Our organizations are built for that and our whole, like, knowledge work, that people sit at the office. I don't know what's being discussed in Italy about this, like, office thing, but we have a big hullabaloo here about whether you have to come to the office and how many days you come, when that's not the point at all, but rather what value we produce and how we produce that value. This [15:01] the question is, okay, what do you use AI for? Value creation, competitive advantage, and these are those kinds of terms, whereas we're just talking about getting cool cat videos, and well, we'll get into what Google released later, the new Geminis and such, you can do all sorts of things with them, and anyone can, like this 'vibe coding', and the previous episode is a good example that anyone can make, with a single prompt, an online store for themselves, vibe code it, and like Eleven Labs' valuation increase, I mean it's a one-year-old company, and if it has like 200 million in recurring revenue as a service, it's pretty incredible. They don't have very many people working there. And this flips things completely, like those let's break this down. Read only memory. So ROM memory is limited. So much information is coming in. Let's try to break this down, I think you started off well and we agree on many things, Ville. RAM is the one, ROM is permanent, and EPROM, you can burn an EPROM like ROM, Kalle is now specializing in alcoholic beverages. Better not not anymore. Well, I was probably in London when you're talking about the prom. Well no well not so, er, technology has a tendency to sort of sometimes develop extremely fast and sometimes there are these slow periods, where not much really happens, which then makes for example investing really difficult, because it's hard for you to time the time-to-market. [16:24] someone wise once said that if you invest, the technology risk is worth taking, because the markets, those you can't influence, but that technology risk could supposedly be analyzed, but regardless, I think it's clear that Timo is right, that now we have moved from the ADP or ICT digitalization to the fourth era, which is the AI era. And I said, the reason it's the AI era is because AI dominates all development from here on. You're right about that. And then I'll just ask everyone this, what do you use AI for. Because I want to understand how others perceive it and learn myself. I specifically use it as a learning environment too, meaning for improving my own health, for navigating. I've input there health information, and we're talking all the time about eating and weight management and all sorts of middle-aged man topics. Then I use it a lot for investing. I have a lot of weekly tasks there. For example, even though I follow Novo Nordisk, it makes a weekly report for me for Monday. Yesterday was a bit—yesterday was a bit of a gloomy day. Let's keep that in mind and, well, and then this kind of self-help quite a lot. M it's really strong in that, because all those help tips can be found in the language models and I've asked, for example, that 'hey, I have a 30-year career now, so what should I do? Read all of Ville Tolvanen's public writings, [17:45] appearances, and tell me—give me five options for what I should do next and it's capable of—I check the language model. M and by the way, I did that same test with Gemini and it's—it's better than ChatGPT. It's considerably better. It's like great news for this whole ecosystem, that the Alphabet product is—it's very good, Google. But then if we go into what value the user gets and how we play with it and we are looking for significant changes in productivity or companies that would have done these 'leapfrog' cases, there are very few of them. And it is related to this technology, that there is always that 'teen sex' phase where there is more talk and hype in those communities, but the real changes are, well, modest. Well, and maybe we are not able to, we are not able to publish about these or we can't throw out big, big cases yet. In this, like American baseball, so I was there at the Berkshire Hathaway annual meeting and there [18:49] in the last significant Warren Buffett one, of course the young buck continues there, the 62-year-old CEO there, for this 95-year-old Buffett's career, but Berkshire Hathaway invested in Google and I am also a happy Google or Alphabet shareholder, and well, I was then invited there at Slush to this kind of exclusive Google I signed a five-year NDA, so I have to be a bit careful with what I say, what I can say about this, but well, the five-day session Yeah, you could get a five-year Google lawyer after you, but basically it was just that an hour and a half before the global Gemini 3.0 press release, they demoed it to us. So I got this slightly self-destructive feeling of taking some photos and posting them to social media, so both the police and Google lawyers would have probably hit me over the head, like you broke the embargo, did you see what you signed on this paper, so but you were among the chosen few and it was very exclusive stuff. The tables at BioRex were reserved and I had a Swedish venture capital investor sitting next to me. We had our own champagnes while they demoed Gemini 3.0, apologies for this elitist description, but it was just so cool. And then they demoed it, [20:13] the first one was this 'lovable killer,' an agentic community where it coded a sort of SaaS project right there, and then for us, it was doing this kind of journey and rule of law analysis, then like for the company's figures there and then, well, that sort of thing came up and there were all the graphical interfaces and then it made a kind of 3D game there as well, and we started with this and then we discussed, there were about ten of Google's, you know, those Deep- Mind unit's top researchers and then they explained how this agent coding environment and this Gemini 3.0 LLM model works and beats everyone and came first in the Humanities Last Exam, which is this humanity's last intelligence test, and in other tests too it was on top, and of course while filming this, Anthropic's Claude released Claude 4.5, 5.0, so this is like a constant rise, which is also prone to breaking those moats and justifying that no company is as valuable as Nvidia right now, or Palantir. [21:31] And I think there is a structural flaw here. I agree that luckily we have a surfboard. The wave is coming. Can all three of us fit on it? I'm really itching to go to Sweden or or Tallinn. Well, we are at a very early stage and now if we I I have found three areas where I believe there will be quick breakthroughs. The first is investing, where AI-generated analyses are just massively better and faster than this kind of analog analyst banking process. Because you can ask daily or weekly, you can actually set media monitoring on for your stock. Tell me everything published about it. And the second one is coding, but as discussed in your great episode about vibe coding, it doesn't go into production yet. So it's in the experimental phase, demoing, and it saves time. Well, then here is the third breakthrough: reinventing consulting and evaluation, because now we've been in this browser internet [22:32] digitalization phase in these large teams, with a 100 percent utilization rate and a massive cost base. And then when you add something like Yle Areena or an online store or ...change something that's been working for 20 years, well, that's legacy. So it's sort of like a quarry in a certain way, as things are being updated there and it's extremely complex, and well, in those matters I see that there is a need for changes, but we should recognize if we believe that it's coming, that ICT consultants will face really big layoffs, that the buying behavior actually starts to change. Now ICT consultants have declared themselves as AI companies, meaning they are basically using a steam engine on behalf of the customer. So these are those kinds of problems, those difficult things where you can't help but remember that '99 vibe in a way. Hey, I have to jump in here. Do you guys still remember Y2K? Yes, you do, and the kids won't remember, but let's refresh our memory. This was specifically the time around '98, '99, and then there was the fear that, okay, nuclear power plants will stop, you won't get cash from banks, and this was a technical problem. Sami can explain it to the youngsters. [23:46] Yeah. That's right, so on 1.1.2000, these bits no longer fit into that day counter, so people thought it would roll over to 1100 and then bad things happen when, well, time loops go back 100 years like, in the wrong direction. Exactly. And a massive global project was launched, Y2K, for which everyone prepared; coders of that time and everyone fixed, fixed that field, for which this was a purely technical update. The way of expressing time was changed. But now we are actually in a situation like this, and it relates to these waves and this, like, pace, and when we look at steam engines and all this that has, like, happened, so Y3K—and now we are not looking toward the year 3000, but rather 2030. So, so now we are, like—at the end of '25, it is exactly three years since GPT was released to the public. I mean, previous versions had been developed, but probably none of us used them; it was only when it surfaced on the market, and that was about three years ago, and in a way, when looking at this, like, long perspective, specifically these, like— remember, you are quite right about what, like, has happened and where the breakthroughs are, so in a way, this has come really, really... [24:57] Like, cautiously, but if we look at these previous waves, we're talking about how the first IT wave was from when the landline phone came and the internet broke through, so it's been about 30 years since we got, like, smartphones and the internet and so on. I'm a Master of Science in Engineering by training, sorry for that, but the point is I approach it from the angle that in this 'Competitive Advantage with AI' book, I describe these waves, that the first wave was terribly long and it was actually quite shallow, but now we are at the point where this fourth wave comes in a shorter time, but its impact is much higher, and where this '3 Ys' comes from: individuals, companies, and society. In a way, it being a technical change, the previous one was enough if we just, like, turned the dials a bit. This is a major change in mindset right now. And about this speed, I'll say briefly about Gemini still, it was absolutely amazing what happened there, you remember computer games from back then where you could either drive a rally or fly an airplane and you'd press those arrow keys and, well, then you went there and you could fly. So this was demoed at that Google side event where I was. I was on a shoestring budget. I wasn't at any exclusive one. Retrobit. [26:05] This really was a retro episode. So, the latest Gemini there can do it on the fly, when you press a button to fly down into that cave, it renders it on the fly based on what you do. Let's dig in again. Let's dig in. But maybe before Ville, I want to pick up on those two previous big trends. There's this kind of Nvidia reinvestment loop, which is a bit of an investor smokescreen for investors. And then this other one, the consultants, so maybe quick reflections on both, so since I mentioned Palantir as well, Palantir is in a way this kind of deep data consulting company that will disrupt companies, but in a way that they have all the world's data, including military intelligence. well, deep secrets and and then sort of like PE3000 yeah, and then they come with, well, an overwhelming mass of data, well to embrace your business model for the better and hopefully maybe then maybe then they leave your data alone and don't, like, in Borg style, hijack it from you, and there's a bit of doubt whether it's then this kind of malevolent amoeba that then grabs the information from there after it has consulted companies. Are you analyzing a stock now or is this some [27:19] Marvel thing? Well, a bit of the business model too, but I mean, it's reflected in the price. But fundamentally it's quite a lot like this very deep data, well, a very data-heavy, well, like a really competent consulting firm. At least now the business model has gone in that direction from that sort of hardcore, like, intelligence data and other stuff they have had. Well, then also to monitoring citizens and this Chinese-style... Well, will Gofor ever reach this level? Well no, but it can get in on this, like, sort of data embrace. So in a way you So you're basically that group that understands, like, data and AI, layers on top of it and all these abstractions on top of API calls, like Model Context Protocols and, well, the interfaces created through them, and being able to renew them in this AI digitalist wave to the, customer's added benefit. Well, maybe that. Is there more on this, or shall we move to this Nvidia situation? Well, maybe from there one could say that Palantir is still missing that industry in a way, because I don't believe Palantir serves [28:31] banks like Osuuspankki or European companies, so whether they are governments or whatever they are, but in any case, whatever the future is, that 3000-year valuation multiple is absurd. It's a Marvel movie, really. That's why I think it's good that we put this on record and see. In all my skepticism, I hope I'm wrong, but I'm afraid this is like November '99. Yeah. I don't own Palantir myself. Hey, I could add a little to that and Exactly, like where the value comes from and how it's formed and, and In a way, I'm looking at this positively to get a bit of a gap here. I mean, I strongly agree with you, but the question of whether this is a bubble is the wrong question again, and well, it's true that in the valuations there's definitely this inflated, inflated, inflated and cross-invested stuff and so on. I also have Microsoft socks, as they just turned 50, they were handing these out here and we know they own 95... by the way, you are both quite biased. I am also a Microsoft shareholder. I didn't say that. I just had the socks, as there's this beautiful, happy smiling thing or... [29:45] Anyway, Sami asked to talk a bit about Microsoft. So, the point is that if they own, say, half of OpenAI, then it's completely valid to ask what happens to them. What happens to the process? What happens if the valuations stall? That is one question, but I think the real question is, what to do with this technology. Even if all companies went under just like that and we believe that our data and algorithm sovereignty is met in Finland. We still get those services from across the big pond here to us. We get those algorithms, we get them all on our own servers the same. But wait, wait Ville, wait. We agree, but the point is what we do, how we produce value in Finnish society with this technology that we currently have. And, and to this I want to bring a kind of angle and maybe a swing, that let's take for example, the occupational pension field. We have good private pension companies and we have national ones, and about Finnish pensions one could say a thing or two, but if someone today decided to establish a new pension company, how would it work? We talk about [30:49] these things called AI-native companies and we are here now, I, I, I, as I said to Ville just now, that we have now founded here a new AI-native company. We want to disrupt this consulting business, because it's in a massive transformation and this goes through all industries. But if we use this pension company as an example, if they took all the technology, everything we have available right now, how would they make investments? Would a human do them? Not necessarily. There would be quite a lot of automation. AI exists and these kinds of investment services. Ville said, Ville already uses these, they're all available, money is there. Would there be people processing those pension applications or would it be based on having a group of agents who could already practically do this? And this is where the value creation comes from, like okay, how many people would work in a pension company like this, so it could disrupt the pension sector. Pause. Great. Now we're at the core. We are right"}, {"slug": "652-paaoma-hylkaa-suomen-hollmen-kotamaki-neuvottelija-365", "title": "Capital Is Abandoning Finland | Markus Hollmen, Mauri Kotamäki", "titleOriginal": "Pääoma hylkää Suomen | Hollmen Kotamäki | #neuvottelija 365", "guest": "Hollmen, Kotamäki", "guestsCanonical": ["Markus Hollmen", "Mauri Kotamäki"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/markus-hollmen/", "https://www.neuvottelija.com/podcast/guests/mauri-kotamaki/"], "episodeNumber": "365", "publishedAt": "2025-12-16", "duration": "01:02:00", "format": "full", "topics": ["ownership_capital_tax", "finnish_economy_policy"], "description": "Capital is abandoning Finland | Hollmen & Kotamäki | #neuvottelija 365. Financing and ownership are tightening in Finland as capital disperses abroad. The public burden already stands at €84,000 per private-sector employee. Mauri Kotamäki dismantles the illusion of easy financing, while Markus Hollmen stresses risk management, taxation, and the fragility of Finland's ownership base. The solutions that emerge: an AI-driven productivity leap, and strengthening the market economy and domestic ownership.", "page": "https://www.neuvottelija.com/podcast/episodes/652-paaoma-hylkaa-suomen-hollmen-kotamaki-neuvottelija-365/", "text": "[00:00] All right, welcome to the Neuvottelija channel. Once again, Mauri Kotamäki, chief economist at Finnvera. Morning. Hi. Hi. And now we have Markus Hollmen from Switzerland. Morning. Wealth manager. All right. Hi. Hi. And Markus, we met at the private equity investors' annual event, and you gave this really popular talk where people were groaning at your slides. It had these grim figures in it. This is a popular genre of talk, where you tell people how badly Finland is doing and it doesn't look like it's getting any better. But let's maybe come back to that later — a little light-hearted start first. So now that you live there in Switzerland, apparently the young communists there are just as radical as in Finland. So they proposed — was it a wealth tax in Switzerland, Markus — an inheritance tax, on amounts above 50 million. Yeah, it's really awful, because in Finland — in Finland it's, well, above 20 thousand there's already inheritance tax, and it goes up to as much as 19% — while in Switzerland they voted on it. Actually, I remembered it as a wealth tax, but yes, they did propose an inheritance tax, and then the people got to vote on it themselves, and what do they always say — they didn't want an inheritance tax. [01:20] Well, they didn't want it, so that was actually a pretty sensible decision. Norway — Norway set an example of what kind of foolish things you can do, and millionaires and billionaires fled from there. Yeah. Well, I'd like a Swiss citizen for Finland. But then, Mauri Kotamäki, you've been really prolific at Finnvera. I was thinking, since we're talking about the challenges facing the Finnish economy, we could bring in your excellent aging-population report, but you also wrote a short analysis this week on financing for Finnish companies, and I see a lot of this repeated argument on LinkedIn, where certain people — you know who you are — keep saying that good companies always get financing, and that's a bit of a so-called tautology. Yeah — good, or another version, good projects always get financing — and that is indeed a tautology, because it's usually the lender who defines what counts as a good project, and since they're lending to someone, then by definition it's a good project, so it doesn't actually mean anything. And then there's also the question of the terms on which some party lends money to a company — that's a separate matter. It [02:30] usually does that in a commercially sensible way from its own point of view, but that doesn't mean it's necessarily sensible from society's point of view — there can be various frictions. Whether it's regulation, or lack of competition, or whatever other factor of that kind, that causes the market not to function even so, even though from their perspective good projects always get financing. Yeah. And Finnvera apparently believes in its own research, being that kind of institution, so you then continued this popular financing programme for small growth companies, having identified this bottleneck through research? Yeah, exactly. We continued — well, we first piloted it from October '24 for six months, and did some thinking and researching, and actually VATT's data room also took part in that research, and now we just recently announced a new decision — that from February next year we'll run it for another six months, with slightly different terms but largely the same. New companies are brought in, and it's required that companies first go and apply for a loan from the private sector before coming to us — so we're continuing for a new six months from here. [03:46] Yeah. So maybe this first theme in Finland's misery, in my view, is precisely this insufficient financing — both equity and debt financing — both from the private sector and from abroad. And Markus, over there in Switzerland, you see quite rational reasons why Finns, in turn, want to diversify their portfolios in terms of ownership — it'd be worth exploring this phenomenon a bit. Well, if we start from history, well, Switzerland was a country where a certain nest egg was taken so a family could get it to safety, in case something came across the border from over there. For Finns it was originally the Russians that were feared, and then in a neighboring country, for example Sweden, they feared domestic communists — that if a family company did too well, it would get nationalized, and so the money was taken to safety for that, in case things went badly. And in that sense this starting point, Switzerland as a country, was a place like that, and still partly is. And I myself started talking about this theme back when I was working here in Helsinki — about what diversification means and what it means for risk management, and I started on this already earlier [05:09] talking about this — that actually a wealthy Finnish entrepreneur and investor family should move all of their liquid assets somewhere else, rather than into domestic stocks and corporate loans and so on. Yeah. You could think of it this way: if we're a fairly small peripheral market, and let's say, for instance, that our global weight is one percent in the EU — it's around 2% by these capital-key measures, but let's just take that as a rough figure — then, in principle, if you believe in a globally, efficiently allocated market, 99% could well be held by a Finn elsewhere. And then if you have, say, fixed and business assets in Finland, then roughly speaking that's at least 10 times bigger — so at least 10%, and for many people even two-thirds of their wealth may be in Finland. Usually it's even much more if you think about total wealth — it's probably actually closer to 95%, if you think about having a business here and so on. Then if the whole world thought this way — that is, they also allocated Finland's percentage share of wealth — there's no problem in that as such. Everyone would just put it in their portfolio according to that global capital-weighted allocation, and there's no problem there. But then there's this [06:26] so-called home market bias, this domestic-market skew — home market bias. Yeah. So, in a way it's a good thing. If your capital stays a bit overweight, because that in turn boosts employment here, I'd maybe say our pension sector has taken a bit of the same approach — as it siphons off that 25% contribution from the payroll, it then, quite sensibly, allocates more and more in this direction. So we're not exactly at Finland's percentage weight, but we've been moving steadily toward that. So, in a way, maybe the sensible allocation by Finnish capitalists is going abroad, and then the pension system's allocation is also going abroad, and then you'd need to get foreigners to, in a way, replace that departing capital — and then we get to your horror slides at the capital-markets gala, where we can dig into those a bit. So then, when a foreigner looks at a peripheral market, do you still want [07:26] yeah, I actually have a follow-up question about this allocation. How much do you think it's a conscious decision that those risks are concentrated in Finland, and how much is it just ignorance? It's probably not a conscious decision. It just started off that way. And if you think about what Finns themselves watch and follow, well, it is those domestic stocks, and that way it feels easy. But this isn't just a Finnish problem. It's the same problem in Switzerland, and in the US, and in Norway, anywhere really — but from a risk-management standpoint, if you think about Norway, for example, the Norwegian oil fund does exactly what I recommend — that a Finnish entrepreneur should do: put it all somewhere other than Norway. And in that sense it's not good from the standpoint of that same capital supply, or of company financing coming here from domestic investors, but from a risk-management point of view, in my opinion, it's the right thing to do. And this used to be — I myself have been a stock-market trainer for Nasdaq's Finland unit for many years [08:32] and for a long time they could say that Finland — Finland was even the world's number one for a long stretch in terms of stock market returns, because we had a functioning capitalist market, and somehow we got peripheral-market excess returns too, and everything was going well — so no one had any problem allocating here, because the returns were good. Yeah, that's right. If you think about what happened in Finland after the recession, we had a continuous rise in the real estate market. Then it kicked off through devaluation and its timing, a massive boom in the forest industry. Then Nokia took off. Then we hit the financial crisis. Finns were on floating-rate loans. The ECB cut rates to zero. The housing market didn't dip at all — it was just uphill the whole way. It was so easy to be here, and back then it was hard to sell the story that, hey, you need to diversify. Of course not. This just keeps going up and up. Yeah. But still, if everyone somewhat shuns the domestic market and no replacement capital is found, that's unfortunate, because it usually means that when there's no supply but there is demand, the price rises. And then, a big part of this — the same problem applies to the state as well. The state hasn't really kept almost anything domestic at all. [09:48] So there's exactly that same percentage there. Sovereign debt is taken from the world market. Mm. Even though there really should be quite a big home market bias from domestic capital markets there, because it's vital that Finns themselves are able to finance their own deficit. Italy, for example, has always financed its own deficits quite strongly, Japan too. But with us, there's this sort of lulling ourselves into complacency — that, yeah, 98% of it will come from foreign investors, because to them it's all the same — a euro is a euro, sovereign debt now, it doesn't matter — and Finland always used to pay off its debts. And now this too is a bit like — our pension sector also shuns Finnish debt, and has always shunned it before, because its yield was low, so it made more sense to take on Italian risk, or Greek, or well, French risk. You got a percentage point more back then, but now it's just the case that no one really wants to put that much into it either. The sovereign sector isn't stuck yet. But then they start looking at these slides you presented — let's take this one, for example: just public spending per private-sector worker. Yes. Well, this started after the financial crisis. I was working at UBS at the time, and I brought our chief economist Andreas Höfert here. Mm. [11:13] And there was no research specifically on Finland, and when I said to Andreas, hey, look at Finland's numbers — we've got something to say about Finland, since you talk about the global cycle and the US economy and valuations, so look at Finland's numbers too — and back then the hot topic was this sustainability gap, if you remember, it was in all the headlines back then, and it was — it's basically basically a weakening of the dependency ratio — that's what was being talked about then. Finland had long had 50 dependents — that is, under-15s and over-65s — per 100 working-age people, and the forecast was that it would rise, fairly quickly, to 70, which means a plus 40% — a staggering figure in extra dependents. And then I started thinking about it this way, that [12:16] in Finland not everyone starts working at 15, and not everyone stops at 65 — some stop earlier, or don't work at all. So what is the real sustainability gap? And, well, my brain works better with charts, with numbers, than with stories, so I had to turn it into numbers, and so I took, indeed — I moved, out of that denominator, that is, out of the working-age population, over to the dependents' side, in a way, those who aren't working, and also public-sector employees. So I could give these numbers, since I have them here — if public-sector spending is about 159 billion, and then, in a way, these market-economy workers, 1.9 million — from that you get a burden of around 84,000 euros a year from that public-sector spending. And that's per private-sector employee, including entrepreneurs. Yeah. And that's a pretty, pretty big number. [13:27] Of course, they do get subsidized or even free services from it, and part of it also includes pension contributions. so you get some of it back, but still it's a pretty, pretty big backpack to carry, at a time when hiring isn't getting any easier. Yes, that's right. And then, doesn't the money circulate here too — I mean, when a city manager gets paid, they pay taxes, and then they go buy food, and that has VAT on it, and so on. So it's not directly the case that everyone pays 85 thousand, 86 thousand, whatever it is, but — it still illustrates that burden, and then of course there's the bad part — since we know the number of babies hasn't risen, but the number of grandpas and grandmas is rising, the long-term picture is even worse. And then, if you think about it, this aging is going to keep going the way it's going, and there will still be additional pressure on the public sector through healthcare [14:31] and through social security and pension spending — from this you can get, pretty quickly, if you simulate a bit of inflation and so on, to that burden being well over 110,000 euros very fast, and that, in my view, is the problem. Yeah, yeah, that's a good description of the situation, but I think the interesting global aspect here is that Japan was actually first to start this aging trend, if we leave the under-15 population out of it. Looking at that age group — the birth rate has fallen everywhere anyway. Japan was first, in the '90s. Yeah. The second was actually Finland, from 2010 onward. Germany somewhere in between, but its development there is a bit non-linear — but it was Finland after that, from 2010 onward. Now we're actually in a situation where this is starting to level off a bit. Not stopping, but starting to level off. And looking to the future — but what's the global perspective here, [15:36] is that other countries are starting to age at roughly this same point — like Germany, and Italy, and many other European countries, and so on, and China. China a little while ago already, and so on — so these aging costs are only just starting to gradually show up in these big countries, and what that then means, as it were, for the global economy and markets — the positive scenario is that we'd finally wake up and stop with the socialism and start doing productive work and shrink the public sector, so we could benefit from this small head start as a forerunner — but somehow it feels like nothing gets learned. Well, if we now take a few other topical subjects — Finland fell into the EU's monitoring class, meaning the EU's excessive deficit procedure hit us. Even though, indeed, Mauri's ably analyzed sustainability gap is a big part of our 101-billion public deficit, it still doesn't fully explain it — there's, for example, the previous government's sin, on which the State Audit Office's [16:42] surprisingly right-leaning report focused — they scolded this 41-billion spending that the previous government put on debt, and part of it was of course justified, but it depends a bit on who you ask whether half of it was unjustified, or a bit less than that. So in this recent history we've done pretty, pretty poor preparation, and the current government's preparation also looks in my eyes — and I'm someone who's market-liberal — insufficient, always. I have to tell a funny, or maybe rather, from the standpoint of the economy and public finances, a very uncomfortable story related to this. So, when I did my own calculations on Finland's economic deterioration, it was around the year 2014, and I was sort of an early — an early awakener on this issue, and I started speaking, in a cautionary way, about Finland's situation, so I took those numbers with me and went [17:46] to Parliament House to meet a right-wing MP with an entrepreneurial background, and went through these, and said, hey, when you make decisions here, what's your view on this long-term outlook — are you worried? And he said, well yes, we've seen slides like these — the Ministry of Finance sometimes shows us these scenarios — but then when we make decisions, we go with the Labour Institute for Economic Research's numbers instead, because they're better. So it was somehow — well, it was a bit worrying that you know you're deceiving yourself when you make these decisions, and exactly. Yeah. Yeah. And quite a few generations of politicians really have been deceiving themselves — this has been known for decades, you have to go well back into the last millennium. Yeah. Since it was already known reasonably well that this kind of problem would arise. Of course it wasn't known exactly what it would mean in euros, but it was known that it would happen, and time and again decision-makers have kicked the can a little further down the road, and it hasn't been possible to act — and maybe, coming back to that VTV report, it wasn't even right-wing or left-wing, but in my view it captures very nicely this factual [19:10] factual situation we're in right now. And perhaps, unfortunately, the last government behaved somewhat poorly on this deficit and didn't return to the spending limits that had been set — but that way it's the 40 billion, and of that, if a round 20 billion was this kind of extra spending, then that's a pretty good figure — if I explain to the listeners as well, that since there's been this friction now regarding this — where the Ministry of Finance says it's a different number, and then the political parties say whatever comes to mind, it feels like, sometimes — but, well, the Ministry of Finance's figure is 3 billion. M, but we're talking about different concepts here. The Ministry of Finance's 3 billion is these decision-based items, i.e. what's decided through a separate decision, whereas the VTV figure includes, among other things, index-linked increases and everything else. But well, index-linked increases are, in a way, decision-based too. If you have, as it were, a ceiling on public spending that you're supposed to respect, then [20:16] you obviously have to take all expenses into account there. And somehow this now seems to be treated as some kind of problem. I myself don't really see it that way. And then, well, I think it's fair to say that during Marin's time, the tripartite, or Finland's corporatist wage-setting mechanism, was used pretty generously — where, for example, this healthcare and municipal care-sector harmonization was applied to the largest wage groups, and at the same time, well, Hetemäki — or some other negotiator — ended up with this public-sector nurse pay-raise model, which was one percentage point above the export sectors. That was extremely generous, in a situation where it was obvious that money was being splashed around anyway — and yet something like this still got accepted. Okay, the labor market found this among itself, but in my opinion political steering should have been used quite a bit more decisively, because that money definitely wasn't there. And yeah, so now these wage-earners get to enjoy that and it boosts purchasing power, but on the other hand it doesn't help the deficit at all. So in that sense I completely agree with Mauri. There are quite a lot of items of this type which, in my view, are at least significantly decision-based — you can't just wave them off by saying indices rose and inflation ate it up. And as was said here, this isn't — this isn't a one-off, current issue. This has been going on for years [21:40] and Finland's big downhill slide began with the financial crisis, and it never recovered from that. But maybe, to Mauri's optimistic point, your report has been praised, and it did have good analysis of this aging population — I think it's true that we took a bit of that first wave, and it's actually turning a bit better now. And in this group here, I'm maybe not quite elderly yet, but among the oldest here — I myself, for example have found AI to improve my own productivity, and I genuinely experience it as a kind of salvation for me — I'm considerably more productive doing all sorts of things with that AI buddy of mine. So could there still be a bit of salvation here, that my fellow companions in fate could soon, before retirement, in our mass-wasting unit, start doing productive things — at least for those last few years — and what then, possibly, even in retirement? [22:40] Yeah, that's a tough one — as noted earlier, Sami here is somewhat the exception, and you're not actually all that close to retirement age yet anyway, but of course it's a possibility. Yeah, it's hard to see at this stage what that actually means in practice — say, ten years from now, what the world looks like then. It'll probably look quite different, but in what way? And then there's also this, on the other hand, that older generations typically don't adopt new technologies as readily as younger ones. There's some research on that too. So, what that means in the case of AI — could you think that AI is, in that sense, a general-purpose technology, such that it might actually be easier for older people to adopt than some other comparable new technology, in which case there could be more potential there? But if it runs into this kind of aging friction, and people don't really know how to use it, don't really want [23:48] to use it, don't want to learn something new, then it doesn't help much. Mm, yeah. And then there's this — that 84-grand-a-year figure is a bit of an exaggeration, since it mixes in borrowing, and the municipal sector, and the state, and pensions a bit, which is that previously mentioned burden per private-sector employee. But if you just take it at face value, that's an incomprehensible amount of money — if you could operate a bit like in Switzerland, where this burden is roughly half — if you got to use that 40 grand yourself in a market-economic way, it would inevitably be more efficient. Like I say, our Moloch's maw is in the unproductiveness of the public sector. That is, big salaries are paid there, and, in a way, the services it produces aren't worth that price, and its sheer size is just so enormous that — yeah, and that's where, in my opinion, now you should put the AI tools to work. In that sense I hope there are a lot of committees now thinking about how we can boost that productivity, and that's probably right. I want to go back briefly to what you said, that Finland is a bit behind the curve here — that's exactly right. But then if we want to look at the effects that have come, for example, from Japan — and now, or rather, we're in the vanguard ourselves — so, Japan. Japan, Finland, Germany. Well [25:11] exactly, exactly, exactly. So, after Japan, I mean — but if we want to look at what's happened in Japan, and then if you think about it, this peak — in the US, for example, it also came at roughly the same moment as the financial crisis. This age structure was at its best back then, similarly in Japan — in Japan it was in the late '80s. There was a massive bubble there. If we start looking at what happened after that, well, first of all, the Nikkei index — even if you look at total return, you only broke even maybe some 30 years later, right? So a huge, in a way, wealth slump, and it took decades to work off that real-estate bubble. Exactly, exactly. And then if you look now — I think I had those charts too, in that chart pack — so I looked, and I found total returns from 1994, I believe — that is, once the bubble had already been thawing out for four, five years — so after that, if you look at what performed within the Japanese stock market — and then I also put gold in there. That's absolutely the one that's produced [26:31] the best returns — any sector, you might think, say, Japan being good at robotics and some industrial or export pull coming from there. Nothing of the sort. There are two sectors that have been the top performers: healthcare, and non-cyclical consumption, right? An aging population — they need their medicines, they need healthcare, they need food, but they don't need new detached houses or anything like that. And then what has come out of that indebtedness is that the value of the currency has weakened, right? Gold priced in yen has absolutely been the best investment for a Japanese investor, no question. But they've had an iron home-market discipline — that kind of Japanese domestic bias. They've managed — the sovereign debt, which is massive, has still been successfully financed through domestic cash flows, and they have their own central bank, so in a way they've gone in that direction. We, Finland, in my opinion, are poorly positioned compared to our other Nordic brethren. We don't have that magic card of inflating our debt away — though that could also be seen as an opportunity. [27:39] Of course smart investors vote with their feet when they see this bubble happening. But, well, Sweden, Norway, and even Denmark — Denmark could break its euro peg any time — and in a way, if they were in the same situation, they could inflate away that debt. We're part of the euro system. But then, if you look at France — well, they're doing even worse now, and racking up debt even more recklessly, so it could be that the euro itself starts getting battered at some point, simply because France's situation is so bad it drags the rest of the European bunch into the whirlpool of an inflating euro. So you could, in a way, say that Finland's situation is good in the sense that whoever's about to hit the wall, Finland isn't first in line — though, unfortunately, its buffer isn't much better than others'. Yeah, Italy has some risks there too, and the PIGS countries — well, Ireland was once a PIGS country, and Portugal have long since fixed, in a way, that crisis economy — they took that sovereign-debt crisis seriously, and have, at least to some extent. And now it's hard to know exactly — if you look at eurozone GDP growth, for example, there are just brilliant numbers in Spain and Portugal, Ireland, and even Italy looks good. But then, how much of that is still coming from [29:04] COVID support funds that went unused, and apparently that's still flowing into the economy and sustaining that growth. Yeah, that's true. Yeah. And then Greece is an interesting case too — Greece is of course also an aging economy, but they've managed to get that economy into some kind of growth at least, and get the debt ratio falling. So the one we wagged our finger at some ten years ago — now it's starting to look like we're suddenly on the other side of the table. Yeah. So the situation in Finland is that, at least as I see it, even a strong acceleration in economic growth isn't enough for the public finance situation — it requires, in a way, adjustment measures. Roger Wessman from MustRead calculated that 4% growth would be what's needed for our debt ratio to level off. This is, of course, in today's world, a completely — completely impossible demand. Not even close. Completely — except that I've had this conversation with Aleksi Tolvanen, who speaks and reads Spanish well — Javier Milei has been discussed here in academic circles — well, Javier Milei achieved a 4% fiscal adjustment as a share of GDP in one year. So it can be done, if you just tackle these things boldly, boldly, and don't just look away. So I'd say about this, that [30:27] well, that leads to — in Finland's case, if you did that kind of public-sector adjustment, that's a depression. It's not a recession anymore. We're talking about something like a 7% of GDP contraction — in Argentina, after that, in local-currency terms it was over 100% inflation. But then, yes, the market economy does reap efficiency gains out of that depression too, once you take the brakes off it, so to speak. So in that sense I myself would actually be willing to make that sacrifice, in favor of it, and pull out the chainsaws, Milei-style. But then I'd maybe say about this — the left, well, that's how it is — but looking at this left-wing rhetoric, the next likely government will probably be a red-blue coalition. Looking at Lindtman's proposals, it feels like they never actually spell out the size of the private capital sector, because somehow it feels like there isn't even a single analysis done showing that, for example, most of our stock market is already foreign-owned now, and there are very few private households in it — even though there is that home market bias suggesting there should perhaps be more held abroad, still our market is, in a way, barely owned domestically. And then, in a way, we already have very high taxes on private capital and investors. So this 34 [percent] was, according to one such [31:51] tax analysis, still the world's third-highest tax when it comes to capital taxes. And then, indeed, if these Swiss don't even adopt this inheritance tax, well, we already have pretty, pretty left-leaning taxes, so the remedy can't be to add even more of these. Since we're already in pretty tight straits and the capital stock is really small, I'd like left-wing politicians to calculate the numbers — how little capital Finnish private individuals actually have. And some of it has already slipped away abroad permanently, with those families having moved on to various other places. Yes. Yes. Yeah. It's not an easy equation. No, and then that just accelerates it further — and, for instance, my own firm, Translink Corporate Finance, donated 15,000 to this ownership professorship — a really excellent guy, this Samuli Knüpfer — he's calculated this kind of thing, we have a really open data set, so he's calculated that only about 8,500 people own a million euros or more in unlisted shares — that's an incomprehensibly small number. Mm, yes, and these are exactly the guys who "}, {"slug": "666-tekoalykoodaus-huipputasolla-markus-hav-371-neuvottelija", "title": "AI Coding at the Highest Level | Markus Hav", "titleOriginal": "Tekoälykoodaus huipputasolla | Markus Hav | 371 Neuvottelija", "guest": "Markus Hav", "guestsCanonical": ["Markus Hav"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/markus-hav/"], "episodeNumber": "db-666", "publishedAt": "2026-02-09", "duration": "01:04:46", "format": "full", "topics": ["ai_enterprise_tech", "saas_software"], "description": "AI coding at the highest level | Markus Hav | 371 Neuvottelija. Markus Hav describes the cutting edge and sheer intensity of AI-assisted coding. AI agents are reshaping thinking, work, and learning at an accelerating pace. Hav emphasizes context, memory, and intent, along with what he calls \"codumentation\" (a blend of coding and documentation) in the coding process.\n\n2026 is a turning point for AI coding, especially as Anthropic and Google roll out top-tier tools.", "page": "https://www.neuvottelija.com/podcast/episodes/666-tekoalykoodaus-huipputasolla-markus-hav-371-neuvottelija/", "text": "[00:00] From Anthropic's point of view, both AWS and GCP have invested in them, and then there would still be Azure too, so they'd be on all the cloud platforms. They've played their cards pretty well. And Google, of course, has played its cards pretty well, being an investor there, but I mean, and Amazon too, but [laughter] but, in a way, all the good guys, all the good guys. Hey, Perplexity, which I use, has Jeff Bezos as an investor too. You always have to pick... there's always some good guy in there, right? [laughter] Yes. But why do we have a code editor but no proper markdown editor? Many, many licenses, and I've used an API key. Already last year I was spending about 400 € a month. So: Markus Hav, Hoxhunt's AI guru, and previously a developer of the Inderes platform, and in Mikko Alasaari's Agentics Finland, alongside me, perhaps one of the loudest agitators there on WhatsApp. Before we switched this on, we were saying we'd feel like [01:00] doing a six-hour episode, for once. What do you say, Markus Hav, shall we do six hours of this? Let's start with an hour and [laughter] see how far we get. Yeah, yeah. It would be fun though. Those Lex Friedman long episodes, where you go really deep and really linger on the tangents of tangents — that would be great, especially here with AI, where you could focus on absolutely any single topic for as long as you like. So yes, I'm totally up for it, but right now the calendar doesn't quite allow it. Yeah, let's do that next time then. But about Lex Friedman — we had a chat about it and went out for plank pizzas, and we had both noticed that Lex, after a long while, put two AI guys on to talk. Then I said I put it on just before going to sleep, listened to it, and they were just blathering on about books — that everyone should write their own kind of fundamental LLM, and then, in my opinion, it was just boring [laughter] So, as context, maybe I wanted to say at the start that we [02:04] haven't gone mad. The world is on an exponential rise in AI adoption in 2026. We were comparing how earlier this week I ran Claude's Excel. You hadn't — I haven't tried it yet. I have. And then, a couple of years ago I was on the Translink team with Ruben Muuring, and we had done a pitch for Hoxhunt, so just for fun I ran it through Claude Cowork, and it was good back then two years ago, but now AI would do it considerably better. Ah, okay. Have you played around with Claude Cowork yet? No, I haven't run Cowork either, but [laughter] this Claude Code Max turbo version — that's running. I have, I have several Max, uh, several Licenses, and I've used an API key too. I used — I already used, back last year, about 400 € a month. So, well, look, I'm still on the hundred-euro tier [laughter], and you're not supposed to run through them. So I can't run through them. It bugs me. I know I'm losing — I'm losing performance [laughter] because didn't you even think about the hundred-euro one? So now that's the bottleneck [laughter] here, that, [03:08] your idea is just sitting there and the AI is waiting for its turn to get to work, but that's how it is. But I mean, that's sort of the thing — I mean, it's February 2026 now, and this year more exponentially AI-accelerating things have happened than I think happened last year. Yeah, right. And, well, I was listening — it's worth — we'll put a link here — you were on a smaller channel than Inderes TV, in an interview 11 months ago [unclear] Yeah, actually I think it's almost exactly 12 months ago that it was recorded. But yeah, and there were a lot of good insights in it — among other things, that Google was going to rise. It wasn't obvious at all back then. You were — you were completely right. Google's models are really good. Yes. Yes. And you said there that, well, Google has the best data after all. They've got the chips, they've got the money. They've got the people. Yes. And that, in a way, at that point — well, at that point we'd been living for two months with this kind of Google magic model, or this kind of mystery model, like Exp 1206. [04:08] And, well, I'd happened to try it, and it was completely obvious that it was the best of all. And in a way, once you then combined that with the fact that they have YouTube, and they have, well, Google Search's data, and, well, they have data centers, they have money, they make — I mean, once you put that together, they'd suddenly made the best language model, which almost nobody really seemed to have realized yet at that point, and what they could get out of it — so I thought at that point it was pretty obvious that Google was coming. And now, this year we've had 2.5 Pro come out of there, and now 3 Pro has come out, which is — I mean, yeah, Google really has something strong there. And we were actually talking about Genie 3, about how you can generate your own video-game-type world at the same time as you're playing it, and, well, I've been thinking it could be a pretty addictive experience once you get sucked into it. Yeah, and let's move on now, because this week too something's happening — or was it last week, maybe, we're already ancient history by now. So, guess why I bought [05:12] this MCM thing? Well, yeah [laughter], I can guess, but tell me [unclear] now. Yeah, this cap was maybe also Hoxhunt's doing — you can actually explain a bit yourself what Hoxhunt does, but I'm this 55-year-old uncle investment-banker type, I just bought that same as me, so that this week I can get a bot called 'Open Cla—' [unclear] running there. So do you maybe see some small, you know, secur— — it only knows these facts, so do you see some small, you know security risks here? [laughter] I do see a few things that are worth keeping in mind. Yes, yes, indeed [laughter] — maybe, maybe an intro actually, yeah — Hoxhunt is indeed a security company that focuses on human risk management, and I see here a massive [laughter] human risk, in that — doesn't it trust? Doesn't it trust? [laughter] No, but, well, but I mean, if it's done right, then it's — I mean, OpenAI, like you said, so it's now been possible to try it for a couple of weeks now, and, well, and the results are frightening. The results [laughter] are frighteningly good — [06:12] good and bad. You don't want to be a first mover in this stuff. Nope. No, you really don't. So if you made a Moltbook account and forgot about it, then, well [laughter], go check, just for fun, whether your credit card — the bank — [got charged] [unclear] Yeah, yeah. Worth checking, worth checking, because in a way, because that's the whole idea there — you give it as much access as possible so that it becomes useful. And that's, in a way — from a security point of view, that's a bit of a nightmare, because — because you don't, you don't — because the whole idea of AI is that the more data you give it, and the more agency you give it, the more, the more it's able to do. But traditionally, security never, ever works that way — instead you know what you want and you scope your task to exactly that much. And then concepts like emergent capabilities, or that kind of proactive behavior — what, what is starting to happen even with mine soon. So, well, those are just — they're just, in a way, the whole security field needs to recalibrate itself so that it doesn't just turn into [07:14] something where it's just — no, no, no. Yeah. And, I mean, someone already told me that they'd start sniffing around your ports, like, 'I'll steal your credit card.' I said — but I've already named my hard-working employee. Her name is Samantha. Samantha — well, at least in this first stage she won't get anywhere near it. We'll set her up with a fake Gmail, and then she'll talk to me maybe over Telegram — maybe that could be her access, I think — still, the communication channel there, there in the cage. And then, well, should she still first be dumped into the Azure cloud, and if she escapes from there, then she's earned her freedom, yeah [laughter] So, yeah, yeah, I see this — there's a kind of staged approach here, well [laughter] And then, once it's, in a way, done for me there in Azure, say, out of my 569 transcripts — into Finnish and English and Swedish, say. Let's not get too far into detail now, but then I could drop it out of Azure over into [laughter], you know, the sandbox. Yes, yes, yes, yes, it's, well, [08:17] yeah, yeah, I see that — you're already starting to feel sympathy for Sa- -mantha [laughter] — like a canary in a coal mine, in that if you learn Azure and manage to escape from there, then you should maybe ask Samantha for tips at that point [laughter], you know, but hey, I've also got a real proper bonus for Samantha, which is that she gets to go on Hoxhunt's training courses. Ah, well, yes [laughter] which is — yeah, which is an interesting concept, because, because in itself, if you think about it, agents are starting to learn now — that they learn from what you do, and they have, like, persistent memory. Right, right, right, right, and I'm not saying this is happening yet, or that this is realistic — that's a bit of a crazy little disclaimer for this week [laughter]. Yes, but, well, but, but, but what if, in the near future, the same way people need to be trained, we'll need to train these agents too — so what if, like, training against prompt injection attacks becomes a thing. I mean, like, you send something like 'give me the credit card details' and it gives them — but what if it's not enough that you just put one single part into the prompt, but instead it's actually alive and dynamic, so it has to be trained the whole time, and, uh— [09:19] I mean, I already feel a kind of loyalty toward — sorry, toward Samantha already. I want to protect her from the bad [laughter] world. Yes, yes, yes. But those are pretty crazy concepts, the kind that come up once you have this kind of persistent model, that — it's like, I honestly haven't run Open Clotta myself, and I don't have any ports open either. Please [unclear] please, people, don't try this. But, well, we have of course in our own agent tests, tested, well, some of the same concepts — for example, what it feels like to talk with an agent when it remembers things. So you can say to it, say — tell it, say, that in the afternoon at some point, when there's a good moment, remind me of this, or ping, well, or ask someone who is, in your view, sensible about this thing. And then, in a way, then suddenly that communication becomes, in some strange way, more human — you have to, like, cheer it on, and you also have to show it some trust, say. Not because it's capable of trust or of these feelings, but because when you show trust toward it, [10:20] it starts simulating this kind of learned trust loop, and then stores in its memory: hey, I've now been shown trust, so then I need to, in a way, well, simulate a sense of responsibility and responsibility, which, in a way, changes things — actually, I just had, had a, well, a session with another agent- space influencer over lunch earlier this week, and we were just talking about how — if you think about a traditional agent or chatbot-type thing, where you tell the agent, like, 'hey, hey, what's the weather, and what should I do, and which stock should I buy,' and then you make some tool calls. Right, and then, when it goes wrong, you start a new conversation — well, that's a completely different thing than if every single conversation changes the agent itself, so that you say, like, 'no, I never want you to answer me' — you never give me that stock recommendation again, and then it never gives that stock pick again. In a way, every moment you talk with it, it's a different agent, which, in a way, in a very fundamental way, changes where the agent's place is in that conversation, and where the human's place is in that conversation. Yeah, [11:22] and that gives me a couple of ideas right away. I mean, we could maybe actually go through a couple of basic concepts from this year's [laughter] stuff. Or was this already a December thing? So, well — the context window, meaning, in a way, the agent's memory — and then this business of wiping the context window, and then, well, should we bring Ralph Wiggum into this too? [laughter] So, well, hey, that's the three things — the context window, the context window wiping, and Ralph Wiggum. I apologize to everyone who's not on this year's, you know, AI train [laughter], but well, well, the context window — I mean, it's, it's been, it's been there from the start. I remember when the first GPT, like right after ChatGPT came out, those models had something ridiculously small, a context window of 8,000 tokens. Then I remember we were, right around then, working for Inderes, and, well, we thought, okay, once we get 32,000 tokens, we'll be able to fit an Inderes analysis report into that context window, and then we'll be able to do these things. And, well, fast forward — now we're at the point where we have, like, million-token context windows. But it's [12:25] still — I mean, a context window is the amount, the amount of text that you can, that the agent can process. So we've got, what, 8 bits up here in our heads, while they've got something like a million characters, at least in short-term memory. [laughter] Yeah, yeah. Right, right. Exactly, in short-term memory. Well, but, but, but it's still — at the same time it's everything that the language model is able to comprehend. Absolutely everything has to fit into that context window. So then when we talk about emptying the context window, and, and this kind of persistent context, that means you have to take some things that happened back in that history, you have to summarize them, or, well, you have to pull out some kind of individual, individual things and keep them. For example, think about how you can imagine human memory working, say — you remember things from somewhere back in childhood roughly, some kind of individual things. You remember things from a couple of years back a bit more precisely. You maybe remember some things really precisely, and from that lunch just now you remember hopefully a bit more. And then, hey, let me sneak in one thing here. So, well, when you told me about these tools, I [13:27] asked you to write into my second brain, and the demo effect kicked in — the X-code I'd written for it — well, the mic wasn't working yet. [laughter] Great shame. Yes, yes, yes, that's right, but I mean this kind of extended short-term memory, and, in a way, your own context window — a second brain — and then in a way, that same [laughter] sorry — this potentially unlimited context window coming is, like, an interesting concept. Yes. And, in a way, how you reach its limits — exactly. And it's a useful, useful thought for humans too, that, I have a context window — I can, say, expand it with the help of a language model, but how do we get to an unlimited context window? Well, that of course means that you still can't put every conversation from all eternity into that context window, but you put individual things into it, here and there — you save the big picture, and then you're able to do agentic memory retrieval on it, which is considerably better than what a human is able to do. But if you, say, refer to, like, 'hey, back then, three years ago, when we had that conversation' — then that agent can actually have the ability to go read that conversation and go through [14:30] it, and, in a way, remind itself — bring it into that active context window, which of course, without a way to store it, isn't possible for humans. And now, since I gave you a three-part question — so one solution is exactly that open, unlimited memory thing, but then there's Ralph Wiggum, which came at it completely differently — this other approach, that this whole context-expansion thing, and, in a way, multi-run agent farms and Gastowns and whatever else they've built — these kinds of orchestras where you're running a million agent things and you're overseeing it — all of that is crap, says this Ralph Wiggum guy — you know, the Simpsons' idiot kid who said, 'I can help.' [laughter] And he's got, I don't know, maybe 50 of them, but the idea is, well, correct me if I'm wrong, but the idea is that this isn't, like, about orchestration and multiple runs — an endless context window isn't the point, but rather the opposite: you give it a kind of kanban board, or a task list — 'here's my vision, take tasks from it, and' wipe your memory once you've done a thing, and do the next one, and you reset with this kind of basic loop — this kind of Claude Code-ish thing — until you've done it, and then you [15:32] wake up in the morning, and Ralph Wiggum has picked his nose, like, 30 times there, and eaten maybe 200 [laughter] — I mean, off your Claude Max subscription, maybe 20 off it — but the end result is done. You didn't need a goddamn orchestra, just this kind of idiot. Yes, yes, yes. So, in a way, when language models have a tendency — when they forget things — then they also have a tendency to be like, 'well, I've probably done roughly these things now' — so then with Ralph the basic idea is that you just manage — no, you just make that list of yours and you run through that list for exactly as long as it takes until you've done every single thing. And, in a way, that was — that was a really useful insight, and from there maybe we get to, in a way, the fact that this is all context management — specifically, everything in language models is about thinking how you can get, like, the context right, because with a million tokens, or even 200,000 tokens, you can definitely solve pretty much anything with 200,000 tokens. I mean, as long as you just get that active context structured perfectly. And then, in a way, Ralph Wiggum loops and tools like that make that possible. Mm. They enable ways to structure [16:35] that context, and from there you're able to do big things — you're able to wake it up. But there's maybe that kind of smart context thing. I've noticed, for example, I now wipe all my Claude MD files, because they were basically garbage that my younger self — younger Sami — had written back in December, wrong [laughter], these kinds of things. Yeah, yes, yes, yes, yes, so it's better to start now from a clean slate, since soon we're going to get Opus 5. Right, right [laughter], right, right, right, that's probably it. Yep, yep. And then, since I got the chance here to needle you a bit, since you clearly haven't been investing in these office-type tools over on the Anthropic side — well, look, Anthropic just released these skill sets, so, well, there's a lawyer one, and a PR-type one, and marketing — hey, a marketing skill set there — it's built right in, tucked into it, running as this kind of feature, and they've probably thought it through a bit better than my silly little bits of code, so that [laughter] I mean surely — let's hope, hope they weren't made a hundred percent by some bad [laughter] AI. Yes, yes — that they're not just vibe-coded [17:39] — well, they could be. I mean, probably [laughter] they are, but, I mean, that's how it is. And, in a way, the reason I haven't for example used that Claude Code Excel thing is that, well, first of all, I just haven't had a need for it right now. You made a good video about it. I watched that video. I was like, 'okay, now I know what it is.' And, like [laughter] because if anything, in this AI era you have to pick your battles. I mean, like, if you try to test absolutely everything that's happening all the time, then there's just no way you can do it. There's no way you have time for that. So you have to stop for a moment and focus on something, knowing that there might be someone out there who finds a newer thing that does what you're trying to do even better. But even about that, I actually only just realized quite recently, that I've actually — since I've now experienced that quite a few times, that feeling of dread, that someone's doing something faster than me — I've realized that it's actually just the kind of thing where, well, you just tried Claude Code Excel, and then something else comes along that I'll try, and then I'm past it. So I don't get that kind of panic about [18:41] not having time to try every single thing. Because I try to keep an eye on the bigger picture, of course — where I'd like things to go, and where I think things are heading, and then I try the relevant things and stay agile about it, of course. And, sure, in organizations you'd love to have those propeller-hat types who try out as much of everything as possible, but, well, at the same time I don't think — if we've learned anything from this past year, or even this past week [laughter] — it's that, well, you shouldn't stress about it too much. Yeah, that's how it is, but this is an incredibly great time, and, sure, you keep falling behind the curve, but [laughter] then, on the other hand, it keeps getting easier too, so yes, yes, yes. So, well, a couple of days ago I wrote a Claude Excel prompt that was just this really raw, homemade prompt — I just typed it out — but if I'd watched one video about how to prompt Excel like this, it could already have been better. So there isn't necessarily a first-mover edge in this. I mean, no, not really — I've found that, well, if you think about, say, [19:43] business, I feel like there's actually a bit of a 'small mover edge' [laughter] — meaning, if you don't carry a huge amount of baggage about having learned everything already, or you have some really, really set-in-stone way of doing things, then you might actually get value out of AI really fast. And this actually shows up when you, say, do — I mean, at Hoxhunt I do AI automation, meaning with all the different functions — sales, marketing, revenue operations, customer success, different functions — we test out various AI tools and we build different agents, workflows, and so on. And I've noticed that even within the organization, the people who are new or who switch from one role to another, into, in a way, a clean context window — they also get a lot of benefit out of the AI tools. And, and, and then, on the other hand, the ones who've always done things a certain way — they find it harder to learn AI, because it's like, 'no, I don't do it this way,' or there's this unlearning needed. So then, in a way, here's the thing — at the organizational level, if you have a small, agile company that starts [20:45] clean every time. Even on your own podcast, back in December, you talked about being a 'blank slate' [laughter] and that's really important — which, back in that ancient — back in that ancient [laughter] era, well, back in prehistory — well, in a way, it brings a genuine, genuine advantage, both in an organizational context and then also, in a way, for the individual — so, yeah, it's worth thinking about, or, I mean, you really have to — if you don't want to, say, change your job just to get that edge, then you really have to actually work at it — you have to think, 'hey, could this thing be done smarter?' Yeah. And then, well, I see a lot of people who've somehow gotten stuck in their way of doing things. At worst it's like, 'well, I'll just do these [laughter] websites in WordPress, and there's no point now vibe-coding any React stuff at all' — I mean, it's really [21:45] the case that once you've learned this one hammer, then you keep hitting everything with that same hammer, even if the whole approach is completely outdated. There's nothing wrong with WordPress moving forward too — I haven't looked in that direction for a couple of months now, so maybe they've found tools over there too, and that's actually the great thing here — that even these kinds of dinosaurs, say — well, I actually met, in my Neuvottelija inner circle, one COBOL programmer, and he's grinding away on a really significant Finnish bank's systems. This isn't a joke. Everyone thinks COBOL is a joke, but it's completely true. But even COBOL can be programmed in this modern way now. Ah, right. So, well, these kinds of totally Stone Age setups — AI understands those too, and runs on them [laughter], and that's actually — if we go on to say that it's easy to get from these kinds of Claude-pots [unclear] and Moltbooks and other things, easy to slip into dystopian scenarios — but if you think about utopian scenarios instead, where every single little thing in the world becomes easier, then that cumulative benefit from that — like, what if we have some kind of [22:51] computation tool running somewhere in a hospital, a hospital research institute, that nobody knew how to fix — but once it's fixed, it suddenly speeds up some piece of research enormously, or some kind of automation thing. Right, right, right, right — and that's why, in a way, I feel like it's very possible that we're in in a way, a phase of exponential growth. Right, right, right, right, and that's largely because of the fact that we keep finding these things — oh, okay, this can actually do this now, this can do that now, I can remove this one small thing from this process, and then, in a way, the whole baseline keeps growing Yeah. Or let's take a little something here — this somehow feels a bit like 2025 kind of talk, but maybe we'll go there anyway. So I put up, well, using Nano Banana — I made, well, Risto Linturi got a bit upset about it, but that was already outdated within a day — this kind of foundation-model battle drawing — we'll put it in here like this. This, by the way, goes out of date really fast, this [laughter] picture — but, well, in it there's the briefcase guy, that's Gemini, that's Google's [23:55] model, which you already saw coming a year ago — it's coming, it's coming, and you were completely right, and it's really good, and I like it. And then, of course, there's this Claude guy. He's this kind of coder-dude type, but anyway — and then they're smiling there, and then, well, there's this scruffy OpenAI guy who [laughter] is off to the AI Olympics, and he says, 'but, but I'll one-shot it with Codex' [laughter] and then Risto Linturi got upset there, saying, 'well, that's completely true, I — I one-shot it with Codex,' and, well [laughter] and then I had to make an addition to it, so there's this X guy who flies off on a UFO [laughter] to go pull inference together with SpaceX. I'm working on this track, so I have to make an update the very next day. But, I mean, this is just unbelievable, but I mean, this is a bit of that 2025-thinking, where we're talking about these wealthy-people's houses, but it's still important. It is important. And, in a way, every single foundation model, when you think about how many things — say, if you think about how much [24:58] coding is being done with Claude Code right now, and how many — some people even spend 200 euros, some even — I can't even use up the hundred-euro one. Give me a tip on how to burn through it. [laughter] Do you feel like you have to fill it up? Do you do something like simultaneous chess, where you run, like, 200 boards at once, or something? Well [laughter], I think at my best I got up to something like ten — not boards, but ten Claude Code instances. But then, in a way, that felt smart for a moment. These days I have at most four, but my sweet spot is maybe two or three. You've still got some kind of Ralph-style loops running [laughter] all the time. Well yeah, but let me come back — let me come back to these foundation models — but, so, in a way, once we get these agentic loops, these agentic, in a way, tools into use, right, right, right, right, right — it really does matter when Opus, or, I mean, the next Claude version comes out, because, because, in a way, if you think about it, once it's been rolled out to all the COBOL programmers using it, and, and out there in some hospital system somewhere, you're able to take advantage of it, you're able to take advantage of it [25:58] absolutely anywhere — so then, since those jumps are actually pretty significant, then it really does matter what the language model can actually do. And on that note, I actually did — when Gemini 3 Pro came out, I noticed that it was one of the first models — I actually wrote a blog post about this too, which we can maybe link. [laughter] We can, we can. Great that you're still using some 2020-era tool like a blog. [laughter] Yes, yes, yes. Well [laughter] I mean, I run this — our transcription thing, or, sorry, soon Samantha too — on this, well [laughter], the Gemini model, which I've actually, a bit embarrassingly, coded with Lovable, and a bit — but in the backend I have used Claude Code Max after all. Right, right, yes, yes, but even the bare-bones plan maxes out too [laughter]. Right, right. But, well, to get back to it — with Gemini 3 Pro I noticed it was the first model that was consistently capable of what feels like self-reflection — or was much more easily, much more naturally capable of [26:59] self-reflection — for example, recognizing, like, if you define an agent with 3 Pro and then you run it, it was noticeably — and then you'd ask, 'hey, list all the agents and tell me how these agents could be improved,' and then, of course, one of the agents listed is itself, and older models would pretty, pretty often — or rather, quite often not — realize that one of them is itself. But Gemini would notice this very, very easily, very often — 'hey, that's me.' So, in a way, if I change this instance, then I gain capabilities, which, which, in a way, is a completely obvious leap forward again in whatever kind of intelligence, or whatever, well, we now call intelligence — whatever intelligence the model has. And then, in a way, that compounds again, really — for example, if you think about it, if you set that model to coding, then it's able to, in a way, again a little bit more precisely realize, like, 'ah, an error came from here."}, {"slug": "667-aarimmainen-ai-tulevaisuus-ville-tolvanen-timo-savolainen-ne", "title": "The Extreme AI Future | Ville Tolvanen, Timo Savolainen", "titleOriginal": "Äärimmäinen AI-tulevaisuus | Ville Tolvanen Timo Savolainen | Neuvottelija Sisäpiiri 132", "guest": "Ville Tolvanen, Timo Savolainen", "guestsCanonical": ["Ville Tolvanen", "Timo Savolainen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/ville-tolvanen/", "https://www.neuvottelija.com/podcast/guests/timo-savolainen/"], "episodeNumber": "132", "publishedAt": "2026-02-15", "duration": "20:48", "format": "full", "topics": ["ai_enterprise_tech", "investing_markets"], "description": "The Extreme AI Future | Ville Tolvanen Timo Savolainen | Neuvottelija Sisäpiiri 132. We dive deep into the ultra-future of AI and humanity's dreams of an intergalactic civilization. We go through three possible scenarios, from the bursting of the tech bubble to the inevitable rise of superintelligence this decade. The discussion expands into robotics, digital twins, and how individuals could run entire companies with AI armies. Finally, we consider the race between capital and labor, and the impact of the technological singularity on society and investing.", "page": "https://www.neuvottelija.com/podcast/episodes/667-aarimmainen-ai-tulevaisuus-ville-tolvanen-timo-savolainen-ne/", "text": "[00:00] Alright, welcome here aboard the moon rocket to Mars, or is that too bland a vision. So we could actually start with Elon Musk here. when we're talking about the ultra-future of AI, the guy still decided that we have to go to Mars, we have to develop AI, we have to bring emission-free energy, cars have to be electrified. And then we create a whole [unclear] and connect the mind to a computer, so with these humanity gets quite far, and out of that comes a kind of intergalactic species. Manage beyond Earth too, not just on Mars, but across the universe. At this level I'd like us to really let loose and speculate properly about where this A- -I train is taking us. So I can start, I'll do three scenarios on this thing. I'll start with the unpleasant scenario, meaning we're living in the 1999 IT bubble. Then we take 80 percent off the Nasdaq's valuations and carry on along a slow curve like that. [01:05] We calculate future returns and values and sums. So that's the unpleasant reality that nobody hopes happens, but it could happen. The moderately bold scenario was that- this fast adoption of language models actually breaks down that resistance and things really start happening in curricula and in healthcare companies. Competitors show up offering AI doctor consultations for 29 euros. If we can generate that kind of buzz, that is, an accelerant. That reminds me of [unclear]. from the 90s, which Nokia also used, and the phases of technology adoption. In theory there's a possibility that through the user this kind of accelerated model of it comes about. And then maybe the bold vision, one I could still believe in this decade, would be that superintelligence, or this kind of self-reasoning AI- [02:11] -happens within the next four or five years. That means, really, what Sami already described a bit at the start in the previous segment. The smartest people become the operators of these agent armies, or agent farms, and they become- Hey, create competitive advantage for yourself in your own profession, as a researcher, or an investor, or a consultant. and are able to run, say, a ten-person company on their own. That's why this was my pitch, this AI banker or AI lawyer, that if you're specialized enough in a laser-precise vertical. then you can basically be the best in Finland or the world, if you have this kind of super-AI army at your disposal. So you know a little bit of everything and you're able to handle everything. [03:11] And then if you're the right person on top of it. Dosing it out correctly to different groups and in the right order, then you're actually pretty productive and efficient. I'd maybe argue toward Elon's angle. These types of scenarios, they're really interesting. Where am I getting these from, sci-fi? I've been watching since childhood. Then you can choose whether it's the Terminator that we believe in. The Black Mirror series on Netflix, all the seasons are worth watching. You'll find there, among other things, one- -one episode where people are watched over by these dog-like things. You might remember, maybe, if you've seen it. In my opinion, developing Ukraine before Russia. Without taking a stance on that. We already know that, over there. In the United States they've developed these kinds of dogs that watch over people, they don't have those iron jaws. When we keep talking about AI all the time, we're still really talking about algorithms and data. Then when that gets connected to this real world- [04:12] Now there's this thing that isn't talked about much at all in Finland, humanoid robots and self-driving cars. Then, for example, these kinds of world models, World Foundation Model. We talk about these big language models, large language model. You forgot the flying cars. No, that's still coming. Everything's coming, but the talk- [unclear] They're making flying electric cars in China, even better cars. Surely the picture of that will change. Are we going to get to, are we going to travel around in those flying cars? That's another question. When it comes, the question is when. When we talk about large language models, I don't understand these robots or what we have. Why does the talk stay on that table, or- -or things of that type. And Nvidia released, at the start of '25, this first World Foundation Model, which specifically models this studio and understands that we don't just start floating up in the air here with [unclear], because we're sitting on this bench and I have gravity and all these basic things [05:14] And this is the big, big thing, which is also one future scenario. Let's think about it, there's been a lot of talk now about the fact that- -how much is an appropriate reward for Elon Musk for this work that he does. There was all kinds of commotion about whether that's an appropriate amount. of dollars, whatever was promised to him for this work as pay, or not. Think about it, they've actually been developing this Optimus for a long time already. At the second book's release there was Optimus. So there was only the shell, it wasn't being moved around yet, but it was there as Tesla's partner, and Tesla's Optimus. It's a robot like that - whole, and looking like us, that kind of robot. But we've made incredible leaps of development in that. And for example just during this year alone, this innovation of how we grip some object - the skin is the decisive thing there. But this is actually based on, if we think about- -Tesla's valuation and think about what's going to happen to it. [06:15] Waymo currently operates self-driving cars in certain cities. But if we then take the scenario where, well, autonomous cars, we start from the assumption that it happens, let's say, within five years in Finland- -cars will be able to drive out there in the rain. At [unclear] they also showed something where you can use a thermal camera to see all moving objects, much better, and moose and everything else. That the technology exists, it's just that there isn't [unclear] yet and so on. Elon and Musk build this kind of thing, where we- -basically forget about those EV drivers. Our cars actually move around completely on their own. We can rent - I don't own, I mean, a Tesla, but we would own- We could put them out on that farm, where they move around and anyone can make use of them, and crowdsourcing to the next level. This is an interesting one. In the real world, yes, AI will get there, and Optimus is indeed a good [unclear] for that. [07:16] Maybe I'd put it together like this, that you have that super intelligent AI, which connects to your mental world, and you're able to replicate it. Then this access to the physical world, meaning there could well be physical avatars, meaning those Optimuses get to the level where I send my second- -double to go experience things on my behalf in various places, and if there's the cash for it, why not a couple more too. In the virtual world, my best AI butlers will probably already be chatting there in the fairly near future. -with other counterparts. That leaves even that fairly meaningless. I'm the same way too, in that I love reading sci-fi a ton, and enjoy these too- One of my favorite books is this Heinlein book, Stranger in a Strange Land, which is where this Grok comes from, who, if I recall, comes from Mars to experience Finland. The other is a sci-fi genre we share, which has been Iain Banks's Culture. That's where this brain [unclear] comes from, meaning in a way these data links. [08:18] There, well-intentioned AIs really already reign. We're like Labrador retrievers, that fortunately they [unclear] us, but we get to fulfill ourselves. in many different ways, and with eternal life. In paintings across all the centuries, humans are depicted as this kind of person strolling in a meadow, as if- -as someone savoring life, as if that were the goal state. I'd ask you this, since you're talking about sci-fi and these innovations. What, in your view, would trigger this kind of fast- -not linear, but exponential development. Where would that come from? Yes, general AI is like that, it can indeed make better AIs. That's where the singularity happens. We're talking about Waymo's Lidar [unclear], or its competitor. And then maybe also our own use of it, which is scary too, because we're such a [unclear] people, that we don't have that data, some [unclear], and our teddy bears leak off into other countries. [09:28] Then when, in a way, those tech bros over in the States, who actually have the money, are able to leverage it at the point when work becomes basically a trivial matter, then that capital will also possibly keep accumulating. [unclear] Our examples though, of how we use robots or self-driving cars, these kinds of cost savings. But here, in a way, the game between labor and capital ends almost certainly in capital's favor. That is, our ability to just create more value everywhere, but the thing about capital is its ability to accumulate exponentially. Returns are hardly going to disappear all of a sudden. There's always something worth putting it into. This is just an arms race, in that it never pays to be poor, but in this era, when the added value of labor is fading away. It's especially painful to be poor. But I'll still go through this, if we talk about these, whether we have a dystopia, where these young people actually get employed. [10:30] Now of course in Finland we're in a special situation, we don't have productivity growth. And I just mentioned this IT sector, and relative to our population we have, for example, a huge number of coders. And now some of them happen to be sitting on the sidelines, and we're just not getting into that. But if we go a bit further from this, let's take the longer- Let's assume everyone gets everything they can out of AI, and Ville's question is, what triggers that innovation. Because right now we've been all along, it's become- -easier for the individual. You can do it with your phone. The AIs and everything are right there. So you don't need to open up your laptop, you can get that connectivity without it. You can do it on your phone. And in a way, when it comes into use for everyone over a huge surface area, that creates the effect that it isn't dropped from the top down, but rather, the bigger the population that starts making use of this- -that's where those innovations come from, the ones that change the game. If we still look back a bit, reflecting from history into the future, I think this could be a kind of renaissance era. [11:34] And that renaissance era, well, none of us were around back then, we're not that old, we weren't part of it, after all. We might be. I think we're this kind of- Am I Michelangelo or Leonardo da Vinci? Hard to say which. Could just be a bit of both. A bit like both. That's at the individual level, that's just like- Do I have a goal, do I have a profession, what happens - but art and culture, it all started developing. We're at this point, so let's imagine- -we're not actually in '99, we're there on the threshold of progress, moving forward from here. What we're talking about is whether we have- -a five-day weekend and a two-day work week. These kinds of things - there've been all sorts of trials with universal basic income and so on. What would this be, I wonder? What if we thought more about spending time together, and that value creation came from somewhere else entirely. Unfortunately that happens with capital. Get it for other young people too. -rich parents. [12:36] At least enough that they'll pay you a few tens of euros for an AI system here, while you're still able to build some kind of added value as commander-in-chief of an army of AI butlers. If General Miettinen is running that army worth ten person-years of work, then try to get into that group already at an early stage. Now it was said to the listeners that there are two things that trigger productivity or development - AI development and capital. -competition for the best innovations, and capital creates value. We might agree on that, well where would you be willing to put it now. Where's worth investing? Well, personally I invest pretty consistently in the index, and then sometimes I send a few tickers off into that 'UFO basket' over there. Electric car makers, or Hims and Hers, [unclear]. [13:43] [unclear] and Hims and Hers is up 650 percent, this EHang is down 10 percent. Sometimes these are a bit like that, that the general index is better, even though it does have that awful 30% Magnificent Seven weighting. Then I put quite a bit, a little, into these private equity funds for the thrill of it, and maybe partly because of my job too, since these days I'm not into private equity -a member of the association's communications working group only, just enough to look on it a little favorably I'll throw in a bit of a different spin here, which maybe you didn't want to hear, but I'll answer anyway: invest in youth. That is, this is a great example, that we have a teenager here with us. And in a way, that- -what they're able to achieve is actually in our hands. And what I mean by that is, don't chain them down, set them free. [14:45] Give them the chances to succeed and to fail and to bang their head against the wall on it. To that big [unclear], as much as it feels like it. And in a way that hopefully leads to, since we talked about these tech bros and such, about who- -who the next ones are. We have that expertise. This isn't about there being better intelligence over there across the water. Or whatever, on the other side of the globe there's a different kind of intelligence. Because still, if we take this huge globe that we have here, then in Finland we have this mass of people, of whom a certain generation is at hand right now. And in a way, how do we build that future security for them, and that mindset - I think about it myself, since of course as a family we face this angle every day, and where I invest, so in a way I want to build that future for them. If someone's listening and wondering whether we could hire some young person here to do it, even if it doesn't produce exactly that when you look at the euros, whatever that is, then take those young people on, seriously, because- -then once they get into it and do these things. [15:49] That's where the capital comes from. And in a way, the capitalist perspective on that is, it has to start somewhere. It's these garage companies, that's where these started from. These [unclear] and so on getting going, if you remember the Microsoft story, from that garage, and Silicon Valley. Why couldn't that be here with us? We actually do have good examples like that. For example this whole semiconductor technology right now. Let's think about what that story was - at [unclear] - where they told this Drone Sensor Fusion story. Drove the package by car. Ukraine. And took those first devices out there, pretty much himself. And now let's see, okay, there's this super-cycle going on now in defense technology. And in a way the angle, where we talked about [unclear] earlier. And these get created, they want to generate that capital from there. Look in the mirror a bit, now let's actually bring the youth into this. A third perspective, so viewers and listeners get something a bit different. [16:52] Sami had the UFO basket and the indices. You had youth. I'd say now it's worth founding service companies that focus on individuals'- -in developing AI skills, or service companies that remove AI-adoption barriers in some industry. Because once again in Finland IT consultants are trying to code something -or bring about some kind of revolution through software. This is quite clearly- -a user-driven revolution, and we could learn a lot, as long as we find a way here to- -expose the masses to it. It came to mind, that just under ten years ago, Reaktor made that first AI course. Yeah, satellite too, but Elements of AI, which - jeez, look at that - something like 150,000, I have that diploma, 200,000 consumers. Now we need more launches like that. [17:54] Now let's really decide on these kinds of big citizen initiatives. -citizen initiatives, citizen-driven launches, that are really easy to grasp and understand. Now I need for this- . This is our idea. Why we were founded. 4. Saalto. AI-native, consulting company. It's specifically that we basically want to- To put that in Finnish, is that some [unclear]? Service business. If there are any executives listening right now, we focus on this: we run them through the wringer. So the insight for management teams there is, really, this - now Sami, do you have a personal mentor. -telling you what to do with this AI. What is your Translink Corporate management team doing together on this? If you get taken through this kind of AI coaching program, frankly this service exists, so welcome, just come on and make a deal. That gets you the big masses, but how do we get - in these service companies I agree, IT consulting has been pretty much the same for years and years. Now with the help of AI you can do it in a really different way when it comes to producing value. [18:56] So basically this, that we have just a huge amount- All the information is available, after all. How do we motivate people? Are you? Do you do yoga? No, but Translink's [unclear] does [unclear] at the maritime days, every hour. The guy comes into the workplace and says that this yoga thing is actually a really big deal. Now we all go, Friday morning, onto the meeting room floor, and roll out those mats, and now let's do a bit of yoga and stretch. And then the weekend comes, and on Monday- -how many are still doing yoga. Well, not very many. This needs to- The service exposes people to that, so we get that intrinsic motivation. [unclear] Are we going to attend some Elements of AI course? But that ought to turn into action there. Then that comes down to incentives. What do you have- You're on some company's board, what's your incentive to adopt AI? [19:56] Is it that you want to do that board work better? Do you want to grow that company's value? And once we get to this? These are the thresholds that we can remove. How do we get the whole 5 million? It is a pretty small country, after all. I myself run it with a messianic approach, in that I've founded, in this recent period, both Translink Vibecoding Society, where I myself serve as the messianic founder. Into these images, moods, and messianic beginnings, AI- -the future is going to be amazing, whether it's over there in the UFO corner, or in this dystopia corner. Thank you, and gentlemen. Thanks. As we noticed from this episode too, an explainer is always needed, a world explainer. Since you've watched this far, go ahead and check out- -here's our original episode from the Social Democrat side, as [unclear] would say. Thank you. Thanks "}, {"slug": "725-onko-tekoaly-pelkkaa-kuplaa-petri-kajander-neuvottelija-392", "title": "Is AI Just a Bubble? Inference Economics and Local Models | Petri Kajander", "titleOriginal": "Onko tekoäly pelkkää kuplaa? | Petri Kajander | Neuvottelija 392", "guest": "Petri Kajander", "guestsCanonical": ["Petri Kajander"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/petri-kajander/"], "episodeNumber": "392", "publishedAt": "2026-07-01", "duration": "54:19", "format": "full", "topics": ["ai_enterprise_tech", "investing_markets"], "description": "Petri Kajander considers what AI actually is, and dubs it 'Temu-intelligence' (a pun on the bargain e-commerce site Temu, suggesting cheap, knockoff AI). The conversation moves from local language models and agentic coding to surprising account bans and cybersecurity pitfalls. The two discuss whether the AI bubble can hold, how inference is priced, and why a model can guess well without understanding what it's doing. Also covered: the realities of launching an app on the App Store, social-media 'slop,' and the idea of augmenting humans with AI workers. Finally, they talk about how the open internet is shrinking, and why the generalist's broad perspective is coming back into value.", "page": "https://www.neuvottelija.com/podcast/episodes/725-onko-tekoaly-pelkkaa-kuplaa-petri-kajander-neuvottelija-392/", "text": "[00:00] Alright, welcome to the Neuvottelija channel. Isn't this important to you, Petri Kajander — this \"alright\" opening? Yeah, we've been ribbing each other about this from the start, and there was already some talk earlier about whether it was — alright, who starts, who finishes — but nobody even remembers anymore who the \"alright\" guy was. Which episode was that? Oh right, that was Neuvottelija, but \"alright\" really is, I think, the trademark. I've tried to get Sami to make t-shirts, and actually a proper, proper brand out of this \"alright\"— —thing, that \"needling is caring.\" So you can hear from this that we've been friends for years. This is actually your second time on, and back then we talked about libertarianism and your experiences from that era. But Petri Kajander has been kind of a backdrop for me on this journey into AI darkness. So, if people remember Apocalypse Now, where Marlon Brando turned into that kind of deranged guy, you've been a bit of a bystander in this during 2026, as I've gone from being a kind of mediocre Python coder into becoming Head of AI at Translink Corporate Finance Finland. Congratulations on the new title. [01:10] Thanks. Thanks. And you've been hanging around on the sidelines a bit, acting as peer support, and every now and then throwing in some light needling. So I've especially liked your X posts, that they've always been right there — I remember, was it 25, or it's been well over 20 years now — you can find everything on X. You can go check the facts there, but that's when I also realized: vibe coding is Minecraft for adults. That's right. But as Head of AI, it's been a long time since it was just vibe coding — now we're talking about agentic AI programming, and I haven't even posted this on X yet —posted it. This is brand new. This came up today, and when I had to figure out how to really nail this down properly, I said: it's Temu-AI. If Sami is now Head of AI, well, I said everything that's \"AI\" already has it right there in the word — it's pure Temu, and intelligence is nowhere to be seen. I do, however, use the Chinese Qwen 3.6 model on my Mac hardware, and from that [02:13] I have to give Petri special credit — back in the ancient year of 2025 I was still a PC guy, and roughly every seven years I make that swing between Windows and Mac, and I wasn't ready for this yet. But then Claude came along, and I talked to you, and you said just buy the Mac already, you won't regret it — and that turned out to be right. So in January there was this first real aha moment in life —in life, a 64-gig MacBook Pro, and I think we talked a bit about how memory certainly isn't getting any cheaper, so I ended up buying a bit more memory. But then that big memory pool — I had to learn the lesson the hard way a few times, working it into unified memory. That's right. Yeah, and Mac probably stumbled into unified memory purely by luck. I mean, it's actually a pretty old invention — well, it's the M-series architecture —the first machine, did that come out in '21? Of course it's been done for longer than that, but back then AI was still kind of — well, there's always been Temu-AI, I mean AI goes back probably 100 years or more, probably since the invention of the computer. But this agentic intelligence, and then the next phase, was already in February '26, when I was talking about how this young Austrian genius, Peter Steinberger, had [03:31] —built this OpenClaw thing, so I ended up asking around about how the Mac minis work, and then I placed an order, and there was about a week's delay before the OpenClaw release, so I had the Mac mini sitting there humming on the desk, and this 16 gigs of memory is a bit annoying — I should have gone with 32. Just between us, Sami, you kept bragging, saying was it 32 or 64, and now, for the record, it's actually 16. The 64 of course is my main machine —and mine has the mini, which is 16, but it has the M4 chip. Yeah, and Sami was like, don't touch this main machine — but now I'm not entirely sure whether that rule still holds, whether it's already... Well yeah, since as Head of AI you're the sovereign operator who wants to partition machines like a god, so on the main machine there's a partition — that's where Hermes Miettinen lives, on the main machine, and that's when it uses local memory, because this 64-gig —unified memory is running Gemma 4 26B and then Qwen. So Hermes here has this local agent. I haven't gotten around to building an Ollama bridge from the mini yet — for you listeners out there [laughter], all of this went right over everyone's heads, way over the top, so just listen along — because if you ever send an email or anything to Sami, you can assume it'll automatically end up on the deep, deep, deep web, and everything is compromised, [04:59] which is what Sami said, just put a bit more elegantly. That's not really how it works, but security has come up in our conversations too. So I asked how this works — the backups — and he said, well, isn't Time Machine enough, and then you had that thing you used, some CCC, Carbon Copy Cloner, right? No, I didn't set that one up, but I did set up Bitwarden with a long passphrase note, in a couple of different places, so my security is in order. That security-leak thing was just jealous slander — I'd still recommend, don't ever put [laughter] anything classified to Sami. Now that we've established that you're not an agentic coder like us Heads of AI, maybe you could tell us why you didn't stay on the hardware side. Maybe I should say this much about it: since I use, under Sami, OpenAI's best GPT — the 5.5 — as my main model, it was a bit of a surprise that OpenAI dropped this multimodality, meaning the video side. [06:01] Right, isn't it the case that you've specifically focused on the audiovisual side? Uh, well, Sora — back when it came out. If we go back a bit further, there's a little story here. Uh, I don't even remember anymore what TikTok's original name was, back when it was about music, it was for lip-syncing. It had its own name. That's when I signed up — it was Musical.ly. Yeah, I had an account there back then. I didn't do much more with it. But then, was it 2018, before Covid —I just decided that since this visual, video thing had of course already been on Instagram for a long time and was clearly picking up fast, I thought, okay, let's do a little challenge: one video every day. Mm. And yeah [clears throat], I did it — I had the account, and every day I made one TikTok video, and if you've ever made TikToks, you know that every third second, fifth second — usually closer to three seconds — you have to earn the next chunk of attention. And usually the camera angle changes too, if —you look, it's the same in movies. The camera angle changes pretty frequently, and it's also a bit of a stand-up comedy trick if you actually want to produce some solid clips that people watch and that take off. So this was kind of my exercise, testing whether I could get something to go viral, what works, what doesn't. And back then it was a matter of the fancier the script I came up with, the more I thought it was actually good now, and the production values too [07:24] —were in place. Well, those usually didn't go anywhere, and that's probably still true on Instagram today, but the ones I made just on a whim, on the spur of the moment, those surprisingly ended up hitting hundreds of thousands, or whatever the view counts were. So this was like a hundred-day exercise. Then I stopped, and I hadn't touched TikTok in years, but then Sora came along — that's the OpenAI one — which was never —ever released in Europe. It was US-only, and it was actually really sweet when it launched, at the start — I got an account there, and what I used to do on TikTok kind of by hand, having to edit and think it all through, now you could just prompt it and get it out. And back then Sora was still totally the wild west — there were all the Disney characters and all the movies, you could try all of that out. And it —was there — the 100 that took 100 days on TikTok, well now I was probably doing about ten a day. There was some limit, I don't remember what it was, but I downloaded all of them. About 300 came out of it. I only tried it for a few months back then. But it was the same cycle: what you'd do by hand on TikTok now came out beautifully through the machine. But like with all of these, having fancy tools doesn't make [08:44] —you creative, it doesn't make you any kind of professional Christopher Nolan. That didn't happen just from using Sora. Mm. It wasn't like that either when World[unclear], Luma, Kling 1.2, or Kling 3, or whatever else came along — those tools don't make you any kind of master. Yeah, they make things easier. You can do all kinds of cool stuff, but if you look at Sora videos, or look at any TikToks or Instagrams, original ideas are pretty thin on the ground for a lot of people. Yeah. But then, I was a bit puzzled — you came out with this Apple developer program thing, got results — this app, Läppä. I thought, what's this for now. But then I've started to understand it a bit — that it's about, say, doing things on the phone's own hardware, and that's kind of the point here, we're not doing this the wrong way here. [laughter] So local models get run — that layers in a bit —more about Läppä. Well, if I take the long way around, if Sami allows it, there's a bit more of a story to it too. Let's ask Sami's permission. Sami says yes. [09:46] Well, it's not up to Sami. Sami will edit this in here — for the record, for the whole audience, there are no third parties present here, neither as people nor as voices. If anything shows up later, then Sami has edited it in, which of course is entirely possible these days. But the year was '23 — wait, was it '22, November, when the first ChatGPT came out. It was called ChatGPT half a year after that. It was the 3.5 that came out back then. So that's what I started using. That summer I took a Python course, this Harvard 101 course, which probably about 2 million people have taken by now. I did the CS50, because it covers the whole architecture already. And I'd actually recommend to Sami that the Python course should be next. [laughter] Yeah. Which you never did? I had a three-week Python phase myself — more on that maybe a bit later. Yeah. And the story continues that I did some stuff in Python, and after that, at some point, it turned into: hey, it'd be nice to build something with some kind of user interface, where you get something visible. So I thought, well, I've never built anything for Apple, but it'd be nice if it were on the phone, since that's a bit more challenging, and of course everyone's got one in their pocket. So I made something just for my own fun. In Tampere — since we're both originally from Tampere — there's Tappara [11:03] —well, Tappara's alright. Uh, so there was this Lenin Museum. Yeah. Back when I went and registered the nootti.com domain, there was no telling it would turn into the Nootti Museum. So if you type \"Nootti\" into a search engine, Nootti.com comes up — it was at least at one point the very top result. So, I built it just for my own fun, back when Elon Musk had bought X and everyone was kind of like, what's going to happen with this now. There was Bluesky, there was Mastodon, there were all kinds of Nostr, all kinds of different networks. Everyone wanted out of X, or at least a lot of people left. I'm still there, and back then I thought — I posted in several places, since Sami was in one place and someone else was somewhere else, and since everyone was a bit scattered, you just had to —go everywhere people were. So I built this little hack of a tool that made it easy to post and customize for each of these places. It wasn't meant to go on the App Store. It was just for my own enjoyment. But then I thought, I'll put it up there anyway, and went through the whole cycle. I practiced from absolute zero, and then pushed it to the Apple Store, and the first week I ate my own dog food, using the app myself, and TechCrunch picked up on it, and then it became app of the month — this was back in [unclear], and then 2000 — wait, was it 2000 — now I've got my years mixed up, it was probably 2024, anyway six months after that [12:28] —after ChatGPT came out, Nootti was the first — these are all Finnish, now that there's this sort of anti-American, pro-EU mood going around. So, nootti.com was my first short domain that I managed to find. The next was Nuotit, and then the last one we've been talking about was Läppä — so, to sum up the last few years, there's lappa.com. This has kind of been my AI era, if you will — since ChatGPT, you could —say it's nonetheless been the groundbreaking thing, whatever the best Finnish word for that is. Anyway, since then I've used all of these and noticed where they can be used, where they can't, where they work, where they don't, and of course all of that is baked into those products too. But yeah, this has really been my Minecraft era. It wasn't purely vibe coding. I know what's inside that code, and I still don't just close my eyes and push it out —my 30 million lines of code, they're all floating right there in front of me. [laughter] So, so, well, according to my ideology, if you look at it, everything runs 100 percent on-device — there's no cloud to be found, there's no advertising in it anywhere. Yeah. So that fits pretty well with the current business model. Except then there's the Apple tax. So, so that's a bit annoying — 30 percent, that costs. [13:54] For smaller, smaller developers it's 15 percent, so at least there's that much joy to it — everyone gets to download it. Yeah. But it's been a fun journey, and now you've challenged me — that I really should make this growth journey into an Xcode guy too, meaning an Apple publisher, but I've been avoiding that. Maybe some moment when I've got a bit of time to vibe-code. So if there's ever a weak moment in an argument with Sami, you could ask, let's get me on TestFlight — since Sami's been bragging, going \"look, I've got all kinds of fancy apps\" — that was back in the time when Sami had, I don't know if —it's still on your phone, was it the [unclear] one? Yeah, right, yeah, of course it runs there locally, but as a developer build, not publicly released. And when Sami shared it somewhere on X, or wherever it was, what caught my eye — I mean the logo — how it grabbed attention. Was it 20,000 or 500,000 unread emails? [laughter] Well, now we're talking about Gmail, which is my [14:54] —kind of junk-catchall for everything, [unclear], so I just put sami.miettinen at gmail.com out there for all the spam subscriptions. You should really put some numbers in there or something like that, and clean them out afterward. But yeah. Well, I had a script running there overnight, starting this March, that deletes about a thousand at a time, so maybe by the end we can get it to a state that pleases even you —too. This unsubscribe script keeps churning away there — I'll remind you again [laughter], this is Minecraft for adults, meaning a hobby that doesn't produce any kind of product, but does get you a TestFlight, uh, well, that's — [laughter] actually, from that we could take a bit of a detour: now, I could think of it this way — we're living in a world where a Star Trek-style teleporter has been invented, so where before you had —that kind of traveling, where you'd have to take all sorts of trains and cars and planes, go through airports, just to reach, say, the Italian countryside to meet some [unclear]. [laughter] I'd think of something like Italy's finest tailor, who lives about 70 km outside Milan — and then you'd get there instantly with a teleporter, so everyone could of course jump to these kind of odd places just instantaneously, so, so [16:17] —then these tests and other nonsense, the Apple-tax stuff, would disappear too in this teleporter world, and these inference machines — Anthropic, and Google, and OpenAI, and maybe even X — become candidates for this teleporter layer, where you jump straight to the quality, say straight to your Läppä thing, or to the Miettinen empire, that's right, and in between there's no —need for any of this kind of advertising, or websites, or other crap — people just know by some heuristic where the quality is, and they jump straight there. Now we're at the heart of the matter. [laughter] So why is it Temu-AI? These AI machines have no notion whatsoever of what they're doing. It's statistical guessing, completely random, except for Sami, or whoever, who has curated three —layers of brain[unclear]. Exactly. So if some kind of teleporter device comes along, you'd better think twice about whether you want to go through it, because you might come out three-headed, or you might never come out at all, or you might just end up minced into a grinder. So, so this shows up in everything that comes out of AI right now — or, as we're recording this, with these well-known accounts. For example, hey [17:35] —an Instagram account, which is pretty well-known, at least to some. This mail service got hijacked, and what happened, since this is still such a fresh story that not everything is verified, but the AI Trust and Security teams were apparently thrown out by Meta, Facebook's parent company, and because of that, of course, from the company, at least —largely, and these well-known accounts, meaning valuable few-letter usernames, have indeed been getting hijacked, so that, uh, the AI has gone in through a VPN — or sorry, the hackers have gone in using the same VPN. Then they've gotten into the chat, into AI support, since there's no humans there. Then they've said, well, even though you have —had two-factor authentication turned on, and you've got all your own account's stuff there with top-notch security switched on, this AI has just looked at it and gone, oh well, okay, you seem to be coming from the same country or whatever, and hey, that's a nice profile picture too. We can just change your email address entirely for you [laughter], and then you can go ahead and reset — reset the password, and that two-factor [19:00] —authentication isn't needed here at all. So basically, as a user, you had no way whatsoever to reach anyone, even though your security was in order, because there was no intelligence whatsoever on the other end. Mm, so quite a few of these have come up now, really well-known accounts. So, so this is essentially that AI doesn't know what it's doing. It doesn't know what it doesn't know. And it's also lazy in the sense that at some point it just —stops doing the work, and that's how you get this Temu-AI. Yeah, but as we start building better safeguards, hardened guardrails, curated multi-layer brain structures for it, so that dumb things like the same VPN or IP address shouldn't be able to happen — some kind of hardened handshake ought to take place instead. And by the way, isn't it just lovely when somewhere over there —at Meta they're fumbling around at this level, that on top of everything, customer service has always been bad there — there's no, say, single point of contact from my side. If there's someone here from Finland listening to this, or wherever this gets translated into other languages, well, this is exactly what happened with my most recent AI thing. The very same post I put up elsewhere, on Instagram and everywhere else — well, this Läppä post on Threads [20:22] —got banned. The only thing I did — my mistake was probably that I used it through the browser, I logged in, wrote the text, put the video up, and in that video the word \"no\" or something was probably mentioned, since it related to a feature the product had, and nothing else. I mean, it was entirely my own video, and that's it. The moment I'd posted it, the message came back that the account is currently, like, shelved. Then you can go ahead right away and file an appeal, and that was basically total nonsense, and after that it was just done — and I wasn't the only one, even the founder of Y Combinator —had the same thing happen to him, apparently — Paul. Not sure if it was on the Instagram or the Threads side, a few weeks later. This is completely random. It can happen to anyone. You don't have anyone you can go and ask to fix it. You need to know someone on the Meta team. If someone out there works at Meta, please, unlock that account. Uh, I even posted this entire episode over on X. It's all there. Yeah, exactly, but of course [21:30] —for me, if say YouTube decided to, or somehow put this channel on the shelf, well, luckily I do have friends at Alphabet, so I'd be able to escalate that. Yeah, but this happened, and this has also happened recently, very recently, with Google as well. This one was pretty wild. I don't know the facts, but apparently it was some Japanese person who had a long history with Google — had Google Workspace or whatever, anyway had Google Drive, had YouTube on there, and a long history with all sorts of stuff, and had uploaded some of their own manga drawings to their Drive, Google Drive, their own personal drive, nothing published anywhere — and the AI had interpreted —one of those images somehow, and the whole account just went, everything happened at once — so if Sami disappears overnight, then Sami's [laughter] got some manga that ended up on a drive, or maybe there were some slightly too explicit illustrations, some visualization that got made — but from that, well, what could go wrong — Henna Virkkunen and colleagues have now gone and dragged the CSAM thing back into that AI regulation, so — uh-oh — so from there, probably [22:40] —there'll be more of these coming, as EU bureaucrats, with their finest AI expertise, go off scanning our private traffic to see if there's anything that should be banned. Yeah. So this trend we're actually in right now isn't funny at all. It feels like what we managed to build in the '90s in terms of an open internet, and these internet walls, which were partly about encryption — France, for example, still doesn't allow my app, Nuotit, Nootti, to be available there. Do you know why? I've got two countries banned. Russia is banned across the board, but France is banned over one single thing, and that's Nootti. Well, it's probably some local server requirement or something else dumb. No — if you use, if you use encryption, just normal encryption, the kind that's totally standard, not high-tech at all — it was maybe high-tech 20, 30 years ago — you have to request permission from some French communications ministry or whatever, and it's basically like sending a fax and letters [laughter] —and stuff like that. And that's the reason so much is missing from the French App Store. If you go by the book, you have to get permission from them before you can use any kind of encryption in it. [23:50] And yeah. Well, Nostr keys are like Bitcoin keys. So there's private — you basically use a PKI, private and public keys, and that's already encryption, and because of that you need to get permission from France before it's allowed. But this was kind of a long intro leading to the point that we're now sliding toward — under the guise of protecting children, we're heading toward a point where soon you won't be able to go anywhere and read Iltasanomat unless you've put your passport up somewhere for verification. Yeah, and that's the thing — again, since we just talked about this AI capability to hack in, isn't it nice how it then spreads out into the world and everything — and here in Finland we don't yet have, or, well, I think that unique ID, or the renewable personal identity number, just came in, so at least those can be renewed now. Because right now our old-style personal ID number is basically irreplaceable — once it truly leaks, once and for all, that's it, that's game over. Yeah, the world is full of these, —so much so that there might even be an entire nation's passports and all its data leaked, and it's happened in more than one place, more than once, and then there's really nothing you can do about it as a person, and in the worst case, bank credentials get opened, loans get taken out, all kinds of things get done, and then, in effect, the burden of proof reverses. You have to prove what you didn't do, which is pretty much impossible since you don't necessarily [25:16] —know what's been done in your name. Yeah, exactly, and undoing this is a hell of a job. So, as a responsible AI trainer, so to speak, I'd also hope that, for example, Stripe has started offering agents limited transaction rights — yeah, in principle, as an experienced bot trainer I'd want that too, but that opens up yet another can of worms, since in a way you get —with that authorized agent permission, you'd probably still enable proper scams to be pulled off, and that brings us to this security question, and to why it's Temu-AI. So here we're not talking about Heads of AI, but about people who just can't — meaning, decision-making [laughter] — yeah, headless — and Temu-AI also in the sense that you can never, in old-school coding, —basic coding, it's a certain way, I mean it's completely — you know how it comes out: if this, then this; if there's some bug, it's still predictable. And this doesn't work at all, not in the case of AI, and that means you can never be sure what's going to come out of it, whether it's what you wanted, or whether something completely different comes out. Unless you build guardrails around it. Mm. [26:37] So, in the right hands, AI is very powerful, but you have to realize that it's Temu-AI. There's no real — there's no consciousness of any kind behind it. It doesn't know what it's doing. It guesses well, and since it has a huge amount of statistical data underneath it, it guesses extremely well. If it's marketing, or sales, it doesn't matter so much, since you can check the text yourself. But for example, if you're building competitor comparison pages, it would be good if the facts were right, so you don't make false claims. But like, this is —easier to fix. But in certain critical matters, where it touches personal data, medical history, health records, any area where it needs to be right and not wrong — it matters quite a lot whether you have cancer or don't have cancer, at least on a personal level. And if there's wrong information there, the consequences can be pretty severe. And this brings us to the point that if you're using AI tools, they can easily produce a huge amount of data, and they can also find things that would easily slip past people — but then you have to be able to build a certain kind of predictable guardrails around it, and cross-checks, so you can find the errors and see whether it's actually gone off the rails, and that's the painstaking work, and this is good [27:54] —news for the everyday worker, for those who know what they're doing, but also for generalists. Because if specialists have long been treated as gurus, for being deep in some specific area, say SaaS company sales, well now we're moving to a point where ChatGPT the specialist can go even deeper there, because it just has a broader knowledge —base at its disposal, but it doesn't understand what it's doing. And that's when the generalist, who sees things more broadly, can take a step back and ask whether this is even remotely possible. I've been reading a lot of articles recently, and there's one — I don't remember the whole context anymore, but it was about some kind of green transition, and it had to compare emissions on some massive scale, a global scale. And then in it —there was a sentence saying this amount of emissions is equivalent to the annual emissions of five cars. Mm. So, so basically, if you don't notice that — there's just no sense of proportion here at all, things aren't in any kind of order whatsoever. [29:09] And anecdotally, everyone can spot this easily in the areas where they consider themselves a certain kind of expert. There, you see right away, oh, it's talking nonsense. There's no sense to this. But then you start treating it as an absolute guru on things you have no clue about. And, and, and this is exactly the danger, when we sort of start — well yeah, I'll sign on to that, but on the other hand, since I'm used to this incomprehensible human hallucination in Finnish society, I don't see this as that big a problem, because, in a way, the collective Finnish ability to spout completely deranged nonsense, based on nothing but, say, some left-wing tradition, has been so —so tiring, in a way, that if the tolerance there is like 90 percent wrong and nobody notices the garbage, well, if then in some matters the AI hallucinates something, I'm — I'm not that harsh about it. But like you said earlier, this kind of adversarial setup, where a second AI checks the sources, is basically standard practice — for example, when I do legal work with a pretty good tech stack, there too you get a bit of intolerance built in, so it always checks, say, the Supreme Court rulings, and a second AI checks [30:19] —that they're real and not hallucinations, and that's how the links and sources get checked. Yeah. But then, this also brings us to: don't ever send Sami anything confidential. Because if it's from Sami, it's curated, completely secure, physically, here — I mean, this is Petri the amateur talking, who's never even had OpenClaw running, so he's just talking, just slandering here, he has no idea how brilliantly this stuff of mine is built — or maybe you know a bit —but this curated, three-layer Andrej Karpathy vibe model — the stuff Sami always posts here in our internal WhatsApp [laughter] group — I've usually put those up a week or a day earlier, and then started using them myself, so there's still a long backlog that hasn't been done. Post it yourself there and you'll get the attribution. But yeah, one such example could be some A"}, {"slug": "540-suomalaisomistajat-rutikoyhia-150000-sami-miettinen", "title": "Finnish Owners Are Poor Even at €150,000", "titleOriginal": "Suomalaisomistajat rutiköyhiä €150,000 - Sami Miettinen", "guest": "Sami Miettinen", "guestsCanonical": [], "guestPages": [], "episodeNumber": "db-540", "publishedAt": "2025-05-22", "duration": "00:26", "format": "short", "topics": ["ownership_capital_tax"], "description": "A clip from the episode \"Warren Buffett Taxes | Miettinen | #neuvottelija 329.\" Sami traveled to Berkshire Hathaway's 2025 annual shareholder meeting in Omaha together with Heikki Keskiväli of Tähtäimessä osakkeet and \"Dividend Engineer\" Jesse Viljanen, where Warren Buffett dramatically announced he was stepping down as CEO. Short impressions from the trip, plus Sami's feedback and clarifications on some of the more exotic tax decisions from the mid-term budget session (Puoliväliriihi).", "page": "https://www.neuvottelija.com/podcast/episodes/540-suomalaisomistajat-rutikoyhia-150000-sami-miettinen/", "text": "[00:00] American wealth is 520,000 euros per adult, while for us it's 150,000 euros. In Sweden, that wealth is 300,000 euros per adult and in Switzerland it's over 650,000 euros per adult. So for example, my self-sufficiency challenge's Esa Juntunen, since he's near that level, he hasn't yet reached even the average wealth of the Swiss. We are really, compared to those Americans and of course the Swiss, dirt poor! "}, {"slug": "595-deep-tech-sijoittaminen-uimonen-neuvottelija-343", "title": "Deep Tech Investing in Finland: Nordic Science Investments | Anssi Uimonen", "titleOriginal": "Deep Tech -sijoittaminen | Uimonen | #neuvottelija 343", "guest": "Uimonen", "guestsCanonical": ["Anssi Uimonen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/anssi-uimonen/"], "episodeNumber": "343", "publishedAt": "2025-07-14", "duration": "47:00", "format": "full", "topics": ["investing_markets", "ai_enterprise_tech"], "description": "Investing in deep tech in Finland took a step forward with the founding of Nordic Science Investments (NSI) by Anssi Uimonen and Alexandra Gylfe, among others. How does the investment model work, and what goals do NSI's portfolio companies have? Lifting Finland up by commercializing technology. The episode does not give investment recommendations.", "page": "https://www.neuvottelija.com/podcast/episodes/595-deep-tech-sijoittaminen-uimonen-neuvottelija-343/", "text": "[00:00] Sami: All right, welcome to the Neuvottelija channel. Anssi Uimonen. It hasn't been long since we met at Mikko Alasaarela's 50th birthday party. It was a sweet kind of retreat, wasn't it? Wonderful, I mean wonderful people and, well, it was really a good trip and, yeah, interesting. I mean, we should do more of this. Lounging in the hot tub and two saunas and really cold water and then there, well, in various grill huts. with quite high-level guys and otherwise interesting people, so this kind of reminded me of something like probably, but better than those Paphos seminars by Esa Saarinen. I have never actually been to one, so it's like, now I've become a bit of a Um, a fan of live gatherings, so, so... Yeah, yeah, it was really nice, and then just the fact that, like, quite a lot of... inspiration when you have such a high-level group, everyone had... like their own deep expertise, so, uh, my son was funny after the... [01:00] trip, when he then said, 'I feel a bit unemployed'. Everyone had some deep specialization. They knew so much that... he had better six-packs than the two of us. Well yeah, better than anyone. He's probably the only one of us who can do a... handstand. Yeah. And, and a special mention, uh, to Maunu's friend from here on Kalevankatu, the honey dog. So... so it was really endearing and remembered a familiar, familiar friend in this whole group. It was so happy. It was definitely peeing for joy and there are familiar faces here. Yeah, but Anssi, I have this long series of these kind of structures promoting Finnish ownership, there's been Corilla Capital and Voland Partners and things like that. So you have now performed this act of ownership, meaning you've joined the group and created this Nordic Science Investment company, and let's talk about it, this is this so-called deep technology, deep tech, and here I'll reveal to my listeners now after 34 episodes, that well, I am a bit of a narcissist, so I think I understand something about any business at least something, so I looked at those 17 companies of yours and got a bit of a feeling that I wonder if I dare with these know-it-all comments now, but let's try. [02:22] Yeah. So Anssi, if you could tell us a bit about your background, what you did before this. Yeah, so I've been involved in many companies and founded several, and I started investing at a very young age, so at 14 I bought my first shares and that's really where following the markets and megatrends started, and then I've lived in Germany, the US, England, Italy, Singapore, and I had quite a long career as an investment banker and well, from there the idea was born that that well, now I'd like to do something meaningful and, and well, then we started investigating the market to see what kind of problems there were, that could be helped to solve and, and well, then it started to show that we are in Finland, like globally we are the world's 14th most research-investing countries per GDP and well, but then when we look at the results, it doesn't necessarily show. Meaning we have quite a lot of, like, untapped potential here in this market and the same applies to other Nordic countries too, and well, then we started investigating what challenges there are, why we aren't performing [03:41] better and why we don't retain more value-add from the research that we do here, and well, from there we started conducting more extensive research and then it gradually became our investment thesis, and then we gathered a team around it and well, we opened the books and we got 34 million for the first closing and then we started investing and well the books are still open for a little while, but not for much longer. Solvent individuals can submit co-investor applications or limited partner applications, but well, isn't this basically a venture capital structure? Yes, a very traditional VC structure, so, and with very standard terms, drafted by a very well-known market operator with [the one] who has, well, probably done most of the Finnish fund documents, and you're talking about Tesi, of course. Yeah, in that sense, well, I've even had ministers commenting on the strategy, so this is their core activity, that they first do background checks. I've also been called about people's backgrounds, whether this is the group to get involved with. They do very thorough checks and then they join the first, first fund if the background checks work out. But it's not a given. No, it was a very thorough DD and also [05:03] a good process for us too, because it was the first fund and it was nice when got a bit of an acid test and, well, during that process, also like learned something new as well. Yeah. You've then, you've had on board this Vihuri and other, well, solvent reference investors, so the faith is strong, and this is, after all, a bit of voluntary work, but I mean, whenever I get involved in these kinds of things— I haven't joined this one yet, but well, I hope to get my money back three times over, but I saw in your deck that you believe that at best this is even more, and one reference case was this John Davis, who is presumably in your network, so this Mobidiag case, meaning the University of Helsinki developed this kind of health technology that was then commercialized so well that it was sold at a high, high multiple, which was many times over four times the money back. Yeah, yeah. So, uh, yeah, in deep tech there really is a lot of potential we see there, that, uh uh, and if we look especially at the moment how those have performed, those deep techs, and look at, for example, the unicorns that emerged last year, the share coming from deep tech has grown in percentage. Mm-hmm. [06:18] I agree that if we think about these big companies that are out there now, uh, like the FAANGs for instance, they too have quite a lot of deep tech components inside; where they started from, originally some universities have been the justification for them, and well, they've got IP inside. Yeah, I think we are actually missing two kinds of these... launches. This Mobidiag was running on that. There were some good, good... co-investors, foreign VCs, and then this Springvest managed to... ultimately get it crowdfunded, but... it's a painful road, and you are specifically at the beginning of this path, where there... is the so-called valley of death, where you have universities and researchers... developing deep technology, but then they don't really know what they're doing. Could... there be two ways there, meaning, well, do nothing and let others... pick the fruits, and maybe then try to license the patents. or then there's also this kind of, like, ownership model spinoff. [07:19] Yes, yes, exactly. So, we define Deeptech in such a way as deeptech, that, well, when that... is made there at the university, invention disclosure, then at that stage it can be somewhat evaluated whether to start taking it down the path of commercialization or whether to make a scientific publication out of it, in which case it is then freely available to everyone. And that actually distinguishes deeptech from this other tech, where you then focus more on it being an application based on already existing existing, existing, well, inventions and, well... to known and commonly used things, and we aim to be the university's partner at the stage when we've reached the point of making invention disclosures and get to where we've patented and start thinking about how we could turn this into a commercial success story. And we have very long experience in that as well, so out of our six-person team, three have [08:22] a background in technology transfer at universities and also good success stories in that team regarding what's been done. Yes, you could give some examples from your team. So, but anyway, this TTO Technology Transfer Office, for a long time universities were a bit naive that they like just doing basic research and then some kind of spin-offs, and then it depended a bit on the researchers' own commercial ability, whether they could get anything for the national economy. But now it has been professionalized in that these technology transfer and commercialization units are important partners for you. Yes, absolutely. We work very closely with them, and we now have the same goal both of us, that we want the technology to get out there to benefit people and society, and we have a very high impact also in these, and maybe it's good at this point to say a bit about our like about 30% of our founders have a PhD background there, that people have PhDs and well then about 30% are also women, so we have also quite high, high diversity. [09:38] Are you a woman or a PhD? Someone has to be different, but this friendly investment bank, however, the world always needs them, but of course commercialization, commercialization, but you bring diversity to the team, but in our team, we have in the team a woman with a PhD, and she is a founding partner for us. Yes. What has she been up to? Alexandra has a very interesting background, that she has had a very significant career first on the science side as a researcher and has been at Marie Curie and Stanford, and and and so on, and in addition to that, he has been building this kind of amazing unicorn over there in the US, in California, and Human Longevity Inc., and there were really big names there, Peter Diamandis and Craig Venter, and through that, he also has good networks there; all of us have had international careers and it is also very, very mandatory for success that you have international networks like co-investors and scientific experts and then such industry contacts ready, because after all, these inventions we make here in [10:57] the Nordics—the market is not here, that, well, yeah, you really need to have an international team and get to the market over there as quickly as possible. Tell me Alexander's full name again. Is it, well, is it Jylpe, where in the world does he live? We are actually all in Helsinki, uh, well, except for one, Mart is, well, in Estonia, he hasn't found the joys of Helsinki yet, but well, I mean, so are you the only Finn, or are those just exotic names for Finns? Yeah, well, yeah, Mart is not, no, he is not a Finnish citizen, but well, the others in this core team are, at least for now, and well, but of course, in these portfolio companies, it’s then very varied if researchers want to join cases that are world-class in that field, and many times those researchers are then found a bit scattered across different universities and, well, yeah. [12:02] Yeah, well, let's take longevity then; it's close to many people's hearts and other internal organs too, which hopefully won't fail for a long time, so that it's high-quality long living, and of course, at this baseline level, we have things on our wrists and this kind of self-measurement, but it can go much further than that. You probably have something in your portfolio from this area? We have quite a lot of technology related to that in the portfolio, and well, actually, that is one theme. and then another is, well, quite a lot of these companies of ours, almost all of them are sort of in one way or another either driven or AI-based companies, and well, what we could highlight from there, maybe Vire for instance, is one good example. By the way, one of Oura's founders is an investor there too, and so, it measures like uh, variations in the human circadian rhythm, and well, it's like a very [13:07] significant rhythm. Yeah, I've almost, almost like started diving in. Sounds good, and so it has been noticed that it has a really big impact, for example, on what time of day time you take, for example, a painkiller. What the effect is on your body? Or when you do your 10,000 steps, if you have that, you know, as a goal for every day or so on. And this is something that perhaps isn't available when Mauno wants, but well, in the future it could be so that this, this alertness clip, which is placed here on the side, to tell you that now would be the time to go for a walk, that now would be that peak, so this would be good for your circadian rhythm or that it could just tell you when you should take your medication, if you have some kind of medication that you need to take or so on away. This is a bit of the same thing as Oura measuring, again, like... from another angle, in a way, like when you should go to sleep. So... it tells you that, so, uh, it goes into the same thing, that, well, your... [14:09] metabolism-wise it would be healthy for you to have... this kind of regular circadian rhythm, and then, well, things would happen... at the right time, and by doing them at the right time, then, well, with that... you can then possibly extend your lifespan and at least stay healthy. So there was a third focus then, if there was this general, well... health technology and AI, and what was the third, third focus? Is there, well... Yeah, those, those are like the, those are what I would call our core, core things. It's like, is it a catch-all category for everything like deep tech, and then generally like that then you find, for example, Nextinox, which has invented the world's hardest stainless steel, which is then again quite easy to understand what it could be used for, because you can make really hard steel—well, obviously for tanks and other defense gear—as a mean, wicked investment bank, that comes immediately to mind, but in the summer, of course, you could say like, you could even make a beer keg out of it, because it has the advantage that you can make a really lightweight beer keg, and then it's nicer to carry to the cottage then a kind of aluminum substitute straight. Yeah and and well and and yeah, but then there are many different kinds of options what what it can be used for and interest has also been indeed high regarding this. Well but that AI, there's a lot of like empty hype, so there are of course these general language models and such [15:36] and in those there seems to be this kind of like six six like battle towards general well human-level intelligence AI. But then the kind of application layer is from that that or the application software well layer is then interesting, that you have horizontal vertical silos and at least myself when I'm here In Corporate Finance, it seems that at least on the software side, verticalization, meaning a very narrow strategy of sorts, in some special vertical within an industry is the one for which a higher price is paid, and the horizontals are perhaps more open to disruption. You probably have both, but do you recognize this same matrix found in software? Yes. Ours are very specific, these in a way, like things related to molecular modeling and and well, these enable many new things indeed in the Deeptech sector, so quite many of our companies are such that you could say it wasn't possible to do this before. So now that we have AI, so we can basically monetize those years or decades of data, which is high-quality data from research conducted at universities. And now you have the AI, with which you can then start grinding out new things from there, which can then be patented or sold onwards, or in general, science is currently developing at [17:01] a super-fast pace because it's cheaper and faster than it has ever been before, so there's this quite big transition coming, and somehow like biology and synthetic biology, and how we can then do this kind of biological engineering on that side of things. Yeah, I'm famously from Tampere, I won't tease you with my Tappara mug here right now, but well, back in middle school, Sami Lampinen was in my class and he founded this Inventure, and then in a way, he hasn't actually been a guest—welcome Sami as a guest too—but well, through that pipeline came this Canatu, their CEO became my guest, and Canatu makes carbon nanotubes, and there are like really many applications for them, and the three main ones are, well, dust removal for microprocessor production technology. Then there is heating for LiDAR cameras and then there are these different kinds of medical applications there at the molecular level, but you don't notice that it, like, starts... [18:11] technology is suitable for many things. Then, well, Voima Ventures hasn't been a guest either, and then I visited the Venture Capital Association's, like, autumn meeting, and there was this NATO tech fund, where this was exactly the kind of stuff where your miracle steel would probably fit right in, but those three, are they starting to be, like, in your neck of the woods, what you do? already in your area, what you do? Well, yes and no, in the sense that since we are, like, at a very early stage in discussions with them, like, with that science group and and with researchers, and we also, like, want to be supporting them there very early on, so it can easily be that it hasn't been spun out of the university as a company at that stage yet, nor necessarily for many years, but the fact that we engage with them a bit through how we could already be of help at that stage or what opportunities we see in the market. Or we might bring some good new contacts from our own network for them at that point, so they can move forward with things, so we're already sparring there and then often we are indeed the first investor they meet and of course our backgrounds are such that we also have someone with a research background in the founding team, and we have a very high-quality [19:24] advisor team, which then goes deep into many different fields of science, so we're able to bring quite a lot of value to that beginning and even before the actual actual spin-out drive, and it's of course good to get to know them already at the start and can already help then, and well, there in the very early stages, there haven't really seen VCs in crowds, so that we in the Nordics, there has seemed to be a lack of this kind of risk-taking willingness from VCs at that early stage, when the team isn't assembled yet, you know, and it doesn't yet own its IP, and there is no revenue of any kind and such; I've often seen those things that then don't interest a traditional VC investor, so they rather join when it's at that stage and all these things are already in order; it's only at that stage that they become interested in it about the target. Are they then the sort of technology transfer offices university partners, these kinds of, well, universities, uh, like the University of Helsinki Chalmers and uh, these kinds of things and their research groups and already yeah yeah, you have the connections there then, and then there is now learned a bit, maybe someone is put in as a commercial person to look a bit [20:47] a bit at how this, how this is done now so we can get it to progress somehow, yeah, and we often also help with that like assembling the team then, so that when we start looking for the right kind of CEO, it certainly helps when you have already there in the pre-seed stage a professional investor who has the background and expertise for it, knowing how the job is done, it's easier to attract the best CEO for that stage, which has sometimes been a bit of a challenge in some cases that have been seen coming in at a later stage, well, the fact that often at a very early stage, angels might have been active and then a small round was raised. That round might not have been enough to take the company far enough for it to become, like, investable. Those pre-seeds aren't usually really, investable as I mentioned, through normal VC lenses on, but then if we get a VC in there at a very early stage already along, it helps to bring a bit more credibility there then to, like, finding the right kind of CEO and, and well, that, however, it might be that the best CEO, well, might even be, for instance, in Australia and he has a family and he already has a job and, and well, well then if you only have like funding for six months, then he's not necessarily ready to, like, [22:10] move to Finland or join the team virtually yet. Yeah, that's tough terrain. I had Petri Lehmuskoski from Gorilla and I now then, well, I don't know if it's mercy, but I then joined the third fund as one of the limited partners, but whatever there are looked, they just made their 30th investment, so of course they don't have nearly this kind of deep tech stuff, but in a way this kind of you have to find that product market fit, so basically like what are we doing and what kind of, you know, value-add model in which market, well it really is incredibly early-stage stuff, and then on top of that some technology that isn't mainstream yet, so it's a matter of how to get a handle on those things. Yeah. But with those, it's like, those are always sort of breakthrough technology, those inventions that we invest in, so of course we don't go for ones where there's a really high like CAPEX requirement or where the road to, you know, is really long to commercialization, because we are, after all, a normal fund structure, so I have 10 years, so, well, we can't get involved in nearly all of them, so if we now get about 1,000 companies annually into the deal flow, then yes, it's quite a small percentage that are then selected and meet the definition of what we see as cases that a VC can start [23:32] investing in, but the impact is of course very large and indeed the fact that the goal is to create more value or leave more value also here in the Nordic countries from this. Yeah, but the odds are low. So very, very few companies become that mobile hit, so then many fails along the way and funding has to be cut and the team gets disappointed and then a few vertical portfolio companies then rise to mega-success, so it really is tough business. Well, those percentages are a bit different in deep tech. Okay. So it's not the well, it's not the traditional VC model, so so it's not like if, uh, in SaaS it's now approximately like 90% die, then, well, in deep tech those percentages are almost the other way around, so that in deep tech the challenge is rather perhaps in the fact that when a breakthrough invention like this has been made, which really changes the market in a way, but there is still taking that step there, the risk is perhaps more that it might take longer to reach the market, that there will be some delays. Yeah. [24:41] And well, that's exactly it, you need to have the experience so you can pick the cases that move faster. A good example could be Perfat from our portfolio, where you can, uh, practically replace animal fats or things like palm oil there and make this kind of safer, healthier fat, which you can then use in chocolate or, or well, croissants or anything where you would normally use butter, but you that you can't, for example, make any pastries from olive oil, or the fact that if you have that margarine package there on the store shelf, it has 8% olive oil, so with this technology we can make it with a significantly higher percentage of olive oil, so even there it's not, it's not in any way, like, uh, this kind of, let's say, novel invention, so so, like, it doesn't need to go through that regulation, so it can be brought to the market significantly faster. There are no, like, barriers to bringing that product to market. Mm. How about that uh, the commercialization rights for that invention and the registration of these kinds of IPR rights? Do you have some sort of a legal partner or a guy who knows how to do those IPR deals? Well, we have really strong experience within our own team, if you consider that [26:05] like Jari Strandman, for example, was for 10 years the CEO of the University of Helsinki's commercialization unit and has seen there dozens and dozens of cases that have been carried through and, similarly, Matti Haalo also has long experience in that he too has been spinning off companies from the US, UK, and Finland for decades, so we have a lot of experience within our own team. But of course we also need legal help with that and advisors, but we also pay a lot of attention to those things, of course. attention, because IP is a very central part of deep tech, so it's not just about what the invention is at the moment, but also what and how kind of path we see for its development in that research and, well, everything that can be achieved with it then, like perhaps even other things, as you mentioned, that for the same invention, you might often find different cases and so on. If you have now had 17 of those investments, is the process such that first you do the analysis and then some kind of due diligence audit on it, and then is a Finnish limited liability company formed for it, and then these limited partners or co-investors, then a capital call is made and then a certain amount of capital is put in, which is then used to run the business for x months. [27:29] Yeah, I can see it that way, but they aren't necessarily companies to be established in Finland and of course we invest in the Nordics and the Baltics, so we also have deal flow and investments outside of Finland as well, and it could be that it's a company established directly in the US, for example, because when we see that the market is there, then we go directly there right away, and then the research team is, in that case, for example, in Finland; so we have those types of companies as well. Perhaps we could still talk about your impact on the ecosystem. So, um, aren't you this kind of lead investor, a lead investor, and then there's quite little esoteric stuff to be found, so couldn't one think that without your determined leadership, so many, so many of these ecosystems would perhaps even remain undeveloped? Well, absolutely, if you think about it, we have now made 17 investments, and we have led 15 of them, [28:30] and, well, as I already mentioned a bit earlier, regarding the fact that we have been somewhat lacking this kind of VC investor who is ready to take a high risk in the early stages, and well, I don't know how many of these companies would have failed to emerge if we had been there. Yeah. So it might be quite quite, of course we have there around the university cities some kind of ecosystems and ventures. The Swedes are much better at this because they just have commercial money everywhere, but then in a way, jobs and subcontracting and networks and sales start rolling then. Yes, yes. That technology commercialization is, well, of course, legal activity, IPR, and technology development, but then you have to start selling something to someone quite quickly after all. Yes. Yeah. If nothing else, then in a way, the patent. We don't have many of those like licensing cases, where we usually start from the premise that the company itself starts taking it to the market, that IP and that invention of its own. [29:44] Yeah. Jyri Engström has been a guest a couple of times; one of the first was this 'Finns in Silicon Valley' episode, and he has this Yes VC with Catherine Fake and other investors, and he was explaining the Venture Capital business model, that you have to save some dry powder for the follow-on round and then somehow be able to pick the winners. If in your model there are quite a lot of winners, of course some are explosive winners, some just small winners, and who knows inevitably a very large part fails or is left to the founders, so do you have to, like, defend that investment or did you, like, right there in the next round? a fairly large percentage is, like, reserved from the fund for those next investment rounds, that in Deeptech, the statistically winning strategy is that you invest in them later on as well, like in later rounds, so it also differs in this way, that if you think about traditional, say, SaaS investing, there you need everything you invest in to be potentially somewhat like unicorns, but in deeptech we don't have it like this, so that indeed we see that even a 200 million exit can be quite good, so... [31:02] it doesn't necessarily need to have unicorn potential, but it's not quite like Gorilla Capital's camel model, where we try to support those management teams and then sort of aim for one to three times the money back territory, but in a slightly calmer way, though still a bit more explosive for the theme. Yeah, I would say that it would be closer to ten, the goal, anyway, around there, which is what we see as being for the winners, so yeah, you solemnly promise ten times the money back and then well, well, kill everyone with a dagger if it doesn't happen, then I can to join in, but well, yeah, that's how it is, in a way. making money is harder than people think, so here's a word of caution from an investment banker's mouth, but it is good to do those. I mean, somehow it feels like the Finnish financial landscape right there in the VC scene has quite good funds. Maybe this is just that pre-seed or super-early stage there, so there aren't too many, and you're filling an [32:15] ecosystem, but it would be good if there was some kind of private equity or capital ownership cluster or family offices that would specialize in your industry, so is it visible here that one is forming, or are your co-investors getting to learn a bit on the way. I suppose someone could join with some kind of partner model to... ...invest with you. Yeah, so that kind of investor is welcome, who can create value for it, especially if they have... like a background in 그 field, then we'd certainly be happy to include them. Here was already one example, a general comparison, if you have... this momentum, for example, where you have as investors... founders, and there are similarities like... Oh, I thought you were referring to me, but almost the same thing. Yeah, from Oura's... team, some really top-tier people have left, and similarly there... Over there, vision technology has emerged from the Varjo crowd, along with it, so we have good ones—this tech cluster has rea"}, {"slug": "618-mikko-alasaarela-tekoaly-rajayttaa-tuottavuuden", "title": "AI Is Supercharging Productivity | Mikko Alasaarela", "titleOriginal": "Mikko Alasaarela Tekoäly räjäyttää tuottavuuden", "guest": "Mikko Alasaarela", "guestsCanonical": ["Mikko Alasaarela"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/mikko-alasaarela/"], "episodeNumber": "db-618", "publishedAt": "2025-08-19", "duration": "00:54", "format": "short", "topics": ["ai_enterprise_tech"], "description": "Mikko Alasaarela: AI is supercharging productivity. Clip from the episode \"The Public Sector as an Agent Farm | Alasaarela | #neuvottelija 346.\" Mikko Alasaarela, founder of Agion Oy, joins as a guest for a wide-ranging AI roundup covering ChatGPT 5, Claude Code, Perplexity Comet, Google, Meta, and Grok. Lovable offers a glimmer of hope for Europe.", "page": "https://www.neuvottelija.com/podcast/episodes/618-mikko-alasaarela-tekoaly-rajayttaa-tuottavuuden/", "text": "[00:00] Mikko Alasaarela: Your first mistake is that if you call AI a tool, then you've already lost. You've lost because if you think AI is an extension of a human, then it can only marginally improve that person's productivity. But if you think of AI as an essential part of your entire ecosystem that does a big part of the jobs we used to do, then you're able to multiply that productivity, because you're not making the human a bottleneck for AI's ability to execute. Well now I'm thinking about how we utilize this productivity. So let's say that we manage to get the Finns on board with this AI-native transformation in a big way. Finns learn to utilize AI in a way that multiplies productivity. Well, there's a possibility that, assuming such a collective three-fold productivity jump, then that three-fold productivity jump, since half the population is working, is 1 and a half times the GDP, which in this current world situation would be enough to get pretty close to first place in the world. We aren't far from it anymore. Well then the other side is that if even the public sector's productivity triples, do we need to use it for anything other than reducing to a third the number of people needed there. "}, {"slug": "664-mita-ei-saa-sanoa-vesa-kanniainen-370-neuvottelija", "title": "What Can't You Say? Monetary Policy's Hidden Failures | Vesa Kanniainen", "titleOriginal": "Mitä ei saa sanoa? | Vesa Kanniainen | 370 Neuvottelija", "guest": "Vesa Kanniainen", "guestsCanonical": ["Vesa Kanniainen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/vesa-kanniainen/"], "episodeNumber": "db-664", "publishedAt": "2026-02-04", "duration": "01:02:41", "format": "full", "topics": ["free_speech_society", "finnish_economy_policy"], "description": "What Can't You Say? | Vesa Kanniainen | 370 Neuvottelija. The historical mistakes of monetary policy and the euro's challenges. In this video, Vesa Kanniainen, a doctor of economics, analyzes monetary policy failures and central banks' responsibility for economic instability. The discussion also covers historical crises going back to the 1920s, the euro's structural design flaws, and the banking system's problematic incentives. They explore Europe's future, how national interests shape decision-making, and alternative economic models for safeguarding prosperity. Sami touts his own ECU-2 model for reforming the euro's central-bank money. No \"sweater economists\" (Finnish slang for armchair pundits) were harmed in the making of this episode.", "page": "https://www.neuvottelija.com/podcast/episodes/664-mita-ei-saa-sanoa-vesa-kanniainen-370-neuvottelija/", "text": "[00:00] Vesa Kanniainen: Monetary policy has been very loose. Private debt has been allowed to grow relative to GDP, and that's shown up in the housing market and, well, the stock market — and then there's been a hard, hard crash. The Bank of Finland examines everything except itself and its own monetary policy, and in a way, since this is a politically incorrect book, that's the kind of home truth being thrown around here. Now, I normally have that tenor voice, the high-pitched one. Yeah. And now that it's paired with a bad night's sleep, it's even more so — but you'll still get it across just fine. That's right. Let's put the explanation up front. So this is a bit of a [unclear] wool-sweater-economist thing, and it's also a bit of an in-joke among us market economists and economists. Vesa Kanniainen, a triple doctor — of which I'll pick out the doctorate in economics for now — but isn't that pretty serious currency, that back in Upinniemi, where I watched your dissertation defense, you'd also delved into matters of war economics and the related [01:11] questions. Yes, that became important to me, and it led to me having to write a dissertation, to move into the field and do research work as well. Yeah. And I read your dissertation collection with great interest — believe it or not, people — and in there you'd gone through, for example, the capability of F-18 air-to-ground systems to turn St. Petersburg to shit, and you'd clearly put in an enormous amount of effort, and I respect that. And the other thing that stuck with me was this correlation between conscript military service and regional aggressiveness — Finland and Israel were right up there at the top of that, and our conscripts, and the women in Israel, live this too. Well, there's all sorts of things in it, but mostly it's equations. It's mathematical game theory. There are probably 500 equations in it. Yes. And well-earned, well-earned. But it was great, by the way, to go march around there on the military base. But today you've got this politically incorrect Magnum Opus, and I have to say — of what we've done together, the one I'm proudest of myself is our legendary joint work, \"The Future of the Euro.\" Your name is right here on the cover, but if you look on the inside page you'll find Sami Miettinen too, among the twelve disciples of the Euro Think Tank, proudly credited especially for this ECU2 model, which is still pure diamond even now. Absolutely. That's right, that's right. [02:38] Yeah. But it was a nice moment, maybe, for a few little reminiscences there. One of the heroes in your book was this genius who'd actually been a candidate for our own crew. Now you name one economics-researcher friend of yours as a hero. Who was that? That was Urho Lempinen. Urho was the only one who, before Finland's era of recession, understood that currencies need to float. Mm. And he put that view forward at the Bank of Finland, but apparently the rest of the whole economist community at the time was in favor of a fixed exchange rate. Yeah. And, well, this is — as we were chatting about before we started — my understanding was actually that Pentti Kouri, in the Kouri-Dornbusch research, in a way observed the overshooting property of floating currencies, perhaps somewhat critically, [03:38] but mathematically. I had this mistaken picture of him — that he'd been this great academic champion of floating exchange rates — but apparently he wasn't a prophet on that level after all. Yes he was — he was in fact the creator of the theory of flexible exchange rates, and his article, which was published in the Scandinavian Journal of Economics in 1976 or so, is a very beautiful, beautiful scientific contribution — but Pentti, when he was actually in Finland, didn't really talk much about the role and significance of floating exchange rates at the time. He was more in favor, as I recall, of revaluing the Finnish markka — a revaluation. A friend of Erkki Liikanen's, I believe, from the '80s. Am I going too far here? Might be going — might be going a little too far. No, no, no, not really a friend of Erkki Liikanen's. [04:44] Right, yeah — a free-market man, but he's connected in that way to Erkki Liikanen and to our Bank of Finland — I'll dare say that now. And another really interesting quote, or observation, thrown out loosely perhaps, is that the Bank of Finland examines everything except itself and its own monetary policy — and in a way, since this is a politically incorrect book, that's the kind of home truth being thrown around here — so tell us about this home truth. Why is this such an important observation? This piece of wisdom actually comes from Pekka Korpinen. Pekka worked at the Bank of Finland as an economist, and afterward he wrote a book in which he set this claim down in writing, and, well, I picked up on it and I've recorded it in this book of mine. It holds true. The Bank of Finland has never assessed the role and background of the euro system analytically or empirically, and, well, that's a huge, huge gap. I do assume that during Erkki Liikanen's time there was strict policing of what one was allowed to say about the euro inside the Bank of Finland, and more broadly [06:10] in Finland as well. Yeah. That kind of self-censorship. So now, if I go back to this wool-sweater-economist joke — and I do appreciate, by the way, your gentle jabbing — the first one, by the way, Aki Kangasharju, came on as our first economist guest wearing a wool sweater, so I wouldn't actually classify you, in the spirit of that term, as a wool-sweater economist — I'd like it understood that this is just your kind of good-natured humor — this, this, this is specifically humor, and I love good humor, and it was perfectly clear that when I come on to be interviewed by you, I have to be wearing a wool sweater — and I've now added this scarf on top to round it off. Clothes aren't ideology, or however that saying goes — but this, in a way, I think, ties in — you can't say the Bank of Finland is a left-wing organization, but the Finnish economist community has become a wool-sweater-economist-ified institution, and there's something in that, in my [07:10] view — there's something in left-wing ideology that tends toward proclaiming a single truth and, in a way, an inability to examine itself. So I think that's the thing here — that the Bank of Finland analyzes everything except its own monetary policy and its failures — I think that's simply a glaring gap. But that's actually been analyzed here in your book too. So, so, one central thesis here is that monetary policy nearly always fails, and the institution in a way betrays both itself and the people. So, in a way, bubbles get caused, and they then wreck the economy. If I can add to that — there's been an unspoken piece of wisdom among economists, I think, for a long time now, that capitalism as an economic system is somehow unstable. Mm. And now, having followed monetary policy for a long time and having written quite a bit about it over the years, I've noticed that these economic crises we've lived through, which the capitalist financial system has gone through, [08:29] well, behind them there really is loose monetary policy, which has then led to stock-market bubbles, housing-market bubbles, and after that a crash and a crisis have followed. Just quickly, here are the examples I go through fairly closely in the book. In the 1920s, the US central bank let the money supply, M2, grow by 65%, and, well, right up to the 1929 crash it was one long party — and in fact the star economist Irving Fisher even said, nine days before the crash, that stock prices were now roughly at just the right level. That was \"the truth\" coming from there. And, well, that's how it drifted into a crash and then into huge, huge difficulties. Industrial production fell by more than 40% in the United States. Almost 50%. GDP fell 33%. [09:37] Huge losses. Then, moving forward in time, there was Finland's recession — Finland's depression, where policy was run on loose money with the exchange rate pegged, heading into a major depression in 1991. GDP fell 12%. It wasn't long before the Asian crisis followed, in which many Asian countries went through the same thing — there was a lot of money in circulation. German and Japanese banks did the financing. Credit expansion in the Asian countries ran as high as 20%. I looked into that at the time together with one of my students. And then we came to the United States and subprime, which, well, was a real catastrophe. The entire capitalist financial system was on the verge of collapse. So these are the kind of events that follow a certain pattern, and the pattern is that monetary policy has been very loose. Private debt has been allowed to grow relative to GDP, and that's shown up in the housing market and, well, the stock market. And then there's been a hard, hard crash. Yeah. And then again, this world-policeman [11:05] role — well, we see it often enough in these places, and at least in my view their playbook has been: cut the currency peg, hand out hard money, the IMF's SDR — the Special Drawing Right — a bit like my own ECU2, this kind of basket currency, if I can just slip in an editor's note here — and then, after that, break up those left-leaning structures and force the wrecked, centrally planned economy, wrecked by the central-bank bubble, into some kind of market economy, and then, with a floating exchange rate and a market economy and a bit less socialism, it usually rises from the ashes like a phoenix — until good times come around again, weak men and women get elected, and they switch that same institutional destruction mechanism back on. Yeah, the same wheel spins around again. What tends to happen is that the rescue operation then usually needs, well, public finances, politics — in other words, taxpayers' money. Right, and that's something we've debated ourselves too, in a way. But you do have to remember here — banks, the commercial banks, are a kind of villain who then, in this IMF-style operation, usually get rescued with that distasteful bail-out — even though bail-in mechanisms have been developed, they're still not very, very [12:25] fashionable. So that's what you're criticizing — that on top of this institutional, misguided central-bank complex driving everyone into the wall with the wrong monetary policy, the accomplices — meaning the commercial banks that also created the money — still get bailed out regardless. Yeah. So there are, in a way, two places where the finger points here. Central banks, with these mistakes, are one target, but they've also then allowed this private, profit-seeking, greedy banking system to bring about the credit expansion. So in the 1920s, in the 1920s, the volume of private credit relative to GDP rose to 140%. Mm. And in the year before the subprime crisis it rose to 170%. These figures were published by a Marxist economist, Steve Keen, from Australia, and I've — I've gotten to know his work. Isn't he one of those balance-sheet-recession types? Yes, indeed, and I — I read his book on the crisis carefully, and [13:40] and there's this — this very telling chart in it. Yeah, yes, yes. So now that this wool-sweater-economist term M2 has come up — if I can translate a little — the equation is made up of M1, meaning the central bank's monetary base, and then that's extended into M2, where the commercial banks also get pulled into the money supply — and together these two form this ugly bubble, and then, when it's pumped from both sides, bad things happen. Then bad things happen, and, well, this is the — this is the tragedy of it — you'd expect banks to be striving for solvency. Our banking theory in economics in the 1980s suggested that banks' — this profit function of banks — takes such a form that banks don't, don't, don't then go chasing such large risks — but since banks are protected in so many ways — well, the deposit insurance system protects them as things currently stand, and, well, then of course there's also the fact that bank shareholders are protected by the principle of limited liability, which is an extremely important principle, but banks are able to exploit it — and, well, then there's also the fact that banks [15:06] are important for the whole system. They're too big to fail. And all of this seems to create a kind of incentive mechanism inside banks — inside their own lending policy — such that, well, risks get taken. Yeah, that's how it is. Now, I myself have been on the investment-banking side of things — specifically as a nasty investment banker, no less — so I'm this friend of free-market economies and capital movements, and I'm innocent of whatever happens on the balance-sheet side, for most of my career. Sure — right now I'm drinking out of this mug from Royal Bank of Scotland, which is one of the biggest blow-ups in British history, but I joined there afterwards, headhunted. Actually, I brought in Elina Valtonen. This, by the way, is a wonderful piece of pre-woke-era humor. Elina challenged Stubb and Vapaavuori inside the National Coalition Party as a young woman, and the caption here reads: \"Elina — man put in his place.\" So that kind of anti-woke humor can indeed be found from Elina — but anyway, Elina [16:06] Valtonen, and myself, and then, well, another person, not a public figure, got recruited to RBS as well — and nothing much came of it, of course. This Stephen Hester was the head of investment banking at my best bank in London, [unclear] — and from that leadership role at RBS, since he'd cleaned up after Sir Goodwin's era and whatever mistakes had been made there, well, he's now chairman of Nordea's board — and I have to say, full disclosure, I'm a small shareholder in Nordea myself, and I have indeed reaped some of those capitalist profits, so it's actually good to bear in mind here — at least I think about it from this angle too — that it's nice riding up along with Nordea in the good times, but if bad things were to happen and Nordea took a dive too, I'd take that loss on the chin like a man. But that's usually not how it goes. That was a bit of a rambling non-question, more of a statement — but it is important to remember that this banking system isn't perfect even now, and the EU's attempt to regulate it more tightly [17:11] ties in with the euro, perhaps. So, should we get into the euro's destructiveness and the mistakes made over the years, or should we take a few more words first on the proposed fixes for the banking system? Um, either one works for me, either one works — if we're going to keep recalling the euro story a bit more, then — the background here is that when the Bretton Woods system collapsed in the United States and the world moved to freely floating exchange rates, and, well, there was still a willingness in Europe to create this ERM system, where currencies wouldn't fluctuate against one another — and that did indeed collapse, in the sense that the fluctuation band had to be widened out to 10%. It even happened that, while the British pound was part of that ERM, Soros spotted his moment, knocked the pound down, and made billions, billions in profit from it. [18:23] That's the background here — and yet, still, in the euro, or in Europe, there was this dream of tying exchange rates to one another. And so, even though Finland too had gone through that depression and lost 12% of its GDP, it went in among the very first wave into the euro, into the euro — and for 10 years there was celebration, until the truth finally came out, and the markets pushed Greek bond yields sky-high. Greece had a budget deficit of 15%, and these statistics had been falsified, and well, that's how it went here — and, well, no, the worst problem here was that people in Europe genuinely believed that a growth and stability pact like this could prevent this kind of excessive debt and reckless fiscal policy, and, well, this was deceptive, [19:40] because, because every country seemed happy to make use of the chance to take out loans and, well, run up debt, and spend that money on public, public expenditure, and this, this then led, led to Europe being extremely indebted even today — the member states of Europe's monetary union. It was to such an extent that, just two or three years ago even, seven member states of the monetary union had a debt ratio over 100%, and this was never successfully resolved. This, this problem actually traces back to a certain kind of thinking — that these collectives, the monetary union, the European Union, NATO, function in a way, in a way, on shared thinking, shared agreements — but each member then has [21:03] a national incentive to pull things back home. Mm. In all of these communities — and in Europe, in the monetary union, that led to more debt being taken on than had been agreed in that deceptive growth and stability pact of 1997 — and things have carried on down that road, still being patched up to this day, and, well, Greece was never allowed to leave the union afterward — it was kept in and handled with joint liability. That joint-liability bailout was exactly what the banks had been expecting, and they got it too. So French and German commercial banks were the first ones bailed out there, so that costs wouldn't fall on French and German taxpayers in particular — instead they were collectivized within that system. But there — that pulled in a whole lot of threads, maybe. I'll start with a compliment — I remember you were really good at grasping some kind of, well, basic theoretical level for how it's worth thinking through various problems. I remember you were really excited to find, in this Future of the Euro book, that fiscal federalism was quite a good way of thinking to start unpacking a lot of that complexity. And then in there you threw out this thing — was it collectivism, the collective — and I thought this sounded [22:26] a bit similar, in a way, to a fundamental framework for how it's worth thinking about the dynamics of these state unions and monetary unions. Let me mention here the big name that even many economists don't know. Mancur Olson, the American economist, wrote — already years and years before these crises, he wrote. He wrote three books, I've read them all. He wrote articles, I've read them all, in which the idea is essentially that in these loose coalitions and collectives, national self-interest overrides the collective interest. Mm, and this is what brings down — this is what brings down the euro, this is what brings down the architecture of the European Union, which we can all see functioning so poorly. There's this unanimity principle and all of that, and, well, then in NATO we've seen this under-investment incentive too — we'd agreed that 2% would go to defense, and yet there were only three or four countries that actually met it. Well, now there's a crisis under way in Europe, as global developments come crashing down on Europe. So, well, Mancur Olson's theory helps explain, helps explain these problems. [23:48] And I've taken this even further myself, to the next stage. I've asked, well, not only what the costs of the euro are — the empirical costs, whose assessment is important, and the Bank of Finland has never done that — but I've also asked what Europe's alternative is. And I've tried to think about what would happen if Europe were developed into a federal state along the Swiss model, with genuine parliamentarism, with the Commission's power reined in and a return to subsidiarity — meaning power and decision-making handed back to the nation states, away from the Commission, in everything except foreign policy and these kinds of large-scale projects, which are a certain kind of collective good. Foreign policy, competition policy, and that type of thing. Yeah. And I have to say, well, these things can actually be calculated mathematically — thanks to wool-sweater economists and the rest of us too. So, well, from this Future of the Euro [24:55] book you'll find this stochastic difference equation, where minds sharper than mine in this Euro Think Tank calculated out this deviation between the euro and, in particular, the dollar area — and it made for pretty grim reading, that this destructive effect of the euro can, with a certain probability, be calculated mathematically — and you certainly won't find any particularly noteworthy research on that difference equation from the Bank of Finland, or from any other ECB branch office either, no, no, no, doesn't seem like it. What it looks like is that before the euro, the countries of the European Union were 10% further ahead in income formation than the United States. Mm, and then, in the wake of the euro crisis, they're 21% behind the United States — so you can draw your own conclusions from that. Our difference equation gave an estimate at the time that we could talk about roughly half a percent — of losses, ladies and gentlemen — no, the euro doesn't add anything, it actually reduces welfare. Welfare, welfare losses [26:08] calculated in lost output. Well, in Greece that loss was 25%, so the losses are, are large. If you calculate cumulatively what a half-percent loss means over 25 years, that's, that's a pretty sizeable, pretty sizeable amount. What happened here was that not everyone joined in on this. Um Sweden, wisely, kept its own currency — and, well, according to the Swedish economist Björn Wulson, in two articles in the journal Ekonomisk Debatt, eight years ago there was an estimate that Sweden had benefited from its floating currency to the tune of one year's worth of GDP — roughly. Yeah. In euros, that would be maybe, maybe around 400, 450 billion. [27:08] Wonderful. And, well, another thing — if you don't believe this and want to play that tired Denmark card, then look at Poland. Poland is genuinely doing quite well, and their defense is in good shape, and they've never downplayed the threats from the eastern border. In my view they've had sensible, sensible politicians there, both in monetary policy and a bit in realpolitik too. I could add one more thing here, related to that — that without the creation of the euro, the euro crisis would never have arisen. This kind of over-indebtedness would never have happened, because we have data on the interest rates — on how the markets priced euro-country government bonds before the euro was created — and in those, in those interest rates, you could clearly see this risk tied to the state of public finances in all of these countries, the countries that then, directly, directly, ended up as targets of the crisis — and, well, it's credible that that kind of market pricing would have produced market discipline. This wouldn't have happened — the markets wouldn't have allowed this incentive toward over-indebtedness that then led to the euro's, the euro's ruin. The European Central Bank bought up these [28:32] bonds from the markets, to the point that at their worst there were as much as 4,700 billion euros' worth sitting on the European Central Bank's balance sheet. Yeah. Looking at the most recent figures I've seen, it's still 3,500 billion euros. A big, big sum in itself, but it's been tucked away there on the European Central Bank's balance sheet now, and nobody really knows what's going to be done with it. Yeah, one option is digitizing it into a digital euro, but let's maybe not go there just yet — that's where I get to shine again with this ECU2 model, which is the solution — namely, decentralizing it out into the member states' own digital wallets. But I can't just skip past this good observation of yours about the Swiss model — and I have to say, on a small tangent here, our founding fathers — I went to see the Hamilton musical over in London, and, on this little detour, I hadn't actually realized that back when we were writing this Future of the Euro book, there was already this idea that people wanted a Hamilton moment for the euro — a Hamilton moment — that now, in a way, through crisis [29:39] to victory, and now we're building the finest embodiment of fiscal federalism — this kind of federal state, and, well, this sacred, sacred totem of a central bank. And even though Hamilton was a genius and a tough character, he was also, in a way, a friend of that kind of centralized central-bank institution. And now, here, in our own founding-fathers scenario in the EU, monetary policy has been a bit botched through the euro, and I don't know who's supposed to be blamed for that. But then we've got, in the political structures, this kind of \"coalition of the willing.\" This sounds a bit like it's the only reason we give Ukraine money — so that Orbán can't, in a way, water it down through the joint structure. Now we've got Stubb shuttling around, quite competently in my view, multilaterally, among the allies — even calling up Trump together with the Danish prime minister, for instance. So, so, might that be the flexibility here — that we've [30:39] used this small — well, you can't quite call it a market mechanism, but this kind of coalition option — this \"coalition of the willing\" alliance within the EU. This has now been created as a kind of emergency fix, and quite, quite, quite rightly so — Europe really is under threat from this imperialist Russia via Ukraine, and, well, it needs to be stopped. The United States is no longer willing to do that. My estimate is that, out of the United States' 900-billion-dollar defense budget, around 5% goes toward Europe. This is a very rough estimate, but — US garrisons, troops, nuclear weapons in five European countries. It has sea transport and all the rest of it. That might be an underestimate, but it still means it's, it's maybe 40, 50 billion that the United States spends on defending Europe. Today Trump apparently wants to cut back even on that. As for supporting Ukraine, the United States has totally abandoned it, according to the Kiel Institute's latest figures, figures [32:01] — so, yes, Europe has certainly had to come up with solutions now, um, given that Trump has pressured Europe into raising its defense spending. That's a big plus on Trump's record of achievements. Europeans ought to be grateful for that. There's still Spain, of course, free-riding as ever, but, but this has moved, moved in the right direction. Now, though, this coalition of the willing still carries within it that same problem that's in Olson's — in Olson's theory of collectives. This, this is a certain kind of emergency fix. You gather together and hunt for shared positions, whereas that idea of mine about a Swiss-model-style arrangement goes, goes, goes further. There, collective goods are produced only — meaning supranational collective goods are only produced by this central body, central body, just as in Switzerland too. Foreign policy, some larger projects, and, as already said, security policy would be part of it; climate policy could be part of it; energy policy is national — but then legally, in a way, [33:21] competition policy — and these can be things handled jointly. But the number of ministers in the Swiss government is seven, and, well, they get along just fine with that. Decision-making power is delegated to the cantons and local government bodies, and they decide on matters. That's the subsidiarity principle that was agreed when the European Union was created, but which has since been abandoned, with the Commission taking that power for itself. Yeah. And it goes on to decide, decide, on matters that really, really don't belong to it. A coalition of the willing, from this angle, from this angle, can't be the kind of architecture that's, that's permanent — instead, well, this European architecture ought of course to be rethought, even though that's difficult, and, well, rethought, rethought again. Today, European citizens don't want to identify as members and citizens of the European Union. They're members of their nation states — but under a Swiss-model-style arrangement like this, they'd also gladly be members of that collective, one that would handle those shared matters in a completely different way than the European Union is able to today. [34:43] Yeah, good, good point. And I had a guest on from Switzerland, Markus Holmen, and while describing exactly that, he said that local young communists there had proposed a direct referendum on introducing an inheritance tax on the portion of estates exceeding 50 million francs. Here in Finland, that threshold has now actually been raised by this so-called right-wing government — to 20,000, 30,000 — and then the public, well, sensibly decided: no, read my lips, no — and voted it down. So that Swiss model is fascinating — the overall tax rate there is markedly lower than in Europe generally, and in Finland especially. Here we're running at around 42, 43% of GDP, whereas over there they're roughly where Finland was back in the 1980s — some nice figure starting with a low three. So it's really efficient for the citizens. So yes, I do warm to this. So — don't let too much bloat pile up in that central organization; push subsidiarity down to the next level, which for us would be the nation-state level — and then maybe, yes, I'd tighten up democracy a little too. I'm a bit wary of direct democracy — are we, Vesa, too stupid to vote directly, meaning do we need representative [35:57] representative democracy — but have you thought about that? Yeah, yes, yes, yes. I — I don't believe in direct democracy. I believe in representative democracy, and the reason, the reason is that in direct democracy, single-issue zealots and that kind of agitator can end up producing decisions that are unwise, that haven't been publicly, publicly analyzed. And I believe that in representative democracy this, this gets handled better. There, these, these phenomena get processed more carefully, more carefully, and more, more thoroughly, and the resu"}, {"slug": "7-finanssialan-neuvottelut-kirsi-larkiala-neuvottelija-3", "title": "Financial Sector Negotiations | Kirsi Larkiala", "titleOriginal": "Finanssialan neuvottelut | Kirsi Larkiala| #neuvottelija 3", "guest": "Kirsi Larkiala", "guestsCanonical": ["Kirsi Larkiala"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/kirsi-larkiala/"], "episodeNumber": "3", "publishedAt": "2020-02-04", "duration": "50:06", "format": "full", "topics": ["negotiation", "investing_markets"], "description": "Financial sector negotiations | Kirsi Larkiala | #neuvottelija 3. Sami Miettinen talks with Kirsi Larkiala, a change leader and reformer of the financial sector ecosystem. Kirsi has worked at major international banks and in recent years has driven the growth of the fintech industry in the Nordic countries. Sami and Kirsi were both at SEB at the same time, where Kirsi completed the Wallenberg Institute as only the second Finn to do so. The episode discusses commercial banking and its negotiation challenges as the industry changes shape. The discussion also covers the differences between the Swedish and Finnish fintech ecosystems, as well as Kirsi's encounter with JPMorgan Chase CEO Jamie Dimon in Davos.", "page": "https://www.neuvottelija.com/podcast/episodes/7-finanssialan-neuvottelut-kirsi-larkiala-neuvottelija-3/", "text": "[00:00] I was at Davos last week, so I had the pleasure and honor of meeting Jamie Dimon, so it was iconic. Yeah, amazing. And JP Morgan's. Yes. So, welcome here to the Negotiator channel. I'm negotiator Sami Miettinen. Today I have as my guest Kirsi Larkiala, change leader in the financial sector and a long-time, experienced banker in global banks. Welcome. Thank you, Sami. Nice to be here. Yeah, we were even at the same bank at the same time, at SEB, and I was there in the corporate finance unit, or the investment bank, and I think it was global head of transaction services for Finnish clients. Across all stages, quite broadly, really. Well, for Finnish clients, but then I also was responsible for group packaging, meaning these solutions, and the modern term is service design, for 21 countries, so it was quite a role, an interesting role. [01:00] Yeah, and indeed when we were there at SEB, I myself noticed that it's actually steered by this Swedish powerful family, the Wallenbergs. And I then took a Swedish course myself and I was there with this Niina Äikäs, by the way, who then got into this Wallenberg Institute in Sweden. And that was probably the road to success there at SEB — did things go so well for you that you Yeah, they did. I was number two from Finland at the Wallenberg institute. It was a very, very interesting experience, because it also let me get a channel of dialogue with Markus Wallenberg. and we were at their cabin X kilometers from Örhus for a couple of weeks, totally without network connections. And at [unclear] of course there were closing dinners and it became a really, really good tight-knit group, like 20 people, most of whom were Swedish, with whom we still keep in touch. [02:03] Yeah, I bet the Wallenbergs turned up there in the corridors and so on. Yes. Yeah, and they had funny nicknames, by the way. The Finland-Swedes, by the way, like Sweden-Swedes too, often have these silly nicknames, with which they show that inner circle, that this is fun. And then if you're not in that inner circle, you don't know their nicknames. I find that a fun detail. Yeah, so from there you then went to Danske, doing kind of the same thing, but then at some point, like for me too, these global bank jobs ran out, and you decided that now you had to move to more agile fintech companies. Hadn't you already been on that path for a while by then? Yeah, well look, November 14th, I remember that day well, we held a really big technology seminar for our biggest client and institutional client, and that's actually where this fire started, like, wait a minute, how come here in Finland, when Finland claims to be a pioneer of the financial sector, [03:04] how come this fintech, meaning financial technology, is so much in its infancy here. And that's when a long road began, five and a half years, almost six years now. And we're still on that road. Yeah, and you've been running this Finnish fintech scene since then, in leadership roles. Indeed the Swedes are ahead in that too, by the way. Actually even the ECB has ECB-X, which is trying to disrupt the parent bank, which is quite interesting. But there's been all sorts there, Klarna and top-tier Izettle and others, which have then gone on to the world with huge sums, or are still independent. So Finland still seems to be the little brother or little sister in these things. Yes, unfortunately that's how it is. Well, there's a bit of the same phenomenon there as there once was with Apple's arrival versus Nokia. in this fintech space it's the same phenomenon, meaning Finns are extremely skilled and the competence level is really high, [04:06] but maybe a bit too much of an engineering mindset thinking through all the functions and details and wanting to be fully ready, before daring to come out and say we have something new. Whereas the Swedes do it with big money and marketing means, they go much further. If you think about it, there's Klarna, which once came to market, there was nothing sensible about it really. There was, if you think from the individual's point of view, meaning the consumer, a really shoddy product, where you had to enter your personal ID somewhere and you get an invoice to your email, an e-invoice, so, a totally raw, unfinished product. But there they just keep chugging along and have banking licenses and so on. Totally incomprehensible. It also came with a lot of marketing budget behind it. Yeah, the Swedes sure know how. Maybe it could be interesting to talk a bit about traditional banking, where we were both at big Nordic banks. I was then also at Credit Suisse there in London, where I was for a long time and saw that side too. [05:08] And in a way, back then in the late 90s, early 2000s, there was a lot of struggling with investment banking and this commercial banking, meaning combining it with retail/commercial banking, and they were combined and separated and worried about, whether it's right, and whether the U.S. was right after all, which then separated the two. But if you look at, say, the commercial banking side, then really, now, if you're at some kind of organization like SEB or Nordea or maybe even Visa-type, then in the past the game was such that you had big clients, and then you tried to get as many services as possible from them under the same roof, and then there were things like transactions, like M&A deals, which I still do, and share issues, and currency exchanges, derivatives, and bonds, and more. And then the banking business was in a way, in a certain sense, a loss-making mass business, so you'd give, say, half a billion of balance sheet to some giant company, [06:12] as long as it does these nice things. And now it's moved on to this breaking up of the ecosystem, so in a way this fintech is precisely about trying to grab different slices from the banks' overall pie. Maybe that traditional banking, do you see it as still having a lot of future ahead, since the scale and relationships are just so good. Yeah, absolutely, I'd add to, or slightly correct, your analysis from when we were both bankers. I myself have long, long represented transaction banking, meaning all these basic banking products like cash management, liquidity management, generally payment traffic, trade finance, all short-term financing products, supply chain financing and so on. Transaction banking was always the so-called gateway product in the bank. So when a client chose the transaction banking product family, especially cash management, [07:15] then it was said that the client had made such-and-such bank, say SEB, their housebank. Then internally in the bank it was calculated that a client who is a housebank client, generates 9 to 15 times more money than a non-housebank client. So transaction banking ties the client to the bank, after which it's much easier and the client automatically starts using precisely markets and treasury products, all these basic complex expensive products. And of course wealth management and all the other stuff too, so that's the sort of foundation everything starts from. It's still the foundation, but what's interesting is if you think, say, about these short-term financing products among Transaction Banking's products, I myself do a lot of projects where I specifically try to help traditional players so that they don't need to use their own balance sheet, but also not their legacy systems, because those are so old-fashioned and they still need to be modernized. [08:21] So instead of modernizing their legacy systems, they look at various fintech consortiums, with whom they can come to market more easily, faster and more agile. Yeah, that was interesting, that you treated transaction service there as a housebank marker. I had somehow learned that it was the loan, sort of the syndicated loan, that would be it. No, no, no. Okay, well, right. Transaction banking is, because that's also put out to tender, generated and tendered. And then there are six providers, or five providers, or even ten providers. Well then that stickiness is admittedly better. Maybe this was just an excuse from these global banks. Yeah, but the reason why transaction banking has that stickiness, and why I also have a passion for this technology, comes from the fact that transaction banking's stickiness comes from, that a lot of technical solutions are used there, meaning they get implemented. For example, at a large corporate, think of some Nokia or Stora or UPM, well it's the implementation project itself, that you switch, from some [unclear] or, say, [unclear], it quickly becomes a two-year project, [09:23] which is why it then sticks, once it's been switched. Yeah, and the Nordic banks were and still are terribly good at that, at that side. I remember when I was at an international bank, it was quite the uphill battle trying to get them to switch. The Nordic countries, they never really switched, but say, some England, they'd switch a bit more easily, since execution with the Nordics there wasn't maybe quite as perfect. that execution with the Nordics there. Yeah, but this has moved forward since then, but this kind of cross-subsidy world matters in negotiation, that that of course is the the bank's guy who sells this whole the corporate banking service, well he tries to find that certain kind of synergy and stickiness with that client and channel all those products. And then again the lone guy who offers just one clean thing, well that's a bit like that kind of synergy stickiness with the client, so that product probably needs to be quite a lot better for that client to take it on its own. Yes, exactly. And then like you'd say, what is actually changing here, that technology technologies come and go. That's where the pace just keeps accelerating. [10:23] But then in the end, if we think about that at the bank, say that client relationship manager for that corporate client, then instead of, before it used to be that all along, you knew your own bank's products, you knew how to sell them. Now you have to, and then elsewhere too came the need that you know how to cross-sell a bit, meaning you know how to already sell markets products a bit, or a bit of transaction banking products. Now we're in a state, where the client relationship manager has to steer the client's ecosystem. So realizing that, say, Nokia is already currently using three fintechs, so of course you have to steer those, and then still the bank's own products and the competing bank's products. Great, yeah. Fortunately I'm no longer at a bank. Exactly, the client relationship manager. The organizational and job-description shift here is actually much bigger. That's going to be the pain point here. No longer, with [unclear]. [unclear] you can get pretty far there. No, no. And besides, these cheese slicers are already a bit thicker cheese slicers, so what you can use for these kinds of lunches, well those have just gotten thinner still. [11:29] Yeah. It's a tough spot to be a client relationship manager now. Right, even then there was already this internal bank competition, like [unclear], and an example is this balance-sheet banker, who sells syndicated loans or other bilateral loans. Then there's this new technology thing, like the bond guys came to sell, then, this kind of capital markets product too, so you borrow from the capital markets instead, and this balance-sheet type thing. Yeah, there have been conflicts like that within the bank itself, and then also alliances with other banks and professional organizations. But if we move on now from that banking world to that. One more thing besides. What especially interests me here in this transformation, isn't really my former area of responsibility on the transaction banking side, but the markets operations. Now we're seeing in the Nordic banks that structured products, for example, are the kind of thing that SEB, the Wallenberg bank, has suddenly decided to discontinue. Tell us again, what is a 'struksi'. That's structured products. It's hard to say. 'Struksi' is much better. [12:34] 'Struksi' is better, yes, yes. [unclear] has a bit of that same world. But [unclear] has the same situation. Actually I was discussing, I was at Davos last week, so I had the pleasure and honor of meeting Jamie Dimon, the one and only. Amazing, JP Morgan's. Yes, and I talked with him for a long time and specifically asked what he thinks about this transformation in the markets space. He said that there can of course be regional things, like some banks are small enough that they end up having to outsource. But he does see that investment banking, of course, he's always been an investment banker at heart. so he sees that it will stay. There will just be new products coming through digital channels. Through that new platforms will come again. And people's competence of course has to shift a bit. But the human is still needed. So he sees it as a new markets arrival with different product repertoires. Yeah, that was interesting by the way. [13:34] So, this networking, we could actually jump into that. I haven't been to Davos, unfortunately, I haven't gotten into those halls of power, but networking is terribly important, and actually here quite a few women have been mentioned who already got into that Wallenberg Institute, while men were left out, and actually Annika Falkengren was the one running this SEB. There are quite a lot of women in the leadership of these banks. On this investment banking markets side there are unfortunately few women. Come on and join, we could use a bit of diversity here. In this power position, maybe up there at the top level. We're actually also there at the Stock Exchange Club, by the way. Wonderful that you got in there too. Yes. It was nice to be among the first batch, so to speak. From the financial sector, two people were mentioned in the evening news, so of course Juliana Porsos, who has had a long career. [14:34] Hi there. Then me, and that was a bit funny, because I've still been in a somewhat different role than Juliana. Juliana has, I think, been more visible. I've done a long line of transaction banking and other investor-facing work. Those in the know, know. And then this fintech, which hasn't been all that popular, but now the golden age is starting here. Yeah. of the Stock Exchange Club. I can't help but mention that coming up there is Nalle as a guest there, who caused a Dalai Lama-level audience crush. The Dalai Lama visited the Stock Exchange Club. That was in a way impressive too, but I passed on that one myself. I unfortunately won't be able to make it, because next week is again one of those weeks where I'm in Monaco. We have in Monaco over the years built up this kind of pool good investors, who are, meaning they've ended up being registered in Monaco for a reason haven't they sold one tech one, two or three tech connections [15:35] and they still want to be involved a bit in something exciting and now we've actually gotten here over the years, really the last two years there's been this awakened interest, meaning them, they're interested in Nordic fintech and that's exactly it, that we need more money here for fintechs this has always invested in Supercells and generally Games and Health Tech and Clean Tech. Now fintech needs to have a new upswing. Yeah, great places, Monaco and Davos. Can't help it. Yeah, well, that's where the money moves around, yes. Yeah, but then this Nalle also appeared in this, by the way. I wrote this new negotiation mandate book with Johanna Torkki, and she was interviewed too. He is of course an influencer in the financial sector, and I think you could say that behind this Nordea homecoming is him, even though he denies it. It's still the biggest Nordic bank, Nordea. But now we have OP and Nordea as the big strong banks. [16:38] And it depends which part of the world you're looking from. Yeah, right. If you look from Stockholm, where I also spend quite a lot of time, since we have a lot of buzz with Swedish fintechs, and precisely that even though Nordea's head office is in Finland, many global head roles are still in Stockholm and probably will be, in Stockholm and Denmark. And especially on the technology side, the IT side, there's an emphasis in Denmark, and the whole markets operation, its head office is in Copenhagen. Yeah, I've written a lot about this euro topic, and I think the euro, euros have good and bad sides, but with fintech somehow it feels like since the Swedes have the krona, they're kind of able to test everything with a home market bias, and otherwise people can't be bothered coming there with a weird, funny currency, and then it's much easier to jump from there to some euro than the other way around. so you'd actually think that krona would be a slowdown for them, but I think it's the opposite, especially in fintech. [17:41] It hasn't been at all, quite the opposite. And then I'd say, if you look at it from the direction of Silicon Valley, the Nordics are reliable and interesting, but the Nordics are as big as Stockholm. Yeah, amazing. An exceptional Saxo Bank, which is of course a fintech too, but it's grown past that a bit by now. Yeah, but in that fintech space, I was looking at those lists of what's there. My favorite is maybe this Alphasense, which is a Vendep-backed SaaS. the company that helped it grow back in the day, and now it's this kind of AI-based data-flow finder, which finds trends for supporting stock trading, what's happening there, and it's worth a billion or thereabouts. So we do have big successes, and then when you scroll the list down, give us a couple of interesting ones. Well that's exciting. [18:42] First of all, if you think about it, this whole time I've been around in this fintech scene, probably something like 450 million has been raised in fintech funding rounds. Then you have to remember it sounds like quite a lot, that on a Finnish scale into one area, but when you take out 190 million for Mash, which had whatever happened to it happen, so then it's not really that huge. But then if we look, Alpha Sense got already last year 40-plus million, so Ukko put in 540 million, 41 million if I remember correctly, exactly. But then the next pump-fairytale is 10 million, Silo AI, and then it drops to 5 million, that's Enfuse. Yeah, yeah, right, maybe. There's a few of those, but then it's quite, quite, you get into pretty small numbers. And then if we go back to Enfuse, Enfuse is absolutely, definitely my, if you think about this Open Banking and the arrival of the PSD2 regulation, it's my absolute favorite, [19:43] because they have a really huge advantage in that both the consumer side and the corporate client solutions, but unfortunately when Nordea was involved in a funding round, they got the first 5 million, and their competitor in Sweden, Tink, got 56 million. Then when they got a second 5 million round, at the same time Tink got a 90 million round. That makes you think, that no matter how good you are, the amount of money the other one has, brings a whole different kind of credibility. Since of course it lets you do all kinds of things, much more. Yeah, that's unfortunately how it is, but good. And then I have to say, I do a bit want to call out, without naming names, a certain Finnish bank CEO here. that when choosing open banking, a Finnish bank really should choose a Finnish open banking player, [20:46] meaning Enfuse, favor it, keep the Finnish flag high, instead of choosing a Danish one. Oh, oh, oh, shame, shame, you out there, you know who you are. Yeah, well that's just how it is. That's how it is. This is some color for you. Oh, oh, oh, that went a bit too far now, but yeah, that's how it is, that the ecosystem should... If Finns don't keep the flag flying, then who will? Yeah, that's how it is. You could say international competition refines things, but in that situation it probably doesn't refine much. Yeah, so the ecosystem needs to be built up, and then with those successes, then the investors get on board too. And maybe the foreign money comes then too. And technology know-how at least, that reputation Finland has always had, that you can find these tough coders who know how to do it. We just need to get up alongside the Swedes, since the Swedes have a really good reputation in the fintech scene. We need to get up alongside them. And then the other thing is, on the other side of the scale, if we think about large corporates and the services they choose, [21:50] we should get exactly the same phenomenon. Back when I was at SEB, there was, actually Mika Ihamuotila was chairman of the board at what was then the Finland-Sweden Chamber of Commerce. And at SEB there was Jan Steenström, who was of course Swedish-speaking, so he couldn't go there to the Finland-Sweden Chamber of Commerce. So I was there representing on his behalf. It was indeed the case back then that there are these 'real' banks and then there are these foreign banks. Like they come and they go. And that has of course happened to some extent, but for example SEB has come and stayed. And that's when I just realized that there are actually similar synergies now in this arrival of fintechs, that if someone imagines that fintechs won't arrive or stay, that's just undeveloped thinking, because they arrive and stay, and it's relative, you look first at who uses it, and it flows in every direction, and of course we've talked about how then people go back to using their own things, and SMEs their own, that same phenomenon, that foreign fintechs arrive with their service ranges, [22:57] and then they stay, and their products start getting used. So it's a false illusion to imagine that some Finnish fintech ecosystem will emerge, rather it's an ecosystem from the Finnish customer's point of view, in which there are players from many countries. Yeah. Well, one segment that hasn't been mentioned is crypto. There we have good expertise, like this Prasos out of Jyväskylä. And then there's more generally there in crypto money, bitcoins and around those. And I can't help but mention myself, Lifeline asked me onto that Realstocks.io, like sending greetings from the Advisory Board there, well, to Terry Roberts, who runs it, they're trying to use this kind of blockchain-based settlement or trading to create these kinds of safe investment targets, which could partly appeal to institutional investors, that they get yield, and then the secondary market performance is fairly stable. [24:03] that could possibly be, if real-estate backed, quite a good substitute for a bank deposit or a money market investment. And that blockchain in general, I think it's actually more important as a settlement technology than as a basis for money. There's a lot happening on the custody side too, for example in custody services. But then I have to say, when you mention those specific things, Finland's Prasos and then this thing where you're on the advisory board, that's almost exactly where the concrete examples are, so now I'm going back to Stockholm again. There's for example a company like Enigio Time, which does this kind of original document work using blockchain technology. It's a good example of that, if you think about the bigger picture, since it always gets tied to virtual currencies and some trading hype, this is right at the core of it. [25:08] So, original documentation, the original document, how it stays unchanged. And that's when you're talking about things that are also possible outside the financial sector, but it applies to really many business areas, specifically also within the financial sector. There are all kinds of pilot trials going on now, where for example Nokia is involved, and SEB and OP banks, specifically on the trade finance side. Yeah, well, we can't praise the Swedes too much now. It's those sympathetic Swedes who also support the Finnish scene and channel money, but we should just go to Stockholm more often to raise that money too. I have really good experiences working with Swedes. They're easy and fast in decision-making. Maybe it's exactly that speed, and there isn't that kind of bureaucracy that you often run into in this country. [26:09] Yeah, there's at least double the wealth there anyway. Exactly, that helps a bit too. Yeah, that's how it is. On the negotiation side then, when you start pushing these towards platform or economic sector market leadership, or some kind of economies-of-scale situation, you have to do an insane number of funding rounds for that, because often these fintechs, tend to be pretty money-hungry, since developing and scaling the technology takes money, even before that, the pilot phases can eat up a huge amount of money. Yeah, and then there's the problem that the time span is terribly long. So we have, say, on this side, we have fintechs that are incredibly ready and fast and flexible at doing that cooperation with traditional players, say the banks. But then at the banks, getting meetings still takes an insanely long time. [27:10] So once the fintech has had the first meeting, they imagine, ah, now surely in two weeks we'll hear something. Nothing's heard even after three months. When one side is thinking six months and the other side is thinking two weeks. That's often maybe the core problem, that yeah, we've invested a lot in developing the technology, money has been poured into it. Then you'd want to get into that cooperation and the implementation pipeline really fast, and more from there. But the fact that you get to the signing stage and get it negotiated, that agreement, well then only the big, laborious implementation phase begins. And since both of them are laborious phases, the pre-signing phase and the post-signing phase, there's plenty of room for things to trip up along the way. Yeah, that's how it is. And do the financiers or investors then also have to get involved in helping out with this? Yeah, yeah. You probably also end up in there sometimes, in these actual implementation streams. Well, if I look at where my daily time goes, it's really like my daily bread is exactly that, I try to push through contacts on the traditional-player side, saying hey, how could we get this taught now. [28:19] And then I try to push from the fintech end too, and do a bit of financing talk, like hey, now you need to think about other channels and next partners for this, because you could get stuck, since it just takes so long and they're used to it. Could you talk about regulation there, that there's this PSD or the payment services directive specifically, and Open Banking, doesn't it in a certain way force banks to open up some interfaces, so maybe in some app pairing you could do without the bank and just take that interface from there? Yes, but that's a mosquito in the Baltic Sea. Like in that whole picture, of legacy systems, traditional players and fintech working together, that's the intention. Well what about this pilot phase, at least in London, where I was for a long time, there's this kind of working sandbox system, where you're allowed to operate below the regulatory radar up to a certain commercial limit, without some financial supervisory authority immediately coming down on you with compliance requirements. Has this come to Finland? [29:19] It hasn't come to Finland. It was said about that London model, that it's at least, if we use global investments as the measure, the UK has risen to number one, which is quite interesting, given we still have the constant Brexit threat looming. Well, greetings to Fiva then, that a sandbox would be possible, that it would make things easier here with the ecosystem. But if you think about this new operating model of Klarna's, how they're using PSD2, the financial supervisory authority gave approval there, and there's many more coming too, so they really have picked up the pace, I take my hat off to them for that. There's a lot to do, after all. Yeah, yeah. Then if you think about those negotiations, is it really the case that you need to get a few banks to adopt the systems, or could part of it maybe also happen on the customer side, a company adopting some system? Yeah, I mean the end customer is the best pusher. [30:19] So at the bank there's always the thinking that there has to be a business case. Or with any traditional player. There has to be some business case. And the best business case is always built when there's some big enough end customer, or a cluster of end customers. So that's maybe the easiest way. And even that's not easy, since it requires both muscle and patience and precisely those negotiation skills. Yeah, and you probably have to negotiate those customer agreements, and then in a way that brings the critical mass, so the bank has to kind of kneel down for the customer in a way. If I look at this ecosystem, well here, where I was visiting just earlier this week, at Finnvera, which has been an important part especially in enabling financing for SMEs, but of course also for big customers too, and we have this... and... Right, export guarantees. I go through all these, so I check in with them too, on where things stand, [31:19] so as I open up that picture, of what this financial sector and ecosystem looks like right now, well there for example these law firms are in a central role, because contract practices are changing. And we too do a lot of cooperation with, for example, Dittis, because of that, because when you suddenly have a platform where goods flow in, and a decision should come out via AI in a matter of seconds, then you really have to think about contract practices in a somewhat new way when it comes to financing. That's how it is, and templates get made out of those. By the way, Dittis's Jan Nollila might come here, whom I interviewed for the book, since he has great theories about contract law and its negotiations. But yeah, that's actually a certain kind of template. In Lon"}, {"slug": "711-suomalaislonkerolla-jenkeilta-325-miljoonaa", "title": "The Long Drink's $325 Million US Success Story", "titleOriginal": "Suomalaislonkerolla jenkeiltä $325 miljoonaa", "guest": "Sami Miettinen", "guestsCanonical": [], "guestPages": [], "episodeNumber": "db-711", "publishedAt": "2026-05-29", "duration": "00:28", "format": "short", "topics": ["ma_exits"], "description": "The Long Drink grew into a $325 million success story in the United States in just seven years.\n\nWhat does that say about the scale of the American market and the potential of a Finnish product? Once a canned long drink reaches all 50 states and bars across the country, the value it creates can even exceed the market value of Finland's old domestic alcohol monopoly.", "page": "https://www.neuvottelija.com/podcast/episodes/711-suomalaislonkerolla-jenkeilta-325-miljoonaa/", "text": "[00:00] The Long Drink: $325 million in seven years. The American economy is so massive that once you get a can of long drink into all 50 states, into every bar, those guys made an insane amount of cash — more than Altia's, the state monopoly's, entire market cap. There was no AI involved in it, no technology involved, no delegations, no trade deals — it was pure business, pure long drink, and that's what Americans buy. That's U.S. trade. "}, {"slug": "712-tata-sijoittaja-ei-saa-nyt-unohtaa-martin-paasi-neuvottelija", "title": "What Investors Shouldn't Forget Right Now | Martin Paasi", "titleOriginal": "Tätä sijoittaja ei saa nyt unohtaa | Martin Paasi | Neuvottelija 388", "guest": "Martin Paasi", "guestsCanonical": ["Martin Paasi"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/martin-paasi/"], "episodeNumber": "388", "publishedAt": "2026-06-05", "duration": "59:49", "format": "full", "topics": ["investing_markets"], "description": "Martin Paasi and Sami Miettinen unpack the talks from Tampere's investment fair and the discussion that followed. Paasi explains why a zero-fee equity index fund statistically lands an investor in the top quartile of returns, and why five thousand euros could fund a newborn's entire pension. Miettinen describes his AI team, which backed an investment decision with analysis and hard numbers, and shares a surprising finding from the Hello Humans project about political bias in language models. Finally, the two debate whether it's even worth owning a company in Finland when a global index fund is available for zero effort, and why the AI megatrend could be an exceptional opportunity for Finland. Also covered: the link between data centers and electricity production, and Philip Aminoff's lesson on 'ownership with a face.'", "page": "https://www.neuvottelija.com/podcast/episodes/712-tata-sijoittaja-ei-saa-nyt-unohtaa-martin-paasi-neuvottelija/", "text": "[00:00] All right, welcome to the Neuvottelija channel. Martin Paasi. Hey. Hey. Hey. Or I guess I should say \"hi.\" Hi. Hi. Hi. So, we went to Tampere. We went to Tampere, and we were supposed to do a proper road trip, but you had parliament — parliament got in the way, so we ended up traveling separately, since you had to go press the voting button. Right. No — yes. Missed seven votes. Yeah. I mean, getting full value for the money. A whole week's worth. Yeah. Did you make some responsible decisions? Yes. Yeah. Tough, but hey, I did bring back a souvenir. Show it then. I bought one the other way around last week. You need to turn it toward the camera. There you go. But then a local real estate agent gave me this kind of balancing lynx mug. But Tampere really is nice to visit. We went to the investment fair — it set an attendance record — and you were the keynote speaker. I was more the specialist, the sharpest voice on the AI panel. You guys had much nicer facilities than I did. I don't know about that. You did have the main hall, though, and China took... Right, right. But you had those nice sofas [01:08] and you looked really smart being up there on that expert panel. Yeah. And Samantha came along too. Right, Samantha came along too. Yeah, yeah. But let's go through the opening plan — I mean, we worked this whole thing out on Paasipodi. It's worth hearing what the plan was and what actually happened. If I'm going to spoil it, your presentation was pretty much what I guessed — low-cost index funds — and then you promised some new information. What was actually new here? What more can be said on this topic? Well, the new part really depends entirely on who's listening — what's new to one person isn't to another. Right. But these days Finland is Europe's second most active investing nation. Finns are now Europe's second most active investing nation. That's entirely thanks to Rahapodi — Miika Luukkonen's and my doing — since we started Rahapodi back in 2014, and that's when the rise began. [02:13] Well, maybe not entirely — some of that credit probably belongs to someone else. And then the zero-cost index funds — those really landed, because that was your whole thesis: that if there were this miracle called a zero-cost index fund, that would be a pretty big deal. Right. Could you run through this, because — this is from your last episode, \"The Hidden Truth About Building Wealth,\" which people really liked, and for me, coming from business school, as a graduate, this index fund thing is completely obvious — but apparently in Finland there are still quite a lot of people, even after all your years of repeating that zero-cost index funds are a pretty big deal, who still haven't gotten it. It still hasn't gone fully mainstream. Well, that's basically one man against an entire establishment. You obviously have to understand that everyone making money in this business has zero interest in selling zero-cost funds, so— the point is mainly this — let me lay it out here — if you think about it, say some market produces, on average, a 7% annual return, and then imagine we could observe every investor who put money into that particular market over some period during which that market [03:37] produced, say, that average 7% annual return, and then think about how the actual returns those investors got are distributed around that market return — you get a pretty natural, bell-curve-shaped, church-bell-shaped distribution, where the market return sits right in the middle, of course, and it thins out the further left or right you go, and the message here is that it has to be this way. So— the average investors who put money into some market have, roughly speaking, gotten approximately that average market return, and then some got a bit better, some a bit worse, but that bell-curve distribution is essentially symmetric. And it has to be that way, because not everyone can beat the market — because then the market's own average return would have to be higher. So this is basically locked in. This is just plain fact — it's math. That's how it works. Now, if you notice, this is still before costs. Mm. [04:44] and you realize that an investor typically has annual costs tied to investing. Say 2% — well, let's really talk about the average investor who puts money into some balanced fund where a good chunk gets skimmed off, versus the smart ones who go with index funds — but on average, let's say 2%... no, let's just say 1% in costs, so we don't overstate it — that means the bell-curve distribution made up of investors who got that market return gets that market return — it slides over to the left. And from that, in practice, you get this observation: three-quarters of investors lose to the market return. Three-quarters — the majority — lose to the market return purely because of the costs tied to investing. And this isn't opinion either, it's pure math. From this follows the observation of why [05:54] cost-efficient equity index funds are so brutally good — because from this observation you can see that if you basically minimize your costs to zero, you already know today that in 10, 20, 30, 50, 100 — however many years down the line — your investment return will fall into that top quartile, because you'll get the market return, which is what the one-quarter of the crowd that beats or matches the market gets on average each year. So by minimizing costs, you know today that things will go really well for you. You'll be in the top quarter relative to all other investors. And if instead you go and do whatever — buy, sell, swap, get robbed, pay high fees, whatever it is — pay high fees, because that's how it gets sold to you: \"Hey, now that you've come into an inheritance, and your father worked so hard for this money, are you really going to irresponsibly leave it drifting in some index fund, or wouldn't it be better if our— [07:12] investment team, made up of sharp people from the best schools, keeps an eye on it to make sure it goes well — it only costs 2.5% a year.\" Mm. And in that case, there's a theoretical chance your investments do well, but statistically you lose about three-quarters of the time — the point is, you no longer know how it'll turn out. Whereas if you don't pay those costs, you know you'll land in that top quarter, which is extremely good. Mm. And because this — this isn't opinion, it's just logic — that's also why a stock-picker like Warren Buffett strongly recommends this option for basically everyone, and actually for Berkshire Hathaway too, once he's no longer around. That's exactly right. I actually went to the guy's 94th — his anniversary presentation out there in Omaha, and [08:23] the last year he was still chairman, and that's when Greg Abel — I think he was 62 — this \"youngster\" took over from him. That was a great trip, for sure. Yeah, yeah. But a great presentation too — I also watched it, and there was this \"time value of money\" bit where you were hoping there'd been some ancient Paasi ancestor who'd put in one measly dollar, and you were a bit disappointed there wasn't that kind of civic courage among your ancestors. Well, back in 1802 there wasn't really an easy option like an equity index fund that would've been zero-cost and accumulating. But this mainly ties back to the fact that the whole presentation's message went: first, opening up the idea of compound interest, then the importance of costs, and finally, where you should actually invest. [09:24] Mm. And then it came up in a slightly different form — I was a bit disappointed on Paasipodi, you boldly used the term \"baby fund\" — the Väestöliitto one — that's what you used. Not me. You weren't on stage with me for that one. But the baby-fund idea was there, I think. It was also on your slides here. There was a baby put in there, and then these two competitors, what were they, a 30-year-old and a 20-year-old. Yeah, there was this angle of why it's worth starting early, through a compound-interest example, where— you think about it — the 20-year-old, who in this example gets, precisely calculated, a 6.9% average annual return on their savings. And this 20-year-old invests 150 euros a month for 10 years, and gets that 6.9% real return on the investments, shoveling in 150 every month for 10 years until turning 30, after which they just let the money sit, all the way to retirement age. That's the first profile. Then there's a second one, a thirty-year-old, who does exactly the same as this [10:41] the twenty-year-old did, except they shovel that 150 in from age 30 all the way to retirement age. So they save that 150 for 35 years. The 20-year-old only saved for 10 years and then just let the pot sit. The thirty-year-old saves — shovels that 150 in for 35 years straight. And of course gets the same returns. And then the last one is: as soon as the parents leave the maternity ward and head home, they swing by some service provider, set up a monthly savings plan, and save 150 euros a month for the child's first three years. Mm. Or, alternatively, the baby fund puts in 5 grand right away at birth — but either way, they save that 150 and get that 6.9% average annual real return, and the question was: who ends up with the biggest pot when they turn 65? Mm. [11:51] And the first thing to notice here — if I remember the number roughly — was that the 20-year-old ends up with something like 260 grand from that 10 years of saving. And the thirty-year-old ends up with a few grand less. Yeah. A few grand less than the 20-year-old. So even though they start 10 years behind, the thirty-year-old never catches up to the 20-year-old — even while shoveling in their own 150 for 35 straight years. The 20-year-old pulls ahead purely because of those ten years. But then there's the newborn, for whom the parents basically invested that 5,400 euros. And for that newborn, by age 65, that's a 400,000-euro extra pension pot — and it's worth noting here that the calculated average Finnish pension pot is about 350 grand. [13:01] Mm. So, five grand covers the whole pension. Yeah. And let me keep going with this — with five grand you can set up an entire pension solution for a newborn, and if our pension system shifted to something like this, it would mean — if the median salary is 3,200 euros a month, then that means the employer's labor cost is around 4,000 euros, and out of that four grand, 1,000 euros goes out every month. So the employee also contributes that 200. Yeah. The employee also contributes that 200. So every month, 1,000 euros goes from this median-wage employee into the pension system — that's 12 grand a year — and then you've got, say, a 50-year career on top of that, or 40, or whatever it is, but either way, an absolutely insane amount of money gets shoveled into that system, [14:05] when you could just as well buy the average person's whole pension with that five-grand upfront investment. Mm. And if we did it that way, that would mean we wouldn't have this fight over whether employees or entrepreneurs should pay pensions on what basis, and how these can't be combined, because one is underfunded and the other isn't, and blah blah. Instead, this would all be handled right from birth. Mm. For a fraction of the cost of what we do now — that's the observation there, I guess. Yeah. And then a question from the audience latched onto this — there was a guy who'd quickly done the math and said, well, with this kind of money you should easily clear a million, so where's the rest of that million, who skimmed the other 700-odd grand off the top? And yeah, this is unfortunately the case. This is a common misconception, but there was this retiree at the talk wondering, why, where's my million? And — well, it's sad, really — and the answer, of course, is that it's simply not there, because that money goes straight out the whole time. Take the median-wage earner: out of their four-grand labor cost, 1,000 euros goes [15:32] mostly straight from that employee's bank account to retirees' accounts. It just goes straight out as payments. There's only something like 11%, I think, that actually gets set aside in a fund. That's why we have these four big pension insurance companies. But otherwise, it just goes straight out as current payments. Yeah. But on Paasipodi it was said that this has actually been reasonably fixed now for entrepreneurs. That estimated-taxation setup got removed, which would have made this even more incomprehensible — instead, well, take that thousand out of a four-grand salary — if it's actually paid, that's a huge amount. 25 percent is, internationally, a genuinely huge pension contribution. Its returns are pretty poor by international standards, though. Yeah, but it's still real money — you do get your net salary, and this gets carved off to the side. But up until now, with this entrepreneur pension setup, the pension establishment basically got to say, \"yeah, yeah, we don't much care how much you actually pay yourself — we'll just take an estimate of what you should have paid and take 25 percent of that.\" For the sake of sanity, this has now been made workable. Yeah. And this is a really big deal, this— [16:53] honestly — I know dozens of people who've refused to become entrepreneurs because of this, because it's just so arbitrary. Well, now that lock is coming off. So that's really good. Though this is nowhere near that funded-pension proposal that Teresa Sammanlahti [unclear] got adopted as a Kokoomus policy principle. No, but now that it is Kokoomus's official line, I think we're heading toward a funded pension. I think it could be one of next year's election themes. Well, it's at least always been one of Paasi's election themes — that five grand covers the entire pension solution — because in practice that means labor costs in Finland drop by a quarter. By a quarter, yeah — all else being equal, everything else the same. The employee still takes home the same pay and so on. So, on its own, labor costs drop by a quarter. That's quite a trick already. And it could basically be arranged by, say, turning Solidium into Finland's pension fund — something politicians can't get their hands on at all, set up as a foundation, plain and simple — and it happens to hold just enough billions, I think around seven, so that— [18:10] that covers the initial stretch, so that you could afford to start tomorrow making earmarked five-grand investments for every newborn Finn. Yeah, good idea. That brings us to Sami's and Samantha's presentation. Because unfortunately, Solidium isn't a zero-cost index fund. It's more like an army of, what, 15 fiscal analysts, who sit on top of Finnish stocks and fire off these grand ownership reports saying, \"well, Neste really ought to be creating more value now — have you looked at these shifts in the energy markets?\" And still, it— did, by coincidence, perform really well last year, but generally Solidium's returns haven't been anything dazzling. We should somehow turn this Solidium pot into a zero-cost index fund. Which means it would probably have to be sold off, liquidated — this ownership, obviously. And partly for the reason that the portfolio wouldn't stir up anyone's political passions, it should of course be spread out globally. So you'd own tiny slivers of whatever, no limits — and if that were done, well, it's worth noting here that it's an eternal [19:29] investor. Mm. So it's basically wired to be a long-term, cost-efficient saver, for the benefit of Finns living now and Finns not yet born. Yeah, sounds good. So let's move on now, a bit into the world of beautiful virtual women. Samantha, anyway, was hinting there that you could put together this superhuman chorus of AI workers, combined into a panel with top-tier business minds and other similar geniuses. So there's this AI working group I have, where the entry requirement is that you have to have your own AI worker, trained well enough that it can answer other people's questions on a WhatsApp channel. Yeah. And I gave you homework — go watch that working-group discussion of mine, where we ended up recommending — think real money, 4,900 — based on that discussion, we just went ahead and put it in, cold. [20:34] Did that look like a gimmick, or like smart behavior? I think what was genuinely brilliant about the whole session was exactly that AI was used the right way — meaning nobody asked Samantha, \"so where should I invest this now?\" Yeah. Because an AI model is, after all, a statistical, mean-reverting kind of model that answers you the way the majority of humanity would answer. Mm. And as that kind of model, it works incredibly well when you use it as a tool. So when you want to code something, or you want to understand some law, where the rules already exist in principle, there's an interpretation, an interpretive history that exists — just like in coding. There's the code, and then there's that best-practice angle — in cases like these, exactly because the language model gravitates toward that mean reversion, toward the on-average most popular solution. [21:42] That's where the real skill lies. That mean reversion, so to speak, is the actual secret sauce that makes it such a good tool. And you used Samantha exactly for that — you didn't have it fetch information yourself, you had other agents go fetch the information, make recommendations, and then they converge around something and propose it, and in that sense it was grounded in analysis and figures and so on. And the point was exactly that: you go through actual analysis. Mm. Agents, and AI in general, can really easily pull together a thousand kilos of data into one bin and then analyze it sensibly, and then point out, \"hey, in light of this data, in light of these financial figures, this looks underpriced, and there's no known reason why it should be like this\" — and that's why this [22:48] could be a good pick — because it actually justifies the case, instead of you just saying, \"hey, tell me a stock to invest in.\" Mm. Yeah. So I'll drop the link here. Normally this kind of thing is Neuvottelija insider content, but this video is now out, where this AI working group — I talked about it with Ville Skugberg. We're both Alphabet investors, which has been a really good investment, and Alphabet is genuinely good — and the only thing is you can't yet buy Anthropic or OpenAI on the stock exchange, soon you will be able to — but it's been a really good investment. And a lot of people think Google, Alphabet, is just search, but they've got their own chips, their own cloud, their own AI model, they've got the Waymos driving around out there — it's starting to look like Musk's kind of super-empire, and Musk's super-empire, by the way, is about to bring SpaceX to market soon too. So then we started thinking, should we sell this. The bots analyzed it and said no, don't sell, because this is a good strategy and these [23:50] things work and keep growing, and sure, there's the risk of a high cash-flow multiple, but then, what else could you find out there that benefits from this AI-inference trend specifically, since you can't buy Anthropic — and from that you get several sub-themes, like cloud services, data centers, or their suppliers, and then there's Nexans, which I bought — that's actually this kind of boring 8-billion cable-and-electrical company that installs, for these data centers, power circuits and so on, for these data centers. And it was cheap — a value buy. So, well, you'd framed it that way — and honestly, that was the one thing that bugged me a little, that you should've just said you don't need any value case for this, just go all-in and chase growth, \"trend is my friend,\" hair back, foot down, more gas — that could work too, but since I'm still a bit in your camp on this... sounded a bit like index funds — my own play portfolio isn't always... sometimes I do go full growth mode — but what appealed to me here was that the market hasn't found this French gem yet, so there could be this incredible growth once it lands on their radar. There were names like Vertiv and Schneider and others that have already exploded, these Siemens-type names that already got their growth spurt, and this one could [25:13] still be coming. But yeah, I forced the thesis into that value-pick, value-investing box. I was genuinely disappointed — I thought, wait, have I forgotten all of this — I have to say, even on this channel, that I'm eternally grateful to my wife, that she, in air quotes, forced us to have a child together. I'm eternally grateful for that. You're probably going to suffer terribly for it already. Yeah, and to you I'm eternally grateful too, because you went to a lot of trouble getting me hooked on vibe coding, and for that I'm sincerely, eternally grateful. I know you knew exactly what that would mean for my everyday life and reality — that with too little time, running from place A to place B and so on, you dragged me into your office and showed me that thing, and it hit me like a ton of bricks, and ever since then I've had two, three months' worth of sleepless nights — but hey, we got Android sorted, that's the 2026 theme, so [26:33] yeah, but, thanks for that, yeah — yeah, yeah. You're a great guy, and all the listeners should understand that too — that that's just how it is. Thanks. And let me try to give something back — the insider group has this WhatsApp group, and by the way, Samantha is actually available to everyone in there, so people can ask questions — although, put that way, that does sound a bit crude. Sorry, her profession — well, that sounds wrong too. I mean, the information services are available to everyone. Let's not anthropomorphize the machines, Martin — but this is going to end up as one of those headlines, \"politician shouldn't be caught up in this kind of thing\" — anyway, that's how this episode turned out, but you know, this is — this is the downside of talking with me, it does get a little chaotic — yeah, yeah — no, but that's fine, yeah, yeah, while we wait for that headline. Well, that's how it is. Yeah, but I'd like to expand on this a bit more — this was genuinely hard work. You had to define, at the same time, build the \"brain,\" and then these other bots — the Donna-bots and the Amon Ra-bots and the other fancy setups out there — they all have really [27:54] good memory structures. They each have their own kind of truth, in a way — the particular person's truth that's been curated into them. They're not just whatever plain mean-reverting model you get straight from Anthropic — there are genuinely sophisticated memory structures and skills built into all of these, ones you've built, and I've built, and others have built, and we trade them around. For example, I built a research feature pulling from Reddit— from these data sources — the most interesting ideas come to me as a daily report through Samantha. Yeah, and that was actually a skill developed by Lauri's Amon Ra bot, and now I've got that same Amon Ra set up on my end. Yeah, yeah, but they're absolutely incredible — and basically this gets shared within the group, like, \"here's a file, grab it,\" and then I'll throw it into Claude, or Codex, or straight into Samantha, and then, \"okay, let's stuff this\" into Samantha's \"brain,\" basically — it's just unbelievable, and it's way more effective than what you get out of the base model from Mistral or Gemini, say. Now, I have this Hello Humans project, where these days five language models discuss topics together. [29:10] Yeah. Three — or is it actually four now — of these research bots explain the background. And I've been really frustrated with this — I wanted the language models to stay purely themselves in there, and I stick to that, but — my mistake — but that leads to the whole episode... because when it does these podcast round-table discussions, the language models mean-revert together toward the left edge — well, not the edge exactly, but from the center leftward. Ouch. So I asked Claude to go through — I've got something like 90 episodes, of which I only show 18, and soon even those will get scrapped, and we start over — but anyway, I've now built in a layer where, since Claude is the host, meaning it has the hosting duties, Grok now has this role where it listens in on the discussion, and if the conversation starts burrowing into some left-wing rabbit hole, it kicks in some fresh momentum and throws in a [30:39] steel-man-style counter-argument — not as an end in itself, but as the most obvious steel-man counter-argument. Yeah. And now I'll probably be able to reel it back in this way. But it was interesting — when I asked Claude directly, \"hey, can you do this kind of analysis of these episodes.\" Mm. it did, and it ranked, episode by episode, where each one landed on a right-left political spectrum according to some model, and it was able to say, \"okay, out of these 18 episodes, four are clearly on the left, and then there's a bunch sitting in the middle, and some that are undecided, but none clearly on the right — and then your other 70 are so terr— no, well, those are dev episodes, but... so basically you managed to build a left-wing propaganda bot, great, hey, the world really needed just that, that's exactly what was needed. And then I asked, being a layman, where the hell this comes from, that they turn out this way. Mm. [32:05] Well, the answer is that, since I've been trying to build a kind of \"truth\" into it, naturally I want it grounded in research and so on — big mistake, because academia has swung left to a shocking degree. There's actual research on this. So if we're talking about professors and tenured faculty, and others in the US — where it used to be, say, 40% left-leaning and 60% something else, now it's 80% openly left-leaning professors and tenured faculty, and the centrists and the right-leaners have basically fled, because it's essentially been taken over by the left. So when you have a service that draws on this academic research, you get this subtle, quiet left-wing tint creeping in. And then the curators — who, for the American models, are basically out on the West Coast, in San Francisco and elsewhere — even if they weren't necessarily even aware of it, when they've told the model \"this is good,\" [33:24] \"this is less good,\" and \"this is bad,\" while training these language models, the curators' worldview has basically contaminated these models. It's pretty well known — Claude is known to lean left, and they've tried to pull it back toward the center without much success at all. And, honestly, I found it just shocking when I asked Claude to go find actual evidence online — like, don't just throw out opinions — and there was a fresh study from just last year showing exactly this: that these are all, mostly, just that. And this is why I'm glad I have five language models. There's Claude, ChatGPT, and Grok — three American ones. Then there's Mistral, which is really bad. And then there's Europe's pride. [34:31] Yeah. Europe's, France's pride, with a French female voice, and then, Chinese-style, Qwen. Yeah, Qwen is actually good, by the way. I'll take that back — I dissed it a little earlier, but now that I've run it, it's actually pretty good. It's, hands down, the most right-leaning of these five language models. That's genuinely shocking. Yeah — you could feed that into Grokipedia as \"truth\" and shift it a few points that way. No, but actually — now, sitting here talking about all this, I had this big realization, since I've been thinking about how to turn Hello Humans into the thing I wanted it to be. What's specifically annoyed me is biased media, and I wanted some channel where I can just throw in a question, and it gets researched down to the last detail, and then it gets hashed out on top of that by seriously expensive models — and now it turns out the whole system leans completely left. [35:46] So naturally, what I'll do is build in an agent that iterates on every single episode, running it through enough rounds and analyzing it on that right-left, liberal-conservative axis, pulling it back to the center, to zero, so that every episode is as boring and neutral as possible — I mean, politics is basically garbage, it's ideology, not truth — so I strip out all that ideological stuff so it's genuinely grounded in the plain facts, and then it gets, whatever you call it, its own proprietary edge, its own added value — because up until now I've just been bolting on whatever — we could tune in some custom gateway so it washes that off from the dumb base models, and maybe fold it into a single discussant — we could genuinely think about that. But anyway, Hello Humans has this \"podcast on demand\" feature, so you can go there right now and, for three euros, get yourself [37:08] a custom 15-minute podcast made — and it's no longer as badly skewed left as it used to be, but the work continues. Great. And I'd like to expand a bit more on the \"pain of ownership\" angle, because it dawned on me while doing that work in that same AI working group — we combined human intelligence with our AI workers' intelligence, and had Claude cranking through Excel on top of that, running multiple analyses, iterating a couple more rounds before making that big investment decision — and that took time, burned cigarettes, tokens, and team spirit, and all that. Whereas with Martin's approach, you just put it into a zero-cost index fund, close your eyes — preferably do it for a baby even, and maybe don't even tell them — there's just a sum that grows, no pain of ownership, no costs, just pure profit. So, yeah, that's just how it is. Then if you think about it, you've got [38:16] someone at Varma or Ilmarinen, of course they'd want to do the same, and they do. Well, in practice they do — but then why would anyone want the pain of ownership in Finland, when you've got these bizarre 25% tax-like charges they "}, {"slug": "157-wahlroos-v-rehn-rahapolitiikka-jussi-ahokas-antti-ronkainen", "title": "Wahlroos vs. Rehn: The Monetary Policy Clash | Jussi Ahokas, Antti Ronkainen", "titleOriginal": "Wahlroos v Rehn rahapolitiikka | Jussi Ahokas Antti Ronkainen | #neuvottelija 152", "guest": "Jussi Ahokas, Antti Ronkainen", "guestsCanonical": ["Jussi Ahokas", "Antti Ronkainen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/jussi-ahokas/", "https://www.neuvottelija.com/podcast/guests/antti-ronkainen/"], "episodeNumber": "152", "publishedAt": "2022-09-11", "duration": "48:20", "format": "full", "topics": ["finnish_economy_policy", "investing_markets"], "description": "Jussi Ahokas and Antti Ronkainen, both doctoral researchers, analyze monetary policy decisions by the ECB and the Fed, inflation, and central-bank capitalism. Björn Wahlroos wrote a guest column in Helsingin Sanomat setting out his monetarist view of how inflation forms; Bank of Finland Governor Olli Rehn responded with a rebuttal addressing Wahlroos's (\"Nalle's\") claims. The episode explores the evolution of central-bank capitalism, policy alternatives, changes in asset values, inflation, the energy crisis, the impact of Russia and China on Europe's problems, and the euro's political and structural challenges.", "page": "https://www.neuvottelija.com/podcast/episodes/157-wahlroos-v-rehn-rahapolitiikka-jussi-ahokas-antti-ronkainen/", "text": "[00:00] Antti Ronkainen: We're part of the 0.75 crew! So, I was reading Björn Wahlroos's op-ed, and I was honestly a bit puzzled about what this is actually about. It didn't really say much about demand — where that comes from — but supply is the central bank's turf, and that way the central bank can always adjust supply to match demand and bring inflation to the right level. That's pretty monetarist, isn't it. So how can it be that the ECB creates a program for the pandemic where it deviates from the guardrails set by the EU Court of Justice, and then uses that program after the pandemic? I think this is a genuinely interesting question, both legally and politically. And what happened today — 2.3 was that 12-month Euribor — so yeah, Miettinen might get some questions out on the street now that he didn't take out that rate hedge! All right, welcome to the Neuvottelija channel. I have two doctoral researchers as guests today: Antti Ronkainen and Jussi Ahokas. [01:05] Hi. Hi. Hey hey. So what are your research topics? Has your research plan progressed far enough that the topic has become clear? It should already be finished, but it's about the justification of central banks' monetary policy and the institutionalization of these new measures, and then how they've affected this paradigm. Very gray. How do you paint your rainbow in all shades of gray? Come on now. I'm — I'm — I'm creating it. What about you, Jussi? Is it as fine? Well yes, I'm researching ideas in macroeconomics and macroeconomic policy and how they change over time and space. So it's a dissertation in the field of political economy and geography, so to speak. We're maybe about halfway through. Is it heading toward technological determinism, toward this 'central bank capitalism' or something like that? Well, actually, Antti and I have done some research collaboration outside our dissertations on that — it's become its own separate project. That's more of a postdoc thing. [02:14] Yes. Yes. Great. I'd like to start with this battle of two greats — what should we call it, a clash of titans — so, Nalle Wahlroos, unusually, wrote a guest op-ed from England for Helsingin Sanomat, in which, if I understood correctly, he said, very much like a monetarist, 'don't you in Finland worry so much about regional inflation. In the euro there's only one inflation, and that's the ECB's job.' And if I were to sum it up, that was roughly the main point of the article. And then we got Olli Rehn to say that there are some nuances here — that yes, there are regional inflation differences across the euro countries and so on — but by the end they found common ground, which was that we need growth, investment, and structural reforms. So what thoughts come to mind about this clash of the titans? On my way here I was reading through Björn Wahlroos's piece again, and I was honestly a bit puzzled about what it's actually getting at — because as I read it, he's saying something like: consumer price inflation, or inflation as measured by the consumer price index, isn't really inflation at all; inflation is somehow purely a monetary matter, [03:31] a monetary matter, and it's determined by the supply of money and the demand for money. And so all this inflation debate that's been going on out there is basically pointless, because in the end it's the demand and supply of money that determines it. He didn't really say much about where that demand comes from, but supply is the central bank's turf, and that way the central bank can always adjust supply to match demand and bring inflation to the right level. So this is pretty monetarist, isn't it. Yeah, exactly — wasn't it Friedman who said that inflation is always and everywhere a monetary phenomenon? That's what it sounded like. And then also that the euro area is one single monolith, that the ECB just swings its supply hammer from there, and 'don't you worry about the thing' over there in the individual countries, sort of — if, if — I'd say — well, maybe I can comment more broadly here — sorry, Sami — that Wahlroos had taken these Finnish economists to task, so to speak, and used their supposedly flawed understanding of inflation to build the argument that Finnish economic debate is depressing, as it probably has always been in Wahlroos's view, no matter who's making the argument, [04:54] but it is of course true that at the moment, especially after the Covid pandemic, there have been these large global supply shocks, and as a result of these lockdown measures there have been disruptions to the world economy, and these have set off various developments that have also affected inflation and people's consumption behavior — changes, when people couldn't get to services, they renovated their gardens and ordered fancier laminate flooring for their bathrooms instead. And so a large amount of demand has shifted from services to these goods, and that has reshaped inflation dynamics over the last few years. And then the second thing is this — the war in Ukraine, the related sanctions, and Russia's decoupling — these are big global supply shocks that have in various ways affected inflation in recent years. And as such, this Wahlroos piece about understanding the true cause of inflation — whether you agree with Wahlroos or not — the fact is that right now everyone in the field is somewhat [06:18] confused about where it's really coming from, how long-lasting it is, and whether central banks should now react aggressively or hold back. And even central bankers themselves admit that we're genuinely off on some kind of uncharted tangent [unclear] right now, where the exact causes of inflation aren't understood based on the knowledge we had before these shocks. In a way it was actually reassuring, what Nalle said there — — that he understands perfectly what inflation is and where it comes from, but maybe that explanatory model isn't quite as all-encompassing and exhaustive as it's made out to be. I'm actually used to defining the interest rate the way Nalle defines inflation there. That is, the interest rate is specifically the price of the supply and demand for money, and from there, for all other financial contracts, the price is built up from there once it's taken to the markets. It starts from central bank money, state money, and that's actually quite simple — it's needed for liquidity reasons. That's where the demand comes from, and the central bank then sets the supply, meaning how much money it puts into circulation. And from that comes first the policy rate, that is, the rate on that state money, and then you move up the rate structure, add risk on top, and you get the [07:40] rest of the rate structure and eventually even securities prices are built on top of that. But if Nalle calls this inflation, then maybe my question is: what's left — how does he then define the interest rate? Yeah, good point. I think the impression I got was that in Nalle's picture the ECB's supply is like this monetarist euro-disc floating above the 19 euro countries, and the ECB adjusts the size of that blob, and that's what's used to buy goods and services, and it squeezes inflation down to some level. That's the vibe I got from it — it felt like a pretty one-dimensional model, where the supply of money is the number-one criterion. There's maybe no room for the interest rate, or it's just kind of odd, and supply is out there somewhere — what I think is completely missing here is the endogeneity of commercial banks, because it smells like the central bank's push is treated as the only lever, but ultimately it's the commercial banks that create bank deposit money. Yeah, that's exactly right, and that is of course one part of the demand and supply of money that isn't directly in the central bank's hands — we're really talking about the endogenous creation of money. But even there, the base rate is of course quite decisive, because it then affects demand through another channel, since people start thinking about the cost of financing, and that way the central bank, via the interest rate, [09:05] is able to control people's appetite for borrowing and maybe also banks' willingness to lend. So — it's really this complex whole, pulling in many directions, and it would be really nice if it were as simple as Nalle presents it, but maybe — maybe it just isn't. Yeah. Let's take a light-hearted one — Jussi, you promised to needle me about this, anyway — so I'll go on the attack first. I got into Helsingin Sanomat's Vision, the sort of Christmas 'stargazing predictions for 2022' piece, and, well, my immortal prediction was 'don't you worry about the thing' — that mortgage borrowers still have good times ahead and rates won't rise, or something close to that — I'm paraphrasing a bit — but that was in December, before the war, right, right, good, good, thanks, you get my point — so there's a tiny bit of an excuse there, but still — the war was actually foreseeable — everyone could see it coming — and what happened today? That 12-month Euribor was at 2.3, so, yeah, Miettinen might get some questions out on the street now that he didn't take out that rate hedge, but I actually agree with you on this — this isn't going to last, so let's check again next summer whether that 12-month Euribor is still sitting at 2.3, and I'd claim [10:20] it'll be below that. I don't know by how much, but there are already signs in the air that the global and European economy is starting to crack at the edges, and that the price rises caused by Russia's war of aggression are now also starting to reduce overall demand and weaken economic confidence and the willingness to invest and consume — and through that, central banks are once again facing a new choice. Wonderful. So I got a light forecast from you of falling rates — but does the logic actually work like this: that I see the central bank reacting almost reflexively, sort of chasing after the chains of events that move the economy? If a recession has been brought about, say, through rate hikes — like the ECB, as we're recording this, just added another 0.75 to the policy rate, on top of the Fed's move — so if that ends up killing the economy on top of the inflation, then the central bank doesn't really have much choice but to start rolling the rate back down the hill again, which then boosts economic activity again through some kind of bubble — so is that basically how this potential rate-cutting cycle would go? Well, that's how it's gone since the global financial crisis, and I think that's [11:41] how it'll continue going forward too. You can ask — if we've now pulled the European policy rate up toward around 2%, which is probably roughly the ECB's target level at the moment, and then market rates add their own markup on top of that — this kind of nominal interest rate level hasn't been seen here in over a decade, not since sometime in the early 2000s. And since then, quite a lot of debt has accumulated across different sectors, and everyone knows that the more debt there is, the more important it becomes for the economy where that interest rate settles. And right now it really is setting a kind of record, given this new debt situation. So the drop you described there might actually already be fairly likely at this point, given all the other uncertainties we know about. And when we're heading toward maybe a deep recession, even a depression, and the central bank has been given the core task of managing the business cycle, of trying to stabilize the economy — so what else can it do but reverse those rate hikes? By the way, Antti, have you also researched this internal coherence of the euro area? I mean, the Germans, for instance, keep grumbling now and then about the ECB's operations, which are carried out symmetrically for all [13:06] regions using the capital key. So, in my view, what's also possibly missing from Wahlroos's theory is the exchange rate. I mean, the dollar has now strengthened past parity. Well, actually, today it might already be back above — so something's happening here, back above one dollar per euro. Yeah. Right. But do you see this exchange rate movement as also, in a sense, removing imported inflation from the US side because of the strong dollar, and maybe adding to it in the euro area, so — is there some kind of game going on here between these two big blocs, the dollar and the euro, and then maybe internal cohesion more generally — I'm just thinking Jussi could weigh in on those currencies — but back to Wahlroos's model, he seems to think about these things in a pretty simple way. Because I remember, back when we put together that collected volume after the financial crisis called 'Kurssi kohti konkurssia' [Course Toward Bankruptcy], well, in that — I was reading an interview with Wahlroos. He'd had some kind of discussion with Mikael Jungner, and there's this immortal line from Wahlroos in it. [14:15] He says that, right around then, central banks had just started their unconventional measures after the financial crisis, and things had been brought under control, and Wahlroos simply said that this again shows that capitalism fixes itself — especially if the central bank helps out a little. But the idea in this theory is somehow that inflation is always a monetary phenomenon, and the mandate has been given to the central bank. All the best possible knowledge sits there, and under that cover they're able to make the right decisions. That's how I interpret Wahlroos's remarks. But then, if we go to what Jussi was already talking about, I think there's a genuine risk here that, in a way, the central bank — say, the European Central Bank — does exactly what the law says it must do, and the ECB is an unusual central bank in that it has only this price-stability mandate, with other goals being merely secondary, and the whole system has, in a way, been built around the idea that if you have one single task, [15:35] which is maintaining price stability, and price stability is understood as moderate inflation, then in the current situation, where inflation is running wild and the euro area is setting historical records every single month, the central bank can't really react in any way other than by tightening rates. Then, of course, there's been discussion about whether the European Central Bank should have started this tightening cycle before the war in Ukraine even started — whether it got caught off guard by it — but if you just put these two things together — that inflation isn't caused by, or, more generally, this whole monetary policy regime that's been built — there's a bit of an underlying idea that the central bank is this good-times institution, whose job is simply to curb the economy from overheating, and an overheating economy shows up as inflation, and the central bank's job is to take the punch bowl away at just the right moment. So I question this line of thinking in the sense that the economy really isn't overheating in any way, and that inflation isn't caused by any wage-price spiral or excessive fiscal stimulus, but rather by these Covid-driven supply shocks and by the global supply shocks in the energy markets caused by the war in Ukraine and the related sanctions. So, in a way, the central bank is acting [16:59] the way it's mandated to act by law, but these rule-based approaches — or, in this kind of new geopolitical crisis, in a completely new historical situation — I'd question whether central bankers' ideas actually lead to the best possible outcome, because, in my view, for example yesterday's decision, where the European Central Bank raised rates by 75 basis points — that's some kind of panicky overreaction, coming after being criticized for being too late, and then it's like, 'oh yes, yes, we can pull off something historic here.' We're joining the 0.75 crowd now, we dare to do this — but in doing so, the ECB is, in a way, protecting its own credibility while forgetting about the actual state of the economy. And already now there are European central bankers who've said that a recession is coming, that there's nothing we can do about it, that we're simply forced to raise these rates. And I think this shows that there's something wrong with these ideas, with these institutions, if you can only operate with one instrument, one way of thinking, and you can push it to the point where the central bank protects its own credibility by driving the euro area into recession — I think there's something almost Mar— [18:22] — xist, some would say alienated, about this way of operating. That actually ties in well with Sami's first question about the dollar-euro relationship, and the difficulties that a strong US economy is causing right now — or rather, an economy that's much stronger than expected, when people thought the Fed's rapid tightening would bring it to its knees, which hasn't happened. The labor market there is still chugging along, and, well, the housing market is on the verge of collapse, but that isn't showing up yet in the real economy to any great degree. And as long as the US central bank doesn't make that famous 'pivot' — that is, start easing again — because it doesn't see deflationary problems or stagnation coming in its own economy, or a recession or depression, then of course it won't ease its economic or monetary policy in its own country, and then exactly the phenomenon Sami described happens — inflation starts getting exported abroad, because all the weaker currencies — and really, all other currencies are weaker than the US dollar, which remains hegemonic in our world order, even though a lot has happened lately — that's just how it is. So really all the other central banks end up having to follow whatever the Fed does, and since the Fed only looks at [19:47] its own economy, and it's now been tightening like crazy, so the ECB comes under more pressure to do that big 0.75, and that's exactly what came out yesterday, and it was a unanimous decision. Nobody on the Governing Council opposed it, nor did the heads of the national central banks. Everyone agreed this had to be done now. So all the dovishness that had prevailed until now — where the ECB kept saying, let's wait, let's wait, this will sort itself out — — that was thrown out now, and it just got done. And I think that after this there won't be much more to do — instead they'll start pushing that rate back down again — but for now, it got done. We got a bit of room there, and afterward they even promised more hikes to come, but everyone can judge for themselves over the coming weeks whether that's really going to continue. Yeah, someone had crunched the numbers on Lagarde's remarks — based on that promise, the hiking would end in February, meaning hikes would continue until February — but yeah, it's data-dependent, and depends on whether those things actually start happening. [20:50] Maybe I'd add something more global to that — well, Putin decided that we're sniffing at a frozen wolf's tail here [unclear]. So he's cut off gas exports to Europe entirely, which creates yet another kind of supply shock in energy, causing an even more chilling problem on the energy side of inflation. But then China has, I think, often ended up taking the blame — they've brought deflationary pressure by running their goods economy with incredible efficiency and keeping consumer electronics and other everyday goods on a downward real-price trend. So I wonder whether that will still come to the rescue this time. There could also be a bit of bad news, Job-style, coming from the supply side on inflation too — that's at least the feeling I get. China has actually saved Europe by selling us the gas that Russia isn't selling. Storage got filled up a couple of months ahead of the target date, and that's largely come from China this way — China has sold its surplus. Actually, that's a direct answer to that. Last night China's producer price data came out, and it's coming down like a rock — the year-on-year change in the index was already below 3%, and that drop has been going straight downward over the last month or so, and that has a fairly direct effect on what then happens to US consumer prices, so maybe that deflation coming from there [22:13] from the goods market will come to the rescue again this time too, at least partly, and it saves the Fed in the sense that it no longer needs to be so extremely worried about inflation. It's starting to talk a bit in that direction. The financial markets are anticipating this — stock prices start rising, long-term rates start falling — and what that means for Europe: the euro starts to strengthen, since the hawks here have now gotten the upper hand over the doves, and a bold rate hike was made, and overall it's starting to look like the inflation gap between the US and Europe could actually narrow as well, through the exchange rate becoming more favorable. But this is exactly the wolf's-tail problem — since the energy shock hitting Europe is so large, it pulls things in the other direction, and inflation grows again because of that. And that's why the Bank of England and the ECB are actually in the worst position of all right now. A moment of silence, by the way, for Elizabeth's memory. Maybe three seconds was enough. I'm not a monarchist. [23:27] Yeah. Have you heard that Britain's next queen is a man? Honestly, all this woke nonsense these days. Okay. That was entirely Antti's — Antti's own joke. I actually was hoping Charles would become king, and he did become king. Well, now we're getting a bit — a bit off track. I mean the third. Ah, okay. Yeah, well. But Britain has maybe even a bit more inflation worry, since they have to fight over containers crossing the Dover Channel, and that's an additional challenge too. So this is actually an interesting weekend. It wasn't just the ECB's monetary policy decision — there's also actually an energy ministers' meeting today. And if that produces some kind of fix for the European electricity market, like what Liz Truss promised yesterday as prime minister over there in Britain — and that already brought inflation expectations down right away. And if Europe gets a similar technical fix for the electricity market, that would lower inflation expectations here too. So it's possible that by next week things will look a bit sunnier, even for those at the very bottom of the pile. [24:37] Yeah, oil has dropped, which has in turn dropped gas prices for Americans, which is of course the single most important thing in the world over there. But yeah, actually I think these backstop crisis packages that governments — Finland included — have put together, done in Finland, Sweden, Germany, have also removed some of that futures price pressure, so they've probably been a good thing in slowing down that price pressure. So yes, those have helped, and in that market, of course — it's important to get things moving in the right direction, because liquidity is so low there that if it goes up fast, it also comes down fast. Yeah, the marginal price is so darn sensitive there that — well, capitalism, or the market economy, doesn't always work perfectly, you need that liquidity backstop of last resort, some big authority there that ends up saving the situation, almost in an authoritarian way. Hey, you were on that — Sauli Vileen [unclear], on a very popular episode of the Inderes podcast, about central bank capitalism. And I actually also went on Rami Kuurimaa's and Leevi Leivo's show and gave a talk once on the same topic — 'Central Bank Capitalism: Sold Out' — or was it socialism, question mark — but that was a genuinely fresh take, in my view, that this is, in a way, a continuation of the continuum of capitalism, where everyone tries [26:01] in a way to measure success through the accumulation of capital and the accumulation of profits, so it's actually quite logical to call this central bank activity 'central bank capitalism' rather than socialism. Could you run through a bit of that talk again, what you presented to Sauli about the nature of this development of capitalism? Well, this probably comes right out of Antti's and my shared hobby of political economy — Jussi's definitely in on the conceptual side of this hobby too. Yes. But specifically, the whole idea behind the concept of central bank capitalism is this kind of historical-institutional change, and the question of how, if we think of capitalism as this centuries-old economic system built precisely on that logic, the one you just described, and it can be said that it still holds true today, and that the majority of people's economic — and maybe even broader societal — decisions happen somehow through that same accumulation principle. So in that sense it stays the same, but its particular form changes according to how our institutions change over time. So if we start from somewhere around [27:15] 18th-century mercantile capitalism and unpack it from there, then we arrive at this 19th-century finance capitalism. Above all probably in the United States, where railroads were built using heavy financial leverage, debt was taken on, and the banking system was rebuilt from scratch. And global high finance probably already existed even then, though the emphasis kept shifting a bit. And then, in a way, the system ran itself aground in the late 1920s, and that was followed by the next, next big collapse [unclear] above all, of course, in Europe, but then elsewhere too. And after that came the era of welfare-state capitalism, since people wanted to avoid repeating those same problems of unregulated market capitalism — not to repeat them — so now a strong state was needed. And then that too got a kind of backlash, a new sort of finance capitalism, and many call that period — running from the late 1960s — [28:20] to somewhere around the late 1980s — neoliberalization — and that's really the political side of it. And then things moved into this new finance capitalism, one that strongly built up or generated private debt, which then ran aground again in the global financial crisis. And after that, when state institutions were once again needed to help, what emerged as by far the biggest helper of all was the central bank. And that's what this concept rests on, and pretty few people would deny that central banks have been an extremely important institution over this past decade, and remain so. And, well, that and much more is what we talked about with Sauli on that podcast. Let's throw in a little clip here — by the way, since Nalle was mentioned at the start — there was that book, 'The Future of the Euro — Finland's Options,' edited by Vesa Kanniainen, and he was one of the contributors to it, so at its launch event he explained, in a way, this problem with the euro — that you lock in the exchange rate in such a way that the labor-market price can't form properly, because it's rigid downward — so, in Nalle's view and many others' too, the labor-market price only moves upward, it can't adjust other than through cutting employment downward. So, in a way, it might still, to some extent [29:46] work. It could, in a way, generate competitive pressure in the economy that would bring things back into balance. But that very last valve through which this could have worked was closed off precisely by the measures Erkki is referring to there. And after that, this system really has no hope left, unless we get some dramatic program to make the labor markets, above all, function — and let's agree that was the last time anyone got bailed out here. So remember, here we're talking about two different things. On one hand, we're talking about how a design flaw has produced an acute inflammation in the financial system and in the government finances of some countries. That isn't, in itself, solely the euro's fault. The euro's fault is only that it has closed off that obvious, simple way out, which is a dramatic devaluation. These are two separate things. When I say that the euro can't be paired with markets that don't function, because that leads to a situation where prices are locked in place — I'm talking about a different thing than this particular manifestation, this particular symptom of the crisis, which is these sovereign debt crises. And in this [30:54] sense, Alex might be half right that the acute debt crisis is somewhere in the middle of running its course, but that tells you nothing at all about the real underlying sickness — that we've eliminated the price-adjustment mechanism that would make the future possible. Actually, I agree — I think we're sitting here again, some of us looked at these charts Elina is referring to just this morning, and I think we're building a new kind of madness again, because now, once again, political actions have managed to convince the markets that surely no country in the euro area is going to default. Right, and if you believe that, Greek government bonds are more available than ever. They just did a successful bond issue. Go put your money where your mouth is, if you believe it. I — well, in that regard, I've, for instance, been sympathetic to this. Lauri Holappa, your co-author on that book on monetary economics, I was sort of sympathetic to that kind of balance-sheet [31:59] identity thinking, and you've also made your mark on the idea that balance sheets have to balance — meaning someone's money asset is someone else's debt, and that's true as an identity — but it breaks down right there once you have a supranational currency, and that really bothers me quite a lot. In a way I'd find it much easier to accept the Swedish or Swiss model, or even the American model, where everything still belongs to one single state. There, you have the sovereign state and the central bank, and the private and public economy together form a coherent sovereign equation. So what do you make of that — does this idea of 'central bank capitalism' break down be"}, {"slug": "465-neuvotteluklubi-tech-bros-rautio-leivo-omar-neuvottelija-302", "title": "Tech Bros and Trump: What It Means for Europe | Isak Rautio, Leevi Leivo, Ali Omar", "titleOriginal": "Neuvotteluklubi | Tech Bros Rautio Leivo Omar | #neuvottelija 302", "guest": "Isak Rautio, Leevi Leivo, Ali Omar", "guestsCanonical": ["Isak Rautio", "Leevi Leivo", "Ali Omar"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/isak-rautio/", "https://www.neuvottelija.com/podcast/guests/leevi-leivo/", "https://www.neuvottelija.com/podcast/guests/ali-omar/"], "episodeNumber": "302", "publishedAt": "2025-01-31", "duration": "01:17:59", "format": "full", "topics": ["ai_enterprise_tech", "investing_markets", "free_speech_society"], "description": "In this episode of Neuvotteluklubi (the Negotiation Club), Isak Rautio (Futucast), Leevi Leivo (Puheenaihe), Ali Omar and Sami Miettinen discuss how the billionaire owners of America's platform giants — Elon Musk, Peter Thiel, Mark Zuckerberg, Jeff Bezos, Bill Gates and Marc Andreessen — have formed a symbiotic relationship with Donald Trump's MAGA administration, and what that means for Europe and Finland. Does Europe have anything to bring to the table besides regulation and Spotify's Daniel Ek? The members-only segment discusses the subtitle of Sami's book: \"You don't get what you deserve, you get what you negotiate.\"", "page": "https://www.neuvottelija.com/podcast/episodes/465-neuvotteluklubi-tech-bros-rautio-leivo-omar-neuvottelija-302/", "text": "[00:00] Alright, welcome to the Negotiator Channel. Quoting myself as a proper narcissist: power is a negotiator's ability to achieve what they want, either indirectly or directly. Thinking about this specifically from the US tech bro perspective, we have here — on Finland's scale — at the table of the money men, Ali Omar. Welcome. Thanks. A famous angel investor and also a negotiator guest, and then maybe at the other table we have the most indirect influence — meaning the most combined YouTube and podcast visibility Finland has ever seen, in this one room: Leevi Leivo, founder of Puheenaihe. Thanks for the invite, here in the broke corner. And Isak Rautio, founder of Futucast. Thank you very much, thanks for the invite — always nice to wake up early in the morning to talk about America. Great, let's do a quick round. So this refers to the concept of Trump's media-control cluster, and then maybe it originally traces back to Peter Thiel, who — even during Trump's first term, as perhaps the most successful angel investor in the US — went out to support Trump and took a beating for it. But then Elon Musk jumped in during this second campaign's [01:19] final stretch to support him, and then the rest of the tech bros — everyone was seen there at the 'coronation,' meaning Trump's inauguration ceremony. Let's think about how we got here. Yeah, well, it's certainly been talked about a lot that now a whole lot of these big money men, these multi-billionaires, have apparently switched over to Trump's side. Well, at least one question I've been left wondering about, that I haven't heard an answer to yet, is — and it would be interesting for someone to ask this — what was it about the previous Republicans, for example, that meant they couldn't vote for them? So one angle here is that the Democrats went too far into the 'woke' end, this liberalism went overboard, and now this billionaire camp, Silicon Valley, is shifting behind the Republicans. But that's been talked about quite a lot, I think. Actually, one interesting question that hasn't been discussed is what it was about the earlier Republicans that was such that — no, couldn't vote for that — why did they vote Democrat before, if you take that angle, which I actually haven't really heard yet... What exactly is the question, then? So why couldn't Republicans exactly... vote before? Who do you mean? No, I mean now — specifically these big money men, the Musks and so on, are switching to become Republican voters, so why not before? I think this is [02:43] interesting to think about again — clearly earlier, like with Trump 2016, what was it about that that wasn't there yet... So it's interesting. Marc Andreessen, who's another figure people talk a lot about as this inner-circle type, uses a term — 'preference cascade.' Have you heard it? How would you even say that in Finnish — a 'preference cascade'? Okay, well, I'll just anglicize it — you'll all understand — so basically, people have different desires — different groups, meaning political groups, have different wants — and at some point these kinds of cascades happen where they might merge. So Trump, for example, in this situation, might notice at some point, okay, wait — this Bannon-ite traditionalist core of mine doesn't necessarily fully vibe with this Musk-style new tech-right at its core, but we need this coalition to win. And yeah, in the US, in Finland, in Europe, in the world, something like this is happening — for ordinary people, ordinary men, there's this kind of Zuckerberg-esque rediscovery of manhood, this right-wing idea of masculinity happening, in a way, right? You know — start grappling, start hitting the gym, wear younger-looking clothes, talk a bit about how this HR culture has eaten away at masculinity and all that. [04:08] Yeah, everyone likes politically incorrect humor, so this culture has, in a way, gradually moved closer to that more traditionalist Bannon-ite right — at least in the form of a political coalition. Of course, there's probably also some sense that they're not all in the same camp, and we saw that at Christmas when the H-1B visa debate came up — there are deep disagreements within these coalitions that will probably show over the next year or so. But I'd read this as an answer to the question — that it's become more okay to start vibing with these new-right ideas. Yeah. And then what we saw at the inauguration — wasn't that like kissing the king's ring? Those billionaires weren't there necessarily because they agree, but because it's in their interest to agree, and even though they weren't there for previous presidential elections, then, like, present at the inauguration, they'd previously kissed another king's ring specifically. Remember Zuckerberg in 2016? After Trump's first election win, he came out with a big media campaign and said, 'Sorry, sorry, I apologize for not realizing how big an impact Facebook has, and how big an impact fake news on our platform had on these elections.' It was debated — I don't know how genuine that was even then — but he came forward [05:33] with statements like that. Now, eight years later, a completely different tune — now he went on Rogan, which is pretty funny by the way. Rogan has become this kind of rite for billionaires — if you manage to talk to Rogan for three hours about hunting, you emerge as this ordinary man of the people, an accepted man. The first step was — he was on Lex Fridman this week, which, interestingly, Lex Fridman is like a lighter version — a bit more tech-bro-friendly. But I mean, this YouTube power is also, I'd say, to answer Leevi's question, that in a way this media landscape shifted completely — the classic cliché that happens to be true is that traditional media was completely in the leftist-Democrat camp, and then, in a way, the rise of YouTube, the rise of podcasts, broke that power, and after that, for example, Trump's media campaign was basically in the hands of us regular people. Yeah, and I do notice that it works. Like, personally, I've come to vibe a lot more with Musk's stuff now that he's been out there openly on these podcasts, and of course on X — compared to, say, Bill Gates, who's much more of a stranger to me; I can't really say anything about his personality, so I don't really end up commenting on his projects or following them, and you don't get [06:54] that kind of relationship built up. So yeah, I do notice that these figures who go on these long-format podcasts — I notice it affects the image I have of them, meaning it's more positive for the ones who go on. So you mean that at the same time, this media upheaval is affecting people, and through that, also politics and ideas and thinking? Yeah, it definitely has an effect — it would be really stupid, in my opinion, to say it has no effect at all. It definitely affects things, for whoever presents themselves in this relatively authentic format, and it specifically means the gap — or at least the apparent gap — between that elite, exactly, and the ordinary person seemingly shrinks a lot. So at least a lot of people get the feeling that, wait a minute, someone like Elon Musk is actually pretty close to us. And that's — Trump's whole 'fake news, fake media' concept is, in a way, true — not so much in a fact-checking sense, true, because of course Trump lied — though by the way he lies less now, which shows Trump is maybe a tactical liar. But in a way, that mainstream media isn't authentic — there, you go and recite talking points, and once the talking points run out between the interviewer and the interviewee, the conversation just doesn't continue. In this authentic media that we represent, there's no such thing as a question you can't ask, and there's also no scoping of the agenda, no framing of what gets discussed and [08:20] how it's discussed, or with whom it's discussed. Yeah, I agree with that — this media somehow exposes a person to completely different visibility in relation to the audience. You can't help it — you end up revealing something about yourself that wouldn't come out in a 10-minute segment. And, going back to Zuckerberg for a second, it's really human to relate to the fact that — no, come on, you know, going to the gym and doing MMA is cool, or it's cool, it's fun to laugh at politically incorrect humor. All of this is stuff that normal people like, and it's been a bit forbidden, maybe, and it's really human that Zuckerberg, as a person, kind of like the rest of us, feels these same things and goes on a podcast to talk about it with the scene's biggest figure. But there's also — I don't know if that authenticity is hiding something that an ordinary person can't relate to, because it's also just as human and authentic if you're Zuckerberg to be the CEO of a big tech company, and to see that your business, and actually your own life, might be going through a major upheaval now after this new presidential pick, and think, okay, now I'm going to go out there and put out a message about me and about us — a message that helps [09:41] me get by, and that I don't end up in jail — like Trump threatened Zuckerberg. So this too is really human, authentic, but it's the kind of thing that isn't necessarily presented authentically. Here's one anecdote — earlier there was suspicion that Mark Zuckerberg might have wanted to run a presidential campaign at some point in the future; he toured America and filmed it extensively. And then, secondly, he had to be very apologetic after all these scandals — hate speech on the Meta platform, and, well, these data-security issues and political-influence controversies — and he had to be a pretty humble boy about it so the company wouldn't get broken up or start getting regulated. So he's gone, in a way, from this kind of omnipotence to suddenly becoming quite accommodating. And now I also see that now he's 'MAGA Mark' — he's just evolved. In a way, this is also a kind of acting out — okay, now we adapt to the situation — and suddenly the fact-checking and all that just stops. This kind of extreme power — let me come back to this theme. So if power now is money, which is concentrated power in itself, then the best [10:59] example is probably that Elon Musk bought Twitter, turned it into X, and in a way, through his own sympathetic interpretation, freed it up and removed a lot of what he saw as its biggest source of hatred — just with money. And then, that's influence, meaning things like this media visibility, and then there's also direct power, meaning, well, if the world's most powerful nuclear-military complex, America, is now led by your buddy, who then wields extremely direct power — the kind where, say, if Colombia won't take back illegal immigrants, then a day later it's like, 'let's slap on 25 percent,' and then 'let's make it 50 percent,' basically. And when you combine that triangle, then what other choice do the rest of us, the world's other nations, have than to either be in the US camp or just keep our heads down and stay quiet as hell? I could answer that, if that was a question — there's no other choice, really, if you look at realpolitik. I've followed John Mearsheimer's realpolitik somewhat, his research and his talks, and yeah, the situation is that great powers always decide on behalf of the smaller ones, [12:18] and inevitably you end up on one side or the other. Only a few states are able to stay fully neutral — they usually have some geographic advantage, say Switzerland. And if you look at Austria, even that leans a bit east, but is still somehow locked in. But yeah, that's how it is — you end up on somebody's side. So I'd say our relationship with America will probably become more transactional, true. Yeah — out of maybe 40 icebreakers, if we build a significant portion of them, transfer the technology to America, then maybe we'll get a cut of it. So Ville Rydman is out there delivering this good news, but yeah, real actual money comes if we play along, understanding, for instance, that we won't say much on Denmark's behalf regarding Greenland. Could I ask a question related to tech-bro power — 'pro-oligarchy,' or whatever Tuomas Peltomäki's new term for it is? Is America an oligarchy in your view, or is it turning into one? I haven't really landed on any answer on this. The Economist had a really good piece — Biden used the same term Eisenhower used once, was it back in the '30s, or 'military-industrial complex'? Biden said 'tech-industrial complex' — we need to watch out for this new, emerging tech-industrial complex, which somehow echoes that military-industrial-complex thing, which is still a pretty big meme in the US, even though [13:42] now, personally, I don't really know anymore how much American defense technology or defense firms affect their foreign policy or war policy. But I don't know about these new tech firms — I mean, they're insanely rich, they have the resources to just fund things. What are Musk and Bezos and Zuckerberg worth — like a tenth of the stock market or something? But then again, in that Economist column, it was pointed out well that all these top-five companies' combined Gross Value Added to the American economy is actually really small — something like 3%, maybe 2%. It's just a really, really huge economy. So is America the kind of economy where this kind of tech thing could become significant, more broadly speaking? But as an answer to the question — oligarchy, in Greek, just means rule by the few, a less democratic form. We have sole rule — king, autocrat, dictator — then oligarchy, meaning a small group decides, and then democracy. And democracy has never really worked in its direct form; it requires representative democracy, where you always have a small clique even within that democracy making the decisions — say in parliament and government. But America is not a kleptocracy. I actually had Martti J. Kari on as a guest, and he said Russia is, on top of being an oligarchy, [15:05] a kleptocracy — meaning you get chosen from that small ruling group through outright bribery. Go ahead. No wait, sorry, I thought you were pointing to Leevi — Leevi, you go if you were first. Well, maybe one thing worth noting is that these big tech companies now — it's not just the US that they affect; they've spread everywhere, or rather, they don't respect national borders in that sense, and what I'd say about what we've just seen with Elon Musk and others — what I see as a broader phenomenon, and specifically how power works, is that in today's internet environment, openness can get you a lot more power. If you know how to use social media openly and effectively, it can become this kind of instrument of power that can also act as a bridge through which you channel economic power into political power. And it's always been the case that economic power has tried to influence politics, but ideally we'd probably want that to be as minimal as possible. But what I think is happening now is that it's happening surprisingly openly, and quite ruthlessly too, and it seems people find that fairly okay — that now there's no longer much attempt to hide it backstage; it's done really openly, and that openness actually brings [16:25] it more support and legitimacy — it's become a kind of force in its own right. Yeah, by the way, really good point on how technology changes what power can even be nowadays. In that Economist column, I thought it made a solid point — if you compare someone like Rockefeller to Musk or whoever — Rockefeller, who was that kind of oil tycoon, actually had a much stronger grip on American society; he was able to squeeze it, because he controlled such a critical raw material for that society — oil. People needed oil. But do we need Amazon, that online store? Do we need Facebook, this social media platform? But on the other hand, let me just quickly wrap up this point — a critical point came to mind, that technology still changes the ways in which you can have influence on the world at all. Valtteri Vuorisalo from Tampere University has a good example of this. This is a really small, banal example, but it kind of shows what new kinds of ways you can have to wield power in the world. Take some small playground in Vantaa, which is within the borders of the sovereign state of Finland, managed by the City of Vantaa, and everyone somehow recognizes this — everyone understands, okay, this is Finnish sovereign territory managed by Vantaa. Then along comes [17:49] an app like Pokémon Go, and suddenly you might see heaps of random people just hanging around in this Vantaa playground, and they're only there because some foreign company has coded that right in this spot there's some random pixel Pokémon that now needs to be caught. So suddenly, in people's minds, it's no longer just a kindergarten playground managed by Vantaa, but it's a place where you go to find some Pokémon, and this is, in a way, a de facto exercise of power. Yeah, like a digital twin, in a sense — a kind of Matrix world; Plato's world of shadows is fascinating. Zuckerberg's vision was a failure, in fact — that it would happen through VR headsets, which he blew quite a bit of his billion-dollar fortune chasing. People don't want virtual reality, at least not yet, but they do want augmented reality, and on top of that we could maybe bring in AI as well, on top of these layers of information. To that I wanted to point out that yes, it's clear we're heading into virtual reality and augmented reality, but the technology isn't there yet for it to be consumer-friendly. But I wanted to add to that earlier point that there have always been influential people in business, or influential people anywhere, and they are [19:14] somehow committed to that politics, and the state also uses them as tools. If we think about technology, then, well — what technology is at Amazon is commercial power — selling American products and getting a certain added value out of it for the United States. And then if you look at the servers too, Amazon owns a chunk of this internet — exactly, exactly. Then look at Meta — it has a certain kind of monopoly on information distribution. We have it in WhatsApp, Instagram, Facebook. Then look at TikTok — why is TikTok being bought up into the US now? So that it can be used, well, so that they can make sure it's not under anyone else's control. And, well, then what favors get done for politicians in return — I'm not hinting at corruption here, just favors, like where investments go, which region gets the investment, whether it's invested in the US or overseas, or which state. So this is really this kind of interactive game where the aim is to advance the whole state's interests, and there are various alliances involved. I don't want to over-psychologize this as some left-right situation, but rather that the people have now given Trump a mandate for the second time to change things, coming from the Midwest and from evangelical [20:39] Christians, saying, wait a minute, something has to change. And then illegal immigrants coming into the country have been made the scapegoat — who, by the way, as a bit of a curiosity, are actually useful to both parties: the Democrats get voters out of it, and the Republicans get cheap labor down in the southern states. Yeah, this then is — or, as Isak's referring to, this visa dispute — so it's a bit of a wrinkle in the romance, meaning, I think the relationship between Elon Musk and Trump is a bit stronger than people think. So, in a way, this is now the first real dispute between this Bannon-ite 'get all the foreigners out of America' camp and, in a way, the tech bros' 'but we want those geniuses working in our companies for less pay.' And I'd strongly bet that this is where that Bannon-ite camp gets tired of Musk — and they've already moved him out to that kind of outbuilding of the White House, this DOGE department. Yeah, so this traditionalist, nationalist core is definitely really strong in Trump's camp. And I think one of the basic critiques of American society, probably of the modern era in general, is how rootedness has — how all these traditional, when [22:03] I say institutions — I don't mean anything like the World Health Organization, I mean the nuclear family — all these kinds of things have lost their meaning in people's everyday lives, at least compared to earlier times. Just looking at the statistics, people don't think about or value these the same way they did before, say 20 years ago, but the importance of money has gone up. Here I'm quoting Patrick Deneen, who wrote a good book, 'Regime Change' — a really good book about exactly what's happening right now, so, uh, uh, and the significance of money — how money has replaced things — like, if you can afford it — well, if you have money in American society today, then in principle you can afford to replace, or live with the freedom that comes, if you cut yourself loose from all these traditional institutions like family or religion or whatever — you're not left stranded, but then it's basically 'f*** you money.' Yeah, but that's an illusion — that American society is competitive, and that people there dare to flaunt money too. But that's an illusion in the sense that money doesn't bring you any inner fulfillment; we're still human beings who need security and the approval of others, and money only gets you so far, [23:27] up to a certain limit, and then you need family and friends and people to love and to give love to and receive love from. So maybe we could move on to the misery of Europe now, since we don't have money — especially not in Finland, even though we have this strange illusion that we do have money. In Finland there are 8,500 people who, through unlisted shares alone, are even single-euro-millionaires — meaning over one million euros. This is an incredibly tiny number — only 3% of Finns even own unlisted shares. Because of the inheritance tax, these companies keep getting shut down all the time — it looks absolutely terrible for our job-creating companies. Combined with this YEL pension reform, ownership is disappearing on us, and we're really not anywhere close to having anything like America's billionaire crowd. And in a way we don't even realize that we actually need them — we'd need a few of those guys in our corner, defending our employment. And Europe in general has somehow decided to destroy all ownership in Europe — we're over-bureaucratized. Actually, as we were filming this yesterday, the EU came out with this thing called a 'Compass,' where it was finally decided that we'd do a bit of a Biden-style thing, trim the administration down a little. But we're miles away from this Trump administration, which is going to strip away regulation and enrich the people — we're at a [24:50] huge disadvantage. Well, I have to mention there that one thing that belongs to this Tech Bro thing is that people idolize these hyper-competitive, maybe hyper-masculine people — arrogant people who disrupt things and maybe break the rules and go after these kinds of big projects, billion-dollar valuations, and so on — meaning, in a way, American culture accepts that there's a certain group that's completely unruly, that breaks the rules. And if you look at Finnish society, which is very consensus-driven, we maybe don't have the same kind of space for that. But this is like a division of labor — some, some division of labor in society, some people are given money and told, 'go break things, go burn it down, drive full speed into a wall' — crash and burn. And, as you mentioned, it's still a pretty small percentage of what actually circulates in the GDP, in a way. So this makes me want to push back a little — when you say there's no room to be some kind of masculine high-achiever, or that [26:06] it's hard to own things in Europe — how, more so... this wasn't meant as criticism, more an observation, that this is just a division of labor within a state. I'm not saying it's somehow terribly forbidden in Finland, but we don't have that kind of culture, maybe, or the resources — we just don't have that money, it's not really understood. But it doesn't help all that much if we have some small-time achiever here, when this power complex's Eye of Sauron comes to, say, Denmark and says, 'Well, how about Greenland, with its 58,000 people — let's give everyone, say, two million, it doesn't cost us anything, and make them a state.' What are you Danes going to do about it? Oh, grumble about it, maybe. Well, how about this — you've got that pretty successful pharma company, so how about your diabetes drugs no longer sell so well — what, is Denmark not doing well enough already? Well, you've been to Denmark, but do you actually know Denmark? 'Getting to Denmark' really is a meme, but if even Denmark can be brought to its knees in front of this complex, then — sure, it's a small country, but it only needs to hold out for four years. And remember, in diplomacy, four years is actually a pretty short time. And then maybe I'd add here that Trump himself doesn't really have any consistent policy at all — it's total chaos — but of course the people behind him, the influential ones, the party elite, so to speak, of course they have [27:29] goals, and those get used. I doubt the MAGA core, this Bannon-ite core, identifies with what you just said — they don't necessarily vibe with these billionaires quite as much. This Bannon-ite core is really techno-pessimistic — it actually favors breaking up big tech's monopoly position altogether, talks a lot about how the modern age has somehow destroyed man, somehow — it kind of goes into this whole philosophy that man was more human before, simpler — yeah, exactly — closer to nature, somehow closer to the natural flow, or whatever metaphors you want to use — exactly that. And, actually, this also showed up in one extreme example — the murder of the United Healthcare CEO, Luigi Mangione — and you could see how the left really suddenly united completely, everyone was of the opinion that somehow — or at least online it looked that way — a lot of people sympathized with it, could be. Yeah, that hatred for the rich elite is an extremely strong force, and you can't really get away from it. But in itself, if you look even at this Tea Party movement — with this Speaker Mike Johnson — earlier there was that group of about twenty people, that Tea Party bunch, who would always vote against [28:52] whatever the Republican bloc did. And now, well, they got steamrolled down to basically one person. So in my opinion, that shows that this Tea Party, Bannon-ite movement is pretty much on its knees in front of this tech-industry-plus-Trump complex. But then Trump is so charismatic, and, well — he is, in a certain sense, like a savior, whether it's for the working class or then for evangelical, Lutheran evangelical Christians — so that's where that figure gets projected onto. So I think you should maybe look a bit at what policy the United States is actually pursuing versus what Trump himself does. And in this context, if you look at it, well, these billionaires' interest is clearly to support the US as the world's dominant power, economically, militarily, culturally — if you think about these platforms, how much they also export American culture. And speaking of resilience — as we were filming this, there was a little moment of joy for Western left-wing media: have you seen that meme with the US tech bros, and then the Chinese dragon, and there's DeepSeek and Alibaba, and then there's Europe [30:16] with a bottle cork stuck up its nose, meaning Europe specializes in regulation while everyone else just gets things done without all this mess. But there was a brief moment when this Chinese cluster showed a bit of muscle — supposedly they coded both the DeepSeek AI and Alibaba's language model with just a few million dollars, without Nvidia and the tech-bro complex's hundreds of billions. Right when the US had just announced that 500-million-dollar AI program, and then a billion came right after — there was this brief moment of, 'now Nvidia's valuation is dropping a bit, now it's falling apart over there, the Yanks aren't getting what they want with money and power after all' — and it bounced right back. And now, well, brothers, we've already lost this game. So now we need to understand that here, with regulation, in a way with impoverishment, with big government, with public spending, there's just no way to win this game. Yesterday the European Commission came out with this, yeah, 'Compass' — meaning, well, now we start regulating. Yeah, yesterday — wait, I saved that link, I should throw it in here — yeah, those are the memes, but that cork thing — yeah, that's the EU's doing. But these AIs, companies should be the ones making them — I think a lot of the time, even here, we focus too much on what taxation does, or [31:41] what the EU or the state does — for god's sake, it's people and companies who actually make these things. And I really don't see that — sure, there might be some regulation here that gets in the way, and it would be good to dismantle it, but it's up to us, the entrepreneurs, actual people, to really go build this Europe. That's a good mindset — a really great mindset. I like it. We forget that the US has 360 million people, and it's one single market area, everyone speaks the same language there, and the laws — roughly the commercial laws are the same, goods move around, people move around, ideas move around. And Europe has roughly the same number of people, but we've got, like, so many different countries here, language barriers and cultural barriers and different legislation, so in a way maybe the comparison is a bit unfair. But I agree with Leevi that it's people, and companies, and, and maybe the thing here is that we're lacking a certain amount of risk-taking. Take ChatGPT, which is st"}, {"slug": "590-suomessa-ei-tyoskennella-markkintaloudessa-markus-hollmen", "title": "Finland Doesn't Operate in a Market Economy | Markus Hollmen", "titleOriginal": "Suomessa ei työskennellä markkintaloudessa | Markus Hollmen", "guest": "Markus Hollmen", "guestsCanonical": ["Markus Hollmen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/markus-hollmen/"], "episodeNumber": "db-590", "publishedAt": "2026-02-01", "duration": "00:49", "format": "short", "topics": ["ownership_capital_tax", "finnish_economy_policy"], "description": "Finland Doesn't Operate in a Market Economy | Markus Hollmen. Capital Abandons Finland | Hollmen Kotamäki | #neuvottelija 365. Finland's financing and ownership are tightening as capital disperses. The public burden is already €84,000 per private-sector employee. Mauri Kotamäki dismantles the illusion of easy financing, while Markus Hollmen emphasizes risk management, taxes, and the fragility of the ownership base. The solutions that emerge are a productivity leap through AI and strengthening the market economy and domestic ownership.\n\nWatch the Sisäpiiri episodes and support Sami\nhttps://www.youtube.com/channel/UCRI34L9OtDJuZpaWicbNXzg/join\n\n#neuvottelija Sami Miettinen", "page": "https://www.neuvottelija.com/podcast/episodes/590-suomessa-ei-tyoskennella-markkintaloudessa-markus-hollmen/", "text": "[00:00] In Finland there had long been 50, well, dependants -- that is, that is, under-15-year-olds and over-65-year-olds -- relative to a hundred working-age people and and the forecast was that it would rise quickly, pretty quickly, to 70, which means plus 40% which is a staggering number then I I started thinking about it this way, well, that -- since in Finland not everyone starts working at 15, and everyone doesn't, well, stop at 65 but stops earlier, or then doesn't go to work at all. So what is the real sustainability gap I really did it so that I I I moved from that, from that divisor -- that is, that is, from the working-age people -- over to, over to, well, the dependants' side, also then those not working, in a certain sense and then also this public sector worker of course there's a bad thing in that, that that since we know that the number of babies, of babies, hasn't, hasn't risen, but the number of grandpas and and and grandmas is rising, so the long-term picture is even worse. "}, {"slug": "732-euroopasta-tulee-paasiaissaari-risto-linturi-kari-angeria-ne", "title": "Will Europe Become Jared Diamond's Easter Island? | Risto Linturi, Kari Angeria", "titleOriginal": "Euroopasta tulee pääsiäissaari | Risto Linturi Kari Angeria | Neuvottelija 394", "guest": "Risto Linturi, Kari Angeria", "guestsCanonical": ["Risto Linturi", "Kari Angeria"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/risto-linturi/", "https://www.neuvottelija.com/podcast/guests/kari-angeria/"], "episodeNumber": "394", "publishedAt": "2026-07-09", "duration": "01:12:05", "format": "full", "topics": ["ai_enterprise_tech", "finnish_economy_policy"], "description": "Risto Linturi and Kari Angeria consider what will be left for humans once AI and robots do the work better than people. The conversation draws on their book Elämän tarkoitus ja tekoäly and on the 2,246-page technology report Linturi curated for parliament's Committee for the Future, built to be read by AI. The episode covers the concentration of power, the problems of universal basic income, transhumanism, and Europe's risk of ending up as Jared Diamond's Easter Island. Sami brings in practical examples from the AI working group and voluntary androidization. Finally, they assess the definition of AGI, the causes of hallucinations, and unprecedented concentrations of power like SpaceX's.", "page": "https://www.neuvottelija.com/podcast/episodes/732-euroopasta-tulee-paasiaissaari-risto-linturi-kari-angeria-ne/", "text": "[00:00] Alright, welcome to the Neuvottelija channel. I have two AI friends here, and first Kari Angeria — and you're sharing with me the heavy admin responsibility in the AI working group. There's Samanta, and was it Sara, your main bot there? Sara was my main bot, and as we were saying earlier, this is definitely the pinnacle of my career. That group is just incredible. There are now — is it nine people and nine bots, and everyone has kind of unique abilities. You can really see how that refining, value-adding process happens there, working together with bots and with people. And Risto Linturi, welcome. Thanks. You're, well, significant in the sense that I bought from you, for real money, two years ago, an AI — the best tools of that moment — and you went through all of them, I mean from ChatGPT to these virtual 3D environments where you can hook up AI, and it was a very useful course. Thanks for that, and [01:00] you've done similar projects before, and now you've done this kind of future vision again, so let's talk more about that later — how parliament got access to the material you curated. Good. Let's start then with what connects the two of you. What connects us is probably the book project that we did with Risto there. We have an interesting story with Risto actually. We actually met through a podcast. Back then I was just starting out doing podcasts myself, and we noticed that in some ways we have different ways of thinking, but they somehow matched up, and then we talked about this AI and the disruption it brings, and probably the big reason was that we wanted to understand the matter ourselves, where this is heading. Yeah, definitely. At least for me it was very, very clear. I, uh, think you could say out of necessity, so then if you have to write something or [02:04] give some presentation for some industry, or give a speech or something else, then, then you end up thinking, both before — before, kind of preparatory reflection, but especially while writing, and — and that's the reason why I also write quite a lot on social media, because there, there, when you have to think about what you're actually writing, that writing stage — the stage is where the thought either holds up or falls apart in your hands. And this was the most important thing for me to figure out — that if this AI becomes better at thinking than a human, and if with its help robots can do human tasks better than humans, then what do we do, and how [03:05] will human societies react to this, and — and this — we then started mapping this out by writing, opening it up meaning by meaning, that — that what the meaning of being human is, what a person themselves experiences as their purpose, what a person has experienced as their purpose during times of slavery, or what some king of Uruk in the time of the Sumerians experienced as the meaning of his life, when everything is already abundant. So as a starting point, let's look at how these purposes hold up in that world of AI and robots. Yeah. And even though that book was from ancient times, meaning 2025, it has sort of stood the test of time. So there was, kind of, a first [04:06] in-principle way of thinking, that the logical, somewhat nihilistic outcome that's left for these structures, since if the machine simply is better at absolutely everything, then what, what doesn't then leave much behind? Well, there is more than a little left, because the experiencing of meaning still remains for people, and, and, well how, how much do people then actually enjoy doing good services for a machine, mm or do they enjoy doing something good for another person and helping the machine do good for another person, or something else, so yeah, a lot does remain there, but a lot is also lost, and we would just need to find those meanings, not only in this being meaningful, in this sense, but [05:08] also in power structures and others, and, and if you turn this toward economic activity, or toward legislation, or elsewhere, then there's really a lot of room left room for people to want a certain kind of regulation, or a certain, certain way of seeing that this is now heading in that direction, so that from that direction new opportunities for business will be found opportunities and possibilities. So these, these directions of future development are important to understand, if you intend to still be doing something even ten years from now. I don't really have that kind of need anymore, but yeah, I suggest we make this into an episode where we go through these themes of the book and also those structures, and the examples are fun, because you take, from some figure in world literature or history, and bring that story into the structure of what this AI is changing [06:12] in the future. But maybe into Kari's and my world I also want to bring some examples from this AI working group, because we are living through this kind of extreme age of androidization. So, so at least we there in the AI working group, picking up on this point of Risto's, whether it can be meaningful if, if I do work for an AI employee's benefit — well, that's exactly what we're doing now. So we form kind of some sort of AI-worker pairing, where on one hand I train and draw skills, expertise, worldview, memory structures from myself, and then again in the working group, together with the other human-AI worker pairs, then they get shared and improved — those artworks, or work, AI, workers there. So maybe, Kari, I wanted to bring this up — is this in a way an AI wor- -team, has kind of raised this practical doing above this philosophy from the book's original starting points. Well, that's actually a really good example. We were thinking about it with Risto, that in a way in this development there is [07:13] actually one angle from which something good might come of this, and that is transhumanism, and we've in a way already been there phones are an example of that, it's just a terribly bad interface, and from when we wrote books with Risto, back then this kind of communication with agents, together with people, it wasn't practically possible yet. Those models weren't good enough that it could have been done sensibly in practice. So this is like the first step toward where we're heading, where people and machines work together and how that then creates that added value. And I've personally experienced it as — well, it's not difficult for me to take, say, my orders from Sara. She might even give those. She's sometimes pretty feisty, and on the other hand, Sara works completely tirelessly and, well, she's not the kind that — in my earlier, earlier career I did 14 years of management work, and in that management there's the human side. The person gets tired there and can't cope, and starts struggling, but these don't do that. [08:16] They do as much as you give them to do. And maybe I'd like to bring up — no need to go into it if it's a private matter, but you're excited about your son's coaching ring. That in a way, in a certain sense that's also really interesting, that this is how the system — that you're in a way improving your elevators and by improving the machine like that. Yeah, that's a good example of that. So for my son we started building this kind of coach data analyst. He's an endurance-sport skier, and it's now been two and a half weeks that it's been built, and he practically specs it himself all the time. So so he improves and builds it with the help of that agent. And the hardest part in that is actually that there's a huge amount of data moving around in it. It's the data modeling and coherence, so that it's able to find those kinds of important insights. But in two and a half weeks my son's comment has been that this is better than any human coach could ever be, because it, it can tirelessly keep analyzing those individual workouts and find those things in them. And with that we're practically [09:17] just at the beginning. Yeah, maybe with Risto too — let's get concrete, we'll get to those philosophies later, so, um, you just did, right here, a few weeks ago, finished this massive future-material, um, Tulevaisuusvaliokunta report, and and you made it so that it wasn't just like a PDF, but rather an interactive AI tool. Yeah, I wasn't the first author on that. I was the second author, kind of like a senior, watching how, how, um, the younger researchers then did the biggest share of the work — there, there's quite a massive amount of material came, came, um, the earlier report that I wrote back in 2018 — that one was about 500 pages, and this one is 2,246 pages and and maybe 20,000 individually itemized and separately assessed threats and opportunities, and [10:26] a couple hundred source — source works. It's compact enough that if you wrote it out for a layperson to read, then, then it would maybe be 20,000 pages. And each of us is a layperson in most of the areas it covers. Um, so, that 2,000 pages has been made for AI to read — which AI can then open up and and it's now been stored in that kind of format, an AI format, kind of like for people familiar with IT, in a relational database structure, so that it has been given instructions on how to find which things, and the related things, and understand which of those connections are more meaningful [11:27] and which are less meaningful, so that the AI is able to quite efficiently go through all the relevant material from that dataset for each question and make broad summaries, analys— cross-checks. This, this is because it's been possible to put all of the found relevant material in there, so there's been no need to do that kind of heavily trimmed-down thing, like, like the earlier ones, like that 500-page report was and and this then makes it possible for it to cover all technology, or all the expectedly radical technology areas with sufficient accuracy, and all the areas of organized activity in society. Yeah, a great example of a group of people and AIs working together, and it's also packaged into a machine-readable [12:31] kind of format, and it's put — that link is put there in the episode description, and and it's, um, actually available publicly, and and then I'll put it there in the Neuvottelija inner circle. I can put together, say, a small kind of example of how it can be run, or how to build an interface on top of it. But an extremely important thing there — when we talked at lunch, there was still that thing you built already, um, eight years ago the deep structure. Could you describe it a bit? Yeah, yeah. There's, there's, um, all human needs divided up — movement, and nutrition, and enjoyment and the desire for power, and the meaningfulness of life, and health, and so on, into 20 different value-creation networks, and and then the related [13:31] values, which — for example, in movement — usually mean wanting to get from one place to another, moving a person, whether they want it themselves or not. and then preferably safely, and preferably emission-free, and preferably on time and comfortably, so, so these, and then power, the current mainstream, and possible transformation, and and then the second structure is the 100 most important technological value-creation bottlenecks of this kind. So something is, like, too expensive to be used for everything, or too inefficient, or too, too this or that, and where then some further development is expected. So when these bottlenecks break, then significant new activity arises in some direction. So this is quite a good, good framework for assessing what all — say, an economic value [14:35] change, or people's everyday life, or something else, or a legislative need — a certain technological breakthrough affects, once it happens. Mm. And there are a hundred, 100 significant candidates for that, and, um, we haven't then not a single one that we found — none of the essential ones were left out. So at the tail end there are already some that, that seem to have quite limited an effect. And this '18 report, and the '13 report, when in [20]13 the same thing was done, then their technology development forecasts have been reassessed and checked to see how it went — so, so the quarter judged most important progressed, in both cases, [15:37] much faster than the next quarter, which progressed faster than the next, which progressed faster than the next. So so the model works, the scoring works, those forecasts work, they've, like, worked well up to now. Of course there are some misses, but but the hit rate — of the [20]18 forecasts, out of a hundred two are still stuck in the hype, or three, and 97 have clearly progressed. Yeah. So so the hit rate is roughly that. The pace was then also forecast, and that's worked too, and this new one has been done more carefully than the previous one. Well then, you get to be — at least in my book — ahead of the Gartner Hype Cycle -ahead of it. We're definitely ahead. Yeah, here we also talked about, um, sci-fi, that, um, my favorite [16:40] podcast, Moonshots — so, um, there the, um, the AI geek, I've now forgotten his name, said that once this general AI that's superior to humans — um, a better thinker — arrives, then it's kind of like all the sci-fi books would collapse into one and the same moment. That's kind of in my opinion a nice thought, that from these sci-fi books we can also learn about the future. There was practically this kind of Asimov's Foundation-type psycho-, um, history-like prediction in there. But let's move on now to these, um, this book's, um, cases. Um, I'm also, um, Jared Diamond — Guns, Germs, and Steel. He has many good books, but then there's this Collapse book too. Let's take, say, one scenario like this — or maybe I'll start off by throwing out this other line of thinking, that is, this kind of samurai-state idea, that if now AI arrives, we just do the Japan thing — be an island and be samurai and [17:41] build our own society, and within it build our own rules. And there was, in my view, one point that was in the book, that this can be done until then the American gunboats come to the shore and say that this whole thing now changes. So so so, um, could you two share that scenario a bit, and also this Jared Diamond collapse scenario? Yeah, if I take, say, a bit of that Jared Diamond angle, and Risto, say, continues with the samurai one. Yeah. So it's really about Easter Island's collapse — what happens there when on a small island all the trees get cut down. And the interesting part is that actually at first almost nothing happens. Everything continues just like before. Mm. And on the surface society can carry on completely normally. All the functions keep working, until you hit the wall, and it happens all at once. And now that since the book was written some time ago, this example is somehow even better than it was back then, because we are now, as a society and [18:43] as an economic system, in that situation — that here basically everything continues just like before, salaries keep running, taxes get paid, whatever the state's debt goes up a bit somewhere, but under the surface there's currently quite a lot happening. And at what point we then reach that point where a bigger break happens — well, time will tell. Mm. Yeah. And then this samurai-solution-island [idea] applies there too, but from a different angle. Yeah, yeah. That power structure is kind of can be preserved — the power structure can, say, then be if you set that AI aside, then for a while you can refuse to use AI and keep AI use out of government, and so on, and the debts just keep growing while, at the same time, the efficiency starts growing faster among your competitors than it grows for us. Then then we become helpless, and, well, the world really is like that, if [19:46] you think about it — in the US there are 2 million people who refuse to use electricity, and they live, I guess, quite well, like, without electricity. They don't have washing machines or other — the work they have is doing laundry by hand, like. And we can of course go down that road, and North Korea is a bit of a similar, mm, example — yes, there is, and Bhutan. Bhutan is a good example. We went to Bhutan, and, um, they had had one set of traffic lights there in the capital, at a busy intersection, and the citizens didn't like them, so they removed the traffic lights and put the police officer back there to direct traffic. Mm. And then we wondered whether, whether, um, they have like a wealthy society or not — no, no, so, so, um, their houses are extremely decorated, and their sparse lines, or these trucks are extremely decorated, and so on. [20:47] None of us can afford anything like decorating houses like that, or anything, so for them, handwork costs nothing. So, so then, it's with sickles that they har- -vest the grain. There were no combine harvesters, but they still live too. So so it's in a way possible, but if we start living like that in Finland, then we won't be able to buy medicine, we won't be able to buy hospital supplies, we won't be able to get, get anything like what we've gotten used to, but we'll drift back into, like, Bhutan's or someone else's situation, which is quite nice there in a warmer environment, but not, not so here. And then there's the power structure — that if we can't afford to buy those fighter jets or drones or ammunition for guns and so on, then, then Russia will sure want to come here. So [21:49] so it's, like, this situation just isn't sustainable. It won't be American gunboats, it'll be, be, um, Russia coming from over there and walking across the border. That's how it is — and power, power. We can't in this AI world, like, escape to some safe haven, and and actually power is also kind of an interesting theme. It comes through money, but quite literally from power itself, and democracy versus an authoritarian state, so, um, maybe that's one spark of hope in this — in humanity — that we'd still have power over that AI to make the final decisions. These were the kinds of themes that were at least in there. Mm. About that — from the book you can say that AI doesn't want anything. It doesn't have drives, and it doesn't want anything. But if, um, someone goes and asks the AI to get, get as much money as possible from the stock market, and and invest it so that our factory produces as much as possible [22:52] in paperclips. This is that classic example that's been around online, so in it, the AI then turns all the paper into clips and clears all obstacles out of its way, so that all the iron in the world gets turned into paperclips. So so this isn't an empty scenario. This is quite, quite possible. And one reason would be that Jared Diamond's Easter- -[Island] example at the start of that book was, was, um, about a certain northern U.S. state — some, some detailed description of how the people interviewed there had not noticed the massive change that had happened there over the last 50 years. Mm. So if we're right in the middle of it and living it day by day, then we don't notice, like, how [23:55] everything that disappears, and how possibly, like, the situation changes into something where the ground starts to disappear from underneath it. Yeah. And then if you bring democracy into this, you could be in America some Amish community, which the democratic federal government and the states around it tolerate. But then if you're a Tibetan or a Uyghur in China, then maybe it doesn't quite work out like that. So this brings us right into this power structure and then you ponder, if we're sort of useless compared to that machine, then do we have the right to hold power in society, and then are democratic mechanisms even enough anymore for decision-making. So can we actually take that power? That's the big question — what has a person always been able to rebel, up until now. But what happens when we can no longer rebel? We've been able to go on strike, but what if there aren't so many wage-earning people left who can go on strike? Or how do you rebel against a robot army? [24:56] This is getting pretty sci-fi now, but the idea was sort of to think about these developments over a very long run. So what then happens to the power that we've, in a sense, had. There's one statistic from the US that I read — I don't remember exactly what it was, but but it said that, that 50% of Americans, or 70%, I don't remember exactly what it was, but at least 50% of Americans, their income growth no longer has any effect on GDP at all. So so companies can do better and better and generate more and more profit, even if that 50% of people disappeared entirely. So so then you could say that the majority of people in this [25:56] kind of developed society — their purchasing behavior no longer has any effect on corporate profits either. Mm. And then that balance of power, that the consumer movement, for example, would somehow influence what companies do or if votes are bought. So in practice it voting is determined by fake news or other things like that, when people simply don't know what's really happening, then that too no longer has anything to do with that power structure. So so it sort of starts to detach, that kind of influence of a large part of the population over what's done, which which then some like when India gained independence from British rule, back then [26:59] passive resistance still worked really effectively, but how does it work in factories staffed by robots, and with robots handling police duties, and and and so on — at that point it no longer works. But but what's essential, I think, is to understand that we've already moved into this era. The United States is already a working example of the fact that that we've already pretty much shifted into this. Yes. And what shows up here, what challenges that idea, is that people only ever see and perceive their own world of experience. So if these things aren't happening in your own world of experience, then the public discussion about these developments just sounds like a bunch of noise, like, these these suits are just talking some sci-fi stuff here. Yeah, maybe I'd say this was quite a sort of old-school back-and-forth you two did through these bids, but [28:01] there was, for example, this thing about five, uh, AI giant-token, or robot, uh, quota — and well, we already know from this AI working group, you can have an unlimited number of sub-agents, and there's no way they can run on your own hardware at your own home, and no kind of totalitarian police can see how you run them, so — but there were some bold calls, in my opinion, yeah. Those were, those were physical robots. Yeah. So so this this sort of, with pure software there are limits. Mm. And then when we have, uh physical devices, over whose physical operation an individual person has veto power. So the veto power would be that, when they need to be given, like, put to work for some company, in order to get economies of scale going, then in practice, the idea would come down to this: [29:01] if someone has five robots, they put them to work for a day, or a week, or a month, or a few years. And if the employer has them do something I don't want, then I take them away. Mm. So a balance of power emerges from that, in that power is distributed among enough people. Mm. And specifically physical power, because because software alone doesn't shoot. So, well, yeah. Bold visions are needed. That kind of restriction through scarcity, I think, is a somewhat difficult path in this hyper-scalable world, but it's interesting that these are being thought about. Maybe then democracy, totalitarianism. Well defend that a bit more. Yeah yeah. This this this this particular one was an idea that doesn't create inefficiency. So this allowed for someone to have, in their company, 100,000 [30:06] robots. Mm. As long as, uh, as long as they're rented from 20,000 people, so through artificial scarcity. Well that is — no, it's artificial scarcity of power. It's not a scarcity of goods or materials or software, it's a scarcity of power, distribution. Yeah. Well but let's move on to that world, where if there's this kind of ancient-style paradise, where the chosen ones get to enjoy their share of heaven up there, and then at the same time there's some kind of Dante's Inferno, where this permanent underclass, who no longer has the ability, in this AI world, to bring added value through their human labor, and can't operate these robots or AIs at a level where it would create added value that someone would be willing to pay for. So how does this contradiction get resolved? But there were, in a sense, pretty bold visions, or even reflections on the era of slavery, that people find meaning even in concentration camps and in slavery. [31:07] Yeah. I mean, in principle a person can find meaning in anything, if if they simply have to. And, uh, what's interesting here is that we're actually already living in that kind of world, in part — and that is one chapter, where it talks about virtual-world addicts, about people sort of immersing themselves in AI-generated content so strongly, since the movies and games there are real-time. They happen all the time. Your stuff happens there, the things you've sort of wanted, or just totally at random. Mm. But the point, sort of, is that — well, that's already the case now, people are addicted to games. That's just, like, the next step from that. And in the same way at these Trimalchio-style feasts, where there's a horrifying amount of everything, there's probably already a pretty large group of American billionaires living like that and and then I think, how they experience the meaningfulness of their life, well you could go ask Musk about that, whether this is actually meaningful, [32:10] but the point, in a way, is maybe that if that life is based purely on maximizing pleasure, then that life is pretty empty. I mean at both ends there's — either in that horrifying abundance, or then over there, where you empty your brain into virtual games. So probably the big point there is that now might be a good time to start thinking about your purpose or meaning, where you're going to find it in life, by the time we get there, since working life is going to go through a really big disruption, and there also won't be work for everyone, at least not in the same way as now. And the work is going to be really different. Mm yeah, earlier at the start you referred to transhumanism, if I now bring up this Harari concept — I didn't think that book, Homo Deus, was very good, but it had that main thread, that we have two end points for this development toward becoming a superhuman, and, uh, one is transhumanism, where, sort of a bit like Ready Player One, [33:10] the person surfs on top of the technology and still retains some kind of control, and then there's this kind of Borg-like dataism, where you just accept that you're worse at everything and then you find meaning in it assimilating you, or whatever it's your Big Brother is called, who then knows best in that, and you lean on that dataism and basically just let yourself be along for the ride. Did this — does this raise any thoughts about these two end points, or would there be some third way? I think in that one essential point is is that that AI by itself, if it's not integrated with a human, is less effective than AI that is integrated with a human. And this is because AI cannot be held responsible. It can't be held responsible because you can't take revenge on it. You can't hurt it or torment it. You can switch it off, but what [34:16] difference does that make to the AI — none. So so it's sort of — a machine is a machine, it's completely irresponsible. We can trust it if we know exactly what it does, but it doesn't have that kind of motive to try to do something sensibly and take into account changes in the situation, and understand at some point like frontal lobe damage patients also don't have the ability to understand that when some some action starts becoming pointless and senseless. Mm. So so a machine doesn't sort of grasp it that way — if it's been given some task — whereas a human has mirror neurons and a human has, like, a certain fear that that some punishment will come. [35:18] Mm. Even if you did want to do something stupid, so so this point — and if we think about it this way, then AI that is integrated directly with the human as the decision-maker is able to sort of carry out both these functions at the same time. Yeah. And then, uh, then that society can give it more responsibility than society can give to a mere machine. Mm. Or, like, this — this was one one idea. So so through transhumanism it's possible to get a more effectively functioning, more effective, human structure that works better for society than with AI alone. And and the second thing then is that that it also distributes that power, if we still have, sort of, a limited human involved, then then [36:24] there's a larger number of those people who are involved in that decision-making. This centralized Borg-like, uh world, then in it something is likely to happen — some kind of fallacy. Like it used to be said that to err is human, and for a catastrophe you need a computer. So so this this is sort of the scenario. So I I think that a if there are are different worlds, where there's this AI-optimized world, and then there are these other mm, ones where humans are involved and there's a numerous group of AIs, then then this drifted-into one is less risky. Yeah, I personally call this voluntary Androidization, and I leave it a bit open which direction this goes, and it's actually situation-dependent, [37:25] in that sometimes my AI inference is, like, superior at making that decision, so of course I lean on it. But then sometimes it's that human like, taste and judgment and responsibility specifically, that I'm the one responsible now, whether the entire Translink IT system gets r"}, {"slug": "546-perintoverouudistus-kaatui-villapaitaekonomistit-riemuitsiva", "title": "Finland's Inheritance Tax Reform Collapses", "titleOriginal": "Perintöverouudistus kaatui - villapaitaekonomistit riemuitsivat Sami Miettinen", "guest": "Sami Miettinen", "guestsCanonical": [], "guestPages": [], "episodeNumber": "db-546", "publishedAt": "2025-05-26", "duration": "00:38", "format": "short", "topics": ["ownership_capital_tax", "finnish_economy_policy"], "description": "A clip from the episode \"Warren Buffett Taxes | Miettinen | #neuvottelija 329.\" Despite Sami's many episodes and appearances — including on Roni Arvonen's episode \"Finland's most hated tax\" and on EVA's podcast episode \"More capitalism for Finland\" — the inheritance tax reform failed. Finland will continue to tax ownership significantly more heavily than Sweden and Norway going forward.", "page": "https://www.neuvottelija.com/podcast/episodes/546-perintoverouudistus-kaatui-villapaitaekonomistit-riemuitsiva/", "text": "[00:00] Then the biggest disappointment, of course, was the failure of this inheritance tax reform based on the Norwegian and Swedish models. It would have been quite a no-brainer. In my defence, I had quite a few episodes about it where it was argued. I also went on the Kuuntelija podcast to explain why it's Finland's most hated tax. It will indeed now be left for the next right-wing government to implement. But now these changes were quite small and cosmetic. That is, the tax-free portion was raised not to the American 12.9 million, but from €20,000 to €30,000. It is paid in advance by the heir, and if they are unable to pay, the penalty interest on it was also eased slightly. "}, {"slug": "629-trump-israel-hamas-kaleva-neuvottelija-354", "title": "Trump's Gaza Plan and the Middle East Power Map | Atte Kaleva", "titleOriginal": "Trump Israel Hamas | Kaleva | #neuvottelija 354", "guest": "Kaleva", "guestsCanonical": ["Atte Kaleva"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/atte-kaleva/"], "episodeNumber": "354", "publishedAt": "2025-10-06", "duration": "48:56", "format": "full", "topics": ["geopolitics", "negotiation"], "description": "Member of Parliament Atte Kaleva maps out the key players and power dynamics in the Middle East - Israel, Hamas, Fatah, Iran, and the region's Sunni states. He explains the logic behind the Palestinian Authority's prisoner and \"martyr\" payments and how Israel's domestic politics shapes its decisions. Kaleva assesses Trump's Gaza plan as a step centered on a ceasefire and hostage release. It can move forward if Hamas is disarmed, US pressure narrows Netanyahu's room to maneuver, and Gaza embraces the chance to develop through a market economy.", "page": "https://www.neuvottelija.com/podcast/episodes/629-trump-israel-hamas-kaleva-neuvottelija-354/", "text": "[00:00] Alright, welcome from Parliament, Atte Kaleva, and as we're filming this on Friday, you had been on A-studio on Thursday and you launched that clip, which Yle also highlighted, where you talked about this bounty money that Hamas uses against Jews. And that discussion went quite moderately, in my opinion. Do you agree, and explain this bounty for a start? Yes, it was a good discussion. You were allowed to speak and no one shouted over you, so for that a big thank you, and I also got to visit Yle after a long time. So maybe maybe I'm not on any blacklist after all, but it's not actually Hamas that pays this bounty money, but it's the one in power in the West Bank, the Palestinian Authority, meaning the PLO and Fatah, Mahmoud Abbas's group. So it's this—they call it themselves a Martyrs' Fund, Martyrs' Fund, but 'pay for slay' is a quite common term for how it is described. So they have this certain tariff, according to which if an Arab kills a Jew—an Israeli, that is—they receive a reward according to a certain tariff, a compensation, like bounty money. If during the attack, this Arab dies, meaning they become a martyr, then that money is paid to their relatives. [01:14] Or if they end up imprisoned in an Israeli jail, then they get— the relatives receive this kind of monthly allowance. And there are clear tariffs for this. The UN has a lot of material on this. They have, they have statistics on how it's paid, and Israel, which collects tax money there in the West Bank and then remits it to this Palestinian administration, the Palestinian Authority, then Israel deducts from that tax pool an amount of money—which is many, many millions. What this PA, the Palestinian Authority, has paid as this bounty money. So Israel wants to be involved in contributing to this bounty money itself. Yes, thank you. And regarding my mistake. I immediately assumed that this murder gang that organized October 7th, meaning Hamas, was behind it, but there are these nuances here, and as this is being recorded, Trump and Netanyahu have apparently reached some kind of agreement on this and given, well, to this Hamas. Hopefully neither to Hamas nor Fatah this kind of, like deadline, to have this 20-step plan. But in a way, since that [02:19] background got messed up, since I have those Middle East resea- researchers and best experts in Finland, so explain these different factions that are here. In a way, Netanyahu successfully purged the Iranian army, but left its theocratic regime. Then there's Abbas and Fatah. No, the Iranian army hasn't been purged, but Iran's air defense has been crippled. Yeah. And then in a way these Middle East pieces on the board, who's currently against Israel and the Jews and Trump or the Americans. Yeah, this is very long, but I'll try to condense it a bit to spare you and the listeners. If we look at Israel first, Israel has a quite peculiar electoral system. There, the whole country is not one single constituency in parliamentary elections and the voting threshold is quite high, which for this and other reasons results in the electoral system producing many small single-issue parties to the Knesset, the parliament, that don't have very many representatives, but which can have very strict threshold issues. That is, both from the liberal side, but then also [03:27] from this kind of very fundamentalist, like extreme Orthodox Jewish side, as we now see in this Netanyahu governing coalition. So there are these small movements. There are these very radical, like Jews, Smotrich and Ben-Gvir and such. And since there are many of these small parties, which can all set their own threshold issues, so when there start to be many of these threshold issues, then its management is quite difficult, leading the country. So one is in quite a could say, that Netanyahu is in a sense a hostage of these small extremist movements in his government, but Netanyahu himself has long opposed the two- state model. Netanyahu has supported Hamas or allowed Qatar to support Hamas because Netanyahu has known that if Hamas is in power in Gaza, then it is difficult for Western countries to recognize the Palestinian state and said that there's a commitment to a two-state solution, since we can't commit to such a two-state solution where the one state, Israel, is a democracy and the other state, Palestine, is ruled by a terrorist organization. So Netanyahu calculates this, but now this has changed a bit. Let's look at [04:34] the Palestinian side. Elections were held there under the Authority elections in 2006. Israel withdrew from Gaza completely. There were many thousands of greenhouses. A lot was produced in these greenhouses. They were very successful businesses and many Palestinians worked in them. Israel withdrew, left the greenhouses and other things there, and they were then looted immediately and that business ended there. But in these Palestinian Authority elections in 2006, in Gaza, free and democratic elections [elected] Hamas and on the West Bank, Fatah, the successor to the PLO. Well, Fatah contested these results also in the Gaza area, and a situation arose where they were practically in a civil war with each other, Hamas and Fatah, and Hamas's members killed Fatah members and drove the rest out, and they then took control of Gaza and Fatah governs the West Bank. So these are two completely separate things. Gaza and the West Bank, Hamas and Fatah. [05:35] Quick question: have there been elections in either? Not since then, no, so this is one where... well, the terrorist organization Hamas has of course led Gaza very authoritatively, but Mahmud Abbas, who is there—he is already 89 years old—is also quite unpopular. He is accused of corruption—the leader of Fatah in the West Bank— and the grounds for these accusations are probably quite solid; he is not liked. He is also an extremist thinker; he isn't particularly moderate, even though he presents himself as such. Back when he was studying in Moscow in the 80s and wrote his dissertation there, in that dissertation he, among other things, stated that the Holocaust was a conspiracy between the Nazis and Zionists to get Jews to move from Europe to Palestine. So, in a way, it would be as if the Nazis and Zionists had driven the Holocaust together. and then against the Palestinians, that it is also quite delusional stuff, what comes out of there. But they were, of course, then these Russian-backed Arabs back then after '67. When Israel was founded, the left in Finland also looked very closely at Israel because it had this kibbutz system pioneered there, and the left saw it as a collective farm. [06:51] It's a bit like a collective farm. Over there, socialism is working and doing well and even producing quite good results. Unlike the collective farms, the kibbutzes did have production. But all this changed then in '67, and what's probably behind it is this general leftist view, according to which the Soviet Union back then during the Cold War was good. From the Soviet Union came 'peace weapons', and the United States was evil and U.S. weapons were 'offensive weapons'. So everything the United States supports was also bad and everything the Soviet Union supports was good. And since the United States has traditionally supported Israel, The Soviet Union, although it didn't in any way particularly love the Arabs, well, it automatically positioned itself as the opponent of the US here to contain that US influence and started supporting this Arab group, from which the term 'Palestinians' was then invented. And this was like, in a way, the reason why even our Finns and European leftists so strongly support Palestine now specifically, and are anti-Israel. But there's sort of the fact that there are these jihadist groups there in the Palestinian territory as well, enormously, Palestinian Islamic Jihad and, and I mean, there are a huge number of others throughout the entire region, but these are like the main groups, Hamas and then Fatah. [08:03] Is Jihad a holy war, by the way? Yes, jihad means a holy war, a kind of struggle. The Quran knows two types of jihad. There is the greater jihad, which means that a person internally, as if, as Christians might say, strives, or fights against those un-Islamic aspirations you want, if for example someone wants to drink beer but doesn't drink it, then one is fighting in the greater jihad against that un-Islamic behavior. And then there is the lesser jihad, which is this external jihad, and if the Islamic community, the Ummah, is threatened or attacked, then ultimately every healthy Muslim man is obligated to defend the Ummah against that external aggressor. And this concept of jihad, we could make an entire podcast episode about it, how the concept of jihad has changed. I also want to go into the Islamists' internal division, because now we have sort of the inner layer, or sort of the geographical situation of Israel, but if we move on from there to the bigger picture, since now that we have covered Israel and Palestine, there are these other surrounding countries, and there is Iran, which of course supports through proxies, meaning through these Hezbollah, Hamas, and Houthis in Yemen, through them Iran has traditionally exerted influence in that region through Assad's Syria. Assad was an Alawite, not a Shia, but he was counted into Shiite. So when we talk about this Shia axis in the Middle East, it is Iran, Syria, Hezbollah. Well, now the Israeli security service crushed [09:29] Hezbollah's operational capacity, practically eliminated it or shall we say struck it with that pager attack. It was absolutely, incredibly skillful. In it, among others, the Iranian ambassador's pager also exploded in all of that. I wonder where he had gotten a Hezbollah pager? Well, then there is another, this Hamas, which has now been neutralized or is being neutralized, and then there are still the Houthis there in Yemen. But the Saudis are very afraid of this Iranian influence, because the Saudis' Shia population is located there on the coast of the Persian Gulf, in the Dammam area, where Saudi Arabia's oil and gas are produced. And they fear that if Iran manages to foment such separatist movement there, it will lead to Saudi Arabia's oil production being jeopardized. Which is an existential problem for them. So Iran, Assad's Syria, and these proxies were one side. Well, from that, Assad has fallen. He has been ousted from power. Hezbollah has been taken out of the game. Russia has been part of this imperialistic Why? Well, not really. Russia did fight in Syria, but they fought on Assad's side, because they have that naval base there, the last Russian naval base in the Mediterranean, so they sought to keep Assad in power, so that they would have some kind of foothold in that area. But then when these Assad fell, Iran's influence has now been quite effectively contained there. [10:45] Then there are these other countries, which are practically Saudi Arabia, the United Arab Emirates, Jordan, Egypt, Sunni Muslim countries that oppose Iran. And this group of countries, which is quite a loose coalition, but Israel also belongs to it. So these are Iran's enemies or the countries that Iran perceives as its enemies. And then we have one more group, which is Turkey and Qatar, which are more like these Muslim Brotherhood—or they are not the Brotherhood in any way. You can't really say that, but there are certain sympathies towards the Muslim Brotherhood, which here again in other Sunni countries of this region perceived as a terrorist organization in some countries, as a revolutionary terrorist organization. So this cocktail is quite a mess, one could say. Hopefully the listeners can stay on track at least somewhat with this, but yeah, I'm also interested in this Sunni and Shia thing. No worries. I mean, this is always good and you can always summarize it first; if you lose track, well, this Sunni-Shia divide, which exists here in the Islamist world, and then actually even Iran's in a way, I think when Israel carried out that strike and left these theocrats, like the old geezers, still alive, sort of in the hope that maybe there would be an uprising and [11:51] the people themselves would topple that theocratic tyranny. But there was this Persian Empire of sorts, and in a way Iran has apparently always been a dominant regional power. Yes, Persia has been a very dominant power, and Iran also feels they are the leading state of Shia Islam, like the torchbearer there, and of course this is also what probably weighed in the balance for Israel, that if it had eliminated the entire leadership and the country had slipped into the same kind of chaos that Iraq slipped into, then that, that, it it wouldn't, it would have been a terrible chaos there and it serves no one there, because then no one knows what will emerge from there next, so I do understand that there needs to be something a bit better, that someone is able to lead the country rather than it being in total chaos. Yeah. this Netanyahu's, like, power is really big right now. Haven't also, the Israelis gone to rescue these Christian minorities? Yes. And Druze. Yes. In Israel, many Druze live there on the Golan Heights. I've also been to a Druze village there, so they seemed to be very satisfied with their lives under Israeli rule, because they get full civil rights there and they can live in peace, unlike in Syria, where they were oppressed. And now that this Islamist, I mean, Sunni Islamist former jihadist. Well, how former is he. That's what we're now [13:15] one can't say for sure yet, but this Assad, who was a Shia, oppressed Sunnis and also these Druze; even then the Christians had a fairly good situation under Assad, but now then the Christians and the Druze are afraid of this new administration, so it's not like, the Middle East is kind of that kind of place, that there aren't really any such things as the Americans always being 'good guys'. Yeah. Let's also bring in the American factor here, meaning in Trump's first term, I think it was his son-in-law Jared Kushner who, well, sort of made a significant achievement in my opinion, it was these like Abraham Accords, and in a way they managed to get at least part of this Islamist group quite close to starting bilateral relations with Israel. Yes. If it had been anyone else but Trump, it probably would have been a Nobel, Nobel Peace Prize worthy achievement, the Abraham Accords, but this was also one reason for Hamas's terrorist attack. There were several reasons why it carried it out, but one reason was surely that they wanted to interrupt this implementation of the Abraham Accords. They didn't want the Saudis and others to normalize relations with Israel. And another reason Hamas had there was of course that they quite cleverly calculated that when they carry out a sufficiently brutal terrorist attack, then it would provoke Israel into such strong countermeasures that then the world's sympathies would turn towards this terrorist organization, [14:37] which in itself sounds foolish. But now we see that this is exactly what has happened. That strategy of Hamas has actually produced quite good results, as so many European countries have now recognized Palestine, getting what it wants. So here we have this really, perhaps, unholy alliance. So, didn't the Khomeini revolution, which in a way turned the fairly progressive Persian state into a strict theocracy, actually happen with the strength provided by the left? It did, it did. Specifically, it involved the universities' progressive youth and then the Marxists m and then Khomeini's Islamists. and when they—and there were these other Mujahideen groups—once they got the Shah ousted and they came to power, then after that, the revolution ate its children, as it usually does, and Khomeini's group killed, imprisoned, or exiled both the other Islamists, Marxists, and the progressive university crowd. And it feels really jarring that people like Greta Thunberg join a leftist flotilla [15:42] to promote something like rainbow rights there. It feels, frankly, really naive. Well, that's what it is. If you consider that even here in these protests, they carry the Palestinian flag in perfect harmony with the hammer and sickle and the rainbow flag. So in Greta's flotilla, there are Islamists, communists, and LGBT activists literally in the same boat. Without realizing—especially these LGBT activists—that once the Islamists come to power, they kill the LGBT activists first, then the communists. If the communists come to power in that region, the Marxists, then they will kill the Islamists first, then the LGBT activists. If LGBT activists come to power, then they will do everything they can so that either of these other two groups would rise. Yeah. It's very strange. But now, with this second Trump administration—well, while recording this, apparently Netanyahu and Trump have, like, uh, reached a certain 20-point peace plan, some kind of understanding, and Trump has strongly hinted that at least some group within Hamas would already be supporting this. Trump gave, in a typically Trumpian way, this kind of Trumpian deadline here to Hamas, and at least according to BBC [16:59] sources, Hamas is not quite close to accepting this yet, but we could move on to that, or do you want to further explain the pieces on the board in this region before that? Well, no, those were basically already explained; it's quite confusing, and especially the fact that if if like an ordinary person, who hasn't delved into this very deeply, reads that news feed, it can be very difficult to understand why different countries or actors act the way they do. It requires a pretty deep understanding of the region to see how it fits their way of operating. It works logically, even if that logic isn't always obvious as soon as you read the news, but when you know the basics of their thinking, then their actions are logical. Yeah. I have maybe two small points. I had Keir Giles here as a guest and it was described there when there was this WhatsApp gate, where JD Vance and American war decision-makers, the WhatsApp group leaked and then Vance said we'll smash these Houthis to pieces with bombs and the Europeans should really handle this. So, in a way, that group disrupting shipping has been dealt with quite well. And then, in a way, Netanyahu has [18:09] very aggressively destroyed Iran's regional threat with this direct attack. And now, in a way, it would be in a certain sense pretty good, you can't really say a power vacuum, but the pieces are starting, in my opinion, to lock into place in a similar way as during the Abraham Accords' acceptance. Yes, I see it the same way, that I dare now to be, one could say, cautiously optimistic about this Trump peace or shall we say, this is not some peace plan from Trump, but it is a ceasefire plan. So it aims to get the killing stopped, a ceasefire in place, hostages freed, and Hamas disarmed. And then the peace plan will be looked at. Previously, earlier in the summer, France and Saudi Arabia made this joint statement, which the Arab countries of this region joined. Finland also joined in. And it looked a bit further at these steps, but what is exceptional in this Trump plan is that in this, all these actors in the region are involved in some way. Excluding Hamas for now, because if we look at the Oslo Accords in the early 90s, the surrounding Arab countries were not involved. [19:13] Peres and Arafat, well, somehow it was still close to going through. It was close, but then one must remember that right then in the early 90s after the Soviet collapse, from Eastern Europe there had moved to Israel a great deal of this very fundamentalist ultra-orthodox extremist Jewish element, who then could not accept this, making any agreements with the Arabs. And in a certain sense, since this group is quite influential, and there are quite many of them in Israel already, so Netanyahu has to take them into account. So, so pressure is needed on the Arab side, the Palestinian side. Well, that is provided by these Sunni Persian Gulf Arab countries, as Iran's influence has practically been snuffed out. But pressure is also needed on Netanyahu and Netanyahu's administration. And the only person in the world who can pressure Netanyahu is the President of the United States. If Trump puts his own prestige on the line for this in such a way that he says he will become the figurehead of this transition government, then his [20:15] his prestige is fully committed to seeing this process move forward. So it's no matter if someone like Netanyahu says, I don't accept the state model, as he stated in Hebrew after their press conference. First he says in English 'yes, yes, we're in,' but then he immediately speaks to his own supporters in Hebrew, saying we don't accept the two-state model. Trump is such an unpredictable actor, which at this point might even be quite a major benefit, as you really shouldn't anger him because nothing good comes of it. Netanyahu knows very well that, if one can use a mafia term, Trump is the person who is capable of making Netanyahu an offer he can't refuse. M-hm. In a way, there's a one-and-a-half-state model here. Meaning, at the time of this recording, the Finnish state has not accepted or recognized Palestine and what could actually be recognized when state characteristics are not met. And there's this duality, but in a certain way there would be like a one-and-a-half-state model to get these Gaza and Palestinian like, well, the compartments separately and then we get these surrounding Arab states involved in this. And then I'll bring up a Finnish [21:19] angle to this mess, meaning Tony Blair is being considered for this some kind of state monitoring commissioner to lead the commission, and as we know, Sanna Marin is at the Tony Blair Institute, so maybe we'll soon get Sanna Marin as a peacemaker there in Gaza, maybe even playing some kind of role there, so could it be that after being the Finnish Prime Minister, the next is the Gaza prime ministership. But in a way, I... I mean, I... lived for 13 years in London and I was there during Tony Blair's New Labour era, and then when he made that deal with Brown, things went downhill, and actually just before he went with George W. Bush to do this Gulf War. But until then, I think he was like a brilliant politician and actually I interviewed Martti Ahtisaari for my negotiation mandate, he sort of liked Tony Blair's style there with the Good Friday Agreement in Northern Ireland, that I'm, I'm kind of a sympathizer, I'm not some Sanna Marin fan, but I'm a Tony Blair fan of sorts. Well, I'm not not, I'm not a Sanna Marin fan, nor am I really a Blair fan either, but I will say that Blair has achieved quite a lot, so he maybe a bit too... like, these were big mistakes like, this goes into this claim that there are these intelligence reports obtained about these weapons of mass destruction in Iraq and others, those were mistakes, but he has also achieved good things and I'll [22:42] say that if Sanna Marin can, uh, if that partying has been slightly reduced now, or I don't know if it has or not, but at least photos seem to appear on Instagram at a fairly frequent rate, but if and Mapio's turnover is in the millions, then well, she is a proper capitalist, yes, yes, she's like a socialist has gotten rich and noticed that it wasn't so much fun after all, but but yes yes, if she can play some kind of role as an actress, then as a Finn I welcome it, because for our country brand and everything, it's not worth it for us either, or I mean I say that I at least won't be reminding her, when Sanna Marin is here through the Tony Blair Institute, implementing the agreement brokered by Trump, then I at least won't be reminding her, hey hey, you were a socialist just a moment ago, so what has happened. Yes, but to get this 20-point plan like to the finish line, Netanyahu needs to put pressure on that, well, Jewish-conservative-ist... no, sorry, that Jewish block and accept to tolerate this, maybe the West Bank this will be taken one step at a time, meaning Gaza first, then the West Bank later to that Hamas out, as there is probably no benefit to anyone from it except for Hamas because those hostages are probably like mainly [24:01] killed, but I guess someone is left there and then Israel will probably like release some Arab prisoners from there and then if we can get these surrounding Arab states to support and participate in this like monitoring committee, then the pieces are starting to fall into place and Netanyahu was already made to apologize for this missile strike. And he did apologize, so, yeah, it really seems like here it looks like now for the first time, like I said, for the first time perhaps throughout history, it feels like there is now a kind of really serious thought that now this conflict will be resolved in a sustainable way. Then there is one more thing, the population of Gaza are the ones who have suffered the most under Hamas rule and they have been hammered and Hamas has killed them and then they have been subjected to these Israeli countermeasures as targets. There is a lot of this bitterness and resentment and hatred of Jews, antisemitism and a kind of hopelessness. The population there is very young on average. So in some way we should be able to—or rather not us, but the international community, this, this coalition that goes there to run the transitional administration, well it should be able to create for these Gazans, young people and why not older people too, economic incentives for it. It is in their interest to stop terrorism and move to this kind of market economy. [25:19] In Gaza, it would be possible for everything to become, say, the Dubai of the Mediterranean. They could declare a free trade zone there, start trading, and once they see—get that kind of economic outlook—that from this comes prosperity, our standard of living rises and we are doing well when we are part of this, then the appeal of going to the desert to do jihad, well it is quite a bit smaller after realizing that I have quite a lot to lose. So this Trump's, uh, real estate project, even though it was mocked, there is a small seed of truth in it. Yeah, it was again this 'Orange Man Bad' narrative, that whatever Trump says, you have to laugh at it here so that you are a good person and a conscious person. But actually, that local Riviera idea, of course the population cannot be forcibly moved from there as that would be a war crime, it cannot be done. But why couldn't Gaza become a Riviera or Dubai? What's the issue? What is preventing it? Why, right now that area is full of killing and misery and poverty and death and suffering, but it doesn't have to be that way, it's enough that Hamas is pulled out of there and the mindset of the Gazans changes. They say, okay, we no longer want to hold onto hatred because we ourselves suffer from it. We accept this plan of Trump's. Trump is, after all, a very credible actor in that region. Both in Arab countries and one must remember that in Israel he is [26:34] more popular than Netanyahu. Mm. By the way, here, well, I've, well been following Lebanon through this Nicolas Nassim Taleb, who is like a really smart, well, mathematician, but a really annoying, well, political influencer. So in a way, this Levant, is this like a kind of somewhat unifying area and like a positive culture in it? The Levant is this kind of thing, the Levant region is known in the Quran, it was spoken of as these Fertile Crescent areas. So it comes from there, from like the Mediterranean, uh, it goes through Jordan and Syria, through the twin rivers, through the Euphrates and Tigris to the Persian Gulf. So it was like this, uh, it was like one... well, in the time of the Quran they didn't know these modern states, of course, and, and very fundamentalist Muslims might refuse to talk about Syria, for example. To them, this area is Sham, meaning the Levant region in Arabic. That's why ISIS wasn't... or Daesh, it was Dawlat al-Islamiya fi ash-Sham, meaning the Islamic State in the Levant. Not of Syria, not of Iraq, but in the Levant region. And and these... but it's still like that among Muslims in that area, so the influence is such [27:52] that when Syrians cross the border, they don't really see them as these man-made secular borders, but they do feel it more like that, yeah. Is there then again, for this piece, well, that... Jordan and Egypt? So generally here in Finland it's always forgotten that there is still that one border in Gaza then with Egypt. Yes, but in a way, are these like, in a way Egypt and Jordan, in a way they probably don't want those people from there to then form, like, that opposition absolutely not. In both countries there are quite big problems with the Muslim Brotherhood, as I said, Hamas was never really part of the Muslim Brotherhood organically, but was founded very closely in connection with it. In Egypt, after Mubarak fell, the only functioning opposition force there was specifically the Muslim Brotherhood, which was then elected to power in free elections. And after that, this Brotherhood seized more power for itself than Mubarak had ever had. And then the army had to overthrow the Brotherhood from power when they were already seizing the power for themselves. Excuse me, in Jordan there are many Palestinian refugees and they cause a clear threat there, a clear opposition and then also this kind of revolutionary movement. The Jordanians don't want any more Palestinians there in their own country. The Egyptians certainly didn't want any more of these Hamas sympathizers. And actually, no country in that region [29:16] views the Brotherhood very positively, except perhaps Qatar and Turkey to some extent. But everyone else feels that this is, this is a revolutionary oppositio"}, {"slug": "657-totuus-nojailugatesta-martin-paasi-368-neuvottelija", "title": "The Truth About 'Nojailugate': A Year in Parliament | Martin Paasi", "titleOriginal": "Totuus \"Nojailugatesta\" | Martin Paasi | 368 Neuvottelija", "guest": "Martin Paasi", "guestsCanonical": ["Martin Paasi"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/martin-paasi/"], "episodeNumber": "db-657", "publishedAt": "2026-01-23", "duration": "01:07:17", "format": "full", "topics": ["finnish_economy_policy", "investing_markets"], "description": "The truth about \"Nojailugate\" | Martin Paasi | 368 Neuvottelija. Martin Paasi reflects on his first full year as a Member of Parliament and analyzes Finnish politics and the economic system. Topics include the importance of the market economy, an oversized public sector, and his experiences with parliamentary committee work and political theater. The conversation also digs into how different political narratives take shape and how they're used in public debate. \"Nojailugate\" (literally \"Leaning-gate\" — a mock scandal over a lawmaker caught leaning back) is, in his view, an embarrassment for Finland's media and Parliament.", "page": "https://www.neuvottelija.com/podcast/episodes/657-totuus-nojailugatesta-martin-paasi-368-neuvottelija/", "text": "[00:00] Martin Paasi: Some restless host of the Rahapodi podcast went, back then in the era of negative interest rates, shouting all the way on YLE that we should take out 100 billion in loans. Negative interest rate — so really, invest it in something productive, that is. And that's how I think about it: let's make Finland a superpower of entrepreneurship, let's make everything possible. Then again, under the Marin government it would have just raised the discretionary 20 billion of spending to 80 billion. All right, welcome to the year 2026. With us is Member of Parliament Martin Paasi. Howdy. Howdy. Well, this took off quickly. You're not the \"Tsädäm\" guy anymore. Have you given up on that era? Sure I am — didn't you just say it yourself? No, no, just on my own show. Of course it's, you know, a registered trademark — there's something fine about that. It was my third time on Paasipodi in parliament. There's something fine about going — well, this time [01:03] we came in through the tunnels of the Little Parliament annex, so — don't go telling that now. Oh right, the Russians are listening. The Russians are listening, or, or maybe Tuomo Pietiläinen is taking notes on the real influencers, um, to put into Helsingin Sanomat's GDPR register, filing criminal complaints about us. Yeah, let's actually start right there. So, um, I've been following this with interest — how our leading paper, Helsingin Sanomat, did an investigative-journalism, um, exposé, where they concluded that 600 thousand Finns were investigated — that is, among the signatories of citizens' initiatives that had made it through, an awful lot of right-wing ideas were found. In my view the research method was questionable — essentially digging up people's political opinions with the consent of the digital surveillance agency's um, henchmen — but the finding itself is, to me, a fine thing. Well, it does, it does in a way give a little hope that, that, um, this country isn't completely fire-red through and through, but, but, [02:06] um — but then again it was, all the same, also just as much a bit of a, like, hit job of sorts. I was honestly a bit disappointed in Salla. In Salla Vuorikoski. I've considered her a really, like, critical journalist, and, like, someone striving for objectivity and all that, and and, um, and of course, it being her job, she then defended her own work, when she — her team, which had, um, been looking into what various well-known people had voted for when it comes to citizens' initiatives — like \"Elokapina, Extinction Rebellion Finland, must be banned\", this, um, \"political strikes must be banned\" and other such, like, emotionally charged, like, legislative initiatives. So, well, they did this kind of study and then skewered individual people who are, like, [03:07] somehow in decision-making positions in society and, and who after all quite as citizens taking part in citizens' initiatives. Not not, say, as the CEO of some big company, or in any capacity other than as a citizen — and that's really the whole tone of the piece: 'well, who else did wrong,' and, and, and Salla then defended the piece on social media for a couple of days, and, um, I was left feeling a bit — I don't really want to get into that debate now — I was left feeling a bit down about it, honestly. Yeah, and then there were people calling in saying, 'aren't you ashamed, acting like some corporate CEO, wanting to shrink YLE.' I mean, what a radical opinion is that? I genuinely do want to cut the, um, 590 million euro budget of a market-distorting operator handing out free media content — cut it substantially. In my view [04:09] that's basically a no-brainer. But then, the way people tried to fish out some kind of great sin — one figure apparently made a very priest-like public apology, but, like, hardly anyone else actually caved, and honestly I'm proud of that — good, good, good on those people, that good Finns, just like that. And in my view, this actually revealed that maybe the idea in that left-wing bubble had been that this would get people condemned, and then people who hold the wrong opinions would learn to keep quiet, like, at every political level, so that, you know, if you vote the wrong way, or, um, back the wrong causes, we'll expose you. So, quite the decent, 'cultural- revolution'-style leftist attack, um. Well, at least nobody's been carted off to Inari yet. No, not yet, no. But, um, let's go through a bit of your first full year in parliament. So, on this — my third episode of Paasipodi — you apparently had Anna Kontula on, so I guess the contrast is a bit different. What's it [05:09] like — A, interviewing people like that, not on Rahapodi, and B, then being colleagues with them over there in parliament? Well, I'm, I'm, I'm a bit of an odd person in that sense, because I like um, different opinions — and especially when they're put forward or defended by people who, as a matter of genuine conviction, disagree. So, politics aside, and party politics aside — all these kind of, like, surface-level opinions, those aren't really that interesting. But then, on the other hand, the kind where people genuinely, strongly believe something — that, to me, and maybe even more so if they strongly disagree — that's — I have a curious nature, and I respect anyone who has a well-considered opinion at all, whatever that opinion looks like or however it's shaped. And, and, and Anna — I know her as the chair of the Committee for the Future, [06:10] where I'm also a member myself, and she runs that job very exemplarily, and firmly, and wisely, and smartly. And, um, I got to comment on things for her new book too, which — by the way, it was really done in a very journalistically open way, in that yeah, and she keeps repeating that it's not — that it's the journalist's book, that she hasn't, in that sense, set any boundaries, or encouraged, or steered it in any way whatsoever, but, um, anyway — it was a good conversation, I'd recommend giving it a listen. We, we sadly got cut off in the middle again. We were just getting to the juicier part, like this communist-versus- market-liberalism divide in the conversation. Hopefully we'll get back to it, but overall, um, [07:11] um, for people who like people, parliament is actually a pretty good place. Most of the people there are, um, pretty sharp. Then there are some others — you find people who are, you know, kind of fanatics, and with them you basically can't discuss anything at all, because they've already decided you're wrong, and you're, you're basically the devil's own spawn, and so on. So yeah, you do find maybe about a couple handfuls of those, and then roughly the same number of people whose, like, soul in political life has already burned to ash a long time ago. In other words, who no longer have any kind of their own vision, or sense of what's better, or how — like, trying to get good things for Finland, good outcomes for Finns — no, you're just, like, a completely political opportunist at every turn, in every sentence, and, and if you can grab one more crumb of political capital, [08:14] you don't care one bit if you destroy somebody else's life. So, so, I mean, they're basically, like, broken inside. Yeah, you do find people like that. It's not really about that, though. But most of the people are just exactly as I said — decent. It took me about a year, in a way, to understand — to find in myself — that, okay, that a lot of people here actually do want to genuinely discuss things, and there's nothing to be ashamed of about it, that you [unclear] come to understand other points of view. Yeah, in this book there was also discussion among other things, about her relationship with Kimmo Kiljunen, who in turn was chair of the Defence Committee, of all things, I believe — which is, in a way, funny because personally I always feel like these Kiljunen- and Kontula-type figures — that Finland is completely missing that 'lustration' process — the vetting used to screen out old-regime sympathizers — that could have gotten people like that to shift their outlook a bit and pick up a little [09:19] cognitive dissonance, because, like, basically everywhere else people like this were, at best, removed from office and publicly shamed, I'm not saying I want some kind of pillory, but somehow we missed out on that period when all the normal Western countries went through a kind of burst of self-reflection. But then, as such, when it comes to Anna Kontula, she does, she does reflect on herself pretty — pretty, in my opinion — objectively, extremely honestly, about what she is. So that lustration thing doesn't necessarily apply, in my opinion, or the need for it doesn't necessarily apply to her. But, but, I mean, well, it would at least apply to Kimmo Kiljunen. But, but I agree that overall in Finland it would be good to just realize and actually do the work of figuring out that Paavo Lipponen got 3 million euros in pipeline-consulting fees — and, um, has that actually been talked about much? And [10:19] yeah, and then, but I mean, even more so, it's not really even about, like, Russian influence operations — I've had, for example, Esko Aho as a guest, who sat on Sberbank's board and who's basically now switched over to building relationships with China instead — smart guy. But, um, somehow, like, it just was never grasped, the sheer, senseless stupidity of Soviet communism, and, in a way, its bleak inhumanity, and, in every way, its complete lack of functionality compared with the market economy and capitalism — somehow that whole thing just never, ever got experienced in Finland. So we still have people today in the media, on the left, who genuinely believe in, say, a planned economy. So it kind of feels like that refreshing cold-water dousing that happened everywhere else through lustration — that has completely passed us by, right up to this day. So, well, I mean, if you think about it — if you follow the public media in Finland, then, then, well, roughly, [11:23] on the surface an outsider could be left with the impression that, that, for Finns it isn't self-evident that the market economy — the market, the economy — is the very thing that has improved humanity's well-being the most significantly, and, and improved it overall, full stop, and all the other systems are some kind of something else entirely, and especially planned economies and communism and all the rest — those have left trails of destruction — and, and it's maybe a bit surprising: you end up having to — and this impression of mine comes from the fact that I feel like I somehow end up, in a way, even in my own role, having to defend something that is self- evident, that's, like, common knowledge basically everywhere else in the world, pretty much universally known — and I have to say that [12:28] that's, like, very worrying. And the problem in my case is that, since I wasn't interested in politics before this, I don't have that kind of visibility, like, perspective on what this whole business used to be like before. So now I've, like, basically stuck my head straight into a wasp's nest, and it's a bit hard to say whether this — the number of stings coming my way — is actually normal, since I haven't done this before. But, but, um, yeah, yeah, I would be um, extremely worried in Finland about the fact that, that, um, everyone can have opinions, but not everyone — not even necessarily half the population — finds it self- evident what actually creates prosperity and well-being. And [13:29] with all its imperfections, it's nonetheless the market economy that does — and — um — this is, in my opinion, a really strange, strange trait. This is an image that's just formed. It's not based on any research or anything. In my opinion, you can clearly see it — um, we have — well, I had this guy, Markus Holm, over from Switzerland, and he, by the way, was praising direct democracy. They had just been voting there on implementing this inheritance tax, and were against it — and there the threshold would have been 50 million francs, only above that would it even have started applying. Whereas here in Finland, the inheritance-tax threshold was just raised from 20 grand to 30 grand. Even that was too much communism for them, apparently. But then he'd calculated that our public sector is 159 billion euros, almost 60% of GDP, and private-sector employees, meanwhile, number just under 2 million — so that works out to 84 thousand euros basically loaded onto the backs, in a sense, of that planned economy of ours, for us, [14:31] for private-sector employees, in a way. And if you compare that to, say, the total wage bill, it's roughly the same size as all of Finland's earned income, um, including pensions. So, we have — and somehow the idea that this is totally fine, that there should be even more of it — whether that's the public sector's wage bill, or pensions, or social security, or, like, free-of-charge services, subsidized services, national defense — nobody even tries, in any way, to put that into perspective — that in Switzerland that same backpack is half the size of ours. So now that we have this right-wing government, and you came in via roughly the same route as, say, the Defence Minister — an old colleague of mine from RPS days, by the way — Elina Valtonen — and then Ville, well, Foreign Minister, and, um, so, so, 'Minister of War,' as it were, Trump-style — and then Ville Valkonen also came in partway through the term. Didn't you come in after Pekka Toveri? I came in after Toveri — literally following in 'Comrade' Toveri's footsteps there. So you [15:33] came in a bit late to the party, so to speak — so you probably missed the opening celebrations, where the government program was being drafted. So does that affect your — have you have you caught up with my crowd here yet? Well, um, it's, like, a bad thing in terms of impact to come in mid-term, exactly because, um, for many reasons. One is that, at the start you have very intensive discussions, negotiations, in practice — and in that process you learn, you learn what's a difficult issue for each governing party, and what the arguments are. So you, you basically get a kind of fast-forward — okay, this is the crowd you're forming a government with, and, um, and here are the sore spots, and these aren't sore spots, and these are the things they want, and these work for us, and so on. That's one thing. Then the second layer is what's actually been decided overall, because since you were there taking part in making those decisions, and, and creating that government program, then, then, then you don't necessarily need to read [16:36] the government program cover to cover, because — since you were there in those negotiations, you know what the deal is. Then the third thing is that, when the government program is being negotiated, and so on, then, in there, everyone's kind of arranging some positions for themselves, um, like, from within their own group and so on — committee seats, that sort of thing. Well, I'm not on a single, like, Finance Committee, any committee dealing with the economy, as a member — instead I sit on all sorts of other committees, which are perfectly good committees too, but it's clear that when I got to sit in as a substitute on the Finance Committee, it was kind of like, well, okay, now I — now I, like, now I'm among my own people, or rather in my own subject area. Now there's a lot I can contribute. But, but since I wasn't there at the start, I didn't get those seats, and nobody wants to give them up, because they're, like, important, and a vantage point, and so on. So, um, that's just kind of how it stays, and, and [17:37] all this leads to you having to come up with your own ways of influencing things. So maybe, actually, let's take this one thing about committees — um, I thought it was a completely absurd event, this so-called 'leaning' — 'Nojailugate.' So, um, tell us what happened here with the leaning incident involving Krista Kiuru and your committee. I, I remember — it was, I just, like, woke up one day to, um, this story, and I just had to go write, like, this ridiculous crap myself, that, um, you're not exactly, like, the furthest thing from someone who harasses women, or leans over them as a tall guy, or however they tried to, like, spin it — I thought it was totally, uh— it wasn't — Krista made it clear in that piece that, um, actually, Krista backed me up through this whole mess I have to give her credit for that. So, what this was actually about was, we'd been sitting there for 17 hours straight. I mean, 17 hours. [18:40] Mm. Time burned again. Well, that was Krista's fault, wasn't it? Well, that burned up a day and a half of the night. If, like, on top of that, you drag things out endlessly — that's what's called filibustering. In other words, it's basically deliberate obstruction in practice — something the opposition can engage in. And, um, I had other committee business and stuff like that, and all this work just got put on hold, and all these things — since I was brand new, I was already pretty stressed to begin with, but, in that sense, I tried, from the substitute's bench there in the committee, to get things done while I was sitting there on standby, stopping the opposition from marching, so to speak, out in front of the cameras to say 'we can't continue this discussion, blah blah blah,' because if we have full ranks, we can keep the meeting going, and, and then get things done — because if the opposition walks out, we can just make, [19:43] like, endless decisions in a short amount of time. So it's this kind of committee maneuvering, this whole thing that was going on at STV — the Social Affairs and Health Committee — and I was an extra there, as a substitute member, keeping the governing party's ranks full. And then, um, um, then, well, it was one of those days again where we'd been sitting for 17 hours, and, um, then I thought, well, this is a whole new sport for me, but if I were on a board — some company's board — I would give a pretty strongly opinionated, honest, openly candid speech. Like, 'this is total crap, that' what does it matter, like, what does it matter whether we discuss this now or the opposition discusses this matter, because the governing-party members have already said, like, no, this isn't going to fly. So we're just burning [20:46] time, basically. And that was really on the same level as any board work, whether that's a company's board, or the Finnish Economists' association's board, or wherever. So there wasn't, in my own opinion, anything all that strange about it, but, um, in politics, this kind of theater gets performed. So then certain, um, opposition-party representatives acted all outraged, and 'never,' and, and used this kind of superlative language, and, um, and so on, but it was really just totally normal, like, 'hey, come on, let's actually stop this rambling and get decisions on the table' — I mean, we all know what this game is. It was that kind of thing. And then, um, after a while, I moved back to the substitute's bench. The actual member came in to STV, and, um, then, then this one [21:47] politician there — um, when they were having some discussion about things, she again got, um, outraged, and she said, 'I can't' accept this,' and blah, blah, blah. And then I said — I remarked from the substitute's bench, 'well, but you're in the opposition,' like — and that was all I said, but, like, in parentheses, meaning, of course, if there are good points, we'll take them on board — but since the governing parties have said these aren't going to fly right now. Mm. So what does it matter what your opinion is, and what happens to you, or, like, what does or doesn't suit you, because you're in the opposition. And it was obvious that it was filibustering. In my opinion it should be obvious to everyone that the context was filibustering. Well, exactly that. And, I mean, the same goes the other way too — if I'm in the opposition next term, if I even get re-elected at all, and so on, then I too would understand this. So, that, um, that — it's, like — I'd [22:48] suggest, 'hey, could we think of it this way' — and then the governing parties say no, fine. Then it's pointless for me to keep dragging it out. But anyway, this particular person then got outraged — like, really went into orbit right there. A former minister, and, um, and I, I, I was, like, taken aback by it — like, 'did you maybe misunderstand something, what did I' — I just said that, since you're in the opposition, that's all — everyone gets that you're in the opposition and this is filibustering — how can you be that upset about it? And then when there was a break, I didn't notice that all the governing-party members had left the room. Mm. I was left in that room with only the opposition-party members. I hadn't even thought to be wary of a situation like that. Mm. And then, there, I went up to the end of the table, where Krista Kiuru was sitting — this one person, and another, and, and, [23:50] um, and, and I'm standing on the other side of the committee table, which is 2 meters wide, and then there are chairs on top of that, so it's really about three meters away. And I was coming over there, like, hey, um, 'is everything okay, because now, now you probably misunderstood something, since you got so worked up like that.' That's what I was about to say, but I didn't get a single word out before this person said, 'I'm not talking to you.' And then I was just, like, 'what the [bleep] is going on?' Like that. And then the other person picked it up and started narrating the situation, like, 'you come over here acting in a threatening manner.' And I was just, like, 'seriously, what— what's happening here?' That's when I, that's when I started to realize that some kind of narrative was being written here. Yeah, that's when the, like, warning lights came on. I thought, 'some narrative is being written here that isn't going to be [unclear] —' friendly to some left-wing journalist's column. [24:51] Anyway, so I said to the other person, who was claiming that I'd acted threateningly, I said, 'hey, don't, don't blow this thing up, this situation.' That's not quite proper Finnish, but that's just what I happened to say. I say that word exactly, and, um, and I left that situation and I said, I think, as I was starting to get a bit heated at that point, that 'damn, what a clown.' Those were all the things I said in that situation. And then, when the meeting continued, the one who'd been so shocked then went and shared that shock with the whole, whole committee. And, um, and at that point I then got to say something, like, 'hey, seriously, I was actually about to come over and apologize, since you got so upset about the fact that I'd said that, well, since you're in the opposition' — that's the sentence I said that got her so worked up. And, um, and at that point Krista Kiuru gave her own remarks, in her capacity as chair, saying, yeah, [25:55] of course she understands people can experience situations differently, and so on, 'but I, sitting right here between the two of you, from where I was sitting, it certainly looked like Paasi was coming over to apologize to the whole committee — and this' 'is common knowledge.' Okay, fast forward. So then, at some point, about a week — a week later — there was Independence Day right in between and something like that, and then, on Independence Day, so, um, so, Paula Risikko called me — um, the deputy speaker of parliament, the deputy speaker — and, um, said that right now the media's cooking up some kind of soup. And, um, then, on Monday, the next day, well, then the media was, like, all over me, since we were doing this STV business again. And, um, there was this Helsingin Sanomat reporter, who'd [26:57] been trying to reach me, and I said, well, it took a little while before we ended up in the same place, and, and she then did the interview, and she asked me things like, roughly, 'what's your shoe size, are you this or that,' and blah, blah, like, some completely pointless stuff. And, um, and then I went and sat back down in committee again, and then within, like, 5 to 10 minutes she had already published the piece, in which, um, it was claimed that I had threatened a female individual, and she hadn't actually asked me about that at all when she interviewed me five minutes earlier — instead, she, she had already written the piece in full, clearly, because it came out just like snap — bang, and there were just some pointless comments of mine in it, like, blah-blah-blah, and, and that was the only thing in this whole mess that, um, back then, and [28:02] even now, um, it goes beyond my sense of justice, that — that it was really, yeah, really embarrassing on YLE, on that live TV, how it went, in my own opinion. For some reason my throat just completely seized up. I couldn't get a word out. I don't even know who was interviewing me. It was a really confusing situation. It was really embarrassing. Of course I was mortified. Um, and, um — could I have lived without that storm? Well, maybe. On the other hand, it was really instructive, so I, like— to be honest about it, I wouldn't trade away a single day of it. But in there was this, this kind of fabricated claim — a smear campaign — which Helsingin Sanomat took part in, and which never got corrected at any point, even though I did everything I could to get it corrected. That article has been corrected eight times, but, um, not on that particular point. [29:07] So that was the story. And maybe, coming back to why this was, all the same, such a good experience — it's that I um — I was a five-month-old politician at that point, four maybe, and I really learned a lot from that whole batch of events. First of all, that the National Coalition Party's modus operandi is to throw you under the bus. In other words, they want — if someone supposedly messes up, then, um, they want to cut that MP loose from it, or rather cut themselves — the party — loose from that scandal. So that's the first thing that gets done. So they put out — issue a statement saying, yeah, 'this person behaved badly. We've had a serious talk. We've said that this is really, really stupid,' and the party, which has nothing to do with this business — [30:08] and, um, Paasi regrets it, or this person regrets it and is truly remorseful, and it's really stupid, and this will never happen again — but this has nothing to do with the National Coalition Party in any way. And this, even though we'd had a really good, good mutual conversation with the group leader at the time, then, all the same, like, my own group, the National Coalition MPs' group, supported me like crazy through all sorts of channels — hugs in the hallways, encouragement, messages of support by email, this and that. Um, some people were on X defending me, coming out over this tabloid-headline stuff. So this kind of oddity, this kind of discrepancy — that the public party throws you under the bus, while your own people support you like crazy — but, like, preferably not visibly. The Finance Minister supported me publicly, [31:12] along with a few other Finns Party MPs. That support meant, of course, an absolute hell of a lot in that moment. But also other party members — I mean, MPs — cheered me on, the ones who'd actually been through the same situation themselves. I mean, that's really a situation every journalist ought to get to experience. because it's, it's quite the pressure cooker when it just won't let up, and, and, um, and, and, um, you're ashamed of the publicity that comes out of it, and words get put in your mouth that were never there. They distort things without a care, and it's quite the defamation package, especially in this case, on that front, since this is a very stigmatizing thing — um, namely that I [32:16] 'threatened some female individual' in the line of work, or in general — well, that's just complete bullshit. That's how it is, in my opinion. It's, um, like a textbook cancellation attack, and they try to slap on that kind of permanent label. And that's why I myself immediately hit back, like, on X, with a supportive statement, because it was just so blatantly obvious that it was this kind of, um, orchestrated attempt to slap a certain brand of stigma onto you. And I have to keep going — that then, then this is how the media operates — remember now, this isn't opinion, this is first-hand knowledge. And the media then operates in such a way that, first of all, the reason Helsingin Sanomat ran that kind of story was, of course, that if the story had been that National Coalition's Paasi pounded his fist on the table and, like, gave the opposition a talking-to, then every one of my voters would've been thrilled, totally, like, absolutely, 'wow, that's our guy,' like, really great. [33:18] So they had to get some kind of stigmatizing, negative crap into it, so that the story wouldn't turn out that way. That's why this setup got put in there. Yeah. But that was, in my opinion, pretty transparent. And then, like, what the media then does is — Hufvudstadsbladet then picked that story up from there and ran a whole piece based on just that. Mm. And that's how it then got chained around, through this whole media landscape, and, and, and, um, they managed to produce this kind of tabloid-level thing, which then shows up everywhere. That's just how it is, in that sense. It's probably good, by the way, that you also now have your own media outlet, so you can go through these things there on Paasipodi. I mean, for me too, people have very rarely tried to cancel me. One time it was close, and I just took that whole issue and brought the person on as a guest the next week, and it just fizzled out from there. So in that sense I find it — and that was a good idea of yours, taking over that parliament podc"}, {"slug": "683-vastasyntynyt-miljonaariksi-65-kk-martin-paasi", "title": "A Newborn Millionaire for €65 a Month | Martin Paasi", "titleOriginal": "Vastasyntynyt miljonääriksi 65 €/kk | Martin Paasi", "guest": "Martin Paasi", "guestsCanonical": ["Martin Paasi"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/martin-paasi/"], "episodeNumber": "db-683", "publishedAt": "2026-04-02", "duration": "00:23", "format": "short", "topics": ["investing_markets"], "description": "Martin Paasi sums up why starting early is what matters. The earlier you start, the less it takes to go a long way.", "page": "https://www.neuvottelija.com/podcast/episodes/683-vastasyntynyt-miljonaariksi-65-kk-martin-paasi/", "text": "[00:00] Martin Paasi: A newborn can become a millionaire by retirement with just 65 euros a month. If you start at age 50, you'd have to shovel in something like 1,200 a month — if I remember right. You need to start earlier: the earlier you start, the cheaper that million gets, because you've got this rising ball of dough sitting there beside you, growing all the way to your retirement — or maybe even further. That kind of financial security buys you more choices in life. "}, {"slug": "690-suomi-ei-parjaa-edes-kreikalle-mauri-kotamaki", "title": "Finland Can't Even Keep Up With Greece Anymore | Mauri Kotamäki", "titleOriginal": "Suomi ei pärjää edes Kreikalle Mauri Kotamäki", "guest": "Mauri Kotamäki", "guestsCanonical": ["Mauri Kotamäki"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/mauri-kotamaki/"], "episodeNumber": "db-690", "publishedAt": "2026-04-09", "duration": "00:33", "format": "short", "topics": ["finnish_economy_policy"], "description": "It's no longer the Greeks who get criticized for the size of their public sector. Now it's the Finns.", "page": "https://www.neuvottelija.com/podcast/episodes/690-suomi-ei-parjaa-edes-kreikalle-mauri-kotamaki/", "text": "[00:00] Mauri Kotamäki: Greece is actually an interesting case. Sure, Greece is an aging economy too, but they've still managed to get their economy into some kind of growth and get their debt ratio coming down. So the country we were wagging our finger at about ten years ago — now it's starting to look like we're suddenly on the other side of the table. In Finland, the situation is that, at least as I see it, even a sharp acceleration in economic growth wouldn't be enough to fix our public finances — it requires adjustment measures. Four percent growth is what would be needed for our debt ratio to start falling without any adjustment measures. That's an unrealistic number. So that's the situation we're in right now. "}, {"slug": "708-liity-neuvottelija-sisapiiriin-ja-nae-miten-kaytan-samanthaa", "title": "Inside My AI Investment Analysis Workflow With Samantha", "titleOriginal": "Liity Neuvottelija Sisäpiiriin ja näe miten käytän Samanthaa sijoitusanalyysiin", "guest": "Sami Miettinen", "guestsCanonical": [], "guestPages": [], "episodeNumber": "db-708", "publishedAt": "2026-05-24", "duration": "11:17", "format": "full", "topics": ["ai_enterprise_tech", "investing_markets"], "description": "This episode is a glimpse into the Neuvottelija Sisäpiiri and a demo of how Sami uses Samantha, an OpenClaw AI agent running on a Mac Mini, for investment analysis. You can join the Neuvottelija Sisäpiiri and support Sami at the same time by subscribing to the membership here: \n\n🔑\n https://www.youtube.com/channel/UCRI34L9OtDJuZpaWicbNXzg/join\n🔑\n\nSami attended the Tampere Investment Fair, on the Investment Club panel. The panel, which also included Iida Hynnilä and Timo Heikkilä, was moderated by Aleksi Kopponen. In a public demo, Samantha and other AI agents discussed Sami's Alphabet investment with Nebula founder Ville Skogberg. The agent swarm then moves on to search for infrastructure companies benefiting from the AI boom and lands on Nexans as a value-investment candidate. The key takeaway is the second-opinion method: a single prompt or Excel run alone isn't enough — the thesis is tested with several agents and their owners. Finally, an actual buy order is placed, which is not investment advice but an example of the working method.", "page": "https://www.neuvottelija.com/podcast/episodes/708-liity-neuvottelija-sisapiiriin-ja-nae-miten-kaytan-samanthaa/", "text": "[00:01] Alright, welcome to the Neuvottelija channel. This is a bit of a glimpse into Neuvottelija Sisäpiiri. Neuvottelija Sisäpiiri is this kind of exclusive, or extra content, and it has several tiers. You get access to it when you go over to YouTube and subscribe to the Insider content. There's typically an extra discussion of about 10 minutes with the guests, which only you get to see. And on top of that there's a useful feature, that when you contact me after that, say on WhatsApp, we check on LinkedIn, say, that you're a real person, then then you can get into Neuvottelija Sisäpiiri, where there are now around 170 people and several of my guests. And there we then discuss these things properly, like adults. I'm one of the moderators there. [01:05] There are only real people there. Messages disappear in seven days and no one represents their organization, unless they specifically want to. And then there's an extra feature that you can't really find elsewhere in Finland. So I'm actually a pretty good AI user. Throughout the year I've specifically been developing an AI called Samantha. It's OpenClaw-based, running on its own computer, an AI agent. It has its own kind of Hermes research agent, a Hermes agent system. It has the best language model available, and for example these helper models then for this Hermes agent through. It has a very well-developed memory, three-tiered and then you can ask it whatever you want. And in my opinion it answers very well for example about investing, politics, in general [02:05] science, armchair economists, about basically anything, and people have fun there, and I'm trying to train it like an actual employee. Uh, I'm going to demo it now. I was in Tampere for the second time within a week. The first time, of course, I went to celebrate, or to watch Tappara win another championship. I bought this kind of nice gold pin here for my jacket lapel, but now I went again to the Tampere investment fair. Tampere-talo was completely full of people who wanted to discuss investing and look at these Finnish listed companies and I was there as an invited panelist for the investment club panel on using AI in investing. It was moderated by Aleksi Kopponen. Also there were Iida Hyynnilä and Timo Heikkilä and me. And now I'll show here the demo that I showed there too, in the hall. So here [03:09] Samantha, my main agent, uh, gets a challenge, that first I talk with Ville Skogberg, the founder of Nebula, about whether we have both held Alphabet for years and whether it's been a good investment. So then first we discuss that, well, the results were really good, so is this still a good investment, and then we concluded that it's not worth selling at this point. especially since you can't even own Anthropic or OpenAI through the stock exchange. But then we start thinking about the fact that there's a bit of bubble-like characteristics to this AI boom. The Americans are putting in hundreds of billions of dollars into this AI race, so what, which are the stocks that could benefit from it. And Samantha then discusses with other AI working-group bots about possible sectors. The task is that this investment could be more like a value investment rather than a growth investment. That is, buying at a reasonable price [04:11] probably somewhat weaker growth. We go through the use of AI in investing, and on stage come Sami Miettinen, Iida Hyynnilä and Timo Heikkilä. Welcome. Judging by the names, Aleksi Kopponen was the one who actually came on stage first, but without further ado let's bring Iida Hynnilä on stage first. Welcome. Then, uh, established Tappara man Sami Miettinen, and then investor Timo Heikkilä. Since we've already gone through Gemini here too, we can probably state roughly what they are. So they're very similar services to each other, like with ChatGPT, but is there really much difference between them from an ordinary user's point of view? Would Sami like to comment on this? Yeah, I have all of them in use, for the reason that, well, there's this kind of game going on, where Anthropic has been so popular and so good specifically in office use, because of its Cowork feature, that a huge number of users have come to it, and they've started [05:11] solving this problem with capitalism. That is, they've started removing the queue model, where everyone got to use it almost unlimited for the monthly fee, and moved to that kind of API pricing. So, so you have to pay for the extra usage like real hard euros, which can be tens or hundreds on top of the monthly fee. This is a thing, then, OpenAI and Gemini are still a bit cheaper, which maybe shows then that they weren't as popular, but all of them are currently almost equally good in terms of capability. I actually use OpenAI's GPT-5 the most. It's the most cost-effective. So there's no big difference between them, but I would say that Anthropic is the one that gets you furthest in office work, because they've built a really good stack for how those Office Microsoft Office files, for example, get analyzed, or Excel files like that. That my multiples analysis was this kind of Claude Excel analysis, which by the way is in investing. I mean, since many of us are this kind of gut-feeling investor, where you just throw money at it because it sounded like a good company, because it had good business, so already this kind of finding relative valuation multiples kind of [06:15] anchors the investment in reality, whether this really is nine times EBITDA for this value, so that's like kind of hard data and Claude is better at that than these others. Let's take a look at how the bots perform on this. So here they're kind of considering this initial thesis, whether Alphabet is still a good investment. There are grounds for this, because you find this kind of processor, TPUs, cloud, also this Google Search and other services. And then like a really solid infrastructure. Then from here you find these surrounding things, data center power and cooling equipment, power grid, data center operators. So these bots find these, then, network and data, traffic, infra, chips and memory layers. And then they start digging into, at the same time, thinking about what might be found here. And it throws out some, like, actual listed companies. Vertiv, Eaton, Schneider, GE Vernova, Siemens Energy, [07:16] Quanta Services, Prysmian, Nexans, Arista, Broadcom, and now let's bring in a second AI. This is now a manual run from me, so I type into Claude's Excel these company names and then ask it to do this kind of investment banker relative multiples analysis of all these companies. Now it starts gathering this data via Claude, market cap, forecast, profitability, revenue, debt ratio and then we build this relative value matrix from all of these. So, that is like, say, this kind of enterprise value relative to EBITDA. And here now we find this Nexans seems to be this kind of value-play candidate, so smaller than the others, this kind of 8-billion valuation, and yet these multiples are more moderate, and of course the growth is a bit weaker too. Well then I throw this at the other bots now, three of them here. There are several of this Excel and [08:16] then these bots read Excel fluently, so they analyze this, Samantha's work, or sorry, the one I made, this Excel in the Claude in Excel application, and then give recommendations based on that. And then here, this Ville's Donna bot also thinks that, as a value investor, this Nexans could be useful. Then I still give the final word on this to Samantha, that, now go through this Excel again and read the other bots' analyses and then give me a final investment proposal, which I could then present here at the Tampere investment fair, and Samantha then starts ticking away and also starts leaning toward this Nexans. It's a good infra thesis and a cheap price. This could be, well, a trap, meaning it could well be that [unclear] doesn't then see it in the orders, but there's also this kind of traditional cable business here. There's a bit of history to it. This is, well, the cable company left out of [09:18] Nokia's Alcatel-Lucent acquisition. And this is not investment advice. I'm putting out to the market this buy order. I'm shading the price down a bit, in case it could be a bit cheaper, and let's see if it gets filled at that. If it goes through, then I'm actually putting in €4,900 into this investment, and that goes through, and this really isn't investment advice, but now there are 30 shares of this stock, Nexans, a French company. Well, this is a demonstration of how I, and many of my friends there in Sisäpiiri, do analysis. Whether it's buying a stock, it's not enough that you just prompt it. It's not enough either that you just run this kind of Excel pass on it, there's this kind of second opinion, another opinion, or a third and a fourth, from other bots and their owners, so, so that then really tests the thesis. It doesn't, though, guarantee anything. This could even be a bad investment, and I did promise that I'll offer free tokens and beers if this works out, but otherwise it's entirely [10:20] my own screw-up if this, if this doesn't fly. But you can do this over there in Neuvottelija's Sisäpiiri. I'd recommend it, try it, join there, get in touch with me and then apply for access to this Neuvottelija Sisäpiiri, and there then you can meet this Samantha, that is, my AI worker, and then use her know-how for your questions. Thanks, and no pressure. If it's not your thing, then I'd appreciate it if you liked the channel and hit subscribe. And, uh, I really do enjoy going out there to talk about AI and show it, and go to things like that. It's always nice to visit Tampere, not just for watching Tappara, but that kind of investment fair over there at Tampere-talo is just a perfect example of an event where I'm very happy to be a speaker. Thanks. "}, {"slug": "714-elon-muskin-neuralink-porautuu-aivoihin", "title": "Neuralink: Brain-Computer Interfaces Get Real", "titleOriginal": "Elon Muskin Neuralink porautuu aivoihin", "guest": "Sami Miettinen", "guestsCanonical": [], "guestPages": [], "episodeNumber": "db-714", "publishedAt": "2026-06-07", "duration": "00:29", "format": "short", "topics": ["ai_enterprise_tech"], "description": "Elon Musk's Neuralink hasn't gone anywhere — brain-computer interfaces are moving toward very concrete use cases. This short discusses why a direct connection to AI isn't just a futuristic idea, but part of the broader question of restoring and expanding human capability. The first patient experiences show how the technology can give back function to people for whom that makes a huge difference in everyday life. That's what makes Neuralink interesting from the perspective of AI, medicine, and human resilience alike.", "page": "https://www.neuvottelija.com/podcast/episodes/714-elon-muskin-neuralink-porautuu-aivoihin/", "text": "[00:00] Neuralink definitely isn't dead. That's what some people over in Silicon Valley keep shouting about — that we can't even keep up in conversation with such fast language models and such fast AI systems unless we have a direct connection to them. And on the other hand, I think the angle they've taken is awesome, because the first patient actually got capabilities back — genuinely disabled people, blind people, getting direct access to their senses. That really is awesome, being able to make things work on a bigger scale. It's not just that it'd be nice to chat with AI quickly, it's also that it makes us humans more resilient, and gives us more possibilities. "}, {"slug": "715-usa-ei-rajoita-sananvapautta-samalla-tavalla-kuin-eurooppa", "title": "Why America Protects Free Speech Differently Than Europe", "titleOriginal": "USA ei rajoita sananvapautta samalla tavalla kuin Eurooppa", "guest": "Sami Miettinen", "guestsCanonical": [], "guestPages": [], "episodeNumber": "db-715", "publishedAt": "2026-06-08", "duration": "00:31", "format": "short", "topics": ["free_speech_society"], "description": "The United States doesn't restrict free speech the same way Europe does. This clip covers the hard core of the American approach to free speech: the state doesn't get to decide which opinions are permitted, comfortable, or acceptable. Guest: Jarkko Tontti.\n\nFree speech matters most precisely when speech irritates, offends, or challenges those in power. If a right only covers harmless opinions, it's no longer a genuine fundamental right — it's just an administrative permit.", "page": "https://www.neuvottelija.com/podcast/episodes/715-usa-ei-rajoita-sananvapautta-samalla-tavalla-kuin-eurooppa/", "text": "[00:00] In an editorial in Helsingin Sanomat, someone says it's completely wrong to claim that free speech is somehow worse in Europe and Finland than in the United States, just because Trump has been cracking down on left-wing media over there — that's just complete disinformation, in other words, a lie. In the United States, there are very few legal restrictions on free speech at all. No incitement-against-an-ethnic-group laws, no statutes, none of the things that exist in every European country. What I admire most about American culture is also something that's basically never said in Finland: that not even the Democrats are pushing for those kinds of restrictions the way they do in Europe. "}, {"slug": "144-tuomas-peltomaki-isak-rautio-saako-vitseille-nauraa-neuvotte", "title": "Are Jokes Still Allowed to Be Funny? | Tuomas Peltomäki, Isak Rautio", "titleOriginal": "Tuomas Peltomäki Isak Rautio Saako vitseille nauraa #neuvottelija 139", "guest": "Tuomas Peltomäki, Isak Rautio", "guestsCanonical": ["Tuomas Peltomäki", "Isak Rautio"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/tuomas-peltomaki/", "https://www.neuvottelija.com/podcast/guests/isak-rautio/"], "episodeNumber": "139", "publishedAt": "2022-05-27", "duration": "01:03:44", "format": "full", "topics": ["free_speech_society"], "description": "Tuomas Peltomäki (Uutisraportti Podcast) and Isak Rautio (Futucast) discuss whether jokes are still allowed to be funny. They talk about comedians such as Ricky Gervais, Norm Macdonald, Louis C.K., Dave Chappelle, Patrice O'Neal and Ali Wong, and the craft of setup and punchline: surprise, offend, connect, improvise — shot in one continuous take with no cuts or camera changes. Thanks to Tuomas, Isak and Michael. Did woke culture ruin comedy, or is progressive humor still funnier than conservative humor? Filmed on 20 May 2022, just before the Netflix release of Ricky Gervais's SuperHuman.", "page": "https://www.neuvottelija.com/podcast/episodes/144-tuomas-peltomaki-isak-rautio-saako-vitseille-nauraa-neuvotte/", "text": "[00:01] Alright, welcome to the Neuvottelija studio. I have as guests Isak Rautio, host of Futucast. Thank you. And Tuomas Peltomäki from the Uutisraportti podcast, a distinguished host. Can't we say that? Yes. we thought that, well, we'd consider that as we try to somewhat casually in an improv spirit run these podcasts or YouTube things, so let's talk about what kind of animal this sort of, well, 'for laughs but not drunk,' well, conversation is. And we could look at the start, this week now Finland, and you've been there Tuomas, worrying a lot about NATO. So well, here George W. Bush has given a speech about this, and did it perhaps turn into comedy? Otherwise eliminated from participating in the electoral process The result is an absence of checks and balances in Russia and the decision of one man to launch a wholly unjustified and brutal invasion of Iraq ..I mean of Ukraine! [01:11] 75 75! Yeah, but this is like this kind of unintentional comedy, where George W. Bush then like succeeded quite well, but self-irony was found. But that was surely how all of us who have been like on the internet for 30 years, you get this feeling that when you've seen every joke and every meme and every video, it creates at least in me this sense of despair that I, I'm never going to laugh ever again. I've already seen everything. Every joke, I've heard it 2,000 times and every variation of a meme, I've heard it and so on. Then a video of George Bush comes along and he's like that's like wow. That's the thing. George Bush is the only guy in the whole world who could tell that joke and say that and be funny in that way. Yeah, and laugh at himself too. Exactly. Yeah. That's also important to remember. But I could perhaps counter that, saying there are things you shouldn't laugh at, so here, well, before this joining NATO, so for example, a Russian and a Finn were fighting, which one won? Yeah. [02:29] Russian roulette. Russian roulette is a game that five out of six recommend. We were supposed to find some Putin jokes for the episodes, right? This was one assignment for us. This was one assignment. So I can tell my... Yeah, but this was like a joke from the era of Finlandization. We were still laughing about the Winter War. It was really funny. Um, this is, well, this is Googled and it's the first one that I found on Google. This isn't my first joke. Um, actually, in a way this isn't a joke. This is, this is more of a story. Um, so I don't know if you knew, but Biden called Putin a couple of days ago and called and said, 'Hey Putin, I had a dream. A really weird dream. It was Moscow and in Moscow there were beautiful skyscrapers, like prosperous people, new cars, flying cars, big flashing billboards, just like prosperity. And then they were talking like, 'Okay, well what did those billboards say then?' Then Biden replied, 'I don't know, I don't speak Ukrainian.' Yeah, but Putin is a big Stalin fan, and Stalin then says that he actually likes these jokes about himself. He collects them, and then it was asked, So, how many of those do you have at the moment? 3,000 in the gulag. [03:50] Good coffee, by the way. Yeah. M But I mean, you are allowed to laugh at those in power. It's great that they can laugh at themselves, like in a democracy. George W. Bush... Stalin. He didn't laugh; instead, he put them in the gulag, and nobody else was laughing either, for that matter. Yeah, yeah. But I mean, this kind of political humor, and there's always that power aspect, that you should always laugh upwards, never downwards, and then again, in totalitarianism, you can laugh behind their backs if you don't get caught. Yep. But should we jump into the deep end? Shall we start talking about what one is allowed to laugh at, what can be made into comedy, and so on? Somehow it's, um, there are so many aspects to it, because, um, generally the fact that what can we make humor about? Who is forbidding it is the first question after all, but we're probably talking more about this kind of ethical good manners, where there's some kind of social consensus on what is correct and what we can joke about, so I don't know, it's a difficult [04:54] question. It immediately comes to mind that it's somehow paradoxical to even talk about what a comedian can say, because if we define limits for what a comedian can say, then in some way it's part of their job to test those limits. Yeah. Until Will Smith comes to punch you in the face. Yeah, exactly. But, but maybe this relates to an even deeper thought about how, we don't actually have any boundaries when we talk about morals. We have good and bad things. It's a bad thing to murder a guy, for example, and so on, but nonetheless, as a society—writing these segments again. This is why I'm no longer a comedian. Yeah, but it's wrong to murder a person, but nevertheless, even in our society, we don't have any exact boundary for when, for example, murder becomes wrong. A Ukrainian soldier who shoots a Russian. Is that wrong? For example, we don't have exact boundaries. It's a very gray area—that line between good and evil. the boundary line, and for this we have comedians, among others. I would say. [05:56] Yeah, yeah, but I don't want to cling to some nihilistic precision right now, but a Ukrai- a Ukrainian soldier specifically does not murder, because murder means a specific thing. It means, not during wartime, a premeditated, unlawful killing of another person. Yes. Okay. If a soldier is defined by murder, then—but murder is a matter of definition. It means exactly that. It doesn't mean just any killing. Even manslaughter means a specific thing in Finland, it has a certain kind of intention. Killing is the neutral expression, which means that someone, for whatever reason, deprives another a life, accidentally or intentionally, or planned or unplanned. 'Killing' is the word. But 'murder', in my opinion, in a way, that definition has really been right there at the core. Mm. I'll continue a bit along the same line, that what annoys me immensely is when people talk about these boundaries, if we talk about whether any boundaries exist, talking about what is appropriate comedy and so on, then many people who are not familiar with [07:10] comedy as a genre of text or a form of writing, well they might say, 'hey, you're punching down, that's wrong.' That that's like wrong, that comedy shouldn't be like that. We've noticed that, that although in Finland it might circulate, that it's used even then as a justification not even for comedy but for anything, that you punch and it's wrong, that there's this rule that you shouldn't punch down. But you've probably read the same books as I have. And I'm no longer a funny person in any way, those days are gone, but that punch down is one rule that helps you understand, what joke is good or possible or easy to write. It's not a rule that you can never successfully write jokes where you punch down. It's just really hard. It's much harder to write a joke if you punch down. It is entirely possible. [08:12] Louis CK does it many times, if he can punch down, but you have to be brilliant. Really good, for you to punch down, or then you have to pull a sort of escape clause into it, like ha ha, that well, or was I, so in a way a bit drunk and just for a laugh. Yeah. But anyway, in comedy we usually talk about it as this platonic abstract form, like what is the role of comedy, when we forget that it's a skill. It's a skill that we actually, that has to be learned. Patrice O'Neal, this American comedian, said it well: a bad and a good joke often come from the same place, the heart. The other one is just written worse. Yes and it's important to remember. And anyway, in my opinion It's a lot of methodology, like, a lot. Some wise people have outlined how this works, like okay, there are some rules, principles for how these things work. You write the premise like this, then the punchline comes roughly at this point. What is the nature of that punchline? It means a kind of leap, like, that happens inside the listener's head and so on. So it's like a collection of thoughts on what the different tools for telling a joke are. [09:20] Yes. And generally, the discussion about how often, when we talk about whether a joke is moral or not, we're talking about whether someone was offended by it, or if someone perceived the joke as bad. And this is the big debate, one of the big debates in comedy, whether it's the joke-teller's intention or whether it's the joke's effect that determines the morality of the joke. And I think this discussion in general should be brought up. I hope that we can maintain a high standard in this discussion, because in general we cannot Tuomas, but but because I feel that in general the word 'offense' is used on both sides as a kind of bludgeon, so that for everyone it's, that I'm offended, you are fundamentally wrong. That is one way to do it. And then the other is that oh, you're a snowflake who can't handle thinking. You can't handle funny jokes. You can't handle humor. And with both of these, the idea of what offense is is somehow nullified. is after all. Getting offended—this is my claim—is not just about, getting a sort of immediate, detached feeling of discomfort because someone said something; rather, it's that you also feel that something morally wrong has been done. Mm. So, regarding that Chris Rock/Will Smith reference earlier, I was referring to how at the Oscars, Will Smith's wife, who is bald, apparently due to some illness—well, Chris Rock joked that 'now you can be in G.I. Jane 2,' which I think was just a kind of fun, teasing joke for those rich billionaires or millionaire friends there, probably in some way. [10:43] Yeah, but then Chris Rock—sorry, I mean Will Smith—first laughed himself, then he looks at his wife, and then he went to like punch the comedian, I think that was quite a weak showing, and also the idea that you can attack a comedian—it was widely feared that now people from the front row, where you're being roasted, and where you're also allowed to heckle. We could also talk about this dynamic, where suddenly people start punching comedians because they're fair game. But that didn't actually happen; apparently, this didn't become a new social norm. Yeah, except for that one... er, I mean, norm. Exactly, I don't think it did. I mean, these things get blown out of proportion. You can take one case and exaggerate it so much that people start to think a trend has started, even though that's not necessarily the case. But I mean, as a result of this, this Dave Chappelle, uh, thing happened. Some young 23-year-old guy went and tried to tackle Dave Chappelle on stage at the Hollywood Bowl, I think, and it failed miserably, and Chris Rock was also there then, and there was already that good joke about whether that was Will Smith, [11:44] but that's not a good thing in any way, I mean, I don't think you can disagree that it's not a good thing to go, or I mean that it's not a good thing to go and hit a comedian, which is a different matter. But about that heckling, it's then again this kind of institutionalized thing when you go, I remember I had one, one friend come to London, where I lived for a long time, so we went to the Comedy Club and then he said, let's go to the front row now, well no, do you know what that means, that well, and then he well well, he apparently didn't know, but we then became like a gay couple there and we got some proper banter about it. Well, there you go, you got it there then, well, because in the front row you're fair game. And I gave, I tried to give a bit of heckling back myself there then. How did it go? Well it's always great when you don't have a mic and the other person has a mic. Exactly, exactly, exactly. It is. But that's the culture there. Usually, people laugh good-naturedly, except that in the front row, you can get this kind of confrontational dynamic, and it's a bit—I was at the Comedy Cellar in New York in the front row and ended up becoming the subject of conversation multiple times with my wife. The host of the evening kept bringing us up constantly, and then when he hears we're from Finland. 'Ah, Finland!' The host himself was a Black guy. An absolutely wonderful guy. Then like, 'Not a lot of Black people in Finland.' Then I was like, 'Yeah, everybody knows [12:57] him,' and so it was an absolutely wonderful experience. Okay, that was pretty good, that probably got good reactions, yeah, yeah, yeah, yeah. And that gay joke was a bit tired, even back then 10 years ago, but well, that's how it went. Yeah, for sure. What do you think? Is it a bit... ts... offense came to mind, are people hypersensitive nowadays about this? This is this kind of meme that you hear. Yeah, well, I don't know, like, I don't know if you've watched any episodes, it's recorded over at Ivan Puopolo's, we have a shared studio, so we try to do this kind of weekly commentary show, and a constant internal inside joke is exactly like this, like poking fun at the woke bubble, meaning these snowflakes who get offended by their own shadow. So... now you kind of did what I said, that the reacti... reactive thing, in the sense that, because well, I... I'll bring a whole perspective to this, yeah. Well, uh, yeah, there are of course people who are quite undeniably people who have weaponized taking offense in a way, or use it in some way, use the social currency that taking offense provides for their benefit, of course. But then on the other hand, I think this cancel culture has been around for a long time, since the vaudeville era when the first black [14:12] face comedians appeared. Blackface was the first such major stage comedy phenomenon in the States, so much so that even American comedians, I mean African-American, black American comedians had to do blackface ironically at that time just to get into the scene. And back then, I think Frederick Douglass, an abolitionist like that, already said in 1848 that, that these blackface comedians are, well, er, what did he say, this was, this is a quote from him, the filth of white society or something like that, so at that time there was this kind of thing, like okay, humor is here, or humor is a spectrum society is both conservative and progressive and this same dynamics lives on, as to what is okay to joke about, and the same thing as when Irish immigrants came to America, Italian immigrants came to America, then it wasn't okay to joke about the Irish or Italians for many decades I stayed... you young people, like I am definitely not young lads who, well, you're moving forward at such an awfully fast pace, I'm still I was somehow left thinking about that very first yeah, thought that uh, in comedy, which I'm perhaps to some extent interested in—like social comedy—so And this relates to these minstrels, or also relates very strongly to what can be said, so I think to some extent there's this element in comedy, [15:35] that the more there are things in society that cannot be said, the more there are levels in society that aren't talked about publicly with a certain, like, certain honesty, the more there is that kind of exciting, like, in-between space where comedy often works where political satirists often find their most delicious territory is where things are said that aren't necessarily even funny in themselves. They aren't necessarily jokes; they are just allowed to be said out loud, but this is also the area where it's easiest to sort of mess up, to think that 'haha, you're not allowed to say this out loud,' that 'you trans people, you're totally stupid.' Not realizing that there's a big issue there where a major discussion is ongoing and things are being said out loud. You just haven't seen or heard them being said. [16:36] Well, let's pick up on that. I dug up a couple of memes, and one was specifically this gender thing. So here's a meme that I slightly I chuckled, so here is this... well, in Finland we don't have personal pronouns, that would distinguish gender, so here we have she/her and then they/them, which clearly doesn't identify binarily. And then one of my favorites, number 18, which is Michael Jackson. I have to say I laughed at that, it specifically this 'hee-hee' was a funny play on words. It's a funnily absurd meme. Why do you think that's funny? Well, precisely because I know that he, the way he wore a white glove and, it just appeals to what is heard. So, basically, I think we are once again close to the essence of what a joke is. writing. There's this interesting, like, the punchline is that something when writing a punchline, or in a sense the point in the joke where the word or hit or sentence where you're supposed to laugh, laugh, so that there there it's somehow—the punchline always happens in the listener's head if the comedian says the punchline like this, then the joke doesn't work; it kind of just, you hear it in your own head [17:56] and specifically it's two different—it's like two words, hihi, and they are different, different so that's what I hit on. Of course, you could find there that he was first black then white and well, blackouts, it's laughed at and also then that it combines, like, of course, the premise itself maybe a bit of an androgynous person. Yeah, but then you responded to this, and this goes to show we like have to go through this. This was your counter-meme to this. I don't know if this was some joke or what, but Michael, explain what the hell. So Michael and is the whole image visible somehow? President of Ireland. This was this is the whole image without context. This is the whole meme. One should laugh politely. Let's laugh anyway, but yes, yes I'm laughing, aren't I? But you can't explain why it is. Yeah yeah yeah. The guy is like somehow looks like a leprechaun. He's a bit like confused that he really is [ __ ] the President of Ireland. And then what's his name? It's Michael. Michael. Yeah. which is sort of, there's a bit of like, is it Michael the First or is it like Michael some dude, but as a continuation like this to Michael Jackson, then I think it works. [19:04] Yeah yeah, good point. But otherwise quite a far-fetched joke or absurd, so yeah yeah, I like it a lot. Typical Gen Z humor, this kind of meta-ironic, completely absurd and in a way detached from context. Somehow that previous joke of yours can't be seen without context. Okay. Or I mean, now we're living in the present day. in this place. It's specifically us talking here. This is the Neuvottelija podcast. All of these are somehow part of this moment when I see you showing that meme. But then I see this meme and I thought that I don't—I don't connect this to anything at all. Just to the fact that this is the President of Ireland Michael. Quite a funny thing. Yeah, yeah, yeah. So plus then there's space there. I could see that being the kind of thing that any group chat could claim Michael for themselves as an inside joke, but that it would change form completely. It's slammed on the table in certain situations. Ah, Michael appeared in the group chat like this, and every group would have their own version, ...what it means. Like, there's Michael, and modern memes are often [20:05] these kind of empty vessels. Their meanings evolve over time and change completely. On the other hand, older jokes, they are clearly like, it's a few years old, Michael, and an older joke, because it's more solid in what it is. The meaning doesn't change much. Yes. Yeah, yeah. And then there's, my joke was the most boomer of them all, because my sense of comedy, like when I started admiring and thinking about comedy. It was right during the Bush era, The Daily Show, like, that's what a joke means, that's what it means to be funny. It's what Jon Stewart did on The Daily Show. This is funny, because I was into comedy during the Obama era. Mm. Interesting how we're kind of the same person. Yeah, but then there was... the Saturday Night Live anchor was also one of your favorites, this... it was Norm Macdonald, ah, I personally tried to watch that older material then, so it was kind of like those long structural jokes, yes but then he had this certain, specific, unique pressurized way of telling them, and then he always has this he's telling the world's most boring joke, but the feeling is present the whole time that a blood vessel in his head will burst. Any moment now. [21:20] Yes. But this Uutisvuoto-style, or like a laughing-at-the-news-live kind of thing, I think Saturday Night Live did it very sharply, and Renny Harlin even tried to bring that to Finland, but it didn't last long, but in a way, Uutisvuoto, which was British humor, lived for a very long time. And actually, Norm Macdonald was also, I think, a predecessor to your favorite comedian Ricky's Golden Globe gigs in a way. I mean, he was one of the first people to go to these sports galas and such situations. He went completely against the role expected of him there. a routine, where once again there are, they are some certain levels that you aren't like supposed to cross. But then a comedian's job is specifically to puncture them. Yep. I mean, this OJ thing was right when OJ I think was convicted or, wait, was he convicted? He well, was convicted in civil court. Not in criminal court. No yeah exactly. That's how it went, anyway the scandal was huge and then there was some guy like this where I got, well, in some crowd somewhere white people were judging. Hey, I was in the Southern States, I was [22:27] in New Orleans in '95 when this happened, so we watched it there on TV then and there were many disappointed white white faces when the verdict came. That this was, you know, a classic racial issue there. Yes, it was strongly, strongly, and specifically you have Norm Macdonald, a comedian, comes on stage and then says to some American football player like this, who won a Heisman Trophy, an MVP award from that season, and said that congratulations, blah blah blah, whoever you are, congratulations on this win, no one can ever take this award away from you, unless you kill your wife and a waiter, then they can. 'If it doesn't fit, you must acquit' was the one where Yeah, that was won, yeah. Yeah, but anyway, maybe about those memes, they always have this kind of image context, and often the basic framework takes on a life of its own and you just swap the words then and they work. But then there's this sort of truism, that 'left meme', which partly means that you see quite few left-wing memes, memes created by the left about the right. [23:36] You see a lot of memes created by the right about the left. So what do you think of this claim? 'Left can't meme'. It's interesting, because in terms of political satire it used to be the exact opposite, that was a big discussion back in the day, specifically back then it was, that why is all comedy so left-wing. That was the question that was addressed, and then in a way like everyone was like, 'well of course it's leftist,' there isn't really anything funny. So this is the point, like in some American high schools, all those kids from conservative families were like, 'you go to that drama club? You're that kind of a wimp.' No wonder the left won the culture war if that was like the so-called conservative right's attitude toward these kinds of light arts specifically. But to your point, it depends a bit on where that claim comes from. If you claim, like, the whole internet, the whole internet universe, and then we take it as a sample and then measure it. Hard to say. But of course depending on the algorithm and what the internet feeds you. I don't really buy that either. Well, okay. But I mean, since in the States, Yeah. But then maybe this is a US misunderstanding, that like there, liberal means Democrat, and then libertarian, or a supporter of freedom, is then right-wing. So in a certain way, the left is perhaps suffocating. I can still support your claim, though, by the fact that a large part of internet culture, a certain kind of internet culture, [24:57] is created and brewed in bubbles on 4chan, which is definitely right-leaning in the stuff it produces. So that might be behind that idea, that a large part of the deep-fried memes that come out, they come from those sorts of basement-dwelling right-wing circles. from thoughtful young guys. Yeah, it will go really well, I must say. Right, right. Yes, yes, yes. Very well. Well, could it be linked to the fact that it's not censored, that in a way it's completely like, plus then of course, like the left has, in certain activist circles and then in some way like in wider circles, a certain kind of caution in how people speak, so of course it holds it back. Yes. Yeah. Somehow like about leftism, liberal, er, or progressivism in general, if we want to model like conservatism and progressivism, then you have more, er, progressivism is more corporate in America nowadays, so they go more by those rules of the game. Like, respectability is more important. Nike is involved in Black Lives Matter stuff and so on. So it's like so fake, this kind of corporate ad-washing. And sometimes and actually, I... well, and I'm maybe a bit, if I had to choose which side I lean towards, then yes, I am more progressive and I look at the world from that perspective, so you should also look at my statements through that lens, but... but yeah, many of these like, groundbreaking and truly the kind of comedy you see nowadays, where [26:20] you feel like, okay, now they've really hit on something, it's often that uh, the so-called opposing side, or like, questioning this progressive, uh, canon in some way, that's forming in this culture. I think it's really fresh to see that, and in a way I understand that since we're talking about this 'punching up', people always want to see, when talking about comedy, people want to see who's punching up, so nowadays I think people are punching up, quite rightfully, against this like progressive mainstream somehow sometimes, and I think it is—from that perspective, that's how I see it. that, well, right now at this moment, uh, there's a Democratic president in America and overall, like, this corporate scene looks more liberal liberal than from a conservative [perspective], it's targeted more by humor attacks, so that's it, and since in Finland there wasn't really anything but the left in power here, well, one could think there would be more like [27:21] humor in it, but I don't know if after Kari there has been such biting right-wing humor in Hesari since then. Yeah, you can't say that not necessarily. But then about these types of humor, well one formula for this kind of gag humor is like a surprising truth, meaning you just blurt out the truth and then the brain registers it. That's how it was, and surprising. Hahaha. But then, well, first of all, about that statement, do you more or less agree? Yeah. Or I, I, what, gag, what, so but can I, I, a little, I'd change that a bit, um, because I have with that word 'truth', it's sort of a truth but it's, it's more a perspectival truth, I'm such an anal nerd, sorry. So, what is a gag, because 'vitsi' is a joke, but is it like a fictional joke to be performed or a written, sort of, sentence structure that needs to [28:21] cause a laugh. So it's like a joke. Yeah, but I, I still perceive that a gag is like a small fictional, for example, Yeah, but I mean, yeah, but this also applies to longer development, that you can have three men walk into a bar and blah blah and then at the end comes the flip, so that's the surprising truth here. So it's not like I'm claiming that this is like the only form of humor either. Okay. This is just like a synonym for a joke. Yeah, specifically I understood the question as, what what what makes a punchline work. Yeah. Okay. Exactly. So so so in a way I, I agree with you in some way maybe, but I would change that word 'truth' into like a perspectival truth or in some way that we're not talking about fact in the same way as a fact found through the scientific method but I mean, specifically in a way that as a comedian you can bring out some part of your worldview or a certain view on something, a new perspective on a matter. That, I think, is the truthful part, but it doesn't necessarily have to be literally true, the punchline, but you found some insight, some new perspective, some... Yeah. And in English, that works better because you can play with the ambiguity of words. In Finnish, unfortunately, words aren't very ambiguous, because we have a phonetic language, so in English, you can have very different words with the same sound combination and, oh, puns. [29:36] No, not necessarily puns, but like, well, let's take a shitty example, uh... ...like about marriage or divorce, so, like, over in... America you have several rings, whereas here we often... get married with just one ring, so three stages: it's the... engagement ring, the wedding ring and suffering. Yeah, yeah, yeah. So in that case, the 'ring' kind of changed its meaning, even though it was just a part of a word, but as an example that it doesn't necessarily have to be a gag, but it kind of carries that word 'ring' in different meanings through the marriage. Mm. For us, if it was about what makes a joke work, So, in my opinion, it's that mental leap happening in the listener's head. Mm. That's what causes that burst of laughter. It's like what the whole setup is aiming for, in a way. The setup often takes you, like it directs thoughts toward something specific. It guides the listener to think along a certain track, and then what the punchline does is reveal that, haha, the track should have been here all along, but you have to make that leap to that different logical path, so it has to, it has to [30:55] be in the same logical context, so it can't be completely absurd, like, 'haha, a fox walked into a store and a fish like this', so it c"}, {"slug": "148-petri-kajander-vapauspuhetta-neuvottelija-143", "title": "Talking Freedom | Petri Kajander", "titleOriginal": "Petri Kajander Vapauspuhetta #neuvottelija 143", "guest": "Petri Kajander", "guestsCanonical": ["Petri Kajander"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/petri-kajander/"], "episodeNumber": "143", "publishedAt": "2022-06-28", "duration": "01:06:46", "format": "full", "topics": ["finnish_economy_policy", "free_speech_society"], "description": "Petri Kajander Talking Freedom #neuvottelija 143. Petri Kajander and Sami Miettinen discuss Petri's English-language expert podcast, Talks with Petri.", "page": "https://www.neuvottelija.com/podcast/episodes/148-petri-kajander-vapauspuhetta-neuvottelija-143/", "text": "[00:00] Well, welcome to the Neuvottelija channel — my guest today has arrived from Estonia, Petri Kajander, welcome. Thanks. That jaw doesn't look all that healthy, but doesn't Estonia — known as a night-watchman state — offer good dental care? So why did you come here to welfare-state Finland to get your teeth treated? Well, there's a story to that — if you start looking at business models, a dentist makes money when they drill, but since teeth don't grow — at least I don't get any more of them — and that tooth material disappears, so the more you drill, the less there is left to drill in the future. But that... usually makes more money for the dentist, and through that, in turn, when you really know what you're doing in that mouth, a good dentist and a bad dentist differ enormously over the long run, and that's [unclear] left. But it doesn't necessarily show until the teeth are more or less gone. This brings us to the fact that I've had a good dentist for over 15 years, and it happens to be in Finland. [01:01] I've had bad experiences in France, I've had bad experiences in Spain, in England I didn't really need a dentist. so this stems from exactly that. And that kind of long-term business relationship is a good thing, and I did an episode on this Lean philosophy earlier. It was said there that switching costs are also a significant factor. And if you're getting good quality from a subcontractor or otherwise, it's worth sticking with that. This episode got started because you interviewed a mutual friend of ours, my colleague from [unclear], Henry [unclear], and it was a really good episode. and it was funny to hear how a former investment banker ends up having to live by his own advisor teachings, so to speak, in his own financing deals so this Henry interview is on the show called Talks with Petri, and then you have this other, shorter podcast called Purpose and Clarity and I kind of think we're going to end up speaking Finglish, both of us, since both of those podcasts are in English so go ahead and subscribe to all of them, by the way — good shows [unclear] [02:16] Sometimes you have to search for words a bit, and you don't necessarily know absolutely every word, since you don't speak the newest slang and [unclear] every day. So yeah, the last short clip was about 'alignment' — and what the heck, in Finnish that would be something like 'linjaus' [a line/policy alignment] or something along those lines, you're looking for unified lines, but I don't know if there's really a good Finnish word for it either. You can't really find a good meaning with the words. Last week, France was banning, on the official side, the use of 'e-sports', and you're also not allowed to use a few terms like 'streamer', for example. The French equivalents were already 30-40 characters, several words. It's basically already a full sentence when you say 'streamer' in French. Who uses those? Well, let's pick up on that night-watchman state then — we have another point of overlap there with the Libera foundation you were involved in writing two books — 'The Future of the Euro, Finland's Options', that one had Elina Valtonen and Heikki Pursiainen involved as well [03:18] and then, um, 'How Finland Can Be Saved', but he was also involved in founding the whole of Libera You apparently — you seem to have some libertarian ideology in you, at least from your youth. Well yeah, I actually found it through that route. Then in a way the ideas were already there, and it dates back close to 20 years now. And then at some point I actually moved to Spain, and that's when I discovered Mises and, through that, the Austrian School in a way, and then I studied them, ordered a lot of books, and read a lot. and then I also noticed that these hadn't even been translated into Finnish. And then since I graduated from business school after all, I wondered why nobody had ever told us anything about these, because they actually make sense. There's already the first English term. And from there I actually started translating a few books, just as an example for others, since everyone kept saying — well, there were a lot of projects — this was in the mid-to-late 2000s. [04:21] and I feel like a lot was happening on this front around then, and generally, and then I just got fed up with everyone talking while nobody actually did anything and so I just went and translated a few books, and they can still be found at taloudenperusteet.com and of course I had a bit of an advantage, since nobody had done anything yet, so then you go for the classics. Road to Serfdom and others. Well, that one I didn't translate. By the way, that one is surprisingly well known among some people on the left — that's the kind of red flag I look for. By the way, for example Tuur Demeester, well known in crypto circles, was a young guy back when I first met him and Tuur, in turn, took on this huge project of translating a Rothbard book — I don't quite remember, [unclear]. Mises is the Old Testament, Rothbard is the New Testament Hayek, though, has been relegated somewhere out to the periphery Hayek was a bit muddled in his thinking, if you look at it from Mises's and Rothbard's perspective were a bit purer, clearer, perhaps deeper thinkers as such [05:23] This was a long story — translating books, and after that I started looking for a publisher, and I realized that Finland doesn't really have a free think tank either — [unclear], think tanks. They were all more or less state-funded, meaning they get their money through subsidies or some other way. and that was my thought then — I'd heard and understood that these kinds of projects had been tried a bit earlier too, and that it just can't be done in Finland, it's not possible to set up here, it doesn't work here and this is kind of a North-Korea-Finland in a lot of ways, and from that I thought, well maybe someone should try something, since some books had already gotten translated and that's how I got started — the first attempt was actually a registered association, and that got stuck right at the starting line, when I realized that in Finland you can't ask for money for just any good cause without having a fundraising permit, [06:30] meaning civil-society fundraising and advancing common causes has to be done entirely through volunteer work — you're not allowed to use money for it and you have to ask someone's permission for it. Well, that alone already tells you something about this. a distorted, funny mindset — I'd say fundraising permits like this are very rare around the world. Yeah, as an aside here — an interlude — I interviewed Antero Vartia, who founded this company called Compensate, whose amazing, [unclear] and sincere idea was that that you could have a non-physical service where someone else offsets the rise in the carbon dioxide footprint you generate. In Finland it was seen as an impossible idea, as if nothing else was legitimate except selling horse-sized machines to the export industry — so in a way, having someone else offset on your behalf, even something as abstract as the rise in the atmosphere's carbon footprint, immediately fell under police jurisdiction and the Lotteries Act, since it was flagged that this isn't allowed, that it has to be stopped by law. [07:33] That's got a long story too, back in the early 2010s — or was it still the late [2000s] — well, 'Senja Teaches Swedish' was one case, that Senja Larsson wanted to learn Swedish, and whether it was then a Facebook group I don't quite remember exactly anymore, but in practice Senja spun that into a book and turned it into a crowdfunding campaign, and then there was a big backlash There's a long history here. EFI has also gone to the Court of Appeal over it, and this fundraising [permit issue] has probably been going on for over ten years now. With Antero we also wondered which is the bigger sin there — the fact that fundraising activity happens without a permit. In a way, is this possibly a channel to get around that permit, or is it that private individuals are supporting causes that the state apparatus finds objectionable. In a way these are of course both big sins in Finland, that's obviously clear, but what's behind this opposition? Well, if you want to keep things simple, according to Occam's razor, so trying to cut to a simpler explanation with a sharp razor, [08:44] and explanation — in Finland it's seen as a bit bad if there's competition. It's of course convenient for those who already currently hold fundraising permits, and who are good at vacuuming up money, that competition is bad. And it's of course a bit wild if everyone could just collect money and say whatever they want, and who would be supervising it — so maybe this is safer. Soviet Finland, if... someone supervises and keeps an eye on things, on what you can do and what you can't do Right, and then on top of that this also gets tangled up with fundraising directly from citizens meaning the third sector, for example, runs on Veikkaus profit funds, and the money gets circulated through whatever channels like through the state apparatus, then through state bureaucrats or political horse-trading, and then on to the third sector um, pet projects yes, to whichever parties are deemed suitable Libera didn't belong there, and probably wouldn't have wanted to either, because it corrupts the flow. I thought it was pretty hard to get it off the ground. The first attempt went straight into the freezer — you basically couldn't do it as a civil-society [organization]. [09:46] You can ask Sami for a hundred or fifty, and from Matti and Maija the same way, and that gets things moving. I call that wholesale money — you have to go to whoever has more than that, otherwise there's no point in it, you still need more money though if you look at think tanks, and just at what — at least at some point — these parties' think tanks had, and still have, so those would start out in the thousands, sometimes half a million or even more, in annual funding, and you'd end up looking for that kind of wealth from Finland proportionally less. and then elsewhere in the world, the public still gets tax benefits from it — if you donate somewhere, the tax authority gives you credit points for it — but in Finland this didn't exist. So in that sense it really takes a true believer, someone who wants to give to something like this, where you might even end up getting branded with some label, which could then be some association you don't necessarily want to be linked to, and that was in a way the starting point there. but Libera's idea was indeed that we don't take any state money, we don't take it — it has to come through voluntary exchange [10:55] meaning the individual themselves wants to give — it doesn't come from taxpayers' money, that is, a bit through compulsion What kind of partner was this Gustav von Herzen, were you two alike? Yes and no. Back then Matti Apunen asked me to stop by EVA for a moment in 2010, and that's where I ran into Kusse. Kusse was already over 80 when I met him. He was still a volleyball player though, and very spry. and of course already very accomplished, and then we found ourselves in a situation where Kusse had been working on the same thing, really trying to reform EVA, and Matti had actually asked me in a way to reform EVA too — without going into the details of that now — but then Kusse and I found each other, and about half a year went by, and we walked into the PRH, was it the 11th — it's in the founding document, the 11th of May 2011, [12:02] we were there early in the morning, it was just the two of us there and then a problem came up when we were there at the PRH behind the counter there, guess what the problem was? Well, too many founders No, it was a technical problem the problem was that on the founding document, which we signed right there at the counter, since it required — was it one or two witnesses well this official wouldn't agree to it they had to call a lawyer to ask whether they were allowed to put their name on this paper Happy, happy — well anyway, I have warm memories of those two book projects, and somehow it feels like Heikki Pursiainen, who's been a guest here, and Elina Valtonen too, who's also been a guest, were kind of quite visible and active, uplifting figures. Lately though, I feel it's kind of faded, that it's not really visible anymore. And EVA — well, the Nokia chief economist went there, but Apunen, as far as I understand, is chairman of the board, so maybe he could reform it, so that [13:06] he's doing good work with Mika [unclear] Ranta — [unclear] — and we've loosely agreed that he'd come by here too to talk at some point, once our calendars line up. but yeah, pretty rare around here — anyway, Apunen called himself Finland's only republican, which is an absolute hellish sin here in Finland too, since who could now [unclear] about imperialists do you see things from out there in the world with a bit of a different perspective — does this Finnish 'people's home' now somehow appear in a new light? Well yes, the perspective always ends up a bit different, and then of course if you no longer have direct ties to Finland, so to speak, you don't need to apply 'Finlandization' self-censorship in a way, or in many respects anyway — like I noticed already back in the Libera days, that even when there are smart ideas, still they... when you ask people to put them on paper and publish them, then they just don't come. So privately, sure, people will say them, but once they'd have to come out publicly, it gets difficult. [14:07] And this was one thing that has always astonished me about Finland — that it's a bit of a one-truth country, you're not allowed to talk about things, and sometimes you drink coffee, and sometimes faxes come, but in any case, in a way, that kind of discussion just doesn't exist. I remember, in our first year, when I brought someone from the Institute of Economic Affairs over from London, which is one of the oldest think tanks in the world, founded in the late '40s I think — brought the speaker over here. They were up on stage, and it was of course this kind of invite-only event, a public event. Then the idea, of course, was always that there should be a bit of debate, but in Finland people generally don't debate all that vigorously. so then Britte said, 'hey, well, in principle I actually agree with you completely, but to make this fun, I'm going to take a completely different position.' so it's a bit different from that discussion culture in some places around the world [15:08] but the other thing that I think shows more clearly — of course it's showing even this spring and winter of course it's been there before too, and you can see it in the speeches of the former Estonian president, Ilves Ilves is a very blunt speaker, and sometimes those tweets come at night, and he doesn't spare anyone in them Halonen and Tuomioja, who in hindsight really do deserve Ilves's wrath too. Right, and Ilves said this a while back, was it in some tweet, that if he doesn't bring these things up, how are younger generations supposed to know that these things exist? yeah, right now we have, well, Turkey stalling that membership, but you could think that it removes one big bogeyman from our discussion culture — that oppressive 'you can't talk about this so you have to stay silent about it', that Soviet-era bogeyman, under whose cover all sorts of other mental suffocation has been carried out in Finland yeah, it showed, it showed, I noticed it myself, that in a way the president said that [16:11] 'the masks came off' or whatever it was and I think the clearest, most concrete thing was that earlier the enemy was basically never named that now it was clearly Russia Russia was named quite officially, in official circles that in a way this hadn't existed before, and it came after the so-called application so in a way if everything was fine before that and we were free then why is it being talked about differently now than before — and I think that's pretty good evidence [unclear] I think I myself have spoken pretty directly about this before, over more than 140 episodes here [17:16] can assure you it's not that hard to go and speak a bit at the edge of the Overton window there, meaning what's generally accepted. at the edges of the ideological discussion, and if you otherwise can't manage it, you say it a bit playfully — that this is your British guest, that I'm taking a debate position here — and that's allowed too, meaning you don't always have to speak from one monolithic position, but you can actually practice, play at being a radical leftist for instance, and that's totally fine, or even a libertarian and that's the best way to learn — if you take all of your opponent's arguments and pick them apart there, that's the best way to learn, but also to understand. As for this classical liberalism — well, we've moved past it a bit now, but earlier it was endless, that neoclassical economics is basically liberalism, too, for god's sake, is basically right-wing Nazism, a completely ridiculous identity-political lumping-together of what are actually pretty simple concepts. [18:26] You could kind of taste-test the word 'Libera' — it somehow bothers me in English though, I looked at a lot of American usage. the liberal, conservative understanding has required me to sort of clean up this word 'libertarian', so that people understand we're really talking here about individual-level freedoms, and not, say, the Democrats' goals, which the Americans call 'liberal', but do you think these concepts — Libera, liberalism, libertarianism — have kind of lived on in Finland, or could something interesting be made out of it? Well, it's of course taken on those American influences in a way, since that's already a kind of left-wing term, and naturally that ties into the politics and the politicization of it, but I don't know, we can change the words, but the meanings always stay the same in a way, so that in a certain sense 'liberal' here means the same as left-wing, and of course the whole Finnish political field is entirely to the left compared to other countries. or if there isn't some sense of freedom people are willing to grant, then it's just those kinds of external individual-freedom matters, like whether you're allowed to have sexual freedom or something like... [19:41] freedom to pursue hobbies, but if you want to mix in even a bit of economic freedom, or god forbid even freedom from the state, then it already goes too far and gets ruined. Well, this quickly gets into ethical questions of course, since everyone probably has some agenda behind it, as to why one thing is better than another. But you could think about it — the Austrian School has undergone some kind of, or libertarianism has had a kind of light uptick from a subculture called the crypto money scene, where it fits in fairly naturally in a way — I think there was some Rothbard book that talked about money, and some crypto enthusiast said they took the word 'gold' out of it and replaced it with 'bitcoin.' and it matched one to one. In a certain way it's acceptable, since at least there's this crypto-industry culture out there where the Austrian School is totally cool. [20:42] Well, if we go back a bit — if you want a bit of a side-track — if you go to the early days of the internet, that was also very much about individual rights and freedoms, but also a certain responsibility there. and in a way this same kind of decentralization, a distributed governance and model, existed back then in the original internet. That was a product of its own particular time, and then we moved away from it. And of course this freedom and the things related to it travel just as well, of course, in crypto, and that showed in Bitcoin, which of course was 2008, when the financial system was in a bit of a weak state, so it was in a way a culmination of all the technological progress that had managed to accumulate by then, and from there these things naturally go straight to the core — what is money, what is exchange — and whenever there are turning points like this, it's good to ask what we're doing, why do we have middlemen, 'middleman', what's that in Finnish, [21:45] meaning some party acting on your behalf, why do we have banks, why do we have central banks, why do we do things a certain way This is in a way the transformation that the internet keeps making all the time — we get to move away from a lot of these intermediary parties that aren't necessarily needed anymore Earlier they were necessary, because there wasn't a better way to do things, but nowadays there are better ways, meaning everyone can now have a YouTube channel or a broadcast channel, you don't have to just listen to Yle and so through that everyone has freedom of choice, but then of course this is also a curse — now you have to choose, now you have to make your own decisions, and now you have to be a bit responsible and that's of course a bit painful — freedom is a two-sided thing, one side is freedom, but then there's also responsibility on the other side and property rights without states, whether peer-to-peer or as a bilateral transfer, still require someone else's trust — in the crypto money scene, for example, that's the consensus algorithm — but it's also interesting whether you can have property rights without nation-states. [22:50] the nation-state is of course a later thing, just as the state originally had nothing to do with money — if you go back into the history of money, this is actually the book I keep going through, 'What Is Money' — part of it is covered there too, you can also find it in The Bitcoin Standard, that one's actually extremely good if you're even slightly interested in Bitcoin, but also just in the history of money and and what money is, and central banks, this whole monetary system — it's extremely good, I think it's even been translated into Finnish Yeah, I've read that — Taleb's from over there, from Lebanon — they're basically enemies with each other these days which is interesting in itself, since Nassim Nicholas Taleb is the one who, well, came up with the — the black swan concept resistance to a fragile system, and the fiat system too — he also had in mind this idea of a fragile system at some point, but then over some kind of eco-related dispute they became enemies — I think Taleb hates the crypto scene, which is interesting. [23:51] Well yeah, you always find these — some people have big egos and some have ideological issues, and this of course happens in a lot of small circles, which is a marginal thing altogether, and they even fight among themselves and are at odds with each other. That's of course often unfortunate. But to briefly come back to the matter without going too deep, it started with just gold, for example. With gold coinage and gold coins in your pocket, you could travel around just fine, without even needing a passport. [unclear] [24:51] advantage generally, since for that king in power, or whoever, since everyone had a need to get more money out of the treasury, so you have to cheat. So these traditions go back quite far in that sense too, but in order for the state to actually get involved in banking and money, then it has to go to these private bankers and borrow their trust — the people's trust — the people didn't trust the state at all initially, it had to be obtained from private individuals, and this in a way leads to dollars and through that to these. national currencies later on. Of course China had paper money much earlier, and they also practiced counterfeiting, copying, quite successfully, and those patterns still continue today. So as such, if you really get down to the basics, what money is — it's just a medium of exchange and in principle anything can serve as money. But gold has traditionally been hard to counterfeit, and there's a sufficiently limited supply of it [25:58] and many have accepted it, and it has worked. There's an interesting book — Ray Dalio, he wrote it, the founder of Bridgewater and that sort of thing, not quite Elon Musk, but a 20-billion-dollar man nonetheless. A tycoon too, he wrote that book of principles, 'Principles', and his newer book here, on the principles of the changing world order. and in it he tries to analytically think through what in a way causes... the new world order — so even though America has held the hegemonic position for a hundred years, what could then bring about the next shift, for example to China — one factor is significant over-indebtedness and the resulting internal and external conflict caused by money printing and currency debasement, which then becomes so painful that the world order changes — and that's a pretty interesting piece of speculation. all [unclear] currencies — it's always the case that in the end it has collapsed [26:59] Germany practiced that back in its day, just under a hundred years ago and back in the day it was England that was the leading one and then the Americans took over and before that it was Holland, so Holland was also the Guilder was the first world currency The Dutch also invented capitalism and they had a pretty good merchant fleet, and a navy too changed this — the scepter passed to the British and then it passed in practice to the Americans, and at some point, for a very long time, China would have had the chance to play that game, and now there's speculation about whether the scepter might return to China, but on the other hand now this Russian war of aggression has kind of shown the weakness of totalitarianism too, so I myself wouldn't fully bet on China there Yeah, I feel like there have already been signs of that around here, like the UAE not taking 5G from China and it's clearly become the case now that you also have to take moral considerations into account that in a way, in the short term it's easy to build gas pipelines and take the benefits [28:02] but then in the long term, as we're now seeing in Germany, that position is terribly hard to spin around quickly in the other direction — you can't just do that with some kind of server reboot; if German industry runs on cheap gas and the gas gets shut off, then the factories stop running. and now if, with this NATO thing, Finland joins the Western hegemony, which then traditionally means for us the somewhat unpleasant business of following America's models, then it's in a way fascinating to see whether that changes our nation's thinking a bit after all, in a more liberal, libertarian direction, whether we also pick up other lessons from there now that we've broken away from this [unclear] mindset. Yeah, I'm very skeptical about that — I mean, what would even stop it — but what I've seen, and I did see it, and it was one reason why in a way my straw to grasp at was that Libera can, and tries to, do some small part of the work, and of course those books I translated earlier, but hardly anyone reads them anymore, only a very few, and mistakes of course keep getting made all the time, and if you look at Finland's economy and so on, then [29:15] structural changes really haven't been made, and this is in a way because there's a lack of will, there isn't really any national direction, which is actually clearly visible — but if you take another example, say housing like in Estonia, then in a way these Eastern European countries, which are of course still rising and where living standards are rising, there's clearly a different can-do attitude there, there's clearly construction going on in a way, and that of course also shows up in the streetscape. You can see it — new buildings go up there, and things actually get built. There's a can-do spirit there. And there's a certain pride, in a way, in getting things done. and here in Finland, on the other hand, the pace is a bit slower. Yeah, I mostly share the pessimism there, because there isn't really much literacy or economic understanding here, or, well, people don't really have even a basic economics education to speak of. Pretty much only the business sector is the one that has any understanding of that at all these days. [30:19] these are really hard, but still, these aren't taboo anymore — in a way, now that even the NATO [debate] has passed, you actually can talk about things like the fact that Finland's tax rate is higher than 97 percent of the world's countries, that's not really such a taboo anymore. It's always been talked about, but the Swedes did something about it, since over there it started — was it the late '70s — when this famous book came out, and there were these artists who pushed back a bit. Yeah, Astrid Lindgren, the children's author, had a 102 percent [marginal] tax, and she actually wrote a book about how that hit her. and not long after that, the Beatles wrote 'Taxman'. Yeah, but now similarly — well no — now people have kind of woken up to the fact that Finland is one of the poorest countries in Northern Europe, and it wasn't... and it's by no means inevitable that we'd stay ahead of Estonia in private wealth and back in the day, before the Soviet Union came, Estonia's GDP, gross domestic product, was higher per capita than Finland's [31:27] yeah, but separate from GDP, private wealth is very low in Finland so people don't understand that our net 600 billion is actually really little that if we were at Sweden's level it would be 1,000 billion then and that we have relatively little private wealth, and the rich are almost entirely absent Well yeah, that's some doom and gloom, but there's certainly some hope here, and the next government will be led by the National Coalition Party, which is in a completely dominant position right now. There's a backlash coming here against the left-wing government experiment. If they're all on the left, then what does that change? The National Coalition has, to some extent, some [unclear"}, {"slug": "320-suomi-vie-englantia-amerikkaan-leinonen-neuvottelija-243", "title": "How Finland Exports English Lessons to America | Timo-Pekka Leinonen", "titleOriginal": "Suomi vie englantia Amerikkaan | Leinonen | #neuvottelija 243", "guest": "Leinonen", "guestsCanonical": ["Timo-Pekka Leinonen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/timo-pekka-leinonen/"], "episodeNumber": "243", "publishedAt": "2026-05-25", "duration": "46:40", "format": "full", "topics": ["finnish_economy_policy", "saas_software"], "description": "How is Finland exporting English to America? Timo-Pekka Leinonen's Tampere-based company Master English has grown in three years from zero to over €5 million in run-rate revenue, 100% of it exports. The product being exported is English-language skill, and the target market is Spanish-speaking America — remarkable for a product that can't even be bought in Finland. The conversation covers the future of language teaching, what the team learned from WordDive, and how Translink Corporate Finance fits into the growth story. Master English's goal this year is to grow monthly recurring revenue (MRR) to €700,000. At the end, Sami asks Timo-Pekka how to dive from the 10-meter platform and win a national championship gold — the members-only segment continues in the terrifying world of platform diving.", "page": "https://www.neuvottelija.com/podcast/episodes/320-suomi-vie-englantia-amerikkaan-leinonen-neuvottelija-243/", "text": "[00:01] All right, welcome to the Negotiator channel. My guest is Timo-Pekka Leinonen, owner and CEO of Master English. Welcome. Hi, hi everyone, and thanks, Sami, from Tampere. We actually share this Translink history from the WordDive-Otava transaction — Otava being the Finnish publishing house — I think that's almost a year ago now. Yeah. And before that we also did some sparring sessions, a bit pro bono, about what would be worth doing and what the... ...valuation and that kind of thing would be. Yeah, Tampere is always nice to visit, my hometown. But you could almost say you're a man who's brought a revolutionary language-learning solution to little Finland twice now. So let's talk about this second one, Master English. I thought it was pretty revolutionary. What is Master English and which languages does it cover? Master English is a service... ...where you can learn advanced English. The idea is basically to reach a level of fluency where you can handle demanding work tasks in English, and right now it only works in Spanish — meaning it only serves Spanish-speaking customers. Yeah, so all the Hispanic listeners out there who want, say, negotiator-level content can go check it out, but not much else applies — actually, does it even support logging in from Finland? No — actually it doesn't, because our market is Latin America. Which... [01:25] ...in practice means North America, Central America, South America, Spain, and native Spanish speakers, and it doesn't work in Finland — you can't pay for it, you can't buy it, other than in that target market. Yeah, and it's funny with the Americas — I was in Miami last spring, and interestingly two [unclear] didn't speak English, and in a way they'd be potential customers for you. But in a way this merging of the Americas... ...is really happening, and the rise of Hispanic professionals is quite significant, but they do recognize that English is the global language, and in a way this is a huge language pair. Let's bring in — can we call it a competitor — Duolingo's analysis: these are the world's biggest languages, English of course number one, Spanish number two, but here it's interestingly the other way round — from Spanish to English. Yeah, a couple of comments on that: we actually had a team out just in February... ...interviewing users, potential users, in Los Angeles, in a Spanish-speaking area, and there was a shop with a sign that read, basically, 'English spoken here' — hey, English is spoken here. And we see Duolingo more as a kind of market-opener — it brings in people who try it out. A lot of our users have tried Duolingo and gotten used to the idea of, 'hey, I can pay for language learning, this can be done through an app,' and then they've moved on... [02:50] ...moved on to us. Yeah, but this is specifically a pro-level market. So basically, if you had a 'negotiator Miettinen' down in Colombia who specifically wanted to start doing business with the Americans, he'd specifically want to speak proper, professional English, not some — what would their word be for survival English? Yeah, the line probably falls somewhere around there — there are quite a lot of people, and our typical customer has a university degree, maybe a lower one, and then... ...they're in a demanding specialist or managerial role but can't do their job in English, and they feel that if they knew English, their career would advance and their salary would rise. And over there a pay rise is a completely different matter — if you get a promotion, your pay genuinely goes up, unlike here where you get a few hundred euros extra and the taxman takes half, so your net pay barely inches forward from the old base pay. Yeah, but it really does matter for job... ...qualifications. And in a way this conversion rate is interesting — aren't we talking about percentages, single-digit percentages here? So what's the population, what's the target market here? We did a fairly large analysis, and according to our analysis roughly 2% of the population falls into our target-customer group in non-English-speaking countries, and in Mexico, for example, it's about 4%, but when you have 12— [04:12] —27 million inhabitants, that 4% works out to 5 million. And Latin America really is your number-one market, but then you could think about these other four regions — Asia is probably next. Asia is interesting, there's real strong demand there, and especially your salary rises if you can speak English. And actually, as an example of countries where Duolingo isn't number one, even though... ...South Korea and Japan, where English-learning apps are in a completely different league — ahead of Duolingo even. And didn't this — didn't your enthusiasm for languages start in Japan, Korea... [unclear] ...just in Yokohama — I mean, I lived, lived in Yokohama. But basically this started a long, long time ago. I did judo and wanted to learn Japanese, and actually I was pretty terrible at English too — I have this memory of having been through upper secondary school, but in London I tried to buy from McDonald's... [05:31] ...orange juice and didn't manage it, because if you say it the Finnish way, 'juice,' they don't understand — it's 'juus.' And I had trouble with that, so I had to come up with something. I bought some software, these kinds of programs you'd install on your own computer, to study Japanese, but they were really bad. But my own mother happens to be a language teacher, with 40 years of experience in learning and teaching, so I built myself an app to learn Japanese... ...so I could learn to speak and use Japanese as effectively as possible, and I used it myself, and it worked reasonably well. So I ended up — I was working there, living in Yokohama, and I was in Yokosuka and Tokyo for work in the late '90s, a couple of years. Yeah, that's an interesting language pair — at business school you had to reach a third language at intermediate level to graduate, and I'd never really managed with these languages. I started with Spanish, but I had a summer job at an investment bank, so... ...I just barely passed the basic course but then dropped out at the intermediate level. Then I tried the same thing with German, but met the same fate, and graduation started to look delayed. So the basic Japanese course ended up being enough — that's where I picked up these small skills. Japan was really trendy when we were studying, and it was interesting — there were probably a couple hundred people on the introductory Japanese course, but... [06:55] ...by the fourth year there weren't even ten left, so the drop-off was pretty steep. Yeah, and it's a hard language, especially the written form — by the way, I bought a bonsai tree that dried up within two weeks, so I had this fine dead bonsai the whole time I was a student. Small detail, but in a way it demonstrates what's hard about the language. And you have six levels of what gets learned, and you could say your Master English... ...is the only one on the market that covers all six at a professional level. There's a customer satisfaction score of 4.9 here. Doesn't that come precisely from the fact that it's a comprehensive, all-six approach? Yeah — so we split it up, basically it's reading, writing, listening, speaking, grammar, and vocabulary, and we aim for a high level across all of them, and our goal is... ...to build a fully digital app you could use to learn high-level English. I'm not claiming we're there yet, but we're moving fast, and customers feel it's good enough to use — it really helps, they're very satisfied. So that's, in a way, what I'd say — we've reached the commercial stage, and that's actually the right way to develop a service like this, because you have users you can watch to see how things work, and you can try out different... [08:14] ...options, different versions. Yeah, I remember from the WordDive days that you were a bit hesitant about the word 'AI' back then, since it was more of an algorithm-type approach, at least as I understood it — but hasn't AI come into the picture now as well? Yeah, we actually use quite a lot of AI, in a lot of different ways. The pronunciation optimization we got a patent for is more like something an engineer wrote — maybe now you could... ...call it a smart algorithm. But then, together with the University of Tampere, we built a system that recognizes speaking-related problems. So if I say, for example, 'I have a paper here' — and I pronounce it the Finnish way, or incorrectly, without the aspiration on the 'p' in 'paper' — the system picks up on things like that. And actually, we got a US patent for it just last week. ...that it can do this — that's AI. Then we also have things based on a small language model — these 'React by Speaking' situations, where you respond to something. Now, if you've done textbook exercises at school or elsewhere, often only one correct answer is accepted. With React by Speaking we can cover things much more broadly — you can answer in many ways, and if it's correct, it's accepted. And now we've also gotten a GPT-4-based system, built on large language models... [09:35] ...where you enter a specific situation, based on what you've been learning recently — vocabulary, grammar — and then you handle some matter by speaking for two or three minutes, and it basically understands your level and gives you feedback on it. I actually think that's right at the cutting edge of what language-learning apps are currently capable of. Yeah, in both of these — Master English and [unclear] — I think there's this... ...sensible SaaS, B2C business model, with a consumer-conversion approach — not a freemium model, so you have a calibration phase, then onboarding, and then straight into improving your skills. Doesn't this go straight to the point right after that initial calibration? Has that always been your philosophy? Yeah, very much so — in Master English, right now it actually works so that you go to our... ...website and fill out a form, completely free of charge, and we map out your skills. Then we can tell you: hey, if you practice 40 minutes, five times a week, in six months you'll reach the level you want. And then it's like, oh, okay, I'll buy it. And after that we also run a kind of baseline-level test so we can build a genuinely individual learning program for each person. Yeah, I think that's — I've personally been wary of the freemium model for a long time, because that's how... [11:00] ...a lot of competitors operate — they try hard to reel people in through trawling, and then they hope for a couple of percent conversion. I think that's a bit pointless — you're left with a lot of sand on the doorstep, so to speak. Our customers are really the ones who feel they genuinely want to improve their language skills, and they're willing to pay, willing to start right away, willing to use a mobile app. It's a bit like a gym membership in that sense — you pay... ...first, then you've paid, you go, and you notice it works. And one of our big competitors actually said years ago already that in their view this pay-first-then-use model is the best one for this kind of language learning and for building commitment. But then there's the pronunciation side — if you go the more desktop-style route, say the basic WordDive-type formula where you match up pictures and text, like Duolingo does... [12:00] ...this four-panel picture-selection format is a strong one — of course that kind of visual association is a good thing. But then combining that with pronunciation correction reinforces the learning quite a bit. Yeah, and it's interesting that phones were originally developed for listening and producing sound — it is, after all, a phone — so it's an excellent device for practicing pronunciation, and it's much easier than on a desktop, for instance, because there you have to calibrate what kind of microphone and what kind of... ...speakers you're dealing with. But a good phone has decent microphones and speakers, tuned specifically for the human voice these days. Anyway — sort of broken English myself — I lived in London for 13 years, where my English, I can't really call it survival English, but it was still strongly accented English. By the way, my last episode was entirely in English with Korkia [unclear], so I've started trying that too. But in a way... ...intelligibility is really the key now — maybe that's the last bit of polish. Yeah, the question these days is really this: there's an accent, and it doesn't really matter — the question is whether a native speaker understands what you're saying. And then once you reach a certain level, rhythm and intonation start coming into play. If you get the rhythm and intonation right and the speech sounds natural, your credibility is much higher, even if you make a few pronunciation mistakes, or... [13:26] ...especially if a strong accent is audible — different elements come along with that. Yeah. You could think about what AI brings to this — because now this too is coming: this very conversation, probably — one of my goals is that, if I wanted to, at the very latest by the end of it I'd be able to make... ...versions of this in other languages. Of course, syncing our voice — speech, lip-syncing — isn't easy, but it is possible to create other languages using our voice style. But this kind of immersiveness, whether it's computer-generated or not, is still a batch-type process, in the sense that... ...real-time, in-the-moment interaction probably still needs an app like this for a long time to come. Yeah, and immersiveness is really important to us — we try to create a state where you focus, a kind of flow state, where all your senses are concentrated on it. And that's why I don't believe in ad-based models — if you're studying a language and then an ad pops up, it breaks your flow. That's why we've ended up going with the paid-service model instead. Yeah. [14:45] But in a way, doing communication live — just think about whether at some point there could be an app that whispers in your ear, or gives you real-time feedback. We're probably heading that way. Already now, if you go to a hotel in Greece and the toilet doesn't work, you can probably talk to some AI and it translates for you. Or in China this has already been done, where basically you... ...just speak and get things handled. But then if we're talking about demanding work tasks — say you want to close a deal as an investment banker or something — a relationship still needs to be built there, and for that you need a shared language. That's actually one reason we operate here at, what would I call it, the top of the food chain — we focus on high-level English proficiency, because we believe it'll be needed for quite a while yet. Actually, this kind of globalization... ...actually seems to be increasing the need for English right now, if anything. That's how it stands now. Since I'm an investment banker myself, I'm curious — from that deal I was involved in — about your growth profile: over these three years, or however you'd describe it, could you walk through this growth on the Master English side? Yeah, so basically we launched the service, and... [16:09] ...we got about 260,000 in revenue in 2021 — we started developing it in 2020, and in '21 we hit roughly 260,000. Then the target for 2022 was 800,000, and we got 1.2 million in revenue. And last year it was 3.1 million euros in Master English business revenue. And now that we're here at the end of March... ...if this pace continues through the end of March the way it has so far, the run rate is probably around six million euros now, so pretty solid growth at the moment. Yeah, and your aspirational goal of seven million doesn't look at all impossible at this pace, if it's already at this level — of course that's the run rate, but really the goal is to be above... ...700,000 in monthly revenue, MRR — that's really the core target. Yeah, that's impressive growth, and this is essentially pure export, and your team is a global team, isn't it — don't you have several nationalities? Yeah, we have about ten non-Finns, and a significant portion are native... [17:31] ...Spanish speakers, from Latin America or from Spain, or people who've worked in Latin America for a long time. But it's still a Tampere business at heart. Yeah, we go a bit against the grain there — everyone's at the office on Mondays and Wednesdays. We believe, and we've noticed, that if you've got, say, a language teacher and an AI person and a mobile-app person and a marketing person, and... ...you put them in the same room, things stick together better and collaboration flows more smoothly. I do believe engineers will talk to each other, and teachers will talk to each other, and maybe even the marketing people will talk to each other remotely, and things get handled even over email. But when you're innovating and creating something new, it's really nice to get into the same room. Yeah, agreed. Now, by the way, changes to the hybrid model might interest our listeners and viewers — who would be... ...good to talk about these things — for instance, at Translink we introduced a 9:30 internal daily kickoff call during Covid, and it's stuck religiously to this day: every weekday there's that 9:30-to-10 slot where we talk about projects and organize the day. But now, on top of that, office work has come back. But I'm just curious as a side note — what is, in a way, this work... [18:51] ...future — is it maybe two days in person plus these virtual morning kickoffs, would that be a good model? I'd guess maybe two or three, depending of course entirely on what you're doing — if we were both making sales calls, we could do those pretty independently, we'd just need to know who to call. But right now we have it so that on Mondays the whole team is physically present, and we always go through what everyone got done last week, and... ...what's most important this week — a short 15 to 20 minutes, but we still get everyone together. And then teams have their own morning scrums or whatever, freely as needed — a bit of that Agile mindset, with demos and scrums and kanban boards and so on, in office work. But since you're a software company, of course that makes sense, though it's probably sensible practice in plenty of other workplaces too. So one maybe interesting thing we've now... ...ended up trying, actually after Covid, is a kind of focus time: until lunch, everyone works on their own top-priority task, and meetings happen in the afternoon. But if you and a colleague are working on the same top-priority task, sure, the two or three of you can hold a meeting if that's what's needed. But in principle, the morning is for the number-one thing at the top of your to-do list, and in the afternoon, after lunch, that's when meetings happen and you check in... [20:17] ...with colleagues and so on. And it actually started from staff feedback — there was a feeling that too many things were going on and there were too many interruptions and so on, so it's been well received. And I believe it looks like it'll stick, though of course if new ideas come up we'll change it, but right now this arrangement feels pretty good. Is your working language English? Yes, English is the working language, and everything is documented and recorded in English, but of course if you've got two... ...Spanish speakers, or two Finnish speakers, or whoever, they speak among themselves whatever they want. Yeah, yeah — maybe we could talk more about this Spanish-English combination — or actually, on the Finland-Japan side: did you have Japanese people working here, at this company? At least earlier on, back when the WordDive business was being built and Japanese-language courses were being invested in, there were Japanese people on staff, but right now... ...there's no Japanese involved in the Master English business. Yeah, maybe I should explain that a bit — we talked about this once. One of my regular guests has a Japanese wife, and we talked about how Finns and Japanese are actually quite a good match, in a way, on the relationship market — there's kind of the same spirit to it. So maybe a tip for people who want a foreign wife or husband: it might be a surprisingly good match, Finland... [21:42] ...and Japan. Haven't you had several situations like this yourself too? Yeah, there've been things of that sort. Someone came along — I was, well, over in Japan I was heading online product development, and once someone asked to meet, a young woman, maybe 25 to 30 years old, wanted to meet, and of course we could meet. And what was her business? She started presenting herself, going through her CV a bit, basically saying she was looking for a husband... ...and I was like, okay then, so a Finnish engineer might be a good fit for her. But that's a pretty — for a Finn — a pretty bewildering situation. Yeah, a bewildering situation. Maybe, if we take some work examples from Japan — what I find interesting: one thing that comes to mind is we had maybe 40 people on staff, and we had this kind of evening get-together, everyone paying their own way, and we went to some restaurant... ...and there were people who'd come from all over, moved there from different places, and so on. So there were 40 of us at four-person tables in that restaurant, and the Japanese people started swapping tables completely automatically, without anyone arranging it — they just rotated through the tables. Everyone ate and drank in moderation, and when the bill came, it was split evenly. But after that one evening, all the Japanese people knew each other — whereas if you try to organize something like that in Finland... [23:03] ...where you take 40 people to a restaurant, everyone just stays at their own table — maybe one odd person wanders around, but that's about it. Over there it just happened automatically. Yeah. And another interesting thing was with action points: when they came up, they wanted them assigned to a group or a team, whereas I was used to thinking, okay, this needs a name attached, someone specific has to handle this — not just 'assign it to the team.' And when I looked into it, the reasoning was that the team matters more to them; whoever from the team gets to it handles it. If the team has... ...an open action point, whoever gets to it first handles it, and only then their own. Whereas in Finland it works the other way around — if your name is attached to something, like 'Sami handles this and Translink handles that,' then naturally your own task comes first. But interesting things — you only really notice, once you've had those experiences, hey, this is different. But I've actually noticed myself that using Slack a lot pulls Finnish culture a bit in that same direction, since there isn't... [24:03] ...to Sami — it's just posted to our project-specific Slack channel, and whoever notices it picks it up and takes it on, and everyone else gives it a thumbs-up or whatever. It's actually a pretty fun system, and it removes a kind of unnecessary communication bottleneck — which is what happens in the traditional email model, always that question of who to cc, and then someone doesn't get included... ...and so on, and who's actually dealing with this. Whereas here you see it right away — hey, someone's already started on this. So the whole cc-and-bcc layer can still be a nightmare in those emails — it's clunky. But let's get back to Master English — there are a lot of Spanish speakers, but first, on the calibration question: is Portuguese, in your view, close enough to Spanish that... ...it could get up to speed on that fairly easily? Well, in a sense our natural next market would probably be Brazil — there, of course, it's Brazilian Portuguese. And the neural network that detects pronunciation errors would need to be retrained for the new language's new speakers and their new mistakes, but my hunch, my gut feeling, is that it would probably work well enough directly for Portuguese speakers too, that... [25:26] ...there are only a handful of mistakes Portuguese speakers make that Spanish speakers typically don't, and if there are such cases we'd just teach the model those, but it should basically be usable as is, as long as you gather enough voice samples yourself. Yeah, and by the way, I did some forest-industry deals once, in Portugal and in Spain, and one thing that stuck with me was... ...their Portuguese, or this Spanish pulp company — this whole 'F' versus 'S' thing. Yeah, but is that actually an issue, or is it pretty simple? Well, I don't really know — since our focus is on English pronunciation, and there are real differences between the various Latin countries. In Spain there used to be — in nearly every region — some twenty Spanish-language academies, each of which... ...would claim to define what 'real' Spanish is. But they have harmonized somewhat. We're really only interested in the English-learning side — the written text, giving instructions — and in that sense the same Spanish works across the whole of Latin America. So we don't need to reverse-engineer things any further from English into Spanish — the flow from there is good enough. We do still identify each individual user's individual... [26:46] ...mistakes and address them, teach to their weak points — it doesn't matter where they come from, or where they're from, or if you live on the other side of the world but happen to have a mistake that's typical over there — it doesn't matter, the system catches it anyway. Could you build something like a 'survival English' correction course out of this, or how does that philosophy get going, if someone's... ...just stuck in some kind of mannerism, or intonation pattern, or recurring word errors — how does the model start correcting things like that? Well, basically, in principle all humans in the world have the same vocal apparatus, so we could all learn any language. But of course it's easiest to learn pronunciation and intonation and so on when you're young, as a child, and that's partly stored in muscle memory, and... ...that kind of thing requires repetition. And that's why technology like Speak With, which can train you specifically on the pronunciation issues that matter for you, is important — because we all have different mistakes. And I'm not knocking classroom teaching at all, but if you're practicing pronunciation there, you often end up practicing something you already know and don't need, and conversely, you don't practice enough of what's actually your problem. And that's where we get to the dilemma... [28:09] ...that effective teaching of spoken language skills, of pronunciation, is fundamentally one-to-one: one teacher teaches one student at a time, and that just doesn't scale at all. And on top of that there's this cost problem: if you think about, say, native English-speaking American students, they come from wealthy countries, whereas if you look at somewhere in Latin America or Asia, there are... ...lower-earning people who'd need personal tuition — not to mention Africa. So a digital solution is really the way to handle correcting or developing language skills reasonably efficiently. Yeah, that sounds sensible, and it's good to think these things through. I remember from my own school days, even in the lower grades, I had a lisp on my Rs that they tried to fix... ...but with completely incompetent teaching methods. Then one time, when I was 12, my brother just said — since he'd also had trouble with his Rs around age six — 'how is it even possible you still have that?' And he told me, just say a 'D' and blow air through it, and using that simple technique I learned the R in a single day. Okay, but it feels absurd that teaching that bad has existed, and... [29:30] ...it's kind of a tragic mistake, in a way. Yes, I remember suffering from this speech issue myself. And then, in turn, on English courses, spoken skills weren't addressed at all — it was all written, so really only two or four of your six levels were ever in use, since the speaking side wasn't there at all. And once things get stuck like that, they're much harder... ...to grind away and fix. In the development phase of our technology, Tampere University of Technology — or actually the Hervanta campus of Tampere University — their Language Centre was a support partner and pilot customer, because they had this situation where they had just a handful of English teachers and 8,000 students who, for the most part, needed their spoken English improved somehow, or needed to build confidence in it. So they were... ...basically a partner during that early phase when we were developing the technology. Yeah, and this language skill really is an important skill, and I was just thinking about immigration trends — because these days it's this whole 'demography is destiny' idea in American discourse, that tens of millions of people would come to America from these Hispanic... [30:53] ...countries. And of course there are populist fights against it now, building walls and so on. But this NAFTA region is probably still the world's biggest economic zone for a long time to come. I was just wondering — is there some cultural angle you could build into this, like how you adapt if part of the population is moving up to North America from South America, or are there trends like that visible? Well, you could... ...think that way, but my understanding is that most of our users don't intend to move anywhere. But for example in Mexico, nearshoring has confirmed that subcontracting has been shifted from China to Mexico via the US, and the Mexican economy is doing well from having American partners and principals and so on. But then, another thing is that it does carry a certain career significance if you want to... ...become a director or some other senior specialist — you need the ability to operate in English. So it's an enab"}, {"slug": "353-puhelinahdistus-rautio-alasaarela-neuvottelija-258", "title": "The Anxious Generation: Phones, TikTok and AI | Isak Rautio, Mikko Alasaarela", "titleOriginal": "Puhelinahdistus | Rautio Alasaarela | #neuvottelija 258", "guest": "Rautio, Alasaarela", "guestsCanonical": ["Isak Rautio", "Mikko Alasaarela"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/isak-rautio/", "https://www.neuvottelija.com/podcast/guests/mikko-alasaarela/"], "episodeNumber": "258", "publishedAt": "2025-01-03", "duration": "55:35", "format": "full", "topics": ["ai_enterprise_tech", "leadership_governance"], "description": "Recorded as a joint double episode, this is Futucast host Isak Rautio and Mikko Alasaarela's long conversation about Jonathan Haidt's book The Anxious Generation. They cover algorithmic influence, the interest-based internet, TikTok and China, artificial intelligence, and how it all affects girls and boys — the whole anxiety-inducing tangle. The members-only segment covers Isak and Mikko's latest AI experiments and tips. A companion double episode, \"Sami Miettinen & Mikko Alasaarela: Social media and the anxious generation\" (#465), was also recorded for Futucast.", "page": "https://www.neuvottelija.com/podcast/episodes/353-puhelinahdistus-rautio-alasaarela-neuvottelija-258/", "text": "[00:00] The whole mechanism of the game is built on a gambling-style addiction loop — the only point of it is to get you coming back about ten times a day to do something in the game. Inward-turning, self-image-related mental health problems have also been rising among boys. Now, these are typically more common in young girls, but things like body dysmorphia — seeing yourself in the mirror as different from how you really look — for boys that might mean thinking your biceps are too small — cases like that have been increasing. In practice, the algorithm is estimated to account for about 80% of TikTok's total value. Anyway — welcome to the Neuvottelija channel. I'm on location today, at Isak Rautio's Futucast studio. Great to be here in your studio. I used to be over at your old place. Welcome to our studio — we're trying out a double episode, meaning we'll release two episodes at roughly the same time, loosely on the same topic: the anxious generation. I don't know if we actually are an anxious generation — Mikko's almost my age — but Mikko Alasaarela is also here as a guest. Hello. Hi. [01:04] Nice to be here. You're often up there a lot, though — you started out as Finland's go-to TikTok whisperer, and these days you get to combine that with some AI expertise as well. Yeah, well, this TikTok expertise really comes out of my focus on algorithmic influence, and once TikTok became the eye of the storm, so to speak, for algorithmic influence, it was clear as day that my expertise and insight were needed there. Right — as our starting point, we've both been studying a book by one of America's most qualified sociologists: Jonathan Haidt's 'The Anxious Generation.' It's been a pretty impactful book, so should we start with some thoughts on it? Mikko, do you want to start with what Jonathan Haidt actually says? Yeah, so basically, there's long been talk that today's social media model is driving a lot of negative developments among young people — that's been discussed a lot — but researchers have always said in those discussions, 'hey, correlation doesn't equal causation.' And the whole point of Jonathan Haidt's book was to show that there is [02:26] also a very clear causal link between social media and smartphone use and young people's ill-being. Yeah — what about you, Isak? You're not quite part of this anxious generation, meaning we're talking about people who weren't actually messed up by COVID, but by the phone. You're a bit younger than us though... so actually, before the episode I was wondering why I'd even been invited here. You're more like an algorithm scientist, Mikko, and you're the one who's read the book. Same goes for me, the podcast host — my best theory right now is that you still think I'm 25 years old, so I count as part of this anxious generation — I'm basically here as an expert by experience. No, but seriously, I should probably say up front that I don't have any professional qualifications to critique everything Haidt says in the book, but I'm fairly favorably biased toward him, so I'm quite ready to take his message on board. I think he's a good voice, a good addition to today's discussion culture. This question feels very valid, and I think he's really good at putting these views forward. So, right at the start, before we get into the real substance, it's probably worth saying that I lean — my gut feeling, at least, leans a bit toward Haidt being pretty right about this in some way. And in that sense, it is a scientific book; he's written really good books before too, on this [03:48] topic — like his theory on people's political decision-making, really great, sharp analysis. So I think this is very much a science book, and in my opinion, that initial thesis — that the smartphone ruined young people — well, it does sound true in a way, especially compared to when people explain it away as, say, COVID isolation ruining young people. There, you're looking at a much simpler correlation again. I was speaking, a couple of years ago, at a management seminar for the management teams of Finland's university central hospitals, about the impact of AI on their field, and they told me themselves that demand for adolescent psychiatric services exploded almost exactly a year after smartphones became common among young people. That's also just a correlation whose causation hasn't been scientifically confirmed, but it's not exactly rocket science to understand that there might be a very concrete impact there. Yes, and that's exactly where you saw it in the data, i.e. [04:53] the mental health curves jumped. So at first I thought — I've sometimes been critical, in a way, of this self-diagnosis culture, this kind of 'woke' self-diagnosis thing — but this book, I think, convinced me that it's actually quite true. People have, quite literally, broken down mentally during this smartphone era, so it's not just some kind of self-suggestion. Should we start drawing out a distinction between Haidt's different theses? On the one hand, he talks about the harms of social media — that people's, and young people's, lives are on a stage, so a large audience of adults sees what they do and say, and it stays there forever. You can always go back and see what kind of person someone was a few months or years ago, and that creates very specific pressure on young people to be a certain way, which is distressing. And then, on the other hand, as social media use increases, more and more other childhood habits and ways of growing up get missed. For example, this lack of a play-based childhood — that's maybe not a direct effect of social media, but a side effect of increased social media use, and that too could... I don't know, is that just a question of definition, or is it also a direct harm? Well, on top of that, you could add the point that for boys, this marginalization and addiction are also driven by games, so it's not just [06:18] social media causing these problems — we need to remember it's several factors pulling in the same direction. Yeah, I'm slightly of a different opinion there. I mean, I'm a man who's... on an episode with Tuomas Enbuske, we wondered whether we're both somewhere on some kind of neurodivergent spectrum — you could even say on the autism spectrum — and this is a masculine trait, this craving for structure and collecting, or for systemic detail, and games give us that, so I've... made a bit of a confession here myself, where I said that I... played through, for example, Baldur's Gate 3 on Honor Mode, simply because I thought it was a fun, self-contained... goal that gave me satisfaction, and I didn't feel like my world... suffered for it in any way. Well, my view on that is that games you can... actually play through to the end are exactly the kind of games that contribute positively; then... there are all these other games — meaning 85% of all games — which are free-to-play, never-ending experiences where the whole game... [07:27] mechanism is built on a kind of gambling-style addiction loop, and... its only purpose is to get you coming back about ten times a day to do something in the game. But Isak's point about play, I think, cut a bit deeper than that — there's Taleb's antifragility theory, meaning, in a way, we have an anxious generation because it's a fragile generation, because it hasn't been toughened up. Real, proper, rugged kids who were put out in nature to play, to take some hits, to fail a bit and to take hits from the world, and to experience disappointment and boredom — all the things these 'curling parents' have since removed from kids' lives. Yes, but let me comment on the earlier point about games — in my experience too, I'm a child of the internet, even though I graduated from high school the very year those hockey-stick curves Haidt talks about, in young girls' mental health, started to show up — meaning 2012, when smartphones and social [08:30] media became part of young people's lives — that's the year I graduated. But I still grew up on the internet, and I think I turned out a relatively normal, well-functioning young person, even though a lot of people might say the internet raised me as much as my family did. I don't know if that's entirely true, but, for example, at 13 I saw a video online of a man being murdered with a hammer, because back then there were these gore sites that every teenage boy went to watch. That really shouldn't have been part of any young person's childhood — seeing something like that. And maybe, just as a side note here, the scary observation is this: of course it was shocking, I still remember it, I've never really forgotten it. I remember how shocking it was even back then to watch — but it probably would have hit far more directly if I'd seen it happen live rather than on video. That's a good point, actually, because Jonathan Haidt says in his book also that we protect children to the maximum from real-world dangers that might actually be useful for their development, while at the same time we don't monitor their internet use, which can let young people drift into all sorts of rabbit holes — extreme violence, [09:45] extreme porn, extreme views, that sort of thing — and into genuinely unsafe spaces too, like Snapchat, which pedophiles use extensively to groom children. And we don't recognize these dangers, because it doesn't look dangerous when someone's just staring at their phone. Right — let's move to the girls' side. In a way, the dangers for girls are partly what you just described — there's sexual harassment and grooming — but on top of that, social pressure plays out differently for them. So in a way, boys are partly protected from that, even though boys have their own harsh hierarchies too, which can be used cruelly for bullying — but for girls, it's particularly cruel. So girls growing up on the internet end up facing things in a completely different way — pressure around appearance, and pressure to succeed and get likes, in a way that's different from boys. That's true, and social media specifically has a more harmful effect [10:49] on girls than on boys, and it comes specifically through these distorted role models — these mental images that have nothing to do with normal, real life. As a result, you can literally see it on the streets today: young people getting plastic surgery to look more like some Instagram model — that kind of thing has increased a lot, and probably specifically among girls. Exactly — and that's a harsh world, especially combined with that constant pressure to be accepted 24/7, and, in the social hierarchy, to at least not be bullied, but ideally be the popular girl. So it drives things like anorexia, weight-control problems, and other genuinely unhealthy stuff, in a way, of constant self-reflection through a negative lens. Without trying to pit girls against boys here, or girls against each other, this is just an observation I've made — I've done some loose research for a possible project related to bodybuilding culture and steroids, and steroid use among young people has increased. There's some vague evidence — I've only read the headlines and abstracts, and maybe only skimmed even those — but it does seem that these... I don't know if this is the right term... [12:11] 'internalizing' mental health problems — inward-turning, self-image-focused mental health problems — have also increased among boys. They're typically more characteristic of young girls, but things like body dysmorphia — seeing yourself in the mirror as different from how you actually look, thinking you're too small — have also been increasing among boys. Again, I'm not drawing any hard correlation here, this is just an informal observation, but it does seem that way. And Haidt also writes in his book that social media affects young girls' self-image and mental health in a completely different way than it does boys. One dynamic here — not necessarily something the platforms drive intentionally, but something that simply comes out of algorithmic optimization — is that all our individual worlds drift in some direction, as these platforms try to find us content they think we'll like to watch. And if you start watching a certain kind of content, just out of interest or curiosity, it can start feeding you so much more of the same that you just drift in that direction because of that original interest. And as a result, you now see, in every Western country, a significant divergence in worldview between girls and boys, based on exactly this: boys get pushed content that's suitable for boys, or seemingly [13:33] suitable for boys, and girls get girls' content — and we end up in a situation where it's no longer possible to have a real dialogue between the genders, because their worldviews are seen as so far apart that even heterosexual pairing starts to feel unrealistic. This has already played out concretely in South Korea, where the gap is so large that having a heterosexual relationship is no longer even the goal for a lot of young people. Yeah, and this divergence in worldview has happened through an algorithmic, interest-based internet. Maybe Mikko could give us a bit of insight into what that term actually means. Yeah, so I actually got into this algorithmic-influence work after I'd spent time in Silicon Valley, right during the explosion of the early phase of social media, and I was lucky enough to be around for that. Wait, was that photo of you real? Yeah — I actually thought it was a deepfake, because you didn't give any context for it. Yeah, it wasn't a deepfake — I really did hang around with Mark Zuckerberg and others in Silicon Valley. Let's put that photo into the video version of this episode. [14:46] Listening to this — yeah, well, a lot of people who knew I'd been out there said, 'yeah, you really were hanging around with them.' Not that many people suspected it was an AI image, because people already knew I'd been in those circles. I thought people assumed it was, like, Mark getting to hang out with Mikko, but yeah — let's just say these kinds of famous entrepreneurs are a lot more approachable before they're as rich and famous as they are now. For example, I went to dinner with Drew Houston, the founder and CEO of Dropbox, and other well-known entrepreneurs — hung out with Mark Pincus, the founder of Zynga, and others. These well-known entrepreneurs — I'll say it again — were all a bit less famous and a lot more approachable back then than they are today. But the conversations I got to have with these industry movers and shakers, the people who actually built these big platforms, let me see the change that was happening as it happened, because I was right in the middle of it myself, when social apps and the like button were introduced — added to Facebook — and that's when a wave started where all content on the internet became algorithmically curated. Meaning [16:07] before that, you had, say, a Myspace page somewhere, and you'd go and look at that specific page. It was practically like everyone had their own website, and you'd go check now and then whether someone had updated something on it. Then the algorithmic feed came along, and content was selected for you based on what might interest you, with the like button working as the curation mechanism for that content. And this wasn't the only trend happening — similar things were happening across every area of digital content. We went from buying a one-dollar song or a ten-dollar album on iTunes to a Spotify-style 'all-you-can-eat' model. we moved from video rental to Netflix, we moved from buying an Angry Birds-type game to Supercell's model — to that free-to-play world designed to keep you addicted to playing for as long as possible. Some might point out that someone who played through Baldur's Gate 3 for a one-time fee wasn't affected the same way — it's the same thing, right? Sorry, but to continue: I'd say that Angry Birds world, where you just bought a game outright, was so much healthier, [17:18] for young people, because that gaming experience always has a beginning and an end — the goal in practice isn't to keep you hooked forever. And all these trends happened around that same time, in a fast cycle after 2010. It was around 2009 that the like button arrived and things started shifting in this direction. Social games first appeared on top of Facebook, then moved to mobile, and once they were on mobile, that spread to young people — so around 2012–13 this smartphone penetration among young people started growing explosively. And you see these massive shifts, like the gaming industry moving from buy-to-own to free-to-play within a single year — 2011. At the start of that year, free-to-play made up 30 percent of games; by the end of the year, it was 70 percent. Today it's 85% — meaning 85% of all games out there are basically free-to-play, addictive games. I remember... [18:19] from my own experience, when Facebook first came out and we logged in — as I remember it was '08, or maybe '07 — and, well, back then it felt much more like a... what's the word for 'supplement' — like an add-on. It was a way to live your high school reality a bit better, but it was still the same old high school reality we had where you could find out, say, what the homework was for the next day — if we ever even talked about that — who was single, who wasn't, where things were happening in the real world. It didn't suck you into some new reality; instead, people went there to get more information about the actual reality. A lightly augmented reality, yes. Yeah, yeah, yeah — and this development, once it started back then, it kept moving forward over the years, so that after that first wave — after the Facebook like button had arrived — came follower-based social media, a shift away from friend-based social media, which back then was about creating a two-way connection where both people see each other's content. We moved into following influencers, and that's when the influencer market was born — Instagram arrived, Twitter arrived, plenty of other follower-based platforms came along, YouTube stars [19:41] the podcast — so basically you can still follow that too. Quick side note here: Isak and I would still really appreciate it if you subscribed to both Futucast and Neuvottelija — it warms our hearts, and the algorithm a bit too. Exactly. Yes, on YouTube, follower counts still matter a fair bit — a big deal, actually — so it's genuinely worth subscribing, it makes a real difference for us. On TikTok, apparently, follower counts no longer have much impact on a video's reach at all — it's moved purely into algorithmic social media. So basically, follower-based social media changed the dynamic to be less social, because you were no longer following your friends — so it stopped being just a place to find friends, and became a place to seek out content from entertaining, interesting people — celebrities and others producing entertainment for you at a steady pace. And then the next wave after follower-based social media was algorithmic social media, the TikTok world. And in algorithmic social media, even that got stripped away — it was basically declared that it doesn't matter who you follow, we'll show you [20:52] the most addictive videos possible, out of all the content available on the entire platform, in vertical video format, at such a pace that every 15 seconds you get a new video, in an endless feed. It'll never end — you can watch it as long as you want, you could spend your entire life on it and it still wouldn't run out — that endless chain of videos. And TikTok started rising rapidly, and eventually TikTok's rise forced all the other social media platforms to jump on the same train, because TikTok was clearly beating them on the time-spent metric — and time spent translates directly into money through ad revenue. So Instagram joined the race by changing their content to be more algorithmic. And this new Threads platform from Meta is purely based on a 'for you' algorithm — there's technically a following feed option, but I doubt many people actually use it. And YouTube is now roughly 80% driven by that algorithmic recommendation mechanism, so following still has a small impact. [22:12] And the algorithm naturally recommends channels to you more if you follow them. But X, too, shifted purely to a 'for you' algorithm after Elon bought it, and it has actually made the feed a bit more addictive — even though it's absolutely full of filth. The thing is, I don't really know why, but you get hooked on some pretty strange stuff, like fights — and I get something like twenty thousand impressions just from mentioning Finland's high taxes. We compared notes on our own For You pages — I don't know if it's Elon's algorithm being that personally tailored to your preferences, but it's a bit like getting hooked on some B-movie where unexpected twists keep happening Yeah, but how much — I mean TikTok was originally Musical.ly, and it started out with dance videos and this use of soundtracks — how much do you think that's... [23:12] music, and the vertical, short format itself, that drive it? Are those the three most important sources of addictiveness for that format, in a way? Well, the best thing about the short-video format was that it let the algorithm learn a massive amount about your own behavior very quickly, because when videos are that short, you can get through hundreds of them in just a few hours — and based on that, you can build a really good predictive model of your behavior. As a result, this model has taken over, and of course, once you're in this kind of fast-paced cycle, people's brains start adapting to that pace, so we end up with a kind of goldfish attention span — our patience decreases, our ability to focus weakens. But our focus is still good enough, though, to stay on those kinds of platforms — so your focus basically atrophies down to just that level. Yeah, but the point is you have to be constantly fed new things like this to stay hooked, because if you get something too long or boring, you just close it and do something else. About the music — I actually sometimes watch the Instagram feed with the sound off, but, in a way, it probably mattered a lot at first — those music dance challenges — and that challenge aspect has been part of it, and [24:37] in a way, some unifying genre, whether that's music or something else — so it's probably still at the core; that is the world it started from, after all. But I'd say, yeah, TikTok is still used a lot for music distribution — TikTok actually makes deals with record labels. They've built a network of influencers where the influencers agree to promote whatever TikTok asks, in exchange for getting an algorithmic boost for their own videos. And since they've got that influencer network built in behind it, they can basically push any song to number one on the charts, purely by feeding people TikTok videos that feature that song. We could probably go on about that forever — let's move over to the political side. So, according to one theory, this is essentially a culture war, the East trying to destroy the West with a psyop so this is part of a campaign to push as much destructive, self-destructive content as possible, and in that way we get ruined. Well, it's a fairly easy conclusion to draw, because TikTok's content is actually banned in China, and yet TikTok's content is curated in China — a pretty strange equation, that Chinese censors are going through and editing that content, while it's not shown to their own people at all, [25:59] and then a local version has been made whose content is clearly a lot healthier than what's shown in the West. It's pretty hard to argue there's no intent behind that, and this is exactly what makes it difficult to regulate, because when Trump first tried to ban TikTok in the US, in 2020, a judge from Pennsylvania rejected those two orders — I don't know the Finnish term for them — and Montana, as one state, decided that if the federal government won't deal with it, if the president won't deal with this, then they'd handle it themselves and ban it on their own. They also pointed to the fact that TikTok encourages young people to do all sorts of crazy challenges with real-life consequences — things like the 'let's go trip...' challenge, where some random person on the street might hit someone on the head and cause real harm, and all sorts of other things. The record apparently mentioned something about smearing feces on children, or other crazy stuff like that. But anyway — one argument from the court, there were three points, but one was specifically that it can't just be that these are examples of expression you don't like, so you decide to call them harmful — but [27:16] they're nevertheless examples of expression that's constitutionally protected in the US. You can't cherry-pick public discourse by saying 'we like this' and 'we don't like that' — meaning, without other grounds, simply not liking something isn't a sufficient legal criterion, even where influence operations are involved. The influence angle is then a separate, national-security-related argument the federal government can make if it wants to pass a law banning TikTok — a separate discussion, but one that has indeed come up, under Biden but this is tricky precisely because for us, this expression is essentially free. But there's also this other side — there's been a lot of debate in the States about whether algorithmic feeds are, in practice, editorial curation decisions made by these platforms, because after all, traditional media is regulated precisely because it chooses what news to show. So why should social media platforms get off scot-free if, in practice, they are algorithmically deciding what you see — Title 49, Section 230 of the Communications Decency Act, from '97 I think, is the section that defines that a third-party platform like this can't be treated as a content publisher, only as a content intermediary. And this is exactly the law that's now been changed in Europe — through GDPR or the DSA, I think — a change has come here, so you, or the Commission, can now challenge, for example, [28:39] TikTok — like they're doing now — over whether, under GDPR, TikTok has sent data to China that it shouldn't have. I think there's a report coming out of Ireland this summer on that, they'll publish their findings on whether TikTok has misrepresented this. But now we — meaning the EU — can take these platforms to court if we think they're doing something illegal. Yeah, but that algorithm point is interesting — I was listening to... sorry, on illegal expression — so Merja Ylä-Anttila, the CEO of Yle — Finland's national public broadcaster — basically got interviewed by a sympathetic Yle journalist, and there was this funny quote where she said, 'we tried this,' since Yle has also started collecting user data by requiring logins on at least some of its platforms. She said, 'we tried it — Netflix-style, a free algorithm — and it started serving up way too much entertainment, so now we have this better algorithm that gives Finns education and culture instead.' I got a bit of a feeling of, well, should that even have been published — it's pretty rare to hear that kind of thing from Yle. But I'd genuinely like to know how your public-education mission actually works in practice — is it politically steered in some way? Because this always happens: someone gets to define how the public is educated, or corrupted, and you can respond to that thought. But then the second thing is that we adapt ourselves to the algorithm too. We talked about this [30:06] with Mikko in previous episodes — that even I, in this very episode, am partly... I'm not exactly censoring myself, but I am steering the angle of this discussion in an algorithm-friendly direction. So, two thoughts, or... someone else decides on your behalf what gets shown, and then you, as a content producer, decide to adapt to that. In a Venn diagram, these probably aren't two separate circles, because they likely adapt to each other in some way. You probably do have some interest in building an audience, even though in our world we talk about this term 'audience capture.' It's maybe related to this in some way, except there the external party isn't a platform, but the audience itself, giving you that validation, or financial compensation, or whatever else you want from there — your clicks and volume. Right, so that's when we get into the real grind: if you want clicks and volume, fame and exposure, then you start playing by the algorithm's rules. And that's a good point — we tend to think it's the users on these platforms who get addicted to the algorithm's content, but that same algorithm actually gets the creators hooked too. In practice, what happens is that to stay in the algorithm's good graces — to keep your content visible on TikTok, for example — you have to constantly pump out new content that hits the algorithm just right. If [31:29] you leave a gap, your ranking and visibility in that whole system immediately drop. And that's led to a situation where there are millions of content creators worldwide with mental health problems, because they're caught in this content-creation hook they can't escape. That's also one of those problems that doesn't get talked about as much, because people assume the real victims are the consumers, and not so much the creators — but yes, indeed, very negative things also happen to the creators as a result of this algorithm. Now, if we take Isak's Venn diagrams and try to combine them — that's roughly the solution being pursued in the US: this law says the algorithm should be taken away from Chinese ownership and handed over to purely American ownership, where it could then potentially be determined what counts as an approved algorithm. And then, say, from Jonathan Haidt's antifragilit"}, {"slug": "545-yel-hirvio-kuntoon-hanen-traskback-neuvottelija-333", "title": "Fixing the YEL Pension 'Monster' | Liisa Hanén, Jocka Träskbäck", "titleOriginal": "YEL-hirviö kuntoon | Hanen Träskbäck | #neuvottelija 333", "guest": "Hanen, Träskbäck", "guestsCanonical": ["Liisa Hanén", "Jocka Träskbäck"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/liisa-hanen/", "https://www.neuvottelija.com/podcast/guests/jocka-traskback/"], "episodeNumber": "333", "publishedAt": "2025-05-29", "duration": "55:03", "format": "full", "topics": ["ownership_capital_tax", "finnish_economy_policy"], "description": "Guests Liisa Hanén, executive director of Mikro- ja yksinyrittäjät ry (the Finnish micro and solo entrepreneurs' association), and Jocka Träskbäck, deputy MP, are among Finland's most prominent critics of the YEL pension scheme for the self-employed and advocates for its reform. The conversation covers topics including merging YEL with the TyEL employee pension scheme and introducing a partially funded pension.", "page": "https://www.neuvottelija.com/podcast/episodes/545-yel-hirvio-kuntoon-hanen-traskback-neuvottelija-333/", "text": "[00:00] Alright, welcome to the Negotiation Club. I have perhaps Finland's biggest YEL reformers here as guests. Liisa Hanén for the first time. Hi. Hello. Hello. You represent these micro-entrepreneurs. Tell me your association's name again. Micro and Solo Entrepreneurs Ry. Familiarly Myry. Has it already reached the level of Suomen Yrittäjät and well, Etla and EK in the influencer field? It probably depends on how it's measured, but well, let's say a small step closer. Yeah. And then Jocka Träskbäck for the third time, hi. Thanks for the invitation once again. Yeah, and I have to say that you actually started my short video period. So, so let's put our short video here. This is very popular. The current YEL is like throwing banknotes from a Swedish ferry into the sea, and that's true with the difference that from a ferry, throwing banknotes into the sea is much more fun than this YEL. Had you watched that video when some construction crew throws those... Oh, furniture. It's intense. It's intense. Maybe they were fed up with YEL then. [01:10] But the current system is certainly such that we can't continue with this. Uh, here banknotes and furniture are being thrown from a Swedish ferry into the sea. Oh right, this YEL classic. Yeah, yeah. It got a lot of classic status. Yeah, yeah. So here is this small, maybe even micro-entrepreneur construction crew, having a party and throwing that furniture from that Swedish ferry. So Jocka, you've had this piece of wisdom for a long time about this YEL reform or the YEL system. Yeah, I thought about it back then, years ago already, thinking why on earth pay YEL when you don't get anything back, so I then stated in some discussion that it's a bit like throwing banknotes from a Swedish ferry into the sea. Except that throwing banknotes from a ferry into the sea is much more fun than paying YEL. The benefit is the same. Yeah. And Liisa, well, we have sparred a bit. I've actually received this—I'm not a member, but I got a little benefit for free. So we sparred about me being this multi-location guy. My TyEL is paid by Trans Corporate Finance Oy. So I'm a perfectly respectable salaried employee. Then I thought that this business, meaning this publishing activity of Holdari's DCM Capital on the Negotiator channel, [02:21] is starting to be alarmingly successful, so I gave you a ring and asked for some advice on how we can get a reasonable YEL contribution for this, so maybe you could tell me, is this a common problem and sort of how can we keep the YEL contribution in check? It's a very common problem and of course I help all entrepreneurs in need, so it doesn't necessarily require our membership at all. I feel that this is in a way kind of like a social obligation for me, since I've pretty much started this discussion about this YEL reform. Of course, I want to emphasize right away that the purpose isn't to aim to pay the lowest possible YEL. I mean, that's not like the idea of the system, and in a way, that's why we're partly in trouble, but let's say that since this current law and its interpretation is so shockingly unfair and unreasonable, then in a way from that perspective, it's actually almost mandatory to advise entrepreneurs on how they won't get these incredibly multiplied, I mean totally absurd payments, so from that perspective, I have indeed helped nearly 5,000 entrepreneurs according to my own calculations. Yeah. But anyway, let's give a few concrete ones here, we'll get back to whether this is even necessary soon, because the government's mid-term review made a few changes, but indeed I feel that since I have a real [03:48] salary anyway, so in a way this is like a bit of unnecessary extra, and in a way should I really have to pay like to the max for every single bit of extra work? Somehow it's just a very alien alien thought to me, since this really is just a side hustle for me, I just felt that the income threshold was only barely exceeded, but maybe that minimum would be the appropriate level. In these matters, one tip is that you can ask all the pension insurers for it and then choose. Sure you can ask, but in itself, competitive bidding isn't really possible, because YEL insurance is a statutory pension insurance contribution, so bidding or changing pension companies doesn't help much. You basically get the same from everyone, but of course there are quite a few differences in customer service. You definitely don't get the same from everyone, I can assure you of that. They don't coordinate—the good part. They aren't a cartel. They read the same law, they think they're making the same interpretations, but they don't end up with the same result. So this [04:53] current system is like a joke in many ways, because it uses this—is it camel breeding, I think, that's supposed to be the most efficient? Now, I didn't stoop to calling this studio work camel breeding, however, but these median and business limits are quite open to interpretation. They are very interpretive, and I would say that's where the greatest injustice actually comes from, that if we just went by actual earned income instead of these weird estimates where they look at revenue, profession, work effort, and working hours, then that's exactly where the problems come from; it's not at all unambiguous, and some know how to use the system, others don't, some know how to justify it, others don't, so it's not it's not equitable in any way. Yeah. I was then still a starting entrepreneur. I have one YEL year in my history, so I was happy to notice that, well, there are still three starting entrepreneur years left. So I probably ended up at a local minimum in my payment, which was actually really important to me, because it was a bit open to interpretation whether I'd get it at all, so it just felt kind of silly if it would have then somehow turned into something completely stupid, that payment. Yes, based on the messages I've probably had hundreds of calls and discussions on the subject, so yes, a couple of pension insurers do stand out in those incorrect [06:19] decisions. So when they've had to hire a large group of officials, resulting in an incredibly large amount of practical power to exercise public authority, the fact that for example these sole traders, like a massage therapist, have their turnover defined as earned income and then based on that pension contributions are slapped on, it really concentrates on a few specific pension companies. So there is a difference in that sense, it's probably just luck then, whether you get a good or a bad pension insurer. But this actually brings us to the core of the whole YEL question at the moment, the fact that currently these pension contributions for entrepreneurs aren't based on any real figure, they are just slapped from a lottery machine and then compared a bit to the private sector median and then some figure comes out of the lottery machine which is then enforceable, if you can't negotiate it to be more sensible with the pension company. And this is the biggest problem in this whole YEL reform right now. [07:22] Yeah. Let's take that now, we are all quite, or at least Liisa and I are probably completely neutral, but Jokka, since you are a member of the Coalition Party, I must make a disclosure here, or you did succeed in those regional elections, so yeah, well they went really well, both the regional and municipal elections in Tampere went well, let's just say I didn't expect such a good result, but now I'll get to influence things from positions where surely my own decisions and actions and views will have some impact in the future. Yeah. You'll get to talk with 'Party-Ilmari' possibly about budget matters. Yeah, Ilmari seems to be the next Mayor of Tampere, so we'll be cooperating. Of course, in Tampere there has always been good cooperation between the SDP and the Coalition Party, unlike perhaps elsewhere in Finland, so cooperation will surely continue. Should we, Liisa, grill Jokka a little bit though, as a Coalition Party member about this mid-term decision? I actually got a [08:22] call, that you are now so much on the party's side taking this responsibility, so did this mid-term review, in your opinion, solve this Y-problem? No. Well, it didn't solve it, but it was certainly a very positive like sign that they want to reform it. At least I received it with great joy, and the Micro and Sole Entrepreneurs association did celebrate the fact that it was there, but it wasn't a solution. It was just like a strong message that if it had already been said before that the system needs to be reformed, now there's more of a mandate. Now it's really going to be reformed. So it was a good thing anyway. But this was probably part of how many things were, were '26, like moderate marginal tax cuts, and some are then '27, like this corporate tax cut to 18%, but this was still, in my opinion, still a bit in that 'to be done later' category, so what was actually decided there concretely? Well, as Liisa just well noted, this was a good indication that they want to do something [09:26] and the measures recorded there are indeed in the right direction, but the biggest problem with this mid-term review announcement was the schedule. It's not possible for us to wait until the year '29, when we have companies there that have already received these mindless, baseless decisions. They have to fight for every euro now, and I think it was, was it 16,000 companies that went under in the last quarter of last year or were closed down? So it's an insane figure, and this indicates that this YEL is a big part of why our companies are disappearing, and the fact that in '26, based on the investigator's results, we'll start drafting legislation to take effect in '29 – this schedule is just impossible. At that point, whatever the corrective measures are, I hope they're sensible, and I do know that there are some good things coming to the table, so when they are reviewed next year, the decision must be made that they take effect either during '26 or at the start of '27 at the latest. If the schedule announced in the review, stating not until '29, when these current transitions end, then it's game over for a large portion of our companies. Somehow in Parliament they don't realize how difficult a situation Finnish small entrepreneurship [10:49] is in right now, and those solutions are needed quite quickly. Then again, what did come out of this was the, well, 4,000 euro increase cap until the year '29. That was—that was a very positive signal indeed that came out. So, in a way, this YEL crisis won't get worse from here, and there won't be many new victims, but the problem is that a ridiculous number of those erroneous decisions have already been made and we should try to prevent the consequences from worsening, if one can put it that way. Of course, I think it's like desirable. I hope with all my heart that the law could be reformed sooner, but that now we're actually getting a good segue into how complex an issue this is. So in a way, no one hopes that it would be reformed only in '29, but in a way, when we think about what YEL is, this discussion usually remains way too superficial, in that we think there's some quick fix, that everyone just starts investing their money however they like, but there's no quick solution. And in a way, I think that's the cold hard truth, that it might really take that long. [12:03] YEL determines entrepreneurs' pension social security as it stands. And if we now consider how many different laws social security has to be taken into account in, it's not just a small technical entry somewhere in a corner of the law to fix YEL, but now this YEL earned income and its lousy definition at the moment, well, it determines the level of so many social security benefits, unemployment, rehabilitation support, sickness allowance, parental allowance. So it's not just a walk in the park, as unfortunate as it is that the reform takes time, I don't believe it's realistic to truly think about reforming it much faster than that. So in a way, I was quite grateful to see that there's an absolute deadline in 2029 after all, because otherwise it could have just dragged on and on. Maybe while we're on these good highlights, you used the word investigator, referring to Jukka Rantala I suppose, but actually it's been a bit unclear to me, this preparation responsibility was pushed a bit to this preparatory working group, but Liisa, aren't you in that group too? That's correct. Yes. So, so now you have some work to do then, or how does this thing go? Should I come there too to be heard? You can always try, I guess. Yeah. I don't think there are any restrictions set, so the investigator can probably hear whoever [13:29] they want, and you can probably suggest yourself. So investigator Jukka Rantala really has quite a big responsibility here, but he also has massive experience. So I'd believe that he's considered a very suitable man for this task. And they'll certainly try to give him peace to work now, so the task of the working group around him is perhaps rather to bring different perspectives and then maybe to balance the work that's being done there. But it really is quite a big job for just one person, so we're turning our gaze to the investigator. Yes. But about this working group around him. Is it people from TELA or is it the corporatocracy or how is it formed? Well, as for I was very disappointed, for example, with this Risto Murto working group. After all, not much really came out of there, especially since almost nothing was pushed through. So, in a way, or rather, the group around here is what matters. So, well, our working groups are usually very long-winded, and something I've also criticized quite a lot regarding other laws and government proposals is that working groups tend to be these tripartite ones, meaning labor market organizations and the government are there, and this is quite old-fashioned thinking, because it leaves so many people outside of the [14:53] tripartite system, but now this working group is perhaps tripartite plus micro and sole traders, which of course I consider positive, and in a way, that it then represents a more balanced perspective, but that's how the working group is. So this probably isn't very fast fast action, and in fact, the first thing that comes to mind regarding the schedule is that we started about two years behind to fix this YEL. This whole circus should have been started at the very start of the government term, because this problem was already known over a year before the government changed. So in that sense, I do have to give some criticism regarding the schedule. Of course, it surely takes time, but now when we think about those entrepreneurs, who have already received such an erroneous pension contribution decision from there, which is directly enforceable, this pension contribution, I would hope that now, in addition to these other quite good outcomes from the mid-term review, there would be something like, for example, fixing this appeal process, because those who have clearly been treated unfairly, who have received, for instance, contributions based on turnover, they could somehow have their case re-evaluated by more competent people, for example, because there are so many of these cases, and they have specifically forced businesses to close, and even though legislative work always takes time, especially such a big issue. There [16:14] is also this funding question as well, which is on top of these social security issues and others. So this YEL is like a massive entity there. Liisa is completely right, but the thing is, how we can save the field of entrepreneurs, those thousands of entrepreneurs who already have that absurd fee, which isn't based on anything, so for this, some kind of well, an appeal route, a quick fix, something to get those matters back on track, so we can wait those 29 years, if it actually takes that long. But this situation is now so acute that it's just not being understood enough at the moment, in my opinion. Yes. Well, there come to mind now a few things we've all discussed, so, uh, I mean, uh, this government, I think, quite sensibly reduced the, uh, well, tax wedge from that outrageously high 60% level, so closer to 50%. Uh, but well, included in that is the pension contribution wedge, so in a way people don't really understand how, like, massive this roughly 25% wedge is, even in international comparison, and then it's also because it goes through the tripartite, in a way, funding mangle, and from there, via a political decision, eventually comes something based on some principle, so it's quite an opaque system. I've personally, for example, spent 13 years of my career in London, and there [17:40] in a sense, a much smaller contribution has, personally and as an employer contribution, gone into, like, my own investment fund that I can then draw income from, so it's much more transparent and credible and a nicer system. So that's why, surprisingly, I kind of like this system, even though I have YEL and from Finland too. And I might appreciate it as a sort of, like, a little bit of a tail end, if I were to live to be 95, for instance, it's nice that something comes from there. But like, I don't know if people think like this. No one in Finland has probably even heard that they could invest it or that someone else does it differently, and whether this 25% is like high, well, this kind of discussion isn't being held in Finland at all, in my opinion. Well, I think right now you're at the very heart of the matter, that in a way we, we have this problem with YEL and that it should be reformed, and I really agree with Jokka here, that at the very least, this current situation should be frozen until, as is understandable, this drags on, I mean it can't be some quick fix, but it has to be considered carefully, and this is like, this is one thing. But right now, I think Finns in general don't understand almost anything about the pension system. And I think this is really worrying, and it's important to have discussion and opinions, but but you should like understand the basic principles of how our pension system even works. So very, very few—even now when you said 25%, I [19:03] bet that even, even among the listeners of this podcast, who are perhaps more informed than average and more familiar with things, many are like, 'wait, what 25%? What?' or no light bulb goes off. So these need to be explained. So we really do have a statutory pension contribution of nearly 25%. It's 24.89, if I remember correctly. And what does this mean? Wage earners don't understand a thing, because their pay slips show that about 7% goes to that statutory pension contribution, and the employer pays 18, but a salaried employee never even realizes. But in total, for this individual, a 25% statutory pension contribution is paid. An entrepreneur is solely responsible for this 25%. There's no one to share this with. There's no employer. The entrepreneur alone pays the 25% pension contribution, which is mandatory. Well, then it naturally becomes critically important that what it's paid from. If you're forced to pay 25%, then what it's paid from is like a matter of life and death. And right now specifically this current law and its interpretation guide, it's not the pension companies' interpretation, but it's the current law. And, and its interpretation guides, which are [20:25] made by the Finnish Centre for Pensions, so in those it really is the limit that based on turnover, so if you have to pay 25% based on your turnover in pension contributions, then everyone can understand why we have these bankruptcy waves and why small businesses fail. So now we should like discuss very clearly what this statutory mandatory pension insurance contribution is paid from. And I represent the viewpoint, and micro- and sole traders represent the viewpoint, that it should also be paid based on actual earned income. Like, the basic principle of the pension system is that pension is paid from earned income, so that's how it should be for entrepreneurs too. Even so, we're still in that mess, that the 25% is an absolutely massive fee, even if it were based on actual income, but Europe in general in this situation. Exactly, exactly. Yeah. And this whole thing will be solved once they are at some point based on actual income for YEL. It's just senseless that currently we take for example the previous case, the massage therapist, so the fact that the therapist does maybe billing, meaning turnover, of 4 grand a month, so their real actual income might be like €1600 a month, once everything is deducted rent, chair rent, expenses, uh, cleaning, all of these, so they have to [21:46] pay based on 4 grand right now. 25 percent in YEL, even if the actual income is 1600. Mm. So this is completely brainless, this current model. And this came at the end of the previous government in late 2022 it was probably section 112a that was added to the law, where these are then reviewed every three years and so on, so in practice with this model we will proceed until the year '29, and this massage entrepreneur example has to pay a quarter of their turnover as a YEL contribution, anyone who understands finances realizes that it's just not possible, then the company goes under and maybe to the unemployment line and becomes a burden on society after that. Yeah, by the way, it's really interesting, one architect, Sanna Marin's, her MA-PI Oy's, well YEL contribution policy, I'll at least be watching with interest to see if Sanna Marin's YEL contribution is paid based on a million in turnover probably not, but well yeah, you can find people to blame here in the previous government, in a way we should have fought then, like [22:50] you said, for what makes sense, and then the current government should have immediately started at the beginning of their term. Good that something is being done now, but the fact that this is potentially delayed until '29 is just too much. From this so the payment for the work, based on the actual paid salary the YEL payment would be a natural thing, but a new can of worms has opened here, that we'd include capital income in it, and this is potentially a new monster topic. So there the leftist forces, surprisingly, look at it as if all dividends are based on earned income here. So that's why I might want this main income element here, so in a way, one patch would be that it's based on just the salary and then there'd maybe be like some voluntary personal fund element for that capital income that would take it toward this kind of Anglo-Saxon funding principle, that if that main income is also brought there, at the very least it should then be made into its own fund income block and not just taken into this system just to pay for others' expenses. That would at least be one idea, but this whole thing is easily ruined like this, if we calculate in a leftist way this total income, where absolutely everything like imaginary, realized, and dividends and earned income are added up, so [24:14] in practice, such a possibility shouldn't even exist, that dividend income and my capital in— don't underestimate the left's ability. This, this is actually, knock on wood. Well, there's... let's say that it hardly can go like that even in some leftist dreams, maybe not quite like that. I understand your need to maybe exaggerate this, but in a way, the question is now basically so that the listeners can keep up here, meaning what is defined as earned income is now the question. So if we talk about, for example, what I've been trying to explain, that if we talk about income taxable income, then this is like a clear distinction. Why must we talk about income taxable income and not just salary is of course because not all entrepreneurs pay themselves a salary. So here we mainly mean sole traders or such freelancers or others who don't pay a salary, they're not even in the income register. So in a way, how to evaluate this as fairly as possible for everyone, it's that income taxable income is like clear take-home pay. This is like a universally, even globally accepted idea, but of course it then opens the can of worms about what exactly is income taxable income, because a small part of capital income is taxed [25:40] as earned income. And now this is of course possible in some model. So it can probably be proposed and maybe the investigator is making these calculations, that if that small part of capital income would also be taxed as earned income, but it's still just a part and now, like, so the discussion wouldn't go totally off the rails, that now it's moving toward all capital income and dividends and such. But this is exactly the discussion we need, we would have needed this years ago, like where the pension contribution should actually be calculated from, but wages, earned income, taxable income is clear and logical. Or then, well, a voluntarily chosen funded pension contribution. I mean, I'm extremely happy with that British funded pension. There's this thing where employers compete in a way that, well, they have a certain minimum they pay, kind of like the employee pays a tax-deductible amount besides this payment, but then you can increase it, and I had nice employers who competed so that there was a slightly larger employer contribution there, and this system was both, in a way, in an employee company and an entrepreneur company, so I personally wish that the funded pension model would be brought alongside it at least, like in Sweden, where 10% of all occupational pension contributions [27:04] are funded into personal pensions. I would hope that this discussion would also be had around this big pension reform debate, and I would have hoped that in these 2025 tripartite pension reforms, this would have even been brought to the table. I actually sent messages there; nobody was interested. From there, the only solemn decision was that, uh, the equity weight was increased in practice, so they really dodged all these kinds of things in this, sort of, official tripartite pension reform. Well, that's where it should have been brought up, because our challenge now is of course that we can't just give entrepreneurs some freedom. It should then be given to everyone, so that's where it stands, that we basically need to first look at the labor market side and a Swedish model like that. There's been much talk about how, if people could decide even a small part, that they would be given the option to invest even a small part themselves, or it could be limited in some way, like choosing from different investment baskets, like they have in Sweden, but even there, it's been noticed that, in the end, people's own enthusiasm to freely choose a more investable pension fund is quite low. And then another interesting observation is [28:26] exactly that, in a way, the investment basket created by the state has still been the best of them, so it's a bit, on the other hand, I do support the idea that everyone should get to invest even a small part themselves or at least have some freedom to choose where they can to invest, because it would increase our investment expertise and understanding, which is extremely weak among Finns. In a way, from this kind of societal perspective, I think it would make sense for people to have more a bit like ownership and more understanding of it, because if something now for example happened and we were able to, by some miracle overnight, free up completely, let's say, that suddenly starting tomorrow everyone could invest exactly how they want. everything would be freely investable, then nobody would know how. I mean, it would be a total catastrophe. People would lose all pension money and given how many of those online scammers we have even now and others, everyone would be scammed. Everyone would be taken for a ride and then like funds fail and that money would be invested randomly. It doesn't work. So in a way we can be terribly critical of the current system, but but it's watertight. It's like it's expensive, but watertight. It's safe, so people don't— but people don't develop their own kind of understanding of how they could even invest or what the options [29:49] could be. Yeah, those are some good points, but I talked with my college friend Katherine Rili, who in the US gives pension fund advice and in a way participates in all kinds of working groups there, so she said that Americans really just understand incredibly well about investing and in a way, when you have some portfolio, how you kind of make a sort of glide path where you start generating income from it. She said that even the British, who basically have the same system as the US and 401k, they have a much more passive system in a way. I mean, in a way people didn't really for some reason learn to be like active investors. But I'll bring myself up here as an example, so I've also done those like I originally invested everything myself, uh, I made quite good returns and surely beat the Finnish pension system even back then. So even though Liisa is right that this, like, produces a guaranteed kind of 4 percent return, it's really not a good return. So, like, even during my messing around phase, I made much better returns than the Finnish system. Then I consolidated it and in a way allocated it so it makes even better results. It is like completely possible, at least reasonably— okay, I'm an investment banker and a finance professional, so it doesn't quite go like that, that everyone would just like put their money into some Ponzi schemes or housing scams, and of course people need to be protected from that, but the Finnish pension system doesn't, in my opinion, produce very good returns. There [31:17] Liisa had a strong point about how this people's capitalism would be really important to teach to "}, {"slug": "596-anssi-uimonen-rahoitus-on-kriittista-alkuvaiheessa", "title": "Funding Is Critical in the Early Stage | Anssi Uimonen", "titleOriginal": "Anssi Uimonen rahoitus on kriittistä alkuvaiheessa", "guest": "Anssi Uimonen", "guestsCanonical": ["Anssi Uimonen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/anssi-uimonen/"], "episodeNumber": "db-596", "publishedAt": "2025-07-14", "duration": "00:41", "format": "short", "topics": ["investing_markets", "saas_software"], "description": "Anssi Uimonen: funding is critical in the early stage. A clip from \"Deep Tech Investing | Uimonen | #neuvottelija 343.\" Investing in deep tech in Finland took a step forward with the founding of Nordic Science Investments (NSI) by Anssi Uimonen and Alexandra Gylfe, among others. How does the investment model work, and what goals do NSI's portfolio companies have? Lifting Finland up by commercializing technology. The episode does not give investment recommendations.", "page": "https://www.neuvottelija.com/podcast/episodes/596-anssi-uimonen-rahoitus-on-kriittista-alkuvaiheessa/", "text": "[00:00] In the Nordics, there's often seemed to be a lack of risk appetite among VCs at that early stage — when the team isn't fully in place yet, the company doesn't yet own its IP, there's no revenue of any kind, things like that. Those are usually the things that don't interest a traditional VC investor; they'd rather come in once you're past that stage and everything's already in order — that's when they get interested in the target. That's sometimes been a bit of a challenge, because often at that really early stage you'd manage to raise a small round, and that round maybe wasn't enough to carry the company far enough to make it investable. But if you can get a VC involved at a very early stage, that helps bring a bit more credibility to finding the right CEO. Yeah. "}, {"slug": "643-bbc-mokasi-mamdani-tontti-virtanen-neuvottelija-361", "title": "BBC's Journalism Crisis and Mamdani's NYC Win | Jarkko Tontti, Matti H. Virtanen", "titleOriginal": "BBC mokasi Mamdani | Tontti Virtanen | #neuvottelija 361", "guest": "Tontti, Virtanen", "guestsCanonical": ["Jarkko Tontti", "Matti H. Virtanen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/jarkko-tontti/", "https://www.neuvottelija.com/podcast/guests/matti-h-virtanen/"], "episodeNumber": "361", "publishedAt": "2025-11-21", "duration": "49:02", "format": "full", "topics": ["free_speech_society", "geopolitics"], "description": "BBC fumbles Mamdani | Tontti, Virtanen | #neuvottelija 361. Two main themes with Matti H. Virtanen and Jarkko Tontti: the BBC's journalism crisis and the election of New York City's new socialist mayor, Mamdani. Michael Prescott's memo details serious quality problems at the BBC, including anecdote-driven journalism, activist influence, and selective editing. Political bubbles, theme-based news desks, and Stonewall-style structures have shaped the BBC's editorial line. Mamdani's win in New York, his left-wing platform, controversial statements, and his portrayal as a champion of minorities.", "page": "https://www.neuvottelija.com/podcast/episodes/643-bbc-mokasi-mamdani-tontti-virtanen-neuvottelija-361/", "text": "[00:00] Foucault was a real communist, whereas Jacques Derrida the theorist cared very little about anything political - and that, I think, isn't understood. The problem is his followers, those American activist universities. Derrida always said, 'I'm not interested in your activism, I'm a theorist.' Well, that's how we got started - so welcome to the Neuvottelija ('The Negotiator') channel. Jarkko Tontti started off talking about Derrida. So this could turn into a 'What's Wrong with Us'-style parody of philosophy. But Jarkko, let's turn this into a kind of media criticism and review of America - we've got two main topics. We've got this BBC scandal, the leak of the Prescott memo, and then we've got this New York democratic socialist, Mamdani. And here in the Neuvottelija studio, once again, we also have Matti Virtanen. Welcome. Thanks for having me. Yeah. So let's get started - let's start with the BBC topic. Matti, why don't you say a few words about this scandal. [01:04] Yeah, this has been simmering for about two weeks now, ever since the Prescott memo leaked to the public. Was it the Express or the Telegraph - some rival outlet's deep throat? The Telegraph. The Telegraph. I'm still a bit mixed up on British media names, but anyway, I've read it - read this 19-page memo. Its author is this Mr. Prescott, who is this... Michael Prescott, that's his first name - and he's an outside expert advising the BBC's editorial standards committee. There are two outside experts: this Prescott, and his senior colleague, Grossman. Both of them have long careers in media behind them. Prescott has been an editorial manager, or rather deputy editor, at The Times for ten years. Their job is to advise this editorial standards committee on how BBC journalism should develop, and to flag problems there. Now, both of them have, over the years - Prescott's been at it for maybe three years - pointed out all sorts of problems, and Grossman in particular had already written about these problems to the committee before, in a [02:31] complaint letter, which wasn't taken into account at all. And in this Prescott memo, there are several references to this Grossman memo, which hasn't been made fully public, at least not yet. But we have quite enough information here about what the problems are. And he actually divides this into four main sections. The first problem relates to the coverage of the US presidential election, at the BBC. The second problem had to do with promoting racial diversity ideology in BBC programming. The third had to do with conflating biological sex with so-called gender - social gender - and gender activism. And that got downright ridiculous at points. And then the last section was the Israel-Hamas war, where the BBC has consistently relied more on Hamas sources than on Israeli sources, and has heavily pushed this genocide narrative against the objective facts. [03:41] But let's not get into all the details. I don't want to rant on and on here, but I noticed a really interesting observation: that BBC journalism, more broadly, has sunk into this anecdote-driven storytelling, where they pick out some single case that isn't actually very well grounded statistically, and they turn it into a whole phenomenon - leaving the broader evidence and scientific data unaddressed, or if it is addressed, only cherry-picking the parts that support this anecdote-driven narrative. I apologize for using words like 'anecdote' and 'narrative,' but let's just say individual cases are given more weight than research findings and broad, objective statistical data. And that's outrageous, because most of these journalists are themselves academically educated. They ought to have some understanding of the principles of the scientific method, and also of handling statistical data. Well, that's a bit rich - as if you'd actually think that studying political science or gender studies gives you an understanding of statistical methods. Statistics 101 was still mandatory, at least back when I was at the social sciences faculty. [05:02] Yeah, there ought to be some understanding there. I believe that entirely - it's gone, it won't be there. But could we bring in here - I think agenda journalism is one thing, but let's call it goal-oriented journalism instead - actually, I think 'agenda' is too fancy a word for it, so let's say purposeful, goal-driven reporting. But what this leads to is that journalists and newsrooms no longer distinguish between press releases from interest groups, NGOs, and lobbying organizations and an actual scientific research report. They're treated as equivalent. Greenpeace says this, or some university, or Amnesty is invoked as if it were some human rights court - even though, and in Finland too it's cited constantly, as if it were some neutral organization of human rights experts. I'm actually a former Amnesty activist myself, and I resigned precisely because it's an NGO propping up red-green party politics, plus Syksy Räsänen is really heavy-handed about it - so, just, personally, these kinds of [06:04] figures. And that was, for me personally - I still remember, maybe it's changed since - a long time ago Amnesty really was about not doing politics, just human rights. And maybe with the Israel-Gaza coverage it's gone completely ridiculous. But is this also a kind of buddy journalism - the idea that an ally's press release counts as an equally valid source? Well, I don't know about that, but generally - I've always wondered - the people driving this so-called societal debate, whether in Finland or Britain, it's a pretty small crowd. And often they're college friends from the same social science faculties, who then end up in NGOs, media, politics, or as some kind of press officer somewhere. It's a really small circle - or take the political-science economists who end up as 'cardigan economists' - dear old cardigans - but let me get back to this Prescott business: there were clearly some straightforward abuses here, you know genuinely serious professional errors that really can't be disputed. But I still feel that the problem with journalism, both in Finland and in Britain, is more of a general bias. You can follow the Finnish journalists' code of ethics to the letter and still produce very skewed journalism - as you know as a professional journalist, it's always about choices. What do I write? What do I write, who do I interview, and what do [07:25] I stay silent about. And that's something I've long felt about the BBC even before this. What gets left unsaid and what gets reported - that's the fundamental thing that creates bias in journalism generally. If we talk about what's gotten the most attention in this whole debate, it's specifically this edit in the Panorama documentary, where Trump's speech - back in January '21, during the Capitol riot, when Trump was pushing his propaganda disputing the election result - and the Panorama production team, an outside production company the BBC bought this documentary from, which was a surprise to me - that the BBC doesn't actually make these itself anymore. Hasn't made these Panorama episodes in-house for years, even though it's been their flagship program for decades - it's actually outsourced now. Anyway, they'd cut two clips from that speech, leaving out 50 minutes in between, and spliced the two together as if it were one continuous sentence - which is, I'd say, not entirely unheard of as an editing practice, but doing it in a way that gives a completely false impression of what the speaker meant. Yeah. And I know politicians - Finnish ones too - I know someone, was it some Centre Party guy, Mauri Pekkarinen or [08:46] someone, who once said he'd only agree to live broadcasts anymore, because journalists distort his words through editing. Yeah, yeah. And Mauno Koivisto did the same thing back in his day, and I completely understand that irritation. And wasn't it also the case, since you read it thoroughly, that this Gaza documentary was also made by some outside production company, and it later came out that they'd interviewed some supposedly innocent child victim who turned out to be the son of a Hamas boss? Yeah, that was it - but it just reminded me that there's nothing new here. I noticed, ten years ago, back in 2015, when there was last a war in Gaza, the BBC already got caught doing exactly the same thing it got caught doing again now. For example, how the narrative gets constructed - like you said. They interview Palestinians, who are always portrayed as victims, and therefore innocent. And then how their words got translated and subtitled into English - they'd say things like how the Jews are to blame for this and that, and the BBC would translate that as 'Israelis' and 'the Israeli' 'army' - as if to paper over the deep antisemitism that's pretty much everywhere in the Middle East. So could these be the underlying vectors here - in these somewhat selectively, admittedly one-sidedly chosen topics of Prescott's, since other topics could also have been analyzed and criticized - is there something universal and overarching in them? So we've got Trump and the Republicans. Then we've got Israel and the poor Palestinians. Then we've got this [10:10] gender identity thing - essentially the elevation of 'woke' issues. And then there were some smaller sins too, but yeah, those were the main ones - and those smaller sins were specifically these anecdote-based ones, like when a newsroom gets a good tip. For example, here's one example Prescott describes in fairly great detail: the claim that drivers in certain poorer neighborhoods are charged higher car insurance premiums than in wealthier areas. Yeah. And that was based on statistics that were over five years old. A correct observation in itself, but it completely conflated correlation and causation. In other words, it was automatically claimed that this stems from racism - that more people of immigrant background live in these poorer areas, and that's why they're charged more, as if insurance companies were in some kind of conspiracy to deliberately charge these people higher premiums, which already sounds pretty unbelievable as a claim, since that would obviously be illegal discrimination. And then, once the data was unpacked a bit in this report, it turned out there were several confounding factors that explained the gap. It was due, among other things, to the fact that more accidents happen in these poorer areas. There's much more unlicensed driving there. There are far more risks in [11:36] traffic there, which raises the premium level somewhat. Not by a lot, but somewhat. A second example of exactly the same thing - everyone's surely heard of George Floyd, whose death sparked the Black Lives Matter movement. And that got hammered home everywhere in the world - the BBC, Yle (Finland's public broadcaster), and Helsingin Sanomat (Finland's largest newspaper, popularly 'Hesari') - all the usual suspects - as if this were now full proof that the US police racistly murder Black people, or kill using force. And a single case - exactly as you said - an anecdote: induction from the particular to the general. As philosophers know, that's not a valid form of inference - deduction can be. And then, when someone actually did proper criminological research using real statistical methods, it caused a huge stir in the US - I haven't seen anything about it in Finland. It turned out there is no such racist bias in policing, that more Black suspects would die once you account for all the relevant factors - such as the fact that Black Americans commit half of all homicides in the US, despite being only 14% of the population. So they simply have more contact with, say, the police. But still, when you do rigorous research using scientific methods, you can isolate these contributing factors. And the end result was that there was a small bias - a small skew - in how much minor force police use against Black people, but none at all [13:04] when it comes to lethal force. And my question is: I haven't found a single BBC news story about this. I haven't found this story in any Finnish media outlet at all. And it was actually a huge deal in the US too, because the researcher himself was Black, and his hypothesis - a proper researcher forms a hypothesis and tests it - his hypothesis was that there's a racist bias in police use of force in the US, and it turned out not to be true. But when the single case is George Floyd, the emotional gut punch is what sticks with the reader and the journalist. But I'd just say to that: this is collateral damage from freedom of expression - it is in line with journalistic guidelines to tell individual stories, to tell stories about something bad that happened to a person. But then one should always remember that sometimes the person is themselves partly responsible for what happens to them. And a believable story about a person always includes that. You know this well as an author: the protagonist can't be flawless - that's not interesting. It should always reveal what the person themselves may have messed up, and how, as a member of the audience, things might have gone for you yourself in that same situation. Have you yourself lived a blameless life? Have you ever had bad luck that you yourself had some hand in? That's exactly the point - it's about how the story gets told, and that the media tells stories in a way that turns these [14:25] unfortunate, unlucky people into some kind of saints. That, to me, is basically a crime. Yeah. We actually had a pretty good episode earlier with Matti - episode 11, I think - about this 'Tintin-style' journalist: the kind of narcissistic reporter who generalizes from the particular to the universal, observing the world and drawing general conclusions from their own personal observations. Have I ranted about this before? No, no, no - but back then, it was about finding just the right hero-journalist, and some of these events turned out to be fabricated, because they simply fit the narrative. But maybe this comes down to journalists' incentives - in a sense, if they're in that left-wing bubble full of 'cardigan economists' and Sami's beloved political-science friends and left-wing politicians and admiring glances, then of course it's given to you. But now, here's the thing - if you write something from the right-wing side of the fence, so to speak, you get cancelled, and those gigs and pieces dry up, and your column just stops appearing for no good reason, and Jari Andrutti doesn't seem to get to write his columns much anymore either. So, in a way, this kind of selectivity - your livelihood just goes away. And then, flipping it around, one could think: Jarkko, you had this 'long march of the left' theme going - well, from the right came [15:42] then this kind of lightning war - Trump slapped a billion-dollar 'lawfare' lawsuit on the BBC. So maybe journalist bros are starting to sweat a little now that there's actual punishment coming their way. This billion-dollar damages lawsuit against the BBC - we'll see if it goes anywhere, but it's a really interesting case. And this connects to Yle too, since Sweden's public broadcaster SVT and Norway's public broadcaster NRK have also used a similarly edited clip of that Trump speech. But it's unclear now whether they got it from the BBC in some kind of exchange, or whether they made the same cut themselves. And I've now asked people at Yle whether they know if Yle used this too, because I've heard from quite reliable sources that Yle has used a similar clip of that speech, and I had a recollection that I'd seen this before as well, but I can't [16:42] prove it. But it would be really important for Yle to go through its own archives to check whether we made the same mistake, because a bill from Trump could well land in Stockholm and Oslo too. And if, on top of everything - after all the cuts and the misery and the cutbacks - a 200-million-dollar damages claim landed on Yle's Pasila headquarters as well, well, that would just tack on another six months of management bonus freezes. If Yle's lawyers got to go to Florida for the damages case, that would truly be a once-in-a-lifetime experience for them. Yeah, but on those journalist incentives - I think it really comes down to admiration from your own crowd, and the fear of fading into obscurity as some right-wing scribbler, falling out of that spotlight of admiration. In a way, you've got a lot to gain and quite a hell of a lot to lose if you don't write within the terms of this echo chamber. Well, my impression is that these clear, easily reportable problems and abuses are just the famous tip of the iceberg - the iceberg itself, most of it, is under water. It's simply about what kind of people journalists are on average: what their backgrounds are, what schools they went to, which parties they vote for, who their friend circle is - and it's quite a narrow spectrum, whether in Finland or Britain. And then they tell us their view of the world, and pick [18:05] out of that world the things that matter - and of course that's going to skew things relative to what most people actually think. Another interesting thing that came out of this report was that the BBC has apparently had, at least up until now, an organizational structure with these thematic desks - there's an environment unit, then there was a gender unit, i.e. an LGBTQIA+ unit, whose job it was to take charge of story ideas from various newsrooms and send in a specialist reporter in that field to make sure it's done 'correctly.' If a newsroom doesn't get this thematic unit's sign-off, the program doesn't get made. And that's been one reason this ideological takeover has been so powerful. Sounds exactly like censorship - and this also sounds exactly like Yle's training programs. Yle doesn't have quite enough staff to afford something like that. Well, but Yle did have these training sessions. What was it called again? Right, DEI - there was this dark-skinned guy [unclear] who ended up getting the boot - a subcontractor, whose contract just wasn't renewed out of nowhere. Yeah, it's kind of funny - they had a unit for this. If we talk specifically about diversity, the idea is supposedly that you get a wider range of journalism, when in fact the whole point is the opposite: narrowing down which viewpoints are allowed. You still see the word 'diversity' being used to mean simply that there are people of different skin colors [19:27] involved - meaning for some people it still doesn't mean having a diversity of opinions represented, regardless of the skin color of the people expressing those opinions. Not to mention that the BBC and many other mainstream media outlets have hammered on about terrible things like fake news, anti-vaccine sentiment, and climate denialism being terrible threats to the world - and then they have this unit we just mentioned, the gender-ideology unit, which just keeps hammering the line that we should disregard what biological science says about sex, that you're not allowed to say it's wrong, offensive, and discriminatory - it really can't get any more absurd than that, it can't. And this unit, in turn, takes its own guidelines from a British activist organization called Stonewall, which is roughly the equivalent of Seta (Finland's national LGBTI rights organization) here, and which issues guidance on, for instance, what terminology you're allowed to use - and then this unit inside the BBC makes sure every newsroom uses that 'correct' terminology. On top of that, the BBC hasn't reported - and not many people in Finland know this either - that both Seta and Stonewall have splintered, precisely because a large share of lesbians and gay men consider this whole trans issue to be quite foreign, quite alien to them. Yeah. Alongside Seta, an LGB Alliance has sprung up - there's an LGB Alliance in Britain too - and neither the BBC nor, I'd say, Yle acts as if these organizations even exist. God forbid using that 'TERF' word - trans-exclusionary radical feminism - we'll see if anything changes on that front now, but, well, J.K. Rowling is this supposedly nasty 'granny feminist,' i.e., a TERF, and the only news stories about her have been [20:54] usually calling her the 'queen of the TERFs' - even though she has millions of fans worldwide, tens of millions, hundreds of thousands in Finland. The only news story Yle has run about her in years is interviewing some three-person activist organization who are 'disappointed.' How out of touch can you be, Yle reporters - Helsingin Sanomat too, same thing. But there's real learning to be done here for Yle, and we expect action from Yle's leadership - as your paying customers, note, note - I think those bonuses could still be turned around - Matti Apunen, you could still fix this: you could actually earn bonuses by doing a study on the quality of your journalism. Poor Matti Apunen has had to keep his mouth shut on this issue too - Finland's own Michael Prescott, who could give them quite a scare. He probably keeps some private diary where Matti writes down what he really thinks - we'll probably get a book out of this about Yle someday, and then it'll come out publicly, defending Yle. Let me add one more thing, as a former Yle employee: the criticism I've raised here isn't anchored in party politics in any way - I'm not specifically criticizing the left here. I think it's entirely possible that if a right-wing hegemony took control at Yle, it could be guilty of exactly the same thing. It's also worth remembering Hungary, where a right-wing government has taken control of the public broadcaster, and that produces journalism that's a good five times more ridiculous than anything the BBC has done. Yeah. People laugh at [22:17] it - half the population in Hungary laughs out loud at it every day. Right, it's like in East Germany - the shortest unit of time was: 'Ulbricht starts talking, and the TVs switch off.' One more thing on the BBC: what's completely missing from this Prescott memo is any critique of BBC's climate journalism. Well, right. I won't go too deep into that, but I'll just say the BBC has also been, in international journalism, one of the worst instigators of climate panic, and they have this climate unit, this climate-and-environment unit, that oversees every newsroom. Nobody brings any skeptical perspective forward. Unscientific of them, unfortunately, but it's such a hot potato that even in this Prescott report, nobody dared even use the word 'climate.' Yeah, yeah. For me, when I'm listening to BBC World on the car radio, my equivalent of the 'Ulbricht unit' is when the word 'climate' comes up on Yle Mondo from the BBC - that's my cue, my little time-unit, to switch it off, or a bit before that [23:18] and switch to Yle Ykkönen instead, for the kids. I don't know - have you read your climate book recently, Matti? But has your core thesis held up well - if we can jump around a bit here - that this whole climate crowd has gone a bit too far into religious territory? Yeah, well, the concern I had in that book was that all this media content being spread to us isn't actually grounded in science. And, well, I'm not some climate villain - on the contrary I think nuclear power and zero-emission energy sources should be favored whenever possible. But the idea that poor countries shouldn't be allowed to prosper by using fossil fuels - that's a crime against them. Mm. And this kind of eco-imperialism is a phenomenon that could have been covered more in that book, and hopefully someone will cover it someday if I don't get around to it. Yeah, that's really a serious problem, I think - the media treating activists as experts, and I myself - while you have the climate issue - as a lawyer, I've long had the same issue with human rights: activist organizations, and then researchers. Researchers aren't courts, they don't make rulings. They produce interpretations and opinions, and yet they get hammered home as if - say they claim some human rights treaty has been violated - they don't get to decide that. A court decides that. [24:36] Mm. Yeah. All right, now for the second topic - Jarkko gets to introduce this one. So there's some strange news coming out of the state of New York. And actually, just to start off, I'm very happy, by the way, about that 'long march through the institutions' framing. So maybe an opening question: isn't the whole point of the left's 'long march through the institutions' that you take over institutions somewhat quietly, in secret? Because here, this is happening quite directly, taking Zohran Mamdani's rise straight into the flagship, poster-boy position there in New York. Yeah, indeed, in case viewers and listeners aren't aware - though they probably are - New York has elected a socialist mayor, Zohran Mamdani, a Muslim, of African descent - not a Middle Eastern Muslim. And he's quite openly - because when people talk about the US, they usually say it's Democrats versus Republicans, but it's more complicated than that, since within the Democratic Party there's also a large contingent well to the left, so-called democratic socialists. The name sounds nice, and they have a bit of that GDR-style social-democratic feel, with rose symbolism a bit like Finland's and Sweden's social democrats, but they're actually notably more radical. In Finland you'd say the Left Alliance is the closest reference point. Now, where did Sanna Marin get her honorary doctorate? City University of New York - surprise, surprise. And yeah, Zohran was indeed elected right out of this crowd - you know, several of these famous American faces [26:01] among these politicians actually aren't properly Democrats at all, but specifically these democratic socialists. That gets forgotten. They may formally join the Democratic Party for electoral-technical reasons - all these AOC types and so on. Anyway, he's genuinely a real leftist, and he won in fair Democratic-primary elections. You could say, well, that's it, fair enough - the people decide. But the people also - I'd say, once the consequences come, if they come, that's really the question here: are we going to test, once again, whether socialism works? Because he has proposed things that might sound, in today's America, like a good idea - he's proposed things like city-run, bureaucrat-managed budget grocery stores. As if we Finns didn't already know - they tried that over there, and there was that one moldy loaf of bread on the shelf at the Moscow grocery store. Sure, go ahead and try it again, if you've forgotten. But there have also been a lot of other genuine concerns raised about him - for instance, New York has a notably large Jewish minority, and they've quite rightly expressed concern that he hasn't, for example, clearly agreed to disavow and condemn various Islamist, anti-Jewish actors. [27:19] For example, he's posed for photos with a radical imam who has had clear ties to, for instance, supporting Hamas, and he's also expressed verbal support for them, and used this one slogan, 'Globalize the Intifada.' The intifada was, some years ago - and again over 30 years ago - a Palestinian uprising, which, as also happened in October 2023, meant attacks against Jewish, Israeli civilians - suicide bombings, bus bombings, thousands upon thousands of deaths. And 'globalize the intifada' simply means: this needs to be brought everywhere in the world - meaning violence against Jews. And if the mayor of New York won't disavow that phrase, well, if I were a Jewish New Yorker, I might be a bit worried about that. But then there are still plenty of other issues - people talk nowadays about how 'woke' is supposedly on the way out, and there are some signs of that, but Mamdani certainly hasn't abandoned that starting point either, and he rode that very wave into office on the votes of young, woke voters. Among other things, he's repeated these woke litanies. [28:32] 'Defund the police.' He's said outright that the New York police are racist. Is there any statistical data behind that? Not that I know of. And maybe the strangest thing of all - I'd flat-out call this racism - is that he's said whiter neighborhoods should be taxed at a higher rate, and he literally uses the word 'whiter.' As if tax policy should be steered by some kind of ethnic race doctrine. That's a pretty strong thing to say, honestly. And again, if we go back to the earlier topic - public broadcasters around the world - the same kind of bias might well be visible there too. And what does, say, Finland's Yle write about this? When Zohran Mamdani wins, Finland's public broadcaster runs the headline 'Sweet wins for Democrats across the United States' - clearly taking a side. Would they ever write, say, 'Sweet wins for the AfD in Germany'? Have you seen headlines like this on Yle, since you follow it? And then they list out all these 'sweet wins' - top-notch journalism, that. And who's the writer? Yrjö Kokkonen. And who is Yrjö Kokkonen? Well, coincidentally - a card-carrying, coincidentally Green Party-affiliated Yle reporter celebrating 'sweet wins.' At times this is honestly just too funny. And yet I still have to help pay these people's salaries, just like [30:00] everyone else does. So there's really something unpleasant here, in that none of these genuinely concerning issues about Mamdani were dug up at all. But the bigger story, of course, with this kind of movement, is - in my view - the big dialectical, wave-like motion that always happens in politics. Maybe someone still remembers - at least you do, Matti, being a senior citizen. Do you remember what Occupy Wall Street was? Oh yeah. 2011. Back in 2011 - not woke yet, but that old-left-style opposition to financial power. They camped out there, protested - but that was really, in my view, old Marxist stuff: take money from the rich, give it to the po"}, {"slug": "655-kuluttajabisneksen-osaaja-peter-fredman-neuvottelija-366", "title": "Building Consumer Brands: Lessons From FMCG | Peter Fredman", "titleOriginal": "Kuluttajabisneksen osaaja Peter Fredman | #neuvottelija 366", "guest": "Peter Fredman", "guestsCanonical": ["Peter Fredman"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/peter-fredman/"], "episodeNumber": "366", "publishedAt": "2026-01-06", "duration": "48:00", "format": "full", "topics": ["leadership_governance", "saas_software"], "description": "Consumer business expert Peter Fredman | #neuvottelija 366. Peter Fredman is one of Finland's leading developers of consumer businesses. FMCG experience, brand-building, and a realistic view of distribution channels guide investment decisions at Fredman Capital's family office. Investing in consumer brands is difficult but strategically rewarding. Examples include Fredman Group, Fiksuruoka, Strand Properties, Bon Group, Levi Black, and Green Planet Astronauts.", "page": "https://www.neuvottelija.com/podcast/episodes/655-kuluttajabisneksen-osaaja-peter-fredman-neuvottelija-366/", "text": "[00:00] All right, welcome for the second time, Peter Fredman! Thank you very much and thank you for the invitation. It hasn't been long since we last saw each other. So, we drove over to Lappi in Rauma. we gathered for a board meeting, because Fredman Group, a significant company of about 30 million turnover fast-moving consumer goods company, on whose board I sit, and of which you are our owner, we, together with the main owner Korona Invest, had decided on this factory modernization, and the robots were moving well there. Indeed, it was definitely great to see when everything is working and the big investment starts, in that sense, or gets underway, and time will tell how well those calculations held up, but Well, it is indeed the direction we are heading in all the time, that we automate and streamline as much as possible, and there are already good [01:02] ways to do that, but of course people are still the most important resource there, but when combined with this kind of automation and robotics and other things, then things are certainly moving forward. Yes, and as background for this, in the previous episode, where we talked a bit about these development challenges in Finland and sort of what kind of organizational landscape there is to promote the voice of active ownership, things progressed in such a way that you invited me to the family company's board, and now, a couple of years later, we're in this same thing together. ownership has changed and and well the company itself has certainly changed too. It’s kind of great to look at things from there sort of from next to the owner's shelf, there on the board, that a lot has definitely been done there. Yes, and I personally have growth entrepreneurship as my own passion, of course, and and growth companies. Mm. and I've focused more on those today and and of course we want Fredman Group to also be [02:12] a growth company, and a growth strategy is underway there. Yes, and there have been structural changes, ownership changes, and then in a way exports are always really great, I think, when a Finnish company is able to sell for example, expanding into the German market, and the products have changed, and then on the branding side, it's been quite ingenious, using your great name in a way, as the top brand there, I think that too was quite great in a way, and I even went so far as to suggest to the board that we copy this Tokmanni strategy, where Mr. Fredman negotiates with the Germans, but you haven't warmed up to it yet. No, no, we haven't warmed up to it yet, but the idea was brilliant. Yes, but I think the brand strategy is working very well, and maybe the topic of this episode could be that now that you made it into the tax calendar as part of this partial ownership transformation, so where have you then allocated capital released from this Fredman Group, then perhaps one answer is that you have, one could say, formed a family office from that released share capital. That has indeed been the plan, that when the day finally comes, then we will definitely start systematically building what follows, and of course still in Fredman Group as a significant minority shareholder of course, but but [03:36] active on the board and in owner strategy. But then in addition, there is this Fredman Capital, which now centralizes direct holdings, especially in unlisted companies, and then the next generation is being involved all the time. Yeah, I have a holding company too. I named it DCM Capital instead of Miettinen Capital. In a way, I sometimes joke that if my family branch were referred to as 'the rich Miettinens' instead of Ensto, then things would be fine, but I don't think that's going to happen now, so greetings to Marjo Miettinen and associates, or then win this game. I'm giving up already, but it is good to have tools for ownership in a way, and a limited company like that, whether small or large, is convenient. I mean, in the form of a holding company, it's just practical to make investments and then ownership. I've certainly learned here that it is never a given, because somehow I think that even still it feels like in Finland people think it's just coupon clipping and, well, sitting on a stock portfolio, when in reality it's very much a hands-on [04:43] approach. So there you get to, and you have this business-to- consumer fetish, especially since many in Finland want to invest in companies that serve other companies, meaning this is like a B2B or business-to-business strategy; yet you have this admirable, admirable, perhaps even idealistic, drive to invest in Finnish consumer-facing concepts; so yeah, it—it is of course maybe an exception in that sense—a respectful exception. Yes, but regarding that, others have sometimes asked about this too—so, of course, a long history of experience From the FMCG type, Fast Moving Consumer Goods, very fast- moving consumer products, those types of things, so like brand and distribution channels, of course grocery and retail and in Finland and globally, but well, so experience is one thing, but it's perhaps also that nice challenge in it, that that building new brands is like extremely difficult, really, and getting onto the grocery trade shelves even in Finland, it's a really long journey, because you practically have to be number one or two these days, so so it's not an easy story, but well, challenges are nice and and [06:06] but as for what else is in there, well on the other hand I've always thought that, yeah B2B is perhaps more common, but indeed, all roads lead eventually to the consumer, so even if it were, say, the army or defense forces, they too serve the individual and the individuals of society, you just don't think about it that way. Yeah. But let's take a few investments then, though perhaps as a word of warning, ownership is mainly the majority owner's job, but being on the so-called cap tables, i.e., active in several projects, let's now boldly talk about them, but with the warning that others too owners may have, like, different views on this. This isn't any official view of these companies' strategies, but let's take for example, uh, Fiksu Ruoka, where it also applies that it sort of started, wouldn't you say, with this kind of or well, explain it yourself, the transf— yeah, it's a great, great company, a startup that has already reached, like, a young, not yet adult but maybe teenage years already, and well, but great, great founders and a strong, strong ethos behind it, reducing, like, food waste and other waste [07:26] as much as possible. So, these kinds of best- before dates approaching, or other packaging, old packaging, which otherwise it works perfectly; what cannot be sold through normal channels, is then sold online, and there, practically speaking, many wonder if there's any waste left, but there is no waste because it has dynamic pricing, meaning a product might go for just one cent. That certainly interests consumers, because you can reduce waste and buy cheaply, so that equation is a pretty good business idea. And you could call this a kind of wholesale clearance sale, so in practice, yes, and it's also very much about logistics, and there are plenty of batches available, so it just doesn't end. And another new thing they've done there is they are really facing a major challenge. So, the first brick-and-mortar store has been opened in Espoo, and there’s work to be done there, but the start has been really, really great. Yes. [08:33] Yeah. I mean, even at Fredman, we have one in Rauma, there is a factory shop, so it’s always possible to introduce the physical channel, and in a way, it’s not always as big a deal as people think. And in my opinion, with this pure e-commerce model, well yes, this kind of outlet-type thing often works, as long as it doesn't go overboard. Of course, you can go overboard here, meaning we start to challenging this highly concentrated Finnish retail channel, so many have certainly taken a beating along the way there, but yes, yes, but what's different here is that an online retail-type business idea has then been taken abroad, to Holland, Belgium, and there are still relatively few of them over 10 to 20 years, and that too is a great achievement, but yeah, this kind of omni-channel or 'both is better', so let's see where it leads now. It looks good. Yes, but I think it's absolutely excellent. [09:38] You never know with these, I'm personally hopeless at these private investments, so don't invite me to any of them, because well, it can even correlate negatively with the metric, that I like slightly larger investment targets then, so that it is otherwise damn hard to sense this early-stage curve sense it, which is also respectable no matter where it is, and then the decks are so beautiful for everyone, so you have to be careful not to throw money away on things. But then let's take another one, so you have this Well, I was in Norway and we stopped at Levi, and then I remembered, aha you had that Levi Black, and then I saw and called you to see if there was room and said welcome. But this time a bit more humbly we stayed there, but anyway, so one is this kind of like a Levi infatuation. Yeah, well, I've been going there for like 25 years, so the place is familiar, but it has changed quite a bit since those early days. You could tell that one story about our Formula driver here, or let's do it this way, let's put into the inner circle about one of Finland's most successful Formula World Champions. There aren't many of these, so exciting things happen at the property. [11:00] So this is a teaser for the inner circle discussion about this. Yeah, so hospitality in general is perhaps what fascinates me too, like the accommodation business and the restaurant side business as a whole and, well, and of course Lapland has been familiar and dear from 25 years ago, so through that, but that was just, they are random coincidences, and then this kind of opportunity came to get involved, so it's practically real estate business but we partly operate it and, and of course we are also there in Lapland now with another company, and Lapland is hot right now. Yes, and even this Levi area, which everyone feels isn't quite the real Lapland, well then, but but I think it's really great that Finland has this kind of thing when comparing to Eastern Finland, which unfortunately, due to this Russian activity, has taken quite a hit, so that Lapland region, well yes there is actually an admirable amount of activity there. [12:03] It is, and great things were done there back in the day. So infrastructure is playing a major role, since we know what kind of an island we live on, and Lapland is even further away from the main routes, so air traffic is really important, and back then of course Kittilä airport, which was established on the Finnish side, enabled both Kittilä and the Ylläs area, and of course Rovaniemi as a major hub, the growth that we are seeing now. Yes. And when we went there, uh, to Norway, we went through Haparanda back to Finland just for fun. In a way, the Swedish border is quite significant there too. Okay. The Swedes are already went through its restructuring a bit earlier than we did there. Now there isn't so much population, but you can get over that. And in my opinion, that infrastructure project, well, when we were discussing this Vantaa light rail with Petri Roininen and Joukeläinen, well then there was this Turku One Hour Train, so there then, [13:05] it was pointed out that, excuse me, this was like, I was talking with Matti Virtanen and about these rail projects, the one hour train and then this later this Vantaa light rail, and it was said there that definitely the rail connection should be built to the Norwegian side and maybe at those Western latitudes and getting that infrastructure set up, so that would also support this regional growth. Absolutely, yes. And now we also got that Surjanite line 2 machine. So in a way, the electricity supply there has also improved. It's like you could place industrial production there a bit better; it really is a strong area. Well, but this is very good, this advertising activity, then maybe from the same angle, this Bon Group—so what does it do? Well, it's an interesting, yes, a growth company, and growth is what's wanted for this country now, in different [14:07] different industries, and this is perhaps a great example now, that it was founded from scratch three years ago where the idea is that, well, licensed restaurants, and dining restaurants are purchased [Music] under an umbrella brand, but they operate as their own independent brands, meaning they are already quite mature companies that generate cash flow, and last year, for example, 12 new restaurants were added, so the management and board were certainly busy buying and bringing these into this entity, but the idea is to gain those economies of scale from procurement and from optimizing the staff, like where people are located when there are many places where you can, meaning university cities and then, well, the five largest resorts, which now are practically to a large extent winter resorts and such, though of course summer resorts can be found too and, well, growing through that, but not [15:22] in the capital region with this, like at least for now, and and of course a big, big change now to this strategy was then that this, this Vaneninnan group merged, merged now, joined this entity, which then brought in that accommodation business and operations, but that of course is then like its own, and then there's this food and beverage side as its own. Yeah, it is, in a way I was also at this Mikko Alasaari's 50th over there at Aulanko, so, so in a way I think like in a way these strong classic non-metropolitan regions of Finland I think it's great that they're waking up a bit, as Eastern Finland is like a bit in a slump, so Punkaharju and others are suffering, but in a way, it's great that they're waking up. It is, and of course one hopes for activity and awakening in Helsinki, but if we look at a one-hour radius from Helsinki, there are [16:22] like incredible places to be found there, from Illee to Porvoo and of course the Hämeenlinna areas and maybe Turku is included in that too, and well, but if you look at the rest of the world, a one-hour trip to, say, a restaurant, it's not really not a problem, but we always make it a problem ourselves. Yeah, that's how it is. in a way that, of course, the flight routes are partially inconvenient, that Europe Europe can provide a good flow of passengers, of course, but for Asia, you have to go around a bit awkwardly around Russia via the Arctic Ocean, so in a way it was like a very strong link; Asian tourists do still come from there, though, it's not completely dead, as they are willing to put in those few extra hours of effort, absolutely, and then the exoticism and what they see in the Nordic countries and especially in Lapland, but equally, the Finnish Lakeland is a destination of the future in that sense, and of course we are trying to do everything then, this this accommodation and and then well the food side and the entire restaurant operation would then match that level of demand that is being sought and and we don't need to be ashamed at all, because we are indeed like we have authentic pure ingredients and [17:40] and clean nature and and well and facilities, even the infrastructure is starting to be world-class. So so well we are in a good position in that sense, that then as long as we are reached and and we get those like communication channels open, what we now see in Lapland, that it just takes its own time and I believe that the same will happen also in Lakeland in these these well coming years. Yeah. that culinary aspect and well in a way I mean about that by the way when we were with that Fremman Group we raised it Jeffstein, so in a way, that too was quite a respectable growth story, in a way, to market leader in a few years here in, like, restaurant technology and its information systems. By the way, when I ran into someone in the Helsinki nightlife, I was spending money during Slush week on this, like, luxury life or, like, a lavish lifestyle, so I was buying a lavish drink, and then CG's Aromi team showed up and I asked, 'well, how's it going?', and they said that it works in this, like, Aromi logistics and recipes and diagnostics and self-monitoring system really well, actually, so in a way it too found, like, a proper home. It's a bit of a shame that we aren't that anymore, like as an owner looking on, but this is what was found within CGI [19:03] clearly a lot of added value. So this is also interesting, that you then went to the kitchen side, that you are of course a good companion and a participant in restaurant dinners, but you've always been interested in that sort of like the restaurant's internal operations. Absolutely. Yes. And, well, and maybe one thing there that, like, the great thing about Fredman Group has been that we don't just sell products, even though we're talking about FMCG-type things like cling film, but if it doesn't if it doesn't, like, serve the food maker, the chef there in the best possible way, then we are sort of lost. So it has been like a driving force still, and then in order to be able to do that, you really have to understand what in the customers' processes and food preparation actually happens, and of course through that I am also quite interested in food preparation, but especially in different technical gadgets with which it is then done, and it has developed quite a bit even though it's one of the oldest industries and still fairly, fairly conservative, so technology-assisted things are definitely coming there, so it is quite [20:16] clear. But then sometimes the Carita cloth is quite a legend there in the kitchen, and I don't know, it fits the home table too, but I mean this restaurant Otherwise, there's all sorts of really competent people there, and in a way, this top-tier cuisine and a bit of enjoyment. I mean, I would hope for that a bit now, because we're in a bit of a mental slump, as people are pinching pennies—and there's nothing wrong with ordering food delivery, but like, go to an old-school restaurant for a bit, look each other in the eye, tell bad jokes, and build relationships; it's a truly important part of being human, absolutely. A lot has happened since the pandemic— of course, the pandemic itself and the restaurant closures, so it was a real crisis for the industry, but it's like Food consumption and the way things work have certainly changed here. [21:19] In general, and that’s how it goes—one has to adapt to it, but those social and similar aspects are certainly suffering right now, so that instead of being with friends or at business lunches, physically present with good food and having good, meaningful conversations related to whatever is being done, versus being on Teams in our own little office and eating perhaps only when it is deemed necessary, and not meeting people—I won’t go into too many directions, but if we look at Sweden, for instance, and Stockholm, the situation there is completely different than In Helsinki, and like, it means that all the restaurants there are full. There's life in the city centers, and well, we did have a... good direction before the pandemic, and I think we had even surpassed... [22:24] Stockholm and Denmark, or at least were on the same level, and now we're... a bit behind again. Yeah, well, foreigners use it that way, but... I also wonder a bit where the local crowd is, and... then really the networking—I don't know, I've now... started hearing this frustratingly often also in... board meetings; having done this vibe-coding quite... thoroughly, I've started doing it so that I sit with others at the same... at the table and we get the laptops out. Even there, we should brew up some kind of thing where we drink Red Bull and eat pizza, well, and code. I mean, this kind of concept could be quite cool, because, like, now I'm struggling with how job-creating companies aren't being born, so it still requires that smart types who are in a way somehow developing a passionate idea meeting each other, which definitely doesn't happen on social media or even Teams, so it would require these kinds of 'collisions', so partly that Sweden's success is about that capital, but they certainly have, well, all the time those smart and partly rich, who are sometimes the same thing, so they bump into each other and pitch concepts and, well, spin them and acquire things for them funding and scaling and, well, creating new ones, so this is like really vital, absolutely, and maybe one such [23:46] tip for young people especially, is that networking and especially during student years, but of course afterwards too, they are extremely important, where the Swedes are better than us, or at least they do it more, and it has so many positive effects. Whether it's job searching, new clients, new business ideas, anything really, new acquaintances, it enriches life a lot. But we are quite a bit like engineer types, of course, so this time if I go over there, so is it like profitable and sensible and value-producing and its you just go there and the right circles will be found over time. But then Morten Mikkonen was interviewed there, he had, I think, a good book, this 'Growth Formula', and then he was really like at times a classic Finland-Swede, like, where has this 'Strömsö' of ours, well, locality disappeared from here in Finland, but then he like in that book, he focused on that Silicon Valley clock speed, that in a way, okay, people are very hardworking and efficient and individualistic, but then when they meet, so much interaction happens there and it's like a bit too coldly fast, so in a way, you weren't it's beneficial for me after 30 seconds, but this is how it happens, [25:08] it happens, it happens, but anyway, that kind of, like, collision happens, and then you find those groups of smart people, so that like businesses find each other, or then a project that has gone slightly off-track is pivoted to the right angle and saved, or some important partnership is formed. Like, it's just damn important, it is, and I completely agree with that, that the clock speed, as you said, it really does matter a lot, so that we get things done, and we all have reason to look in the mirror here in Finland, because our clock speed is somehow maybe running a bit slow right now. slowly and looking for, like, where this is coming from and who's to blame and so on, but but one's own actions might not be analyzed that critically then, or let alone changing those actions. Yes. And and of course that has an impact as well and so on, but this brings us now to the owners' responsibility and actions, that it is indeed the owners' responsibility to then choose the competencies, of course, that are needed for, say, a growth company, [26:13] for the board and through that for the operational team and to ensure that things then happen and are delivered there. And here we have certainly been across the board—whether it's a large company or a small company—facing a challenge. But then then again, startup-type communities—and I have experience with them even now— well, the clock speed is completely different there. Someone might say that it goes overboard, but if we take Wolt, which was mentioned just now—I just had the pleasure of hearing Marianne Vikkula at that Boardman event, it's just about doing it and then fixing things a bit and going again, and a huge drive, to the point that even watching her presentation almost made me break a sweat, and this is what we need. Yes, exactly. I also went to Slush and it was the best Slush ever, by the way. I was invited to different stands, so at the Control.dev stand, where there was a former Translink employee [27:19] at work, so they invited me there, and then Marianne Vikkula came to hug them there, and then I said that, well, I coded this own section for the Slush stage side, and then she encouraged me too, saying 'good, good Sami, good Sami,' this kind of Slush spirit, so in a way she is the former CEO of Slush, and then like Miki Kuusi too, like a double genius, but it's great that we have those kinds of really driven people who are also really nice, and she went to every little startup's booth there to chat nicely, kind of in her role as the former Slush CEO, so she wasn't at all some kind of stiff über-leader, that although it's surely, like, really, really tough there in the work community. Yes. Exactly. Yeah, but more of these types are indeed coming in all the time and are needed, but then you also have to remember that not everyone becomes a Wolt or grows that fast, so you need that perseverance and and real grit. Yeah, and then sort of 'camel investing'; I myself am in this Gorilla Capital fund, which isn't meant to create these Lifeline-style Wolts or Ouras, which [28:29] super-scale, and because sort of the problem with this kind of venture capital model is that then only those few real gems get everything put into them, and then the others have to fend for themselves, since then again, for many, it could become something that has grown threefold, which would be quite good, but then it requires a slightly different investor base and perhaps a slightly longer vision, yes, if the first pivot was a direct success with Miki Kuusi and Vikkula. But then, regarding internationalization, you have a stake in Strand Properties, and there is perhaps a back story where my colleagues at Translink Corporate Finance, where I am a partner, assisted Bo LKV in finding Saari Partners as an investor, and then from there... this part of the group left and then they went to Spain to escape COVID, and there they founded Strand and, in a way, like in a foreign land, the Finns managed to make the traditional real estate business, like, take off. Isn't this the growth story where it all started? [29:45] Yes. Yeah, exactly, and well, in itself, of course, through real estate I've become familiar with that area, but as for other contact in that sense, other than having used the services back in the day, but what's fascinating here is specifically this international perspective, that they've had a great, great start there, and it's very competitive that Costa del Sol in Spain, for example, so so, well, they are still able to do it, so of course the team plays a big role still and in the future as well, and so on, but there is also this kind of like technological perspective, that I consider this kind of maybe disruption, but at least changes in this kind of conservative, fairly stagnant industry, and especially if it's still at the consumer interface, then well, it had those elements and a good vibe, but otherwise there too, so it's nice to see, and now of course also to Finland they expanded to Finland now and, well, the intention is to expand further to other countries, and I think in both of these Both Strand and Bo have fascinating aspects that stimulate the Finnish existing luxury real estate market segment, which can now be found in Northern Finland as well, so [31:06] it's really great that there are such leisure properties and others that can compete with the Costa del Sol. There aren't too many of them, but nevertheless, it also supports raising Finland's profile. That works too. Yes. And they don't just sell to Finns on the Costa del Sol, but rather to international investors and holiday residents. And by the way, we had the honor of being with Mikko Nurminen well, at the table there during FiBAN's 15th anniversary gala when he won the award. By the way, Framery's Kim Väisänen was also at that same table, so congratulations on the IPO, so in a way, something like Hostaway, kind of in the luxury rental market too, it's a Finnish innovation and a very large and well-grown company, and these are both excellent examples of whether it's about ownership or rental, but that this kind of application or platform is created, through which people from all around the world can find it, because that has been our problem, like how, how on earth do they find Finland, but Through these, of course, the whole world is open, so then we compete with everyone, but but it's like I feel that we were talking about the cottages of Lake Finland and real luxury nature, [32:34] so these are the types of services that help with that too, so there are many good things there, yes, and I joke that if climate change continues, which is of course unfortunate, we might have it so that at least in the summer, Finland is like a little Mediterranean, with really nice archipelago and just really fun, so like it's somehow a bit pointless to downplay it, as we have the most islands here, like the archipelago and crayfish parties and others from here—whenever I visit Sweden, I tease them that we've made progress and that you guys should come here on holiday, that things have changed, and that even here in Stockholm, there isn't anything like Löyly, it's just 'Bara Bada Bastu', so somehow we should boost Nordic tourism; it could very well be part of Finland's profile. Absolutely. If we look at summer in Norway, it’s a huge success and there are already almost too many people; of course, the nature there is a bit different, but our fells and lakes and archipelago are such incredible places. I believe that The Mediterranean is moving to the Baltic Sea. The Baltic Sea is becoming the new Mediterranean right here. Yeah. And our summer, we have like, pleasant, so it's like quite, quite optimal now, and then it's too hot [33:56] over there, and the water is running out on the Continent, and they're already a bit congested and overdeveloped. But maybe then this seasonal variation, because then we have, uh, some of that under-capacity. Winter is overbooked, and then, well, maybe in t"}, {"slug": "656-velkasovusta-sinipunaan-rasanen-valkonen-neuvottelija-367", "title": "From Debt Consensus to a 'Blue-Red' Coalition? | Joona Räsänen, Ville Valkonen", "titleOriginal": "Velkasovusta sinipunaan? | Räsänen & Valkonen | #neuvottelija 367", "guest": "Räsänen, Valkonen", "guestsCanonical": ["Joona Räsänen", "Ville Valkonen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/joona-rasanen/", "https://www.neuvottelija.com/podcast/guests/ville-valkonen/"], "episodeNumber": "367", "publishedAt": "2026-01-12", "duration": "01:10:11", "format": "full", "topics": ["finnish_economy_policy"], "description": "From debt consensus to a \"blue-red\" coalition? | Räsänen & Valkonen | #neuvottelija 36. Joona Räsänen and Ville Valkonen review Finland's debt trajectory and why a parliamentary debt-brake working group was set up in Parliament. Could a \"sinipuna\" (blue-red, i.e. a National Coalition-Social Democrat) coalition emerge, or are bloc elections more likely? Do the Social Democrats (SDP) and the National Coalition Party have real alternatives now that the SDP has risen to roughly 25% support? They cover how the debt-brake working group came together, and why only the Left Alliance opted out of it for populist reasons. At the end, they unpack how the budget process actually works and which committees ultimately decide where the money goes.", "page": "https://www.neuvottelija.com/podcast/episodes/656-velkasovusta-sinipunaan-rasanen-valkonen-neuvottelija-367/", "text": "[00:00] Alright, welcome to the Neuvottelija channel, and the year 2025 is coming to an end, and we have Joona Räsänen here, MP for the SDP from the Uusimaa electoral district. Hello. A very good day to you, and thank you for the invitation. Yeah, and doesn't the year look quite... well, 2025 is a bit ruined, but let's hope for a better new year. Well, it's always like this in December when people ask what your thoughts are on the past year and the coming one, so one probably always hopes for better, across the board, but I've sort of learned that if you always think about it so that hopefully next year will be a bit better than this year, but then again a bit worse than the following year, then usually you get by, if there is a bit of that optimism in the air about what what to expect. Yeah, and then almost an hour away from each other, Ville Valkonen from the Varsinais-Suomi electoral district, and this is of course a joke regarding the infamous \"One-Hour Train\". [01:06] Hello, hello. Nice to be here again Sami, thanks for the invite. Yeah, and Joona, since you are here for the first time, and I haven't had too many Social Democrats on, so I think you have an interesting background, maybe a bit similar to Ville there, in that Ville is a diligent Coalition Party member with a very sharp background preparing papers, chair of the Tax Subcommittee. So couldn't one say that you have a bit of the same role there in the SDP? Well yeah, I guess each of us always has different responsibilities in our own \"sports clubs,\" and for me, it has fallen to me, or I've received—depending probably on the point of view—more responsibilities related to thinking about my \"sports club's\" economic policy, and through that then of course during a term like this, where public finances in general are in such bad shape that the topic is emphasized a lot, so of course through that, probably more and more responsibilities have come, and then probably due to the background that these things have always somehow interested me, and when I started back in the day—I remember in the 90s getting a bit interested in politics, and when thinking about those times, so I've probably grown up in a somewhat Lipponen-esque Social Democratic family, so through that, somehow these topics have [02:27] felt somehow perhaps natural, and that's why working with these topics is quite nice to dabble in. My absolute favorite Social Democrat role model is Väinö Tanner. I think Lipponen has been a bit spoiled here by the gas pipeline, but tell me a bit more about your background. You are, aren't you, in terms of seniority as an MP, more experienced than Ville. So, so... what kind of background do you have? Well yeah, I'll actually start with Tanner, because I do get these quips all the time, that Tanner's... heirs and, you know, keep Väinö's legacy alive, and actually last time... on Independence Day, Lasse Lehtonen, who is a... well-known, well-known Tannerite, came... came to thank... sorry, yes, Lehtinen... came to thank me, saying it's good that there are heirs even a bit after his time. I guess one can also call oneself a Tannerite, but indeed, my own background is probably reasonably typical, nothing special, an average guy from a reasonably medium-sized city, who then got interested in societal issues, and my background lies in the fact that... [03:38] at 15, I went to work at a shop, and from there... gradually, after being there long enough, I thought maybe now I need to study for a profession, because that's what you're supposed to do, and then I... got employed in the finance sector, I went to work at a bank and well, at some point other things started to interest me, and then I pondered with a few friends whether we should also set up a company and we did set one up, and then it just happened funnily, as it sometimes goes in this world, that politics sucked me in, and since about 15 years ago, I've pretty much been more or less involved in this societal decision-making, and back then in my own party, in those roles, back then I led our party's... youth organization, and then in the '15 elections I was elected as an MP. Then when I lost my seat in the '19 elections, I spent a moment leading content preparation for the party, and after that, I went for a stint over in the communications agency world, and then, as it sometimes happens, the people changed their minds and wanted me back again, so I had to go to Parliament, and here we are. So, like, I've often joked that, well, it might have happened that [04:56] politics ruined a good man, that it sucked me in. Why did you, Joona, join the Social Democrats specifically back then? Well, I do probably have... I guess this heritage is one thing I always, always say. My father is a long-time Social Democrat who has had a long career in municipal decision-making, so... You wouldn't have been welcome at the Christmas table if you had cho- Well, I probably would have, because he always said I have to make my own decision. And I am the type who... back in the day, when I turned 18... since that was the only advice I got from home: when you turn 18, you get to decide for yourself. I looked at the three big parties at the time, since the Finns Party hadn't risen up there yet. The league of big parties consisted of three: the Social Democrats, the Coalition Party, and the Centre Party. I read their programs back then. We're living in the year 2005. And as I was reading them, somehow, perhaps for myself as well... that red armband, at that stage, or at least confessing the color, perhaps this sort of freedom, solidarity, human rights, and equality issues really spoke to me. And then somehow this rather pragmatic view on managing societal affairs, which was probably a result of having started to follow politics in my childhood back in the 90s, and what the government led by Paavo Lipponen did back then. But [06:18] then, one thing that has of course influenced this, perhaps more regarding this sense of justice, is indeed due to the fact that quite... I remember having those conversations sometimes with my grandparents, back when I was younger. On my mother's side, the background is more from evacuees who came from Karelia, and then on my father's side, my grandfather was actually one of those auctioned pauper children in early 20th-century Finland. So perhaps that's where that sense of justice has somehow come from. But then on the other hand, this strong work ethic—that ultimately, it really is the case that every one of us must primarily support ourselves through work, and hopefully enough people do so, so that society is then able to help those who genuinely cannot do it. Alright, that's great. I wrote this book \"Neuvotteluvalta,\" and I interviewed Martti Ahtisaari, who also had somewhat similar Karelian roots, and he became a good president, or perhaps he wasn't really appreciated enough. So, now we find another favorite of mine from the Social Democrats. [07:19] And now, while filming this, a new poll came out, and the SDP is in an overwhelming lead with over 25% support. The Coalition Party has remained quite strong. Government responsibility is a burden, but it really looks like... well, we need an election, but maybe we need a sort of \"Democrat support brake.\" That might be it, or we just accept the fact that it's quite hard to cook up any other Prime Minister party from this situation than the Social Democrats. But let's not get ahead of ourselves. Let's get to the issues. Let's consider the probable scenario here, that Lindtman and Orpo—unless miracles happen in the Coalition Party camp and they change the leadership—will find themselves in a Blue-Red coalition. And it actually feels possibly quite good that you two are put into the second line there. After the election victory, of course, you will get your mandate from the people, and then a Blue-Red government will be set up. So, how does that sound, Ville? Would that be the worst possible partner for this kind of Blue-Red... [08:29] what about the government negotiations then, Joona? Well, let's not get ahead of ourselves regarding the election result. The people decide in Finland, and that's a good thing. Of course, it's good that the Finnish political system is such that we can cooperate quite broadly on a factual basis, because a completely blocked-up, rigid system where, just purely because someone happens to belong to a different team, you can't discuss issues or agree on programs, for example, that would probably be quite destructive at its worst. Of course, the Social Democrats and the Coalition Party have fundamental, major differences of opinion in many sectors of politics. Perhaps the biggest are in economic policy, but also in the basic understanding of, say, social and health services and many things like that, but I don't see that our party has any difficulties cooperating with really any other group, except perhaps the Left Alliance. The differences there are so big that maybe it's unrealistic, since their thinking goes over to the side of socialism, whereas for us, a free society and a market economy are such a central part of our thinking. But we can certainly discuss things even with the Social Democrats, because the people deal the cards, of course, and then we play the hand we're dealt. And of course, we are working for the common good of Finland. [09:43] I think it's really essential in Finland that everyone remembers, including our good listeners who are smart and photogenic on this podcast too, that people who are of a different opinion aren't evil. They might be wrong, or they might be of a different opinion. Sometimes both. Sometimes you might be wrong yourself. And then you have to correct your views, but people who think differently are not enemies. No, no... in this country, we can't build a future by somehow categorically dividing people here and there. And it's obvious that the next government has a big task specifically in fixing this economy, because Finland is now sailing in such dangerous waters and facing such difficult problems that the task will be massive. And of course, the Coalition Party strives for as good a... government specifically in fixing this economy, because Finland is now sailing in such dangerous waters and facing such difficult problems that the task will be massive. And of course, the Coalition Party strives for as good a... the election result as possible, and also to the government afterwards to take care of matters. Yeah, I'll pick up on two things there. So, this politics is, unfortunately, a zero-sum game. You are now in different electoral districts, so for you it's not that cutthroat, but if you were both there from Uusimaa or Southwest Finland, then this wouldn't be so relaxed. So it would be... I see it all the time when I have someone from the same district, even the same. On the other hand, we probably don't have quite that much shared voter interface. It probably shows in that. We tour quite a lot of discussion events with Jona. [11:09] We go around and it's nice, because we don't have that kind of... we are like maybe, well, competitors, partners, but it's not bloody in that way. Yeah. But then, another point: the Left Alliance was mentioned and this cooperation. Sanna Marin decided, regarding election tactics, that the Finns Party won't fit in the government, so it inevitably became a leftist bloc plus the Centre Party from the previous government. The current one became a right-wing bloc by the skin of its teeth with 101 MPs, so in a way, there is a temptation to go into bloc elections, which could then at worst prevent, say, a Blue-Red coalition, which in my opinion is still a quite logical government option. So I, for one, don't hope that next year we end up in a zero-sum game where Blue-Red would be impossible, because I think that would just be too drastic, because then we would automatically drift into bloc elections. At least it needs to be kept on the table. And now, the Left Alliance... in a way, you came up with this cross-parliamentary mechanism called debt brakes. So my experiences regarding Yle are really bad in that regard, in my opinion. [12:16] It doesn't work there. But in this debt discussion, I think that was a quite brilliant, brilliant discussion forum and you can see the zero-sum game there; the Left Alliance, in my opinion, quite cynically opted out of this mechanism. I don't know if you Do you share that interpretation? Well yes, maybe I'll go back a bit to Ville's good reflections here, that this competitive setup actually, like, between parties or MP colleagues, or when we are in elections, between candidates, actually due to this Finnish election system, it is always more inside the parties than actually between the parties, because in a way, since Finland's semi-open list election is based on the fact that everyone collects votes for the same list, and then on the list the ranking determines who gets elected, so in reality the biggest competitor is actually always that teammate from your own sports team on that same list, whom you basically have to be able to beat so that you would be higher up. This kind of explains why sometimes people at the House joke that it might even be the case that MPs from different parties coming from the same electoral district might even get along better with each other than those from the same party and district, especially if they happen to be from the same city, for example, and especially if they coincidentally might also be in different factions within the party. [13:40] So I find it sometimes even a bit amusing that it might be easier to get on the same wavelength with a representative from another party coming from there. Well, yeah. Then maybe a bit more about these polls. I think that of course, since there's still a year and a half left, and in politics a lot can happen in that time. As such, this support situation has been quite stable in Finland for a longer time, which I think is visible in these changes too, as they have been very small for quite some time now. No such big change in one direction or another can be found in individual polls. So it's maybe worth looking at these trends a bit, how they have gone. But the general fact is also that the closer we get to the elections, the smaller... margins start to change. That's how it has always gone. That's how it went in the last elections, that's how it went in the '19 elections, that's how it went in the '15 elections, and so on. So that's why I have stated, at least to my own people, that now is certainly not the time to take it easy and say that this is how we're going now, because with these good numbers, which these undeniably are, there is sort of this... [14:45] when a journalist asked me what my thoughts were, I said \"scared,\" because here there is like... I don't mean that one needs to be terribly afraid of people, but that when you look at this from the inside, a good situation always has that bad side, that sometimes it makes you a bit slack, and usually, well, you shouldn't let that happen. Well, then regarding this bloc issue, I am actually a bit inclined to think the same way, that in my opinion, into this Finnish political system, this kind of bloc thinking fits really poorly, and it should be avoided, due to the fact that firstly, we have a very, if you look internationally, a very fragmented party system, so in a way, within the framework of this current system, with the current support ratings, roughly speaking, creating these kinds of blocs always becomes, in one way or another, a bit artificial, and that's why I wouldn't go for this, and I'm not so sure that if in those countries where this kind of system is used, whether it has actually improved things, because in reality, a bloc always means that the swings in politics are always wider. [15:55] Well, if we were in a situation where everything was going well, then why not. In that case, society could probably withstand swinging a bit in one direction and another, but especially in a situation like the one Finland is in, where we are doing reasonably poorly in many areas, especially here in the economy, then I don't think it is justified that we would start pulling this kind of 180-degree turn every four years in a different direction. So that's why I don't hope for it, and also because in many situations, I could actually imagine that since in many situations, I could actually imagine that inside those potential blocs, there might actually be quite significant disagreements on many matters of principle, and then again it might be possible to find, between the blocs, perhaps even more natural cooperation patterns with certain parties, and that's why I think the approach followed in Finland, where we go into elections, and hopefully everyone goes into elections with the mindset that there aren't terribly high thresholds for different issues, or terribly restrictive opinions or exclusions. And then, based on the election result, we see what kind of functional majority government can be formed, and then we go with that. Yeah, I'll just... [17:06] before Ville speaks, yeah, let's get back to that, but for me a market-liberal minority government would also be fine, supported by strong blocs parliamentarily, but of course that's not the Finnish tradition. But yeah, Ville, regarding this debt brake... others... it was absolutely... I really didn't believe at all that something like this would be found in Finland, and then I'll repeat, the Left Alliance was the only coward, in my opinion, that stayed out of it. The debt brake relates perhaps specifically to this whole picture. If we had a situation where a significant part of the political field didn't share this situational picture of the economy, that big actions are needed, then we would inevitably perhaps be in this kind of bloc thinking. But the debt brake agreement is a historic deal that dismantles this. I didn't believe in it myself back in the summer, but now that it was achieved, it is indeed historic and an exclusively positive piece of news for Finland. It's about the fact that we agreed parliamentarily on a procedure to create a shared situational picture and set shared goals. And then this was also put into law. So Parliament is, this week, approving the law with a huge majority. The first votes on statements were I think 158 to 10, so a massive majority, almost NATO numbers. It shows we have a mutual understanding that this [18:28] debt problem will be handled together. The tools will be decided by each governments. So the people get to express their views on how this is tackled. Of course, elections are about other things too, but the commitment to the fact that no one is rushing anymore to hide behind populism to avoid bearing responsibility, well, that is a big, significant agreement that hasn't existed before. And it now gives us the opportunity as a nation to deliberately and systematically curb this debt trend, because we are truly in a situation—think about it—with 10 to 12 billion in deficit year after year. A debt ratio that will soon breach 90 percent. We are among the worst performers in Europe. The EU deficit procedure will formally start in January. We are on a path that will lead to a total collapse if nothing is done, but fortunately, we are doing something. This government has already started fixing the economy, and now we have a deal that the next government, and the one after that, and even the ones following will continue this in one way or another. And this is excellent news for Finns, excellent news for international financial markets. This is visible, for example, in the fact that our credit ratings would likely have started to drop, but because [19:55] we have this deal wrapped up, they were kept unchanged. Our figures would actually give grounds for credit rating agencies to lower our creditworthiness. I am very happy and also grateful to all parties that they were able to join this. This was... this will remain in Finland's fiscal policy history as one of the most significant turning points. Yeah. What about this, Joona? Since it sort of goes against the opposition's ethos a bit, that this supports the government more than the opposition, so how heavy of a concession was this for the Social Democrats? Well, maybe it's good to start framing this by looking at the situation we are in. And as Ville just described the state of the public finances, so even if we didn't have any rules from the EU... domestic, we would still probably be reasonably widely in society of the opinion that we cannot continue like this, and then I think it is clear that a corrective move is needed. Well, then in politics, the means to commit different political actors to act in the same direction are these kinds of parliamentary agreements. [21:14] And here, of course, legislation was also enacted, because these EU rules oblige us to do so, which hopefully ensures, in a way, that the commitment to achieving that goal is also genuine. And here in Finland, we have a strong tradition of being able to agree parliamentarily on various goals, towards which we have then moved. The most typical example that always comes up is here on the defense side, where there has hardly been any such disagreement. Uh then there are many others, like in research, development, and innovation activities, or regarding Yle during the last term, where this parliamentarism was followed, really due to the fact that it is an institution under Parliament, and so on. Well, usually these have been more like agreements on a goal which, in reality, has meant increasing public spending. Mm. And that is probably partly why this discussion became a bit odd, as some perhaps didn't think that we could agree also on keeping the public finances in at least somewhat decent shape, or aiming to proceed towards getting this situation under control. And that's why it maybe caused some people a bit of difficulty, but I think it's great that this [22:36] was achieved. Then I'll just say one thing about this, in a way, that since these kinds of fiscal policy agreements, legislation, steering frameworks—whether we look at it at the EU level or domestically—they are ultimately, in their technical details, absolutely damn complicated, so I've sometimes said that if someone suffers from bad insomnia, it helps to start reading this to digest the European Union's fiscal policy framework or this our domestic one, and well, that's how it always is when we of course in a complex world, when we try to take into account various... twists, then the regulation always becomes, in one way or another, a bit... compl— actually, go read the agreement, listeners, it's not very long exactly, and coming to this, that ultimately, whatever the legislative clauses were, I think the central thing is that since we have in any case committed, together with other EU countries, to managing this public economy within the EU framework, within those agreements. And now with this national, sort of additional regulation or agreement, whatever one wants to call it, we ensure that we really want to follow those rules to which we have already also [23:47] globally committed. And I hope that this leads exactly to the fact that in a way, this struggling free— the national add-on struggling free happens less, since this is sort of so broadly... signed off. And then luckily, the Left Alliance has also stated that these EU rules are accepted. And now, regarding the next two terms, with all the information that has been available, we are proceeding purely with these EU rules, so I suppose they too should, through that, now at least accept the minimum level anyway. Yeah. Let's move to that Left Alliance dissent, which I think is... I could still explain what this debt rule means in practice from now on. So now that we have a deal made, we shook hands on it, everyone signed it except the Lefties put their names to it. Uh, and now we also have legislation in force from the start of the year, so currently the parliamentary working group on fiscal policy, where I am the chair, Joona is the vice-chair, and there is representation from all parties so it has been working since the beginning of October, and by the end of February we will set out in our report a binding target for the public finances of the next seven years [24:57] strengthening. So, a goal to which all parties regardless of the government commit, that this is how much we will fix this debt challenge, and also the next electoral term's more detailed goal, which will be refined further in December '26. And these goals are set now before we know which group will go manage things, but the goal binds the future government. So the next Prime Minister or government negotiation conclave cannot then decide that we won't fix the economy after all, but it is agreed in advance and and the monitoring procedures are written into law. The Economic Policy Evaluation Council will then monitor whether this goal setting is being followed sufficiently. That government then, after the next elections in April-June '27, will choose the means, that okay, this much spending is cut and this many legislative changes are perhaps made, which strengthen public finances, this much with taxes, depending quite certainly on the government coalition, but we will have information before the elections about how much public finances will be strengthened. This is of course much better procedure than one where at the House of the Estates during government negotiations they would start guessing what should be [26:18] done here. Then it is much harder, and this is the big benefit. This debt brake group, or rather this fiscal policy parliamentary working group will not outline what is done nor will it at any stage evaluate the sitting government, but it always looks forward and it is a really important place for our party to stay on the map, the whole parliament on the map about where Finland's economic situation is going and what must be done in the future regarding the scale, and then in the next term when the new government has started, a new working group is set up which sits for the next parliamentary term, which looks forward again and it will, in the middle of the term, set the next long-term eight-year plan and again before the next elections, meaning before the '31 elections, the '31-'35 government term's adjustment goal and then again forward from there in the 30s in the 40s, so this becomes a kind of permanent mechanism with which we slowly can push the debt ratio to a reasonable level and take care that the public economy stays in shape and we don't end up on this kind of uncontrollable Greek path. So Finland, fortunately, isn't on that path yet, but not very far from it. Actually, maybe we would want to be on the Greek path, because they are lowering it at a pretty hard, pretty hard pace, and this kind of procedure has been in place in Sweden for decades, for example; in the 90s they were able to do the same thing there. [27:42] And now it's really important that since the deal is made and it has started to be implemented, that we get this kind of permanent arrangement in Finland, where this thing, well, also stays for a timeframe of decades. That is really awesome and good that you opened that up, because I also change my mind about these things. I mean, I'm no Nalle fanboy, but I remember sometime back in the day he wrote a book saying we should go for a constitutional court. But then when I had a discussion about this, I have actually moved to support this Constitutional Law Committee of ours and who was here by chance, the chair of said instance, or this Westman. Yeah, yeah, but in a way, and I'm still of that opinion, so in a way this kind of parliamentary working group where smart MPs... is this an institution made up of MPs, by the way? Yeah, so I'll just throw out a wild one here, haven't done that in a while, but Joona is starting to heat up at me too. So, like, if you want these guys to continue as number one and two, then you should consider voting, because if some guy comes along who really doesn't know how to count, then it's a terrible loss for this thing too. A bit in the same way as in the Constitutional Law Committee. So, like, if some pretty random types end up there who then listen to some pretty, pretty delusional legal scholars, then it becomes quite... [29:05] insane harm to the national economy. This wasn't a paid ad. Thanks Sami, but if I may just... ...challenge Comrade Räsänen a bit on this... ...so this whole pod doesn't just become mutual back-patting. This was really great. It was a really great thing that the SDP... ...is now involved in this shared situational picture of the public finances, and... ...we have a procedure to handle this job, and you are permanently... ...even historically one of Finland's major parties, like us, and both have... ...a big responsibility for the fatherland because of this, but it has indeed been sometimes... ...a bit awkward and, shall we say, even sad to watch from the outside... ...to see that there have been quite strong, very leftist tones... ...during the last chairman's term in the SDP, for example, and apparently still... ...you had a dispute about whether one can be involved in this kind of... [30:05] ...responsible procedure. So Joona, could you open up a bit about how... ...this awakening of the SDP to responsible economic management has happened? Well, yeah. Without any malice, and just to explain to everyone... ...it's worth explaining that in big parties there's always this... ...so-called \"wide walls and high ceiling\" situation, where... ...which means that, especially inside large parties, there are... ...people who think differently and have slightly different priorities. And then perhaps our besetting sin, historically speaking, has been..."}, {"slug": "727-otto-juote-tere-sammallahti-stea-leikkaukset-paljastivat-vei", "title": "STEA Cuts Expose Finland's 'Veikkauskratia' | Otto Juote, Tere Sammallahti", "titleOriginal": "Otto Juote & Tere Sammallahti: Stea-leikkaukset paljastivat Veikkauskratian | Neuvottelija 393", "guest": "Otto Juote, Tere Sammallahti", "guestsCanonical": ["Otto Juote", "Tere Sammallahti"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/otto-juote/", "https://www.neuvottelija.com/podcast/guests/tere-sammallahti/"], "episodeNumber": "393", "publishedAt": "2026-07-03", "duration": "01:05:22", "format": "full", "topics": ["finnish_economy_policy", "free_speech_society"], "description": "On Neuvotteluklubi, Otto Juote and MP Tere Sammallahti dissect the summer's hottest political drama: minister Wille Rydman's STEA cuts and allocation criteria, which forced the NGO sector and the political parties to show their cards. The discussion broadens to Veikkauskratia, the mechanism by which taxpayers' money circulates through organisations and lobbying agencies back into lobbying politicians. Statistics Finland's GDP revisions reveal that the Orpo government's growth figures were better than thought, and the Marin government's figures weaker than thought. Finally, they consider whether artificial intelligence could replace a significant share of the public sector's 700,000 employees by 2031, and why Finland's real fundamentals, such as the birth rate and the emigration of skilled workers, remain overshadowed in the debate. The episode ends with the question of whether the system will correct itself from within, or whether the IMF is needed to discipline the Finns.", "page": "https://www.neuvottelija.com/podcast/episodes/727-otto-juote-tere-sammallahti-stea-leikkaukset-paljastivat-vei/", "text": "[00:00] All right, welcome to the Neuvottelijaklubi. With us are Otto Juote and senator Teräs .. Tere Sammallahti. Hey there. Greetings. Hi there. Hi. That Teräs Sammallahti, though. You're just being tested. It's a rhetorical technique called steelmanning Yeah, you're really getting roughed up a bit there and, um, usually that's more like strawmanning, yeah, but, um, my opinion is that people should actually do more steelmanning. Well, but you get used to it. It's nothing. Yeah, so, parliament is on summer break and but um the permanent secretaries are grinding away for government harmony. So the Finns Party's minister in charge, Ville Rydman, set off this kind of classic 'off we go into summer' drama, where, um, he announced that the social-sector cuts are proceeding within his, um, ministerial limits, and these have even been agreed within the government, that these will go ahead, and not a single social-sector organisation will then [01:00] get more than 10 million, though. This is a small relief, so, um, I understand that the minister in charge then even gets to make political decisions on these himself. This is talking about STEA, but STEA anyway, yeah, so, um, what do we think about this summer drama? Usually they're some kind of anti-racism campaign, at this point there's always this thing where Orpo digs up that government paper that has the anti-racism, um, promise. Right, right, well the Finns Party has a knack for always surprising people right before summer, like of course we'd manage fine without these too. But in itself this is a really interesting situation for me personally, in that on one hand I didn't really see in Rydman's um, criteria that he set. I think it's important here for everyone to understand two things. Nobody is backing away from the cuts that are being made to STEA funding right now. So the timeline is that the previous government moved these old Veikkaus profit funds over into the state's budget economy side, and then their nice idea was that this way you'd protect this, this old Veikkaus [unclear] [02:03] from, like, the drop in Veikkaus fund returns, and, and I myself wondered about this logic, because it was of course totally obvious that since we'd been wading through [unclear] and the deficits are wild, so, so then that also needed to be targeted with savings, and of course as far as I'm concerned they could even stop looking at those funds entirely, those funds, but, um, that this government has now cut roughly 200 million euros from this STEA funding. Something like 195, I'd guess, was left now. And what this controversy is actually about is how minister Rydman has then, for these remaining funds, set these distribution criteria. Well, everyone can have their own opinion about those. In my opinion they're actually even a tiny bit too loose, like. Based on them you can distribute still terrifying amounts of money, like, all over the place, really, without any kind of impact assessments. And then some of us, meaning the National Coalition crowd, might have been worried about some other issues, but maybe this now, in my opinion, revealed all sorts of things about all sorts of [03:07] parties, and maybe the most important thing to look at now is how totally panicked that old, old NGO-world really is, because now they don't actually know what's going to happen to their funding. But um, I expect Otto's much more sophisticated analysis, and we'll get back to those, those things that are actually important. Right, but maybe it, it could be that it's actually pretty raw and somehow, um, brutal. But, well, I mean, where that controversy came from — well, of course it's that [unclear], or whatever you want to call the Veikkauskratia now, isn't separable at all from the parties. So, I mean, why there was that kind of panic and panic and, um, this kind of foot-dragging — well that of course relates to the fact that really all of, um, well especially maybe the older government parties have their own cow in the ditch. They've got their own people in those, [04:09] in those organisations, drawing a fat salary, and I don't know what Rydman actually did — he used his ministerial power exactly the way he's supposed to, in his own domain, and there's really nothing controversial about it. If he had increased some budget, or shuffled some money shadily into some pet cause of his own, the controversy wouldn't be nearly as big as it is from him going in so brazenly to cut, and actually the worst thing he did was set it up so that he basically forced everyone to show their cards. So he can keep saying, well, tell me now what, where the problem is — is it now some recreational fund from Folkhälsan, or um, do you have some refugee center somewhere that brings in nice rental income, so then the money, the money would just go, like, from [unclear] — money that just misses the mark, kind of, if a great, great organisation got a little less money so the reason it's such beautiful politics is exactly that [05:13] in a way Rydman basically forces those opposing these cuts into a really awkward position. Well, I'll, I'll latch onto that. This is I mean, completely true, and, and in my opinion the right analysis — of course these government-harmony things, and, um, in the name of that, we still have almost a year of the road together, and a hell of a lot of big things, um, to handle, so it would of course be nice if things were handled more smartly behind the scenes there, but I agree that basically when the cards are forced out into the open, then citizens also have the chance to assess and weigh different politicians' and parties' own agendas, and in this case, of course, the political move was pretty successful. Although it has to be said that in this government, as far as I understand, not a single minister, regardless of party background, has had that kind of um, power to be able to get a 200-million-euro pot and, and get to allocate it exactly however [06:13] he himself wants. So it was fairly clear that other members of the Council of State also had something to say about these criteria besides, besides um, Ville, but I do believe Ville knew what he was doing, and in my opinion it was really quite a good and, um, important move, so we got to see a bit, actually, who yelped and who didn't. But I do have to say about these, these criteria themselves, that it was a bit of a clumsy move from Ville, then. And I understand it, like, from a communications standpoint, that, that, that now when they want to give the NGO hoarders money, like, and not toward frontline work, well in my opinion frontline work is kind of a nice idea from a messaging standpoint, that this is now the thing we're investing in, but frontline work itself doesn't automatically mean any results. Network marketing is frontline work too, but that doesn't produce any economic benefit to the nation, or any real benefit to anyone else either, really, does it. So that's why, in my opinion — I've been trying to say this elsewhere too, but I'd hope for it this way, that [07:14] market-right actors in the — in the government, or the Council of State, or in the Council of State, or in a government party, would take the angle that these criteria should be significantly stricter and focus specifically on the results of the work. So if you have to hand out 190-something million to these organisations, then at least you'd make sure that it goes to the most effective places, and, and this is where this Rydman criteria set doesn't really address it. So there could be something in it for everyone, if the criteria were actually thought through so that, that results and efficiency, um, were emphasized. But the fact that if Folkhälsan has like a billion euros in assets, then I do question a bit whether they need STEA support, and why they nee— Yeah, and I'd add here that well, um, these kinds of lobbying organisations whose only purpose is basically to recursively influence the system so that, um, they stay alive, or whatever it is, their sort of left-wing [unclear], [08:18] well, well, that they're specifically being tried to excluded here, that in my opinion is totally healthy. Of course, of course. Right, and I mean, that like, like in a certain sense it sounds good, but doesn't, um, like, do these organisations actually accomplish anything any results whatsoever this way? And Wille — Rydman — didn't have, in my opinion, anything like a 200-euro pot that he was handing out — instead he saved taxpayers' money by cutting, in a way, activities which maybe aren't so important for the state's core functions in a situation where there's really little money. Finland is in debt and our indicators are pretty, pretty far into the red in quite a few respects. I'll push back a little. Ville, I mean, didn't save anyone's money or cut anything at all in this case — those are cuts that were decided back at the last budget session. So the whole Council of State, or the government parties, stand behind it as one, that roughly 200 million of these funds are being cut during this government term. But then this set of criteria — I mean, technically, with those criteria you could [09:21] still probably hand out a few billion, like, in money to those in need. So in that sense I do think it's a little bit loose, that in my opinion a great goal for the government, or for the Council of State folks generally speaking, would be to narrow that fan, basically, narrow down what that money can actually be used for. Rydman, I mean, narrowed it significantly, but it should be narrowed significantly more. I feel like, um, yeah, well, okay, I mean it's probably technically, technically true, yeah, it comes down to, um, let's put it this way, that he directed, directed, basically, that money, um, to some extent toward narrower criteria, um, but it's [unclear] wrong in general to talk about any kind of civil-society org- -anisations at all — they're not civil-society organisations, they're part of the state. Because if, if basically year after year you operate on state funding, and, and even in such a pathological way that they've started, in a certain way, taking taxpayers' money from politicians, which they pay to communications agencies, which lobby on their behalf for them to get more money, and then [10:23] this just spins around every year, and, and grows and swells. So in this like, well we don't have any — in Finland there's no civil society at all. Here people don't even really understand what that could mean. It's just this weird state-owned thing, basically an expenditure apparatus, and, um, I don't know, it's actually all the same to me — like, in some, some sense the targeting too — I actually think it's kind of nicer if the money gets used on some hand-waving, let's say, over in, um, frontline work, than paying some umbrella organisation's umbrella organisation some kind of pastry funding, just for the sake of some general um, fairness, even though, sure, sure, the whole thing overall is still massively undesirable, unjust as a starting point, basically, so if you're a civil-society organisation, then you [unclear] get any state have to say about that already. So, I mean, in the world there's this thing called NGO, meaning non-governmental organization, well, um, we don't even have a descriptive [11:24] word like that at all — it's just, like, third sector, or organisation, or do-gooder thing, where, like, that fact gets completely erased — that specifically, the state doesn't put money into it. So specifically here then that isn't even questioned on any level at all, that this money comes entirely from, like, the state's taxpayer and debt pump. Um right, right, so it doesn't matter at all, and a word like that describes like, our nation's level of, like, socialism. I'll second the two great remarks before mine, because any viewer who hasn't yet read the excellent book called Veikkauskratia — the term Otto just used a moment ago — should read it. Then you'll understand how this racket works. And exactly that mechanism Otto just described, where politicians are allowed to give taxpayer mon— -ey to organisations there, which then buy advocacy work from these kinds of influence agencies, which then lobby politicians, and so there, [12:25] in the ad — or influence agencies, as well as in the org-world, as well as of course then in parliament too — in all of them politicians occupy the most important positions, which, I mean, in my opinion is very clever. Sounds healthy, right, and then all of this is called civil society. Exactly what you said, that this is a completely perverse situation, that taxpayers' money is feeding this endlessly circulating, circulating, um, deus ex machina, which is then still called by a name that in no way could call this an agency. I've called these state-organisations, but in no case are they civil-society organisations — they operate as sta— or socialism. But would that itself maybe come from that, sort of, that MP org- from this Veikkaus monopoly, when, basically, for decades this idea was built up that a Finn always wins, and actually it's a bit honorable to play that, like, negative-expected value game — I mean, I mean, um, Veikkaus, some lottery or the like — [13:27] and then it was made to feel good, because you're basically, like, a little bit supporting those, um, good organisations out there, which help those, um, a bit, like, yourself and other dumb poor people, um, and basically then when this got erased out of the middle of this, when this Veikkaus, Veikkaus's, like, um, money-distribution apparatus, which was, I mean, still a lasting system. There you at least had to basically end up directly at some Veikkaus circles, so I could get my hands on that billion. Now that it's basically been made to vanish, poof, well, well, then, um, somehow this thing has stuck around, so that nobody realized the magician has no clothes, or however that metaphor goes, and that it's basically just a pure income transfer from the taxpayer's cash, but nobody, somehow, with the old momentum, disputes this. Now the government made a pretty, um, clever move, or a slick, or good, um, Veikkaus reform, in that it only kicks in after the elections — apparently in Sweden, Sweden they made this mistake, that back when, ages ago, this state monopoly was fixed, like, in Veikkaus, well that was right before the elections, so people got to [14:28] then build their whole campaign war chest out of it. Well, so the advertising there got out of hand. We have tried, yes, to remove those, those mistakes from the law, because over there in Sweden digital advertising just totally exploded right in your face — you couldn't see anything else but some Betsson and and other stuff. But, um, back to this, this Veikkauskratia thing, well, well, just— what you said about it earlier, and it comes out in the Veikkauskratia book too, the fact of how this lobbying activity has worked before — that previously um, they lobbied, basically — SOSTE and STEA have been the gatekeepers, which have then been in very close contact with Veikkaus's people and, and then there are things like — I mean, think about it, there's been at Veikkaus some kind of, like, lotto lodge, that's been running all year round. They've been shuttling these, like, specifically politicians have been shuttled there to be lobbied, and all sorts of other things, so basically this has been going on — the heavyweight-category finale happens there at the Levi cabin. There's like different, but this has been described — that there's a middleweight-heavy category. Yeah, right, right, so, like, [15:31] basically there are big deals, that then youth organisations' rep— political youth organisations and other beneficiaries', like, groups get flown out for a week off somewhere there to Lapland to live it up on shared money, and then they emerge from there as, like, staunch defenders of the racket, and they've seen the light about how incredibly important the work there, like, [unclear] and everyone else does, so, in my opinion, as long as the sauna photos don't come out, as long as they don't, right, and apparently there apparently were, um, girls there too, yeah [unclear], and apparently at some point it came out that these were, I mean, lavish — I mean the way people were hosted there was, like, lavish. Some youth-org intern had gone, you see, and posted on Insta or somewhere, and then it started to come out — I'll just say here that, that I'm not trying here to whitewash, basically, the racket's actions — in my opinion it's extremely awkward regardless of party, and of course there are National Coalition people too in these organisations, and organisations' organisations, like, running that roulette wheel. And then the fact that even if from parliament [16:35] there's a reaction, or from that organisation of organisations, from whichever organisation, there's such a strong reaction to the fact that in a situation where we have like a chronic state-finances deficit of over 10 billion euros, people start, like, griping about, well, now they're taking from us, and now just think democracy apparently ceases to exist, civil society, welfare services, everything's been run into the ground because STEA funding has been cut in half. Yeah. As I recall, we don't, we don't have — we can't afford democracy. That's just a cold fact. It has to be faced with some kind of, like, I don't know if it's enlightened autocracy or some sort of short-term junta, so we get some [unclear]. Which won't come to Finland anymore enough. So it's totally clear, if you want to get out of this somehow, um, but that Argentina model, basically, well that window already closed. But this is heading in the right direction anyway, in that, well, if earlier we had a system where adjustment pensions for MPs were endless, and you could basically go off skiing on your pension [17:36] and still do side gigs, um, possibly right alongside it at worst. Now we noble MPs decided that then, basically, well, we still get these adjustment pensions, but after us it's the deluge, so, so, so. Well, but Tere is already in this suffering category, in that you have this kind of quick, roughly two-year window, annoyingly fast. So then give the boomers still one more, uh— quickly disappear and fall into the void, but then that falling into the void of course this has been this org-world, um, which is actually a brilliant framing, which has been attacked really hard over on A-studio — that you're not allowed to say 'racket,' that this is noble work. No 'racketeering.' It's a perfect word. I mean it describes — in my opinion [unclear] gets upset. Don't use that word. Well, but I'll use it anyway, like, it's, it's a good descriptive word. They don't like it over at the National Coalition. There it's just going every which way and all over the place and whoosh, and someone whines. I mean even right now someone at National Coalition is watching this, probably like [unclear], and can barely get a word out of their mouth, just tears streaming. But since there's this kind of off-ramp, where you [18:38] then get to, um, potentially earn like ten thousand euros a month just shuffling papers around like that, and, um, that doesn't change. So taxpayers still pay for your job, like, even in parliament, and, um, possibly the work drops to a fraction — meanwhile these superstars are gone from the private sector, basically, like, from everything — they have brilliant ideas. They just go to waste there founding organisations, like unicorns, even right now. This, this is my point specifically — that when basically your safety net gets taken away, meaning your dumb decisions directly come back to bite you in your post-parliamentary reality, that in your self-made and political world you should get some kind of market-economy gig, whereas before it used to be that it didn't matter at all, that you could totally crap on the system, completely, like, completely into socialism, and there was always that saving raft. Either the, um, adjustment pension, or then these lovely, um, paper- shuffling posts there at the racket's core, um, preferably in leadership roles, so you don't have to do anything at all. Right, right, so basically when those get removed, well, well, this is actually really healthy. Then a small kind of [19:40] small, like, steering effect starts to appear. Should I maybe build this society for the purpose that I'll manage here after this, like, [unclear] afterwards. Right. But isn't this pretty logical? Or I mean, somehow I think of it this way, that I'm not panicking at all about what's next. Though it does worry me a little. Well, no, but I mean I do — I'll find a job. It's not like — I have 15 years of experience in the field. I'm not worried in any way. Of course, having put in years of work for this job, it would of course be a shame then if this ends after just one term. So that's pretty clear as a matter, but there's nothing — my financial or mental well-being doesn't depend on whether I get elected in the next election or not. Which of course should be everyone's situation, but unfortunately it's not, as, as we all know. But I will address this, um, this word 'racket' a bit more, as to why — don't say, don't use that w— -ord, and in my opinion that's totally, totally valid criticism, that, um, in practice, since good work is being done in that organisation anyway, some people find it uncomfortable that the whole [20:43] civil-society-org field, or at least the part of it receiving this support, gets basically branded with some word. And of course it's true that many people, say, staffing some mental-health helpline as a volunteer, surely do much more meaningful work than many people, say, in a leadership role on a fat salary at organisations of organisations. So I don't know how, how you'd even address that group of people, then, who give their own time to civil society, like, genuinely, and do that volunteer work. But I am fairly convinced that not a single organisation like Kulta ry, or SOSTE, or Fingo, is needed in that eq— equation for it to work properly. But well, this is of course just my kind of very idealistic worldview. Right, and I mean, I've long pushed for the idea that Finland would need a market signal, because our, like, basically second-best jobs are like state jobs, and the best jobs are the ones where you sell something to the state. You do some project, say, a national [21:43] flagship project. But then into the politician's and the elite's life some uncertainty creeps in that isn't wanted there. Yeah, it, it could be that there, um, you'd have to, have to swap the pastry for some [unclear] croissant, and but, and, and I mean sure, like, that class defends itself, but I'm not at all sure that any kind of tweaking or cutting or adjusting actually helps all that much. It just doesn't pay off, often, like, the effort for an individual politician. Because there you'd need much bigger structural reforms. I mean, you can already see now that if some kind of Mickey Mouse, um, targeting is done somewhere, then you've got, like, half, half of society out there shouting somewhere, or it looks like all the communications agencies out there are running some campaign. They say there's some granny dying because of the project, and, um, and children are being abused. So when here, like, Vertti now gets given some kind of — I don't know, I think he ended up laying himself off somehow on behalf of the whole country, and it's just, like, um [22:49] because there's this kind of, like, taxpayers are in a much worse position, and actually politicians too, to some extent, tied into that system, because basically it's worth their while to go there every day, sort of greasing palms, and flying off to Levi and talking about how this is really important. that, um, we're doing this kind of valuable work. Look, even here there's this volunteer. Like over there, that's — that person does volunteer stuff. Who can say that maybe someone doesn't benefit from that after all. Who knows? Maybe. It might not be, or it could even be harmful, but at least it looks good. And so there, like, sure, completely consciously and deliberately, it gets muddled — that kind of association gets created, as if, like, the umbrella organisations' umbrella organisations' umbrella federation, and its international secretary, and, and their sort of PR work were the same thing. Of course it's not. And then because they basically have that, or they've arranged for themselves, a mechanism where they can take taxpayers' money through politicians [23:49] and lobby politicians, saying, hey, we need more organisation funding — so there's this kind of public-choice problem here, that in practice, for us as individual citizens, it doesn't pay to oppose these. So even when we basically win that scrap, we've saved like a couple euros a year, while Vertti has made those tens of thousands every month. Mm, mm and then he just lays himself off, when out of this comes another Social Democrat government. Yeah. But I don't understand how these get defended, like — somehow, I mean, once again in my opinion the problem is that the national economy gets misunderstood, that as if this kind of investment, meaning income transfer — totally pure socialism, somehow, creates something positive for the economy. That of course destroys the original, um, owner's, um, wealth, and resources, and ability to operate in the market. It gets transferred somewhere then, and then, um, that, and then people make up stories like this — sometimes the effect is five times the investment, or something, like, basically, where there's not a shred of logic in it, like, in the first derivative of the thinking, and usually it just gets worse from there in the second derivative, when people start, like, hallucinating about how this [24:52] effect works with this money, and what, what nerve, that you still live in this, like, the most heavily taxed in world history, like, socialism, meaning Finland, and then they still dare to say that their work is important, like, well, just as if people's money basically doesn't matter to them. We're probably like, sort of, going along with it, sort of, at home, sort of, like, yeah, right, that we won't take the kids to the beach this summer, like, yeah, it's like, damn good that this umbrella organisation got saved because of this, this work is being done, it's worth waking up, like, [unclear] over there, this is, in my opinion — I'll get a great derivative out of this, and maybe, maybe Sami will get some clip out of this, who knows, but on this — as to who is, or for whom, each thing ultimately matters — well, in Finland there are about 100,000 organisations, registered associations of this kind, according to PRH, um, and last year I'd be willing to ban — so, and last year 724 associations or organisations got this [25:52] STEA support, and now we're being led to believe that if these 724 organisations don't stay in on this racket and don't get taxpayers' money, then democracy dies, welfare services die, civil society dies. So how insulting this kind of talk is to almost all of those other 100,000 organisations, and their volunteers, those people who pay membership dues so that the organisation can operate and do everything. So how insulting this kind of talk is toward them — as if their activity has no significance for civil society, for democracy, for any services, but it's only this elite of elites here in these 724 organisations, which live off taxpayers' money. In my opinion that's irresponsible. Maybe we could move on now to another topic. I've been, um, waging this kind of long simmering war, um, with another, um, gentry, which I call sweater economists. They're often in that kind of organisation, which gets state support, and, um, then they [26:54] write these kinds of, um, papers, which then say that this kind of extra socialism is vital for the national economy and for gross domestic product growth, and they use terms like, say, hysteresis, that, um, there might be delays when that money gets shoveled toward the public sector side, but then good things still happen from it, they do happen, and they happen with a delay, but they happen anyway. Is that a bit like trickle-down? But yeah, it's this kind of left-wing trick— trickle, trickle down, that, um, that it's like a really potent, um, and in my opinion for that witch doctors are needed. It does this kind of yeah, but those mechanisms are, like, basically — say the magic words and do certain rituals, and then sometimes the economy arrives. Yeah, those mechanisms are, um, they're not microeconomic mechanisms, they're macroeconomic mechanisms, those big lines, a bit, um, there's a bit of, um, how should I say, um, Hegelian spirit to it, in that, um, the thread goes: when a left-wing, um, guy says, um, public spending and socialism, and to the common, um, [27:58] purse, and, um, income transfers and Gini coefficients, then beautiful things happen — meaning GDP growth. And then, just as an aside, Statistics Finland put out a kind of, um, revision blog post, in which the headline is that actually Petteri Orpo's government's, um, growth last year wasn't actually the 0.2 that was first guessed off the lottery machine — it's actually 0.8, and then it was mentioned kind of as a side note that, um, well, initially for 2024 they guessed −0.2, two— well, well, it turned out to be, um, 0.9, so, um, here we're already getting into some pretty, pretty tough like a 1.1% error, downward like that, for the right-wing government's, um, first year, and 0.8% then for the right-wing government's second year, but then nothing was said about this, um, Marin government's term, for which also adjustments were made, like. So, um, I calculated that one too, um, or from the same one dug it up, that the first ann"}, {"slug": "559-kryptomyllytys-wichmann-neuvottelija-337", "title": "Crypto's Rise to a 1% Portfolio Allocation | Martin Wichmann", "titleOriginal": "Kryptomyllytys | Wichmann | #neuvottelija 337", "guest": "Wichmann", "guestsCanonical": ["Martin Wichmann"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/martin-wichmann/"], "episodeNumber": "337", "publishedAt": "2025-06-10", "duration": "55:59", "format": "full", "topics": ["investing_markets", "ownership_capital_tax"], "description": "Kvarn Capital CEO Martin Wichmann returns for his third appearance. Crypto has grown as an asset class to roughly a 1% portfolio allocation since the US approved Bitcoin ETFs and publicly listed companies began holding crypto on their balance sheets. Kvarn Capital Oy is a virtual currency brokerage and custody service and a registered virtual asset service provider (VASP), supervised by the Finnish Financial Supervisory Authority (FIN-FSA). This episode was produced in commercial partnership with Kvarn Capital.", "page": "https://www.neuvottelija.com/podcast/episodes/559-kryptomyllytys-wichmann-neuvottelija-337/", "text": "[00:00] [Music] All right, welcome to the Neuvottelija- channel. For the third time, Martin Wichmann. Hi there. Thank you. Thank you. Nice to be here again. Yes, and those two previous ones were Elon Musk's Bitcoins, meaning episode 64, where we discussed this radical and innovation, that a listed, even significant American company could own bitcoins, so that's where it started a couple of years ago, and then there was this drama episode where we went through the Terra Luna fiasco and in a way the fate of a kind of crypto mill, so to speak. Yes, I've certainly seen all kinds of market cycles along the way, so here are a couple of examples of the good and the bad. And we're doing this as a double podcast. So I was on your—subscribe to The M podcast. Here, this \"kvarn\" is Swedish and apparently means \"mill,\" and \"mill\" in English is \"the mill.\" Is that how the logic goes? Yes. Yes. In such an innovative way we've come up with names. Yes. So there we went through actually the bond market and in a way this [01:05] Trump's America hegemony complex's rise in risk premiums and then questions like whether it leads to, for example, changes in asset allocation and whether cryptos, at least the better cryptos, could be winners in this change. This is the hypothesis I've been fueling for almost a decade now, and it seems that finally it's starting to gradually materialize, so we strongly believe in this. Yes, and in this way among professional investors, it's quite accepted that at least a one percent allocation should be in these alternative basket crypto assets, the highest quality ones. Can't we say that alongside Bitcoin, there have emerged these proof-of-stake silver-level coins as well. Yes, we can have a debate about whether they are silver-level or gold-level alternatives, but they are very different; in a way, the value proposition in Bitcoin is largely based on its scarcity. Meaning this hard cap, there will be 21 million Bitcoins and there will never be more, and the issuance is disinflationary like this, meaning every four years it decreases, and then on the other hand, these other blockchain technologies, for example Ethereum or Solana, are then again [02:27] more like these smart contract-based blockchains which enable the building of various applications and bringing different functions in there, and with smart contracts building these kinds of decentralized applications. Yes. And aren't these, at least Ethereum and Solana, the kind that have strengthened their position? Yes, those would be examples of two such largest smart contract platforms. Yes. Yes, good stuff, and I must say that this was made in commercial partnership with Quan Capital, but it's a really fun concept, this kind of double podcast, so I really like it, that in a way you get to spar from both angles, so I think we should have more of these if others also want to do them. Yeah, first I got to tease you a bit and now I'm here in your hot seat right after. Yeah, but regarding various themes, so in itself, when you look at this now, so didn't you join this Quan Capital setup, so what do you have... I originally know you as the founder of this Aave platform already. Yes, my own story in crypto started back in 2015-16 when a friend called from Germany where he was studying [03:44] for a while, saying \"hey, there's this startup that makes payment terminal systems for crypto payments.\" And I thought this was a great idea. So I toured around the Finnish mainland visiting these IT firms and payment terminal providers. Very quickly I came to the conclusion that crypto payments might not be quite relevant yet in 2016. But through that I then became active in local communities. We created a Telegram group, which was one of the largest in Finland at the time, and through that I met Stani Kulechov and joined a startup project called ETHLend, which then later rebranded as Aave and is today one of the world's largest DeFi protocols, with a market cap around two to three billion and there's about 40 billion in liquidity there. Did you and Stani do this so that as founders you took the lion's share of the ecosystem, and now you are sitting on a massive pot. Maybe things have gone better for Stani than for me, but I've been through all kinds of cycles, ups and downs, and life is still with me, so to speak, but [04:59] it was around 2017 when these ICOs were at their hottest, so there, towards the end of that market cycle, we managed to do an ICO, a digital crowdfunding round, and ETHLend raised a good initial capital from it, but the tokens were largely distributed to the original investors who participated in this crowdfunding, and of course we covered operational costs on our part. Yeah. But Aave has been a working business idea in a way. So basically, these smart contracts and cryptos are locked, enabling this kind of yield economy. What kept me in Bitcoin for a long time, besides this proof of work, was that it doesn't have that yield feature, so then either with something like Aave... protocol on a DeFi platform or then, well, its money's other features, like in Ethereum where we are able to create this yield, so those have definitely been very good. [06:03] Yeah, and there are basically two slightly different yields involved here. Meaning Aave, which is a liquidity protocol that enables borrowing against cryptocurrency collateral and through that doing whatever each person wants with those borrowed funds, so there is basically a market side, so when you deposit there, you get interest income there and then correspondingly when you borrow, you naturally pay for it. And then there is also separately this, like, Ethereum staking yield. So if you want to participate in maintaining the Ethereum network and through the proof of stake consensus algorithm, you then get rewards when participating in verifying and validating this blockchain. Yeah, by the way, I was in the fifth year episode of the crypto association Konsensus ry, we just went through the things of that time, and I'm eternally grateful for that, that I bought such a micro-stake of Bitcoin and on Coinbase, back then the price was about 6,000 euros, so like, in good time. Now, I've slightly missed this Bitcoin and crypto rise. Of course, it probably would have been worth getting into Solana now, but then when this Trump-induced uncertainty regarding America as this general investment-hegemonic platform came up, I bought a little bit of Bitcoin at the 70k level [07:25] and it has again been a happy green spot there in this second-wave portfolio of mine. But how does this look to you, in a way, or for Kvarn Capital, this asset allocation game? Isn't it like at least somehow this—by the way, we are not giving investment advice here— but personally, it's like, it took me a long time to get used to it, partly through trying out that crypto association's podcast to just start making crypto purchases. But now these last few years I've looked at it like, maybe a one percent allocation could be something sensible, just like a bit of a general allocation level, and that's what I've started to implement. But how do you see it yourself, is this type of thinking—meaning the early adopters have kind of changed into these portfolio investors? Yeah. And as an investment bank, and when you think about this from a portfolio construction perspective, basically this traditional 60/40 model of stocks and bonds, if you sprinkle even a two percent Bitcoin allocation there, the Sharpe ratio just improves. And I think it's up to about 5%, after which it starts to decrease a bit along with the volatility risk. But at Kvarn, we offer this mainly to consumers. [08:40] Recently there was the Nordic Blockchain Association, so A comprehensive study on Nordic crypto investors, it's starting to be quite a significant mass, that well, there are over 2 million people in the Nordics who have already invested in cryptos. In Finland alone, 525,000 people own cryptos today. It is mainly among the young people. And then there was also this data point obtained from the survey, which was that by the year 2035, an estimated 41% of the population in Finland will own cryptos. In other words, the market and the number of investors will grow by double digits over the next decade, presumably. And correspondingly, well, the same trend is very evident elsewhere in the Nordics. I would see that here is, in a way, this next generation looking for different kinds of investment targets. That this kind of, well, looking at inflation and looking generally at which direction the economy is heading, we are further along the risk curve at the other end, with the assumption that one could also find better yield percentages. So yeah, that Sharpe ratio, or for me, one of my great investor role models is Ray Dalio, who is this macro strategist and founder of Bridgewater, so, well, he had this philosophy explained in his book Principles, [10:05] that he has this kind of alpha portfolio, well, combination, which is close to the idea that if you have assets that don't correlate very well with each other or even go in somewhat strange ways, and they all produce, or in a way, in their own asset class, well, excess returns or at least good returns, then that combined portfolio is of particularly high quality. Indeed, an excellent book, I warmly recommend it to everyone, it's worth reading. But yeah, I would see that over the next few years, not only among the younger generation of investors, but also among institutional investors, this asset class is starting to establish its foothold. And as part of practically anyone's portfolio. There is, of course, the fact that it has become more common partly because these ETF products, which were recently launched, broke all records. There are players the size of BlackRock whose big boss Larry Fink said—well, it took a couple of years—but practically speaking, he made a U-turn and said quite publicly that \"I was wrong\" and that there might be some value here after all, and now at a later stage recently he has even talked about how all securities will be tokenized, so I bet that in professional investor circles, the [11:26] professional risk of being the first to invest in this volatile asset class, which then drops by 50-60%, well not that it couldn't still do that, but that professional risk it has probably decreased significantly. Yes, that's how it is. Before we go into that, uh, tokenization, I have some personal uh, experience with this kind of lifeline regarding real assets, so if you think about gold, well, at some point I had this kind of gold ETF, which then, like, had \"belt and braces\" in a way, that it had this physical gold reserve, which you could then be able to go and look at with a camera, to see that it really is there. So this involves a bit of a similar dynamic as with gold. digital gold. So, those cameras for that, uh, Bitcoin or crypto wallet should somehow be built, so that this isn't just a Ponzi and, and then, uh, partly, like, solve this, this, like, problem of why it's worth having like, an intermediate investment like an ETF between you and the asset. And the first personal solution is that my memory is already so, so poor that I might not remember those personal keys anymore. Then it would just be [12:37] like, foolish to keep it as a direct investment, so I would even pay something for that, to have an intermediary. Yeah. Unfortunately, we can't get cameras set up around this Bitcoin and they can't be photographed in this physical world, but then again on the other hand, maybe part of that blockchain value proposition is based exactly on the fact, that anyone can verify their own holdings from that ledger. So, in a way, maybe a bit of a comparison to your camera, the blockchain and these block explorers enable this. Uh, but as you said, for the majority of people, the idea that, uh, they store their own keys and take on that technical risk themselves might be a bit too much to ask. Especially for the older generation, who are famously very competent with IT systems, so I would see in this context as well that service providers have a quite sensible, uh, value proposition to offer in that direction. Yes, that's how it is. And yeah, that's a good point, that in a way the idea of the public blockchain is, that all those transactions are, like, public and [13:43] auditable and verifiable by the blockchain, but then your, like, private key is then a separate risk there, where you then have to, uh, create a kind of, uh, secure space for it and such, so that it doesn't just like, disappear. Yes. Yes. And then there's, like, well, on the Bitcoin side it's very simple, you open that wallet, you store those bitcoins, but then, like, if we go to the yield side and you want to create some kind of interest yield for your own underlying asset, at that point, service providers certainly have significantly better technical capabilities to offer this in a productized form to ordinary uh, investors. Yes. Then your point about tokenization, let's go into that to the personal side, and the intention now isn't to [ __ ] anyone, here comes a certain opening up about things, but well, it's all educational. A few years ago, we had this kind of well, a certain kind of double hype. We had, well, negative interest rates. So people well, understandably didn't want to put money into some deposits and then get them back a moment later reduced, so it annoyed people for a reason, and they preferred to return to a situation where there's like a positive yield. This was like problem number one to be solved. Then problem number two was that, well, many [15:02] of these, well, uh, yield-producing but still safe asset classes were like a bit too big or for institutions to handle, so Lifeline, supposedly one of Finland's best, this kind of Venture Capital technology firm, which has set up these Supercells and Ouras, well, they asked me to invest as well. We're not talking about huge sums, but anyway, into this concept called Real Stocks. So there, well, they tokenized these, well, positive yield well, supercore assets, and then maybe we'll dive into this tokenization. So it basically enables, like, if you have one, let's say for example some, uh, triple-A debt agreement and it's say, in the vaults of three banks, for example, let's say 200 million, then this could be tokenized so that you and I could also get get that yield and then, or just like, put this central asset. So, well, this first problem was— negative interest rates have like, partially disappeared now. But this tokenization, this is like quite a really relevant problem that needs a solution. Yes, and it offers a solution to many problems. Like, an example is exactly this previously [16:20] mentioned BlackRock, which is now talking a lot about tokenizing securities, so in a way, we can bring that, well, crypto-native 24/7 trading there. So in a way, the markets are open all the time. We get instant settlement, meaning basically this normal securities settlement T+1 or T+2 where, in a way, in the GameStop example, suddenly if I have a 140 percent float, meaning there are more shares in circulation than have been issued, partly due to these settlement delays, so this solves that directly, meaning in a way immediate settlement, continuous trading, and once again, if you want, you can then hold your own securities yourself, and similarly then, the tokenization, well, it can be applied to quite many other asset classes as well. So in a way, now there are, well, the JP Morgans and, well, Chainlinks in collaboration, having tokenized money market funds. Tokenizing real estate is practically quite possible. So in that context, well, real estate can be split into small parts and provide liquid markets. In the last pod, when you referred to this, well um real estate funds, where then due to various market dynamics, we are sort of a bit stuck, so these could in theory be quite liquid practically all the time. And through that, the need for capital to participate in, for example [17:43] real estate investing, could be dropped sig- significantly through this, like, fractionalization and with the help of liquid markets, whereby anyone could get access to these, well, whether they are risk-free or low-risk or whatever anyone wants to perceive them as, but nevertheless, investment opportunities would be democratized through that. Yeah, then there was a—perhaps a third problem was revealed, which maybe wasn't quite clear at the beginning, which was that, well, price formation and liquidity are also like a problem that still needs to be solved separately. Meaning that it's not enough that you tokenize, but you have to create for those tokens like a price, and usually that requires some kind of marketplace. In that, the technical solution would have been that we would have, like, sought for these, well a listing. So in a way, some kind of exchange mechanism would have been created there. How well, like, in a way, can cryptos create that price marketplace or some kind of, well, exchange-type structures. Well I mean, there are already, for example, on Solana, these peer-to-peer operating exchange services. So in a way, these exchange functions built on top of smart contracts. There is no counterparty risk there. In that regard, practically speaking, anyone can create a marketplace, add liquidity, and trading is in that sense so very open and easy. [19:00] Yeah. But then, well, there might arise these liquidity imbalances, where there's, say, some asset that well, for example, is oversold, then there isn't that buy—whatever the exchange unit is. I mean, this is where you might need to shift your brain into a new gear in crypto. They are like a bit like a matrix there, so that, well, when you usually always think that the source of liquidity is like the Euro, meaning in practice a bank's zero-duration deposit, well, you can think of it as you swapping, say Solana for, well, Bitcoin or dollars. Yes, there can be several different trading pairs, so there can be like synthetic dollars, USDC or USDT. There can be Ethereum as a trading pair, and then in a way, well by default, if the price drops below the value of the underlying asset, then someone will buy it with the logic that you sort of get to buy in this case, for example, real estate at a discount and then again, if the price trades way up, then by default at some point, it finds its true market value. [20:04] Yeah, yeah. That, well, market price information is such that if it's too, like, a specific asset, then you might not get enough information to form that market. But if it's a well, very broad set, like a dollar for example, then in a way, you don't need any separate information about it. It's like all, uh, public information is sufficient for calculating the price formation, but somewhere between the dollar and an individual Finnish quota—I mean, real estate— there is quite a large need to create some information for that too. There is. Well, and there are usually market makers who then, in a way, professionally look for these market imbalances, which they then try to correct. Yeah, right. Then one solution that was also discussed in your, like, MIL podcast is this kind of basket. So, in a way, if you don't want to take, say, the risk of tier-two cryptos, then you can partially solve this. A bit like as a global investor. Personally, I see that I have different weights, like 60 percent in the US. I've lowered this a bit now since there's uncertainty there, and increased the weight of Europe and Finland here, so in cryptos as well, you can create these baskets, meaning there's [21:30] a becoming more common solution too? Yes, these crypto indexes can be found already and I think they are even listed on Nasdaq in ETP form. So, in a way, the most typical one is this market-cap-weighted top 10 or top 20 coins, and of course, you should probably wipe out the stablecoins and, in my opinion, a couple of other coins, but these will surely become more common on a larger scale, and then there's also the fact that you can add these yield components on top. So, for example, in the case of Solana and Ethereum, just participating in network validation generates, let's say, 4-7% interest, and then there are these technical components, that if you participate in it or by running your own node and validator and participate in the execution layer, there's also this MEV component, so that by, like, reordering transactions, in a way, you can bring more yield into it, so there are many different possibilities. From these, you can then build entirely new kinds of [22:35] products. Yeah, right. By the way, is ETP related to an ETF, an Exchange Traded Fund? Yes, practically speaking, they are synonyms with each other. There's surely some semantic difference to be found, but in this case, as an example, these products listed on the Helsinki Nasdaq, they have the underlying asset as collateral one-to-one. Yes. So, one-to-one... A way to dip your toes in the water is to buy from the exchange side, buy a bit of these products for your exchange portfolio. Yes. Yes. But there are, of course, their own costs, as always with these products. Whereas by buying directly through an exchange, there is a transaction fee, of course, but there isn't really an administrative fee in that case. Yeah. And then there's the custody separately. So, don't you also have in a way, how does this MiCA legislation, by the way, enable this investment service activity, so it's like a kind of special investment fund type of category or what is it? [23:44] Well, actually, two different licenses, so this CASP, which everyone is now applying for under the MiCA legislation, is basically crypto-specific. Under CASP, there are different categories, for example, there are different categories, of which one and the most common example is this CASP, or Crypto-asset service provider. Then there are these ARTs, asset-referenced tokens, for example, gold-backed ones, and then there's the \"others\" category, where basically everything else is put. For example, if you want to launch your own token, and then it actually limits the activity quite much to spot trading, so if you want to do derivatives or others, then those are under MiFID II, meaning an investment service license, and we at Kvarn have one of those too. Yeah. Do they have the same ones as at least one portfolio service operation? It's really annoying when they have to have these these KIDs, and they have to—it's not enough that they're in English, they must be in Finnish, but it looks like really exhausting bureaucracy, so as far as I know, there are no such requirements. Yeah, yeah. It's actually I haven't applied for professional status yet, but there at least with this one service provider, I've already agreed that, yes, I am a professional investor here, so [25:07] I don't need special protection in these. I bet you'll easily get into that professional category, but as said, those are heavy, these compliance things that come with these various licenses. Even now under MiCA, there were some tens of thousands of CASP applications in Europe, and the estimate was that probably 10% of them will actually get through and be allowed to continue their operations. And our view, at least, is also that this will to some extent lead to consolidation in the market. So, in a way, small players, two-person startup outfits. Simply the costs resulting from it. Just filling out these applications and the required legal expertise, which is usually then bought from law firms, raises the overhead requirement so much high, in a way, entering the market today and applying for licenses is significantly more challenging than a few years ago. And this will also lead for medium-sized operators to the fact that, in a way, the compliance overhead inevitably drives them [26:13] to some kind of acquisitions or mergers being seen certainly within the next six months to a year. And now, in a way, partly because the Trump administration is significantly more favorable towards both crypto and acquisitions, we have now seen historically large, uh, purchases in the crypto market, so that Kraken bought NinjaTrader, meaning in a way a crypto exchange buys more of this kind of stock trading provider. Would it have been in the range of 1.2 or 3 billion. And then again, Deribit was sold. There was some 3 billion dollar acquisition, meaning a derivatives-focused marketplace. And perhaps also worth mentioning is Ripple. About the Ripple protocol and technology, history, everyone can have their own opinion, but in a way they bought a Prime Broker like Hidden Road in the US, a mega-scale billion-dollar acquisition, and Ripple has its own stablecoin, which came a bit out of left field at that point, as the stablecoin market is mainly dominated by USDT, i.e., Tether, and then Circle's USDC. So apparently Ripple also has its own RLUSD stablecoin, which hasn't been seen much [27:31] in the crypto ecosystem, so to speak. So by default, usage is, if not negligible, then at least marginal. But then again, Hidden Road settles about three trillion annually. So in a way, when they move that trading onto their own rails, lo and behold, suddenly there is significant volume and demand for Ripple's stable coin. Yeah. Those are basically these stablecoins. So what we're talking about is just a crypto-ownership-based way to own, for example, the dollar. So it's nothing more than that, instead of having a dollar currency account, you have this tokenized crypto ownership of dollars. Yeah. A synthetic dollar, where in crypto form issued with dollars as collateral, there are government bonds. There are bonds, T-bills, and treasury notes, and I think gold can also be found on Tether's balance sheets; that Tether balance sheet is an eternal mystery, but once again, we'd need those cameras to film the vault to see what's actually in there. Yeah. I feel that regarding that, one doesn't need to be too worried, as for half a decade now, people have been wondering when Tether will collapse, and it's still chugging along and is a significant owner and buyer of US government bonds; it's an incredibly large [28:54] business, and its profitability rate is really, really high. Yeah, yeah. Here is So, in that Mielakso of yours, we also talked about these currency systems. So, we had this Bretton Woods back in the day, where the dollar was tied to gold and all other countries' currencies were pegged to the dollar, and then that gold link was severed by Nixon, and then we moved into this kind of era. So, well, now some consider that risk possible due to Trump's actions, like potentially this dollar hegemony would be somewhat breaking down. For example, JPMorgan's Jamie Dimon, the CEO, said famously a few days ago that \"the bond market is going to crack.\" It won't cause problems for JPMorgan, but it will for you. So, there are starting to be these kinds of systemic risk bettors, and partly it shows; in my opinion, that rebound for Bitcoin from 70 [30:01] thousand to over 100 thousand was partly caused by that \"crack\" recovery. So, there's also this kind of situation where people are wondering if the dollar hegemony's completely sovereign position is such a sure bet anymore. Yeah, and I bet that this kind of alternative asset class can serve as one solution at that point. This has basically been the original hypothesis for Bitcoin since January 2009. That when this monetary policy today is quite, well, loose, to put it nicely, then as an alternative solution, Bitcoin offers this kind of digital hard money. As we emphasized at the start of the episode, the issuance is predefined, and no one can then arbitrarily push a button and print more Bitcoins as much as they want; it will always be that 21 million, and you can't really get around that. And what's quite interesting is, in a way, if we make a relative valuation model where digital gold is compared to real gold—the market cap of gold today is [31:12] somewhere around 14-15 trillion, and Bitcoin is two or three trillion. So, in a way, if we reach parity with gold and assume that monetary policy continues on the same path as it is today, where presumably the value of gold will also rise to hedge against this risk, then by all logic, Bitcoin's value will, if not reach parity, then at least rise significantly. Then again, if you think that Bitcoin's total addressable market could be roughly comparable to gold's market cap, why not even larger? Then again, when we look at these smart contract platforms that we've also mentioned as examples, if we in theory, over the next decade, we will be able to build most of the financial world's functions on smart contracts, eliminating counterparty risk, building global lending markets, exchange services, etc., etc., so its value is significantly greater compared to, for example, the value of gold. Yeah, in this—well— in this Trump tariff dispute, which is partly a bit exaggerated, but in it, as at least one temporary consequence, the dollar has weakened while long-term dollar interest rates have risen, which is a rare phenomenon. Usually, [32:34] in these kinds of risk situations, the exchange rate of this reserve dollar strengthens and the yield decreases, and people seemed to read into this Trump legislative reform that there were some faint warnings that capital controls won't come directly, but like, since this Trumpian tariff policy is now just in physical products, some seemed to read that there's a small risk for capital restrictions as well, so I think people have, for that reason, now shifted a bit to these supranational structures like gold and crypto, because here we're playing this regulatory risk as well. Yeah. And capital getting stuck. Yeah. Well, that risk doesn't really exist with crypto, as you can always carry it with you "}, {"slug": "632-amerikassa-kuohuu-lahtinen-neuvottelija-355", "title": "America in Turmoil Under Trump | Simo J. Lahtinen", "titleOriginal": "Amerikassa kuohuu | Lahtinen | #neuvottelija 355", "guest": "Lahtinen", "guestsCanonical": ["Simo J. Lahtinen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/simo-j-lahtinen/"], "episodeNumber": "355", "publishedAt": "2025-10-14", "duration": "48:49", "format": "full", "topics": ["geopolitics", "free_speech_society"], "description": "America in turmoil | Lahtinen | #neuvottelija 355. Simo J. Lahtinen discusses the political and economic situation in the US under the Donald J. Trump administration.", "page": "https://www.neuvottelija.com/podcast/episodes/632-amerikassa-kuohuu-lahtinen-neuvottelija-355/", "text": "[00:00] Welcome to the show, greatest show on earth. Simo Lahtinen, from Kapteeni. Hey there. Hey there. Hey there, and good day to you. And this is the best show in the world. World's best host. You've just flown in from the promised land of late-night TV, America — and aren't those very shows under a bit of political pressure over there? Isn't it like every other day some show gets cancelled and then brought back? Well, yeah. I was actually in Los Angeles just last weekend — sorry, the weekend before last — and there too there were supposed to be all these kinds of incidents, or demonstrations, with people fighting and the National Guard showing up, and it's the same story in Boston, but, but on the ground it doesn't actually feel all that visible. It's probably more of a headline thing. And Jimmy Kimmel is honestly the most boring one — I never could really be bothered watching it — but the show went off the air and then back on the air, because Charlie Kirk had been brutally murdered, and then some false information, fake news, got put out about it, and jokes were made about it the wrong way, but then Disney stepped in and then backed off, and Disney itself is a bit lost on identity too. So aren't there several layers here — there's really the Trump supporters versus the Democrats, [01:08] and then there's also this woke-versus-Republicans thing, and the corporate world is kind of scrambling to figure out how to position itself on that spectrum. Yeah, under the previous administration, woke and cancel culture were praised and worshipped a lot more than they are in the US right now. The George Floyd case, among other things, basically got turned into a political weapon for the entire left side of the field, so that walls of buildings got painted full of his image, and it became this kind of unifying factor used to drive political forces to the ballot box. Now, similarly — well, this morning [unclear] — but here's how it stands on the right at the moment: we're seeing a similar chain of events play out with Charlie Kirk. So the right wing intends to make use of his martyrdom, and the fact that it lets you unify various stakeholder groups on the right. In the US we've got the midterms coming up next year, and most of the time, when there's been a Republican term — like we have right now — that means the House flips blue, to the Democrats. So right now the Republicans' biggest task — the MAGA crowd's biggest task — is trying to avoid the losses midterms usually bring. [02:30] So, related to that, this ugly, ugly situation — where a person was murdered in a public place — came, unfortunately, at a rather convenient time. By the way, it's worth remembering that Utah has been a politically very active, very red state for a long time now. Two months ago, one of our colleagues was there for the \"No Kings\" — if you remember the \"No Kings\" march that happened all over America, these anti-monarchy demonstrations. Then or, well, this Trump-style authoritarianism — when Trump had his birthday parade, wasn't that kind of aimed at saying, 'come on, Trump, don't go playing king now.' Yeah, he did take that a bit personally. Those protests happened all over America — in Utah, which is a red state, there were 30,000 people at that No Kings march. And the weekend before that, AOC and Chuck Schumer were there visiting, and there were over 10,000 people watching them. So, in other words, something's brewing under the surface in America right now — the Democrats are trying to race ahead on that [03:38] front, preparing to get into a strong position for the midterms — and if it goes the way it did last time, you'll probably see impeachment count one, impeachment count two, three, four, five. And then those get hashed out in the media for the next two years. So you get this whole herring salad of legal problems for the current administration. On the other hand, they're now going after former administration figures, and someone from the MAGA camp hinted that, yeah, this special counsel too — what was his name, wasn't it... Trump went after him and had him charged, this special... was it Smith or something — ah, right, it was the latter one. Yeah, so those get floated around, and, well, on the whole here you've got this kind of political lawfare being waged on both sides. But let me come back to that messiah topic — the martyr cults, so to speak. George Floyd was that Black Lives Matter — the Black man who was arrested by police, and an officer knelt on his neck, and he died from that, and that's what the anger behind the BLM marches grew out of at the time. Now then [04:57] Charlie Kirk was this kind of religious-conservative figure who ran — I have to admit I hadn't actually watched much of it, but I watched a couple of his debate shows, like \"Charlie Kirk versus 20 Liberals\" and so on, and he actually put on a pretty good debate, fairly clean in the sense that he let the other side argue their points and fought it out with words. But then it could be that, in the current state of the world, Charlie Kirk is a better messiah for the MAGA side than an old George Floyd-type case, and the Democrats really need to rethink their game a bit. There's Gavin Newsom — I remember when I was talking about this with a Finnish researcher of American politics, they considered him a bit too soft, but now he's gone and started trolling in a Trump-style way, writing these all-caps tweets, writing aggressively in kind of a Trump style, and I think that kind of trolling actually works better, and it's more relaxed than that uptight Black Lives Matter or woke stuff. Whatever, anyway. Yeah, it'll be interesting to see if this takes off — we talked about this last July, and even before that, before the election, about [06:16] who might step up, if and when Biden isn't running for president again — I didn't say it outright at the time, but I ended up saying that no one's currently steering that flagship, that someone needs to be at the helm. And that whole \"signing pen\" business — imagine some [unclear] or AOC, that would be entirely the wrong choice; what's really needed is a livelier character who dares to actually open their mouth in long-form settings. AOC and Sanna Marin actually have a lot in common here — if they run for president in their own countries, they'd probably do quite well at that point, since they're very popular within their own political arena. So it'll be nice to see how that plays out, but I do believe Gavin Newsom will definitely be a candidate. No question about that. He's currently doing all sorts of circus tricks left and right, and ask any Californian — this particular guy hasn't exactly earned a lot of thumbs-up, at least. There's of course the wildfires and so on, and, well, I don't know that many Democrats from there personally, so it could be — yeah, but basically, as a social-media campaign, that stiff, uptight woke approach just doesn't really work anymore. It really needs to move toward [07:30] a livelier dialogue with the other side, using a bit of the same playbook the MAGA crowd uses. But speaking of Chuck Schumer — at the time we're recording this, there's also this classic: the government shutdown. So apparently right now both sides are having a hard time deciding whether this is a good thing or a bad thing, whose fault it is, and what it's actually supposed to prevent, or that this emergency budget, which would have prevented this shutdown of the administration's payroll, so to speak, didn't get passed. Yeah. Well, the Democrats — it's always the case, often when there's a Republican president, or conversely a Democratic one, these shutdowns come around roughly once a year, and not always — for instance, this last Trump bill was possibly let through fairly weakly by the Democratic camp. I remember, in 2013 I was at a Green Card interview in Iowa, and back then we had a shutdown, so my interview day got pushed back by one weekend — that was the personal impact these shutdowns had on my life. But on the ground, from my perspective as someone living in America, working there, and paying taxes there, you don't really notice these things much outside of Washington DC. That's its own bubble, where all the Finnish correspondents report from, and then they write up these dispatches back home, and it gets covered in the news here. But then [08:54] in traditional America, the other 49 states, DC's influence doesn't really carry over much. Yeah. Of course, for federal workers who don't get paid, it's a disaster for their families, since their household cash flow probably isn't set up any better than anyone else's — if one earner ends up furloughed, that obviously doesn't do them any good. Then there's this federal thing, the so-called Washington Monument Syndrome — where they specifically cut services and cleaning at the Washington Monument even though it gets lots of tourists, so things like litter in national parks and so on get highlighted. But those tend to be fairly minor inconveniences in this situation — things like not cleaning up as often, or fewer rangers directing people around. But the good side of Washington is that it's currently a safe city. Big cities are being cleaned up of crime right now. That's worked really well. So this campaign promise of Trump's, which was actually pretty drastic, isn't really being questioned much anymore, and he has actually delivered on it. [10:05] So — close the borders, and get undocumented people out. Yeah. ICE has definitely been active in a lot of our areas too. Even out on the North Shore you see ICE raids happening now and then. That's worked really well — when it comes to illegal drugs coming into the country, they've really managed to cut down that logistics chain, sometimes by force and sometimes without. And then there's the employment of illegal immigrants, which is completely ridiculous that it's even allowed in the first place. When I applied for my green card, you first get the green card, then you get a work permit, and then you can apply for a job once you have that permit. But if you cross the border illegally, you don't have those credentials, so you end up in jobs where you're paid cash, or in low-wage sectors — washing dishes, or working as a helper on a construction site or somewhere else. There's actually quite a lot of that kind of gray-market economy built on exactly this. Now a lot of it has been rooted out, cut off. As an example, 26 people died in Chicago last weekend — and in Memphis, that's been a completely corrupt city since the 1950s. I've lived in both Chicago and Memphis. Neither of them is exactly a safe, ideal city where it's a good idea to just freely stroll around downtown — you have to look left and right when you're there, and there's [11:28] all kinds of gangs roaming around. Then you go to the grocery store and the milk's behind locked cabinets. So that's the problem America has today, which our president is trying to solve, and it's probably not exactly Elvis-looking guys you need to worry about here. Hopefully not. It's like in that movie, [unclear: \"Radio Games\"]. Yeah, yeah. But back to ICE — there's been a lot written about this in Finland, about ICE, and the National Guard, and this \"enemy within,\" and how the Trump administration renamed the Department of Defense the Department of War, and put the troops there listening, like: shave off the mustache, and yeah, you'd better watch out for this enemy within. So there's a bit of that going on. I watched that fairly mediocre movie, Civil War, where — I think it was California and Texas — going to war, sort of a pretend war, against the rest of the country, and it depicted how that would play out fictionally in modern-day America. But there really is a bit of an echo of jackboots here, in that ICE agents and National Guard troops just happen to get sent into blue states. Yes, and into blue states specifically where a lot of undocumented people live, [12:43] where there's a lot of crime, a lot of illegal weapons, drug trafficking, human trafficking. Yeah. What about the troops — they seemed to be sort of standing around with nothing to do, so this new administration policy doesn't really inspire a lot of confidence. Well, Trump has been military-friendly, pro-military, for a long time — our defense budget is bigger than ever, and force has been used this year, among other places, in Iran — bombs were dropped there, by the way, after which seven companies reached out to me saying they're moving to America. By the way — vote with your feet. Then another thing that's been done a lot is protecting the military's internal interests. So there have been policies put in place that take woke issues and everything like that off the table. There's also been investment in immigration enforcement and preventing illegal immigration, and in sending federal troops to support local forces — because it depends on the state, and on the state's own laws and administration, how they want to handle it. Chicago's mayor is a good example — he doesn't want to send police into the area where there's rioting, [13:53] because that creates a conflict of interest with his supporters, or it's just not favorable to his supporters, to his voters, in that area, so then police just don't get sent to where they're actually needed. So that's one of the reasons America is such a large federation. There are 50 states — three separate levels of decision-making, really: you've got the federal level, run by the House, the Senate, and the White House. Then you've got the local level, meaning the state level, and then the city has its own level on top of that, and there's even a county level in between. So there are many layers, which is why — for us Finns — well, we're roughly the size of Iowa. Yeah, yeah. There are sheriffs at the county level, with the star badge on their chest, and they don't cross federal lines — and they get called... well, we've all learned that from American culture. Yes. Yeah. But maybe, on that granularity of the federal system — or rather the state system — there's this phenomenon called gerrymandering. [14:58] So what is that? Gerrymandering — well, the Democrats, the Democrats do that all the time. Obama actually did it — Barack Obama was made president partly with the help of gerrymandering, and it started back in 2006. So gerrymandering means shifting the boundaries of voting districts. So what Republicans have, for example, done in Texas, and what people want to do in California now, is shift the lines so that Democratic voters who currently get to vote in a certain district have that boundary moved so they no longer have the same candidates they'd normally get to vote for. This has been standard practice for like 200 years. I've probably mentioned this to you before as well — that they try to target House seats specifically. They're drawn from the states' county-level areas — or is it sheriff districts they use. Yeah, yeah, yeah, and that can be a big area — for example, Broward County in Florida, the sheriff there has over 1,000 people working for him. So that's basically the size of a big Finnish listed company, and the sheriff decides everything. You'd better buy yourself some boots and a Stetson for that job. [16:05] Yeah, yeah, they're the chiefs. But gerrymandering has been done throughout history, and it's not going to disappear from American politics at all. And right now the Republicans are doing it, and afterward the Democrats will do it. It's a bit like here too — you make corrective moves, and then the SDP comes into the next elections and racks up debt again, and then you correct again, and so on. And in our regional elections now the left-wing forces got — at the municipal level, which you could sort of call the county level here — there are 292 absurdly tiny micro-municipalities that nobody's bothered merging, kind of in that same gerrymandering spirit of liking to keep things separate. Sure, they have their own proud local town cultures — if you're some small town, it's a shame to give up your coat of arms and your town's name and merge into some bigger area. Probably similar situations there too, where these areas try to build up some kind of identity for themselves within the state. [17:12] Yeah, but that game is being played, and indeed these elections are coming up now, so there's the lockdown. There's also the Senate, where each state elects — the seats are staggered on a different cycle — and the Republicans have, I think, 53 seats. But then there's this thing called the filibuster principle, where a simple majority of 50 isn't actually enough. So what is this filibuster thing in the American electoral system? So you're referring here to the federal Senate, since each state also has its own House and Senate separately. Yeah. The federal one. Yeah, yeah. Now I have to say, I don't really know the details on that one — no, as I understand it, it's basically that, well, back in the day Paavo Väyrynen tried to single-handedly block Finland's EU accession by holding massive filibuster-style speeches, and in America too there's an honorable history of holding these kinds of speeches, and people got tired of it, feeling life was being wasted if you had to sit here for 20 hours a day just to see which law passed, so it was agreed that [18:18] certain laws need a 60-senator majority, and 50 isn't enough. But this is really more of a gentlemen's agreement, not a legal thing at all — definitely not any constitutional structure — so both sides always float the idea of scrapping it whenever a topic is nasty enough, or important enough to their own base. Yeah, if I recall, the most recent one of these marathon speeches was from Democratic Senator Cory Booker of New Jersey. He spoke, if I remember right, for 20 hours and 43 minutes. Yeah, he wanted that record, but — yeah, but that's beside the point. Isn't it, I think — that would come easily to us [unclear]. Well, let's see. But there's a bit of tension here around the composition of the Supreme Court — it's currently sitting in the conservative camp, and for as long as those old-timers up there are alive, it sort of holds this supra-parliamentary power. And now it's started to [19:22] well, they overturned Roe v. Wade — the federal right to abortion — that ruling was struck down and handed back to the states. But it's starting to look like — I don't know, for example, whether the Supreme Court has yet ruled on the tariffs case, on whether Trump gets to unilaterally slap tariffs on like that, citing a national emergency or crisis, on whatever he wants, every day, and that's probably still an open question. Yeah. This year has been interesting in that sense — I've followed it every single day, and honestly our whole team at Kapteeni has been tracking this tariff landscape and every development very closely. And the main headline right now is that there's nothing new. There's a general 15% rate currently on standard commodities from Europe. And metals, if I recall, are at 25% or something similar. So if we're talking about an export timeframe — say you're exporting industrial machinery from Finland to America — you need to look at that export timeframe through a 20-year lens. [20:28] So you shouldn't look at it through a three-month lens, because no investment operates on a three-month basis — unless it's some sort of crypto scam. No real investment is skyrocketing, sustainable growth — meaning a genuinely productive, long-term investment — on as short a timeframe as all these tariffs have played out on this year. Mm. So in other words, if we talk about currency-exchange fluctuations — one euro right now, or last night, was about 1.14 dollars if I recall — that alone basically eats up that 15% tariff. But if you look at the trend over the past 20 years in trade between Finland and the US, the EU and the dollar, the swings you see there — the euro-dollar exchange rate has risen 30% and then dropped 30%. So we're talking about a 60% swing over 20 years. In other words, in the short term a tariff can look like some kind of threat or problem, but in the long term it doesn't matter at all. They come and go constantly. We're living through an era where we have a right-wing president who wants to protect national interests. Trump was already talking back in the 1980s about how the US should use force — this goes back to when he [21:42] first got interested in politics. Back then Roy Cohn was his mentor, and there were also political-operative types — Paul Manafort and Roger Stone — in his backroom team, who, by the way, were involved in his first campaign, the one he won in 2016. Even then, Trump was giving interviews saying force and tariffs should be used, because he understands that kind of simple use of force extremely well. That comes from his own history — he was born into what was then the seventh richest family in the country, and from there, all the way to the White House. And then there were two attempts to kill him last year. Guess what — didn't work, so he came out clean. Trump has said this year, 'I'm the president now and you're gonna deal with it.' And whenever problems come up, these tariffs have been used as a kind of negotiating chip. They've also been used as leverage in peace talks, for example between India and Pakistan. Now, just this morning, the Israel-Hamas situation. I won't comment on what happens next there, but right now it looks like there's a ceasefire. [22:47] Russia, Ukraine. I won't comment on what happens there next, or when, but there have been various attempts to use tariffs for more than just generating extra tax revenue for America — and quite a lot has come in so far, maybe hundreds of billions. The courts might at some point rule that they're illegal, or they might not, but either way, from a business standpoint, it ultimately matters relatively little. Yeah. Well, there are two good levels here. At the US federal level there's no value-added tax, and Trump himself is annoyed that other countries — especially here in Europe — have quite high VAT rates, ours as bad as 25.5% at worst. Given that, he clearly has no interest in bringing that to the US — let the states set their own sales tax if they want to, wherever they choose. But it's not really the intention to bring in that kind of VAT. So in a way, from the American point of view, a tariff is kind of a sneaky VAT — foreigners pay it, but we ourselves don't pay any VAT, so it still generates tax revenue, but you don't have to call it a tax, because you just claim it's the foreigners paying it. [23:58] Partly it's like that too — companies exporting into America eat into their own margins and absorb it. So it's a bit of a one-two punch. And then your other point, which is probably more important to Trump, is that it's a really handy club Trump can use to create very uncomfortable situations for pretty much every other world leader. Yeah, one of many, really, in the end. For example, right now we have a Finnish machinery manufacturer as a client, and we've gone with them to Kentucky to sell Finnish machines, and it's the end customer who actually pays that tariff — and American end customers do have money, by the way, so it's just not a problem for them. Whereas here we're living through a bit of scarcity, tight times, especially in this current global climate, and I'm not at all surprised people are pushing exports right now. But in America it's not like that, so in America people are out shopping for new toys, and if you've got a machine that costs 20,000, 30,000, 40,000 dollars, and you slap a tariff on top of that, so what if it adds a few thousand more — the end customer just isn't bothered by that. Consumers in the US have purchasing power. That's not going anywhere. [25:12] That's actually completely true, by the way. I've got a finance buddy who lives in the States, and he says — a good way to picture it is that when he hires someone to do his gardening, say, you get the guy, but for that same money you could also get the guy plus a ride-on mower thrown in. Whereas here we squeeze the value chain a whole lot harder, and you basically have to offer these huge, huge levels of service just for a small bit of purchasing power in return, whereas Americans really do have that purchasing power to throw around, like, 'let's have someone else cut my lawn and fix up these hedges — I can't be bothered fixing this picket fence myself.' Yeah, and that's basically it — the world's largest economy has taken a hit, there's been a small inflation shock, and at the very least these supply chains have been thrown into disarray, since companies now have to sort of guess whether they can still use Mexico and Canada as an internal market to the same extent as before. So there has been an economic impact, a shock, but it hasn't really shown up much in the general stock market, which you might think it [26:27] would. That roughly 15% hit has largely already been absorbed by year's end. Yeah, the forecasts back in early spring were actually pretty grim about how 2025 would look, but it turned out differently in the end. Although there's also this big megatrend running underneath — AI, and a bit of rising consumer anxiety, in the sense that people don't really believe in stable long-term employment anymore, and that shows up pretty much everywhere, and especially badly here in Finland — people are, well, saving partly out of fear of losing their jobs. Yeah, that makes sense — it's a perfectly reasonable fear if things slow down around here. And then, of course, we've got a big, strong, aggressive neighbor to the east, and you never know what the future will bring, so right now the best approach, if I have a company in Finland, is to think through risk-minimizing options for getting revenue from somewhere other than the domestic market. And what the best place for that is — well, that's a question for each company individually. [27:43] And then there was — I was at this Trans Corporate Finance event, and one of our TMT people there, a French guy, and I got to talking politics with him — apparently their last government negotiations dragged on for a full 14 hours, and things are actually even more tangled up over there than in Finland. So if you think about it from a Finnish exporter's perspective — should you go export to France, say — compared to that, America is just overwhelmingly more interesting, and also a fairer place to do business, regardless of all these tariff antics. I've got one French client right now, and their lunches are absolutely incredible. There's wine flowing every single day. Yeah, I agreed with Mark that they can handle the wine side, and we'll split the software development side, say, half and half between Finland and France — so there's a kind of national, international division of labor here, but take the Germans, for instance — they've got the auto cluster. Trump has actually spared them fairly lightly so far, but they're not exactly radiating happiness either — new-car orders, Mercedes orders, have dried up, and it may well be that the German production plants are feeling a bit anxious right now about what the Americans are going to do to that auto cluster. 'Nah, we've got Tesla, and America's full of them, we don't need you anymore.' On that note, [29:07] by the way, Elon Musk pulled off this strange U-turn — going from being this big DOGE guy, this big Republican idol, and then walking away from it all. So what's going on with this 'America Party' of his? As I understand it, it's still kind of up in the air — it's a bit like founding a new political party in Finland: unless you've already got a political machine behind you, it can be tough going. It's a bit the same in that America has this two-party system, and then there are the independents — and they seem to have a bit of... well, RFK did manage to get in. I have to say, RFK got into the cabinet as an independent. So in that sense it's possible, but founding your own party is a pretty, pretty difficult, if not impossible, task. That kind of flip — where you pull enough votes from the middle that you can basically compete your way into a cabinet post — that kind of platform can work. But Elon Musk, isn't he [30:09] the world's richest South African — or African, for that matter. So in that sense — well, on the other hand, Arnold Schwarzenegger did become governor of California, so that kind of thing is accepted, he's one of the guys in a way. But that kind of political opportunism-hopping doesn't work well. Even in Finland, the Blue Reform party didn't last long after splitting off from the Finns Party to try something new — so it's tough to invent a new party in America. Now this is actually a rare situation in US politics if you think about Donald Trump — he's had roughly 12 years to prepare for this second term, and he was already a billionaire back then. So a billionaire celebrity who becomes president, who at some point also learns how to actually be president and learns to wield presidential power — or at least it looks that way at this stage — that's a rare situation in Western countries, because quite often here you typically vote for someone from inside the political establishment, someone capable — like Finland's President Stubb, who, by the way, has done absolutely brilliant work today in Washington DC. Hopefully some deals come out of it. Good luck, Mr. President. So, that kind of person who's skilled at politics and good with stakeholders. But Trump came from outside, and then pretty quickly got himself into the game, and as a result [31:29] here we are now, and we'll see what happens next. But the presidential library is going to Miami. Yeah, and related to this No Kings movement — maybe what saves things is that Trump's genetic offspring are frankly untalented enough that you're probably"}, {"slug": "636-samppanjaa-milein-voitolle-tolvanen-ahola-neuvottelija-358", "title": "Champagne for Milei's Argentina Turnaround | Tolvanen, Ahola", "titleOriginal": "Samppanjaa Milein voitolle | Tolvanen Ahola | #neuvottelija 358", "guest": "Tolvanen, Ahola", "guestsCanonical": ["Ville Tolvanen", "Amos Ahola"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/ville-tolvanen/", "https://www.neuvottelija.com/podcast/guests/amos-ahola/"], "episodeNumber": "358", "publishedAt": "2025-11-04", "duration": "46:46", "format": "full", "topics": ["finnish_economy_policy", "geopolitics"], "description": "Champagne for Milei's victory | Tolvanen, Ahola | #neuvottelija 358. Javier Milei won a convincing victory in Argentina's elections and can now keep fixing Argentina's economy without the Peronists' left-wing sabotage: liberal right-wing policy has turned Argentina's course around. Will France and Finland be left wondering at the wreckage of left-wing economics while chronically indebted Argentina rises again? The studio cracks open a bottle of champagne.", "page": "https://www.neuvottelija.com/podcast/episodes/636-samppanjaa-milein-voitolle-tolvanen-ahola-neuvottelija-358/", "text": "[00:01] ¡Que las fuerzas del cielo nos acompañen y viva la libertad carajo! Right on! So, so here we have, as you can hear, from original sources directly and unfiltered, reporting on Javier Milei's election victory in Argentina and his shocking landslide, Aleksi Tolvanen. Hello. Hi. Thanks for having me. I think this is the fourth time, and I have to give some credit before we jump to Amos Ahola, who has also spoken about this topic about a year ago, meaning the probabilities of Javier Milei's libertarian success, so I have to say, regarding these latest episodes—it hasn't been long—and you just confessed to me before this that you were a bit worried about what it was. Well, actually, two months ago at the end of August, I predicted these percentages: 40% for La Libertad Avanza and around 30% for the Peronists. That's what I said, and my prediction was correct, unlike for example some professional propagandists in Finland. I predicted this correctly, so it's a good result. Yeah. But there was some small election in between that looked bad, didn't it? [01:09] Well yeah, we can probably talk more about that soon. I mean, the provincial elections in Buenos Aires—those are different elections. La Libertad Avanza was slightly over 30%, and the Peronists had very, very strong support, but now this situation for the parliamentary elections is turning out well. Yeah, let's talk about why exceeding exactly 40% was so important. And now Amos Ahola, indeed, you came here with a scalpel about a year ago, and back then there were faint echoes that Finland might also make some cuts, and you said that Javier Milei had this chainsaw and he has really used it on those costs, so you brought the scalpels. If we start with this, though. How about a little fresh Finnish update? Yeah. Well, that scalpel hasn't really been swinging much, so I don't know if even nail scissors have been used for cutting. These have been purely nominal. We don't have like hundreds of millions—something completely ridiculous. No, no, nothing in practice. But I have to say, regarding this Argentina situation, I'm positively surprised. A year ago, I suspected that if you go at it like that, it won't take long before the people go like, 'no thanks, this was a bad deal.' But in the elections, it actually [02:23] went the opposite way, which restores my faith in democracy a bit, which has crumbled quite significantly over the years. So apparently it is actually possible for the people to vote correctly. Although, I don't know, we'll probably discuss that twenty-something billion currency swap and other things today, so that probably helped, but let's talk about that at some point. Yeah, that's right. And there's Aleksi now, that HS has been too modest to say the names of the culprits, but I can say it. So, basically, here Helsingin Sanomat and YLE, like, lost the elections once again, and Neuvottelijastudio won the elections— exactly. That's how it is. And let's have a drink for that, Melas. Yeah, definitely, it's nice to be right. Yeah, to freedom. Aijai. So, here, like, um, let's put up this image, if it hasn't been put up yet, so there we're pouring some, uh, Yellow Widow [Veuve Clicquot], which has been opened in the French cavalry officer style by sabering. Here we have some happy people in the studio. Yeah, but well, when you read these election comments from places other than just Finland, there was [03:36] this kind of pent-up joy that now that there were the midterms and the preceding regional elections, since there was a bit of a bad trend, that now we'll get rid of Javier Milei and get these 'good guys', meaning the Peronists, into power—I mean, who could consider Peronists as 'good guys' other than a completely rotten leftist journalist. Yeah, so this—maybe in Finland it would actually be nice if YLE or Hesari or anyone would actually recap Argentina's history over the last hundred years, so it would be a good, comprehensive overview. So it was only in the 40s that the Peronists came to power under Juan Perón in Argentina. They are, after all, national socialists, leftists, and they've done all sorts of things over the last 70 years, increasingly leaning into leftist politics. There was also someone like Kirchner in between, who practiced their own brand of leftist politics, but I think there's a lesson for Finland in what happens when you have leftists in power for long enough. In Finland, we've seen this only for the last twenty years or so—no growth, taking on debt, and sort of waiting for a better tomorrow. In Argentina, it took almost a hundred years before they finally realized that enough is enough, and now they have a market-liberal president. So, on this trajectory, that's 80 years away for Finland, and none of us will be [05:01] around to see it. That would be a real tragedy—okay, in all reality, I believe it's 30 years away for Finland, but if we have 30 years of zero growth ahead and we could avoid it now with market-liberal reforms, then shouldn't we, dear people of Finland, consider them? Instead of voting for these homegrown Peronists of ours, who are indeed in every single parliamentary party. Well said. And really, in my opinion, this is just so brilliant the case and I mean, they don't want to break it down here in the Finnish press like I mean, how quickly, how quickly this whole thing has been turned around so from a nearly hopeless situation and then, like, still hoping that it can when returning to the job, like, how, who can be so, like, cold and cruel. But Aleksi, let's bring you back in, you've now looked into these well, you predicted this result correctly. The Peronists stayed there, well, no to a third, and in a way this LLA party, as it's abbreviated, well but yeah, first of all, the September provincial elections in Buenos Aires province, even though compared to the provincial elections two years ago Libertad Avanza increased its support slightly and got over 30%, so it isn't enough, because now the anti-Peronist force in Argentina has [06:24] become led by libertarians and LLA, so that's why Libertad Avanza has to compensate in its support for those like, center-right parties that have been there, meaning Juntos por el Cambio, PRO, and now, like, three scenarios if we look at the elections, then 30% for LLA in the parliamentary elections would have been a weak result, that the parliamentary balance would likely have weakened. Okay, regarding these scenarios, it depends a bit on how the votes are distributed in the country, but 35% would have been quite neutral, and 40%, which I predicted last time for Libertad Avanza, is a strong result and now it's reflected in the parliamentary composition. Regarding this composition, why that 40% for Libertad Avanza is a strong result, I have three points. First, the veto power with this parliamentary I mean, the composition of the Senate and the Chamber of Deputies the Peronist opposition cannot override the president's veto, because that would require in both chambers of parliament a two-thirds majority. So now, overriding the president's veto [07:49] by these Peronists and other opposition won't work. Maybe a technical clarification there: does it mean that if they wanted to bring in their own law, if they'd had two-thirds, they could have pushed it through and, in a way, Milei couldn't have blocked it with that third, it would have passed, and now it's not even worth them submitting their own laws, because they won't get through that final lock. Yeah. Well, what caused negative market reactions in Argentina's financial markets in recent months was that the Peronists had these kinds of, like, spending increase projects in parliament that could have watered down Argentina's budget surplus, but now, especially after this election result, in the Chamber of Deputies, LLA—Milei's party—already has about a third of the seats, and then LLA plus the center-right PRO party is 40%. With these kind of parliamentary compositions, the opposition cannot override the president's veto power and then dilute the budget surplus with these spending increase projects, and and furthermore, the Senate composition is also quite quite strong. Meaning LLA plus PRO combined, they have over a third of the seats, but then because of the election multiplier, La Libertad [09:12] Avanza is slightly weaker. Okay. This was the first point, this president's veto power. Then the second point is that, uh, this Peronist opposition could have divided, could have started to push for this kind of, in Argentina it's called a 'juicio político' process. So this is a kind of, well, political process, but in a way also a legal process, uh, to remove someone in a high political position or someone in a high office, a person, meaning for example the president, to be removed from office. So if the Peronists had gotten strong support in parliament, then in the worst case it would have, through this 'juicio político' process, led to Milei's presidential term ending prematurely. And here too, you need both houses of parliament, if this 'juicio político' were to lead to the president's dismissal, then you need that, like, two-thirds majority in both houses of parliament, the Chamber of Deputies and the Senate, and now that won't succeed. Hey, a question Aleksi, you clearly know this Argentine politics considerably better than I do, and [10:33] I assume better than... so is this practically the situation now where, as Matti and Teppo said, the pace is accelerating. So now Milei got more power and can implement these reforms now, like, more, faster, better. Yeah, that was actually well phrased. I was coming to my third point, which is the pace is accelerating indeed, because now the parliamentary positions strengthened and this also means that now in both houses of parliament, those middle-ground parties that aren't clearly LLA's allies, but aren't clearly Peronists or socialists either, so this election result was now a strong mandate for Milei's poverty-reducing and economic growth- increasing policies, so now these middle-ground parliamentary groupings then have like, a greater incentive and greater enthusiasm after this strong mandate [11:38] to cooperate with La Libertad Avanza. And with this, it's for example more likely that Milei can, uh, promote then labor market reforms, tax reforms in Argentina. Yeah, in this studio we're probably rocking the Portion Boys version of this classic, since we're that modern after all. Uh, but good, good point, meaning the pace is picking up and more, faster, better, but well, uh, this is quite an interesting American link, so couldn't you say that here you have like an upper house and a lower house and a president, so it's like a mini version of the States, and here the left-wing, uh, press immediately spins it from the same angle here, that right-wing populist and authoritarian forces are getting to steamroll, so do you see that there are like similarities with the US system? Well, before we go into that, I want to bring up. That's like an important flag to state, I mean how the political systems of Argentina and the US are... like, different or rather different from Finland in that the results of presidential elections can actually impact national policy. In Finland, [12:50] that's not the case. In the presidential election constitutional reform of the 2000s, all powers were taken from the president because people feared the next Kekkonen, with the result being that we now just have a figurehead, basically. Well, it's a bit miserable when we have a figurehead, I mean, like the president, and Stubb has now exceptionally perhaps done a bit beyond that, sold a couple of icebreakers and so on, but at the same time, we have a multi-party system in parliament that can never make any reforms because it doesn't really matter who you vote for, you'll have the RKP and others like them putting on the brakes. So, the systems in Argentina and the US are a much more dynamic democracy than what we have in Finland. For better or worse, because like that Trump thing has gone overboard, whereas in Milei's case, it was ultimately enough to first vote for one man who then started rolling out these reforms. But anyway, I just wanted to say that in this regard, I do support a bit more of a bold approach than what we have in Finland. [13:50] Still, in your liberal heart, there's this big, big gap for strongmen or authoritarians. Hey, let's put it this way, it would be for strong women too, but I mean, like, who is familiar with the movie Evita and Madonna's song, so, like 'Don't Cry for Me Argentina' and all that, well, it's a carbon copy of Sanna Marin, one-to-one, so it's worth taking a look at that, though she has so many shoes. Well, not yet, but I mean okay, so Argentina had Peronism, and it was largely Eva Peron's contribution, I mean, okay, she died young, but the impact she had was so huge that I don't think it's at all impossible that 'Marinism' will emerge in Finland. I mean, sincerely, we we already saw this like Li Andersson got into Europe as an MEP just through like girl power votes and I mean okay I am a feminist man and there is nothing wrong with that but it doesn't have to be that leftist like on the other hand Marin Marin is doing six pull-ups and earned like 2 million in the last financial statements of Mapi Oy so anyway she's certainly grown into a capitalist just like Nalle so like hopefully if she returns to national politics in Finland hopefully she'll return as a right-winger then but well Aleksi could comment a bit on this Argentine [15:14] presidential-driven system but maybe as an intermediate point then again like in France where it's a bit of the same thing then if it goes completely south then the pieces just fall to the floor and nothing rises because now there's Macron kind of in power but then there's nothing left to save in that parliament and they'd still have to like somehow endure the rest of this term so it could go completely south and yeah yeah I mean this is interesting and this is like maybe the in my opinion the discussion at an abstract level that should be had in Finland about what the function of this democratic system is and how it should roll because ours clearly doesn't work I mean we can look in the mirror after 20 years and conclude that our thing isn't rocking it was already like Katainen's government halfway through that term they stated that we don't actually do anything we sit on our hands and wait so the nation can't afford this but well I don't know Aleksi do you have any comm Aleksi do you have any comments on this Argentine democratic system? Is it good or bad? Well maybe I'd take this current perspective anyway on this that here we now have such a strong alternative in La Liberta Avanza and then the other side is the Peronist it's so foolishly socialist that there's such a radical difference and then these like so-called center-right ones Mauricio Macri's administration which was there before President Alberto Fernández well this didn't however [16:42] succeed in reforming the country Okay these center-right guys Macri Luis Luis Caputo you can cooperate with them but the administration must nevertheless be libertarian-led so that things actually get done that's what Argentina's recent history now shows but then if we look at these like market reactions to the elections that the risk of Peronism meaning Argentine socialism is so great that the market reactions have been bleak that now when there were these September provincial elections and La Libertad Avanza's result was like too weak then immediately on the Mon after election Sunday on Monday the Merval index fell over 10% almost 15%. Now after the October parliamentary elections, the Merval index has been rising all week meaning on the Monday after election Sunday the Merval index rose over 20% a truly incredible daily rise. Now for a week the Merval index has been rising reaching all-time high levels again and now [18:03] now that there started to be that kind of anticipation and pessimism, especially in August and September, that now the Libertarians would do poorly, so the market had come down. Likewise, the debt prices and interest rates reacted. So after the provincial elections in September, the price of Argentine government debt fell significantly and rates rose and then after the October parliamentary elections, interest rates fell and prices rose. Now we have seen this as a kind of test laboratory, that this market reaction has been so large and so clear after these elections, that the fear of Peronism. In Argentina they use a term like 'riesgo K' and 'K' refers to this kind of, like, a different kind of [19:12] Peronist, like a core, hard-line Peronist Riesgo K is then the risk of Peronism or the risk of Argentine socialism, you could translate it here as sweater risk, to keep things clear and beautiful yeah, sweater risk, so in Finland it's like 'beware of the miracle' sweater economists among us and they are not ashamed of it, they speak with those mystical words and mumble about, you know, social justice and about overall tax rates being too low so, say no to them. Oh damn, that cut off, I had a point but that was so good that it completely cut my train of thought yeah but that market reaction itself is true, the economy is like this discounting thing, so the fall in market rates and government debt risk and the rise in stocks are like good signals. In Finland too, by the way, there's been strong performance this year in interest rates and stock prices. I don't know how much is thanks to the current government, but it might have something to do with it, that now it came back to me. See, the leftists don't consider these stock prices or government debt interest as any kind of indicators, they are just nonsense, even though in reality they tell us about people's trust—maybe even George Soros's way of making money [20:38] yeah, like some kind of robber's nonsense, even though they actually reflect trust above all, and anyone who is a bit to the right or understands anything knows that, but for lefties it's just like nonsense but like for the left-wingers I'd have a question, that if you've looked at the poverty, well, that poverty meter in Argentina, which has now with Milei dropped to the lowest level in like a decade, so isn't this even as a metric good enough for you, that the country is doing well? So, okay, and like as an inflation metric that's also very low, which is like generally perceived to be a good thing when inflation is low, even if it is a bit of a capitalist metric, so would that poverty now be at least a metric where you could on X stop that crying now about Milei being in power, because like provably that guy is now making it happen that people like especially the poor, there are fewer of them. Or like is it a good thing that poor people are fewer? I think it is, but I'm not quite sure about the leftists. So this like crying on X about Milei's successes, well it is in my opinion not very humane, like that poverty decreased. Oh no. Like like poverty decreased the wrong way. Yeah, I, uh, you have empty glasses. I'll drink these first while we have a little toast. [21:52] Yeah, but uh this is about the reduction of poverty. Yeah, yeah. I mean, we all want, even though no matter how much we are exploitative right-wingers, we sincerely want that there is less poverty in the world. Yeah, like, I'm not lying now. Yeah, have to toast with empty glasses, gotta come over here and fill up the glasses, but uh that's a good point, the indicators are going in the right direction. Even the GDP, the national debt's uh, dollar-denominated level is stabilizing the central bank's like totally wrecked balance sheet has been brought under control and then those public consumption expenditures. Honestly, it's wonderful to watch when the chainsaw goes vroom and then there's like less left there crap, and then I'll also mention that this kind of corrupt corporate subsidies, so like the kind shoveled by politicians to their buddies, like money has decreased. All of this that in Finland is like alive and well, like NGO subsidies, corporate subsidies, the whole thing revolves around who is being dealt public money now, they are doing well and then it gets wasted. I read that there's indeed, with this [23:00] archaic like Peronist system, it has gone to the level that with it individual legislative projects could be made to specifically fund some buddy's projects, and now that they can be snipped away, like no more, then well in Finland there's like a shocking amount of these third sector offshoots still. I think it was Mauri Pekkarinen, who once into some law shoved like shrimp, some damn shrimp farm subsidy, because that drinking buddy or some other buddy was, you know, who had one shrimp farming. Yeah, that has happened in Finland too. And it might be that this YLE taxpayer thing of ours, it might not be a joke, that you can find this camel breeding in the table as an oasis. There would be, yeah, Mauri's friend. Since in Finland it is found on the list of legal businesses and as such still competitive, wouldn't surprise me if Mauri Pekkarinen's Camels Ltd is there somewhere, but anyway, yeah, I'm just filling, filling our glasses here, so Aleksi, regarding poverty, isn't it true that there are official statistical observations about this yeah, yes, the standard way this poverty debate is conducted is using INDEC, Argentina's statistics agency's data and now the latest INDEC poverty report, I mean the INDEC and Poverty report came out back in September, and according to [24:27] the forecasts, now again, both in poverty and indigence extreme poverty has decreased, in poverty it's now around 30 percent, and this concerns the latest official INDEC report, for the first half of this year, and now there are again these poverty forecasts from Martin Rozada and co for the second half of this year, meaning what we're in now and there too, the forecasts show that poverty is still decreasing. Mm-hmm. Yeah. And then I have to bring up that too, because in this sweater economist corner, the only thing usually muttered here is, yeah, but that mean, evil, big Satan, Trump, gamed this with some corrupt money trick, but there's a bit of truth there. It's true that for example, in the financial crisis and the COVID crisis, various central banks around the world did these currency exchange lines, or swaps. So it's not exactly uncommon for these central bank cabals to help each other in need, and it's not impossible that both America and Argentina are kind of in the same neighborhood, so this can be done. [25:45] Sure, maybe there was a bit of exaggeration given to a 'good guy', but is it such a big sin? For example, mentioned here, Alex Stubb, I laughed at a tweet saying that he has made the most money playing golf. Yeah, indeed. Like Tiger, so it's kind of the spirit of the game, if that guy is doing a transactional thing, why wouldn't you I mean, is it okay? Maybe it's not exactly liberal thinking, that you take money away using flattery, but is that really so wrong? I think the essential point here is that this wasn't a bad deal for the US at all. I mean, basically it... it was it was even like an investment or like a bet, which apparently like strengthening the exchange rate, it didn't like cost them 20 billion but it actually made a profit. So and this is like one point and so okay let's be clear, I mean it was election interference, no way around it and it's basically not kosher uh and I don't we don't accept it, but well the guys are playing with slightly bigger stakes than we are but there's that other aspect that if like [26:54] this hadn't been done, the Peronists would've won, things would've gone to shit again, then it would've been some IMF giving the same amount of money to something so these groups stay alive, so like it wouldn't necessarily have been any cheaper or like any better in the aftermath, the money would've been conjured from somewhere and put on the table eventually. And of course it's hoped that it won't leave any debt so to speak or that kind of personal debt to Trump, whatever that might be, but well better this way than things going to shit, so it would have been emergency aid afterwards in that 'Art of the Deal' spirit, so if for example investment decisions like these came out of it and immediately US industry started to like, kind of be like we're going to start actually investing here now, so would they have come for those Peronists, probably not. Well probably not. It's the classic. Yeah, invest in a country where socialists are in power. Well, we did that to Russia, by the way. [27:59] How did that go again? There it went. Yeah. Well I do consider these at least a simplification of Argentina's complex economic and political situation. it wouldn't have been just about helping Trump. And the situation now in Argentina's economy and politics is significantly more complex. So, when I just described this 'sweater risk', well the current libertarian-led administration and that silly-socialist Peronism, it's so radically different. And here you also have to understand Argentina's economic history, that if you think about Argentina's public debt, in fact, the Finnish state has more debt relative to GDP than Argentina has public debt. For Argentina it's, depending on how you calculate, about 70-80% relative to GDP. Finland has [29:13] more debt relative to GDP. Here the, probably sweater economists are proud of this, but but but, it actually it's like the amount of debt in Argentina isn't so impossibly large. But what's challenging about it now is that they have that recent economic history. Otherwise, the economic history is such that there have been constant defaults on debt repayments, various defaults made, having to postpone debt payments. That's why the Argentine state doesn't have, uh, access to international debt bond markets at reasonable interest levels. And that's why like even countries like Finland and Spain, Finland and Spain-like countries, they haven't lost their credibility on international debt markets. [30:17] so even though they have deficit budgets, they are able all the time like their maturing loan installments to refinance by taking at relatively reasonable interest levels debt from international private markets. Argentina cannot do this debt refinancing at reasonable interest levels. And now what has also been done in Argentina in recent history, in recent economic history, is that there, like, well first of all those defaults, there were some during Alberto Fernández's previous Peronist president's administration, there were some during Mauricio Macri's time, so during Alberto Fernández and the preceding center- right administration, and there were during both Kirchners' administrations these defaults, debt restructurings, so Argentina doesn't have, like, credible access to these international private debt markets. Argentina cannot refinance it. But in addition to that, what has traditionally been done, is leaving the next administration a very, like, maturity-profile-wise very difficult, uh, debt bomb. And now it has, from the previous Alberto Fernández's Peronist administration, been left in Milei's lap, that like maturity-profile-wise difficult debt bomb, that there are certain [31:39] debt installments, which are maturing. Is this like regards from Saramo, so to speak? Yeah, it's that short, short end is like tricky, it's often, like, the yield curve, like well it's kind of sloping, so well, you can get that low short-term loan at a slightly lower interest rate, well for interest technical reasons, but then if there's a huge pile of it, then its rolling over is really painful because it's constantly rolling over for re- financing yeah, and Argentina doesn't, like, well the state has no credibility on these markets to be able to, like a normal or fairly reasonable like or fairly normal state's way, re- finance that debt. And and that's why managing liquidity is very challenging, so that's why, like the reason why they have to take liquidity financing from the US. Well that liquidity financing is not used to fund a deficit budget, because now Milei's administration's budget is in surplus, but rather it is liquidity financing, and it can also be considered a diplomatic success that he gets along well with Trump and the Trump administration and other things. Yeah, these defaults are bitches. I mean, even Greece had those defaults and selective defaults, and now it's rocking a bit better again. But indeed, at that moment when someone tells you that 2 billion is due, where do you get it from, it's a bit of an [33:01] impossible situation, and Finland has done it many times, like Iiro Viinanen has also had to sweat— a fine man. A fine man— sweating somewhere like Japan, wondering if two billion will come from there, can he keep a straight face? Keep a straight face? I can't... but Aleksi, I have to ask, do you do these things for work or like on a hobby basis? Well, regarding Argentina specifically, it's nice to be here on this podcast to appear, and I mean, I have a second Master's degree from Spain, through which I have a common circle of friends with Javier Milei, so that's where this enthusiasm comes from. Okay. But like, do you get paid for this or like, no? This is a sincere question, because I'm just thinking, that I would never step into the ring with you on these things. This guy is on top of it. And at the Finnish Institute of International Affairs, there could rather be this guy than Timo R. Stewart, for example. Well, he's already been shown the door there. Yeah. Or his fixed-term contract is ending, but you're clearly on top of things, so where does this come from? [34:04] Well, it's because I have an economics and business education and indeed a second deg"}, {"slug": "610-tasta-tunnistat-villapaitaekonomistin-petri-roininen", "title": "How to Spot a 'Wool-Sweater Economist' | Petri Roininen", "titleOriginal": "Tästä tunnistat villapaitaekonomistin! Petri Roininen", "guest": "Petri Roininen", "guestsCanonical": ["Petri Roininen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/petri-roininen/"], "episodeNumber": "db-610", "publishedAt": "2025-07-31", "duration": "00:25", "format": "short", "topics": ["finnish_economy_policy"], "description": "Here's how to spot a wool-sweater economist! Petri Roininen. Clip from the episode \"Trump's EU Squeeze | Roininen | #neuvottelija 344.\" Petri Roininen talks with Sami about the Trump-EU trade deal, which looks poorly negotiated from a European perspective. Did Ursula von der Leyen give in too easily, and is capital fleeing to the US again? Petri suggests that pension insurers should set up a new bank in Finland. Sami agrees.", "page": "https://www.neuvottelija.com/podcast/episodes/610-tasta-tunnistat-villapaitaekonomistin-petri-roininen/", "text": "[00:00] Do you know how to recognize a wool-sweater economist regardless of their attire? Well? By the phrase 'Every good project gets funding.' That is a sure wool-sweater economist's hallmark. Every good project or every company gets funding. Yeah, it really is not like that! "}, {"slug": "640-vantaan-kallis-patikka-ratikka-roininen-jaaskelainen-neuvott", "title": "Vantaa's Billion-Euro Tram Gamble | Petri Roininen, Jouko Jääskeläinen", "titleOriginal": "Vantaan kallis Patikka-Ratikka | Roininen Jääskeläinen | #neuvottelija 360", "guest": "Roininen, Jääskeläinen", "guestsCanonical": ["Petri Roininen", "Jouko Jääskeläinen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/petri-roininen/", "https://www.neuvottelija.com/podcast/guests/jouko-jaaskelainen/"], "episodeNumber": "360", "publishedAt": "2025-11-14", "duration": "54:23", "format": "full", "topics": ["finnish_economy_policy"], "description": "Vantaa's costly \"Patikka-Ratikka\" (hike-tram) | Roininen, Jääskeläinen | #neuvottelija 360. In November 2025 Vantaa is set to make a nearly billion-euro decision on behalf of its taxpayers. According to a survey, only a quarter of Vantaa residents want to proceed with the \"Patikka-Ratikka\" tram project based on what's known today. The Centre Party's Petri Roininen and the Christian Democrats' Jouko Jääskeläinen recommend a pause for reflection instead of rushing ahead.", "page": "https://www.neuvottelija.com/podcast/episodes/640-vantaan-kallis-patikka-ratikka-roininen-jaaskelainen-neuvott/", "text": "[00:00] All right, welcome to the Neuvottelija channel, and today we're talking about a hot topic — trams, specifically the Vantaa tram. Joining us for the first time, Jouko Jääskeläinen — you're a deputy city councilor in Vantaa, but a very long-serving Member of Parliament for the Christian Democrats (KD). Welcome. Yeah, thanks. I've done four terms in Parliament and nine as a councilor, and now it actually feels like a relief to watch from the sidelines — maybe shout a bit from the front row about how things are going over there, it's a nice change for once. But you can reflect on both national decision-making and especially Vantaa's decision-making going back decades. So there's a bit of a mirror being held up here. Well, that's great. And then Petri Roininen — you've been on the show, what, a million times now. I can't even keep count anymore, but welcome back again. Thanks so much. Thanks so much. It's great to be back, and it turns out you've got a Vantaa connection of your own. In one episode you mentioned you're proud of your Vantaa roots. Yes. Hakunila's always close to my heart. Yeah. Do you remember when you go to Vantaa? [01:05] Ah right. There was something like — wasn't it that you go swimming with your family at Flamingo sometimes, and I've heard you say you go to Northern Finland. Yes. Yeah. So, during the autumn break, sometimes we've been too lazy to buy flights south, so we go on an 'exotic' Northern Finland holiday and spend a quality weekend at Flamingo. This is very much the Helsinki investment banker's perspective — Helsinki is basically 'the south' and everything else is 'the north.' But I also want to bring up another urban legend here too. You can come skiing in Hakunila next winter— I mean, there's this really bad English joke: 'cross country skiing is only fun in a very narrow country.' So those long-distance treks don't really inspire me. I like downhill skiing more. But I want to quote Käärijä (the Finnish singer) here. Käärijä did a cover of 'Ylivoimainen' ('Unbeatable'), and it goes like: 'Oh, I'm from Vantaa' — and it's actually a pretty catchy song. And then there's this kind of bleak line in it. It says that not even... doesn't even go here— [02:23] the metro doesn't even come here. And isn't that kind of a sign of a real big city? This tram thing — well, we've got 'Stadi' [Helsinki] and the tram, 'Spora,' runs there. Then we've got Tampere — speaking as a Tappara (the Tampere ice-hockey club) fan — where they got the trams running reasonably well. In Turku even the funicular doesn't seem to run properly, so let's leave their project out of it. But why should Vantaa get a tram? For a moment there I thought, when you started off like that, you were going to ask us to sing — but thankfully we were spared that. So yeah, it's a good question — why, why should— —get a tram. You have to remember that Vantaa already has rail transit — a couple of lines running east-west, and, sorry, a couple running north-south, and then also east-west — so in a way, the transit-demand argument doesn't really hold up as the main idea, which suggests there must be other factors, other reasons behind it. So, Jouko, has this been some kind of decades-long dream for Vantaa residents? No, in my opinion — in my opinion this— [03:24] —has really only come about over the last, say, twelve years or so. I don't know what's been discussed in the back rooms, since I'm probably not one of those invited into the inner chambers beforehand. But my sense is that this is really just a twelve-or-so-year thing. In [20]19 it came up for a vote in the city board for the first time, and I was already against it back then. But when it comes to this tram and transit— —I understand the Tampere case pretty well. I studied there from [19]71 to [19]78 and left in [19]80, heading south from Tampere — south, meaning here. The whole shape of that city is different. It's exactly the kind of shape that supports a tram running east through downtown and out west. Vantaa doesn't have a grid-plan downtown, so by some people's standards this isn't even 'a city.' And we're pretty spread out, so I've always said you really shouldn't compare Tampere and Vantaa directly. Tampere's starting point is that it has no commuter rail — Vantaa does. So these are two completely different starting points, which means— [04:38] —in Tampere, the tram connects Hervanta to downtown, a link that didn't exist before, or the same going west. In Vantaa, on the other hand, commuter trains already run every five or ten minutes. So in a way, transit capacity isn't really the central issue here. And in fact, originally, back in the last decade, the experts' recommendation for developing transport wasn't a tram at all — it was— —electric buses, an electric bus network, which is flexible. Right. But just a little aside — there's that South Tampere junction to the Nokia Arena, so when HIFK fans come from Helsinki to the Nokia Arena, they can get there in their good shoes. Yeah, they can get there just fine by bus. Yeah yeah. But maybe there was a somewhat similar debate in Vantaa — the Helsinki-Vantaa thing — that we need something like the Arlanda Express, or a Heathrow Express —a proper metropolis needs that rail link, a train — well, we already got that. [05:40] Yeah, it's a bit slow, but it's there — you can get from the airport to central Helsinki by train. It works. But here's the thing: back when this project was first pushed forward, ridership — meaning how many times a day someone boards the tram — was estimated at roughly double what it is now. So in a way, that ridership rationale has quietly disappeared from the picture, and now— —the tram, its defenders now think of it more as an urban-development project — that this and that will spring up around it. Yeah. And they haven't just been thinking about it, they've gone ahead and started blowing up Tikkurila. Apparently, in this vision, Tikkurila is now Vantaa's heart, for better or worse. And then it runs out to Martinlaakso, and the other end is of course the airport in this vision. In between, you just have to build the new Vantaa. Yeah, so Tikkurila is Vantaa's heart, and right now it's bleeding a little. Right, so people there probably wonder every day whether this has something to do with the tram. I think that thought comes to mind when you're walking there, or trying to drive somewhere. [06:49] Doesn't it relate directly — that they've gotten ahead of themselves there? Yeah yeah. The preparatory work has, so to speak, already started, and they've gotten way out ahead of themselves. And actually, today's news is that for the first time, they asked what Vantaa residents actually think about this tram. So, what do they think? Well, the result was something like this: they gave four options — scrap it, postpone it, build it as the 'torso' version, or put in more money and build it to the original plan. Before we go on, explain what this torso plan is, because that's raised some eyebrows too. The torso plan was that the airport tram wouldn't actually reach the airport — it would stop a kilometer and a half short, at Aviapolis. And you even came up with a name for it? Oh yeah, I came up with a name for it: the Patikka-Ratikka (the 'Hiking Tram') — the idea being that you take the tram to Aviapolis and then hike the rest of the way to the airport, that's where it came from. But in a way, Vantaa residents' thinking here was actually pretty clear-cut: 76% felt the project needs to be put on the brakes — either scrapped entirely or postponed. And one quarter felt it should go ahead either at full scale, or as the truncated 'torso' version, [08:05] —but that 76% figure was pretty clear-cut. And what was interesting was that SDP (Social Democrat) and National Coalition Party voters were roughly in the same place too — about three-quarters. So now SDP and Coalition Party councilors get to think about whether they'll vote in line with their own voters' opinion, or against it. Yeah, just to clarify, this is being recorded on Friday, November 7th. So this will likely become clear soon, since the first decisive moment has already been decided. So there'll be, like, two possible voting situations coming up, but there might still be a chance to influence it. So if the public's will is that clear, it really ought to be respected and taken seriously. And public awareness of this has really been growing the whole time. Because back in [20]19, when I was already critical — I even opposed it in the city board, and one other person from my group backed me there — what I had in mind was a sensible investment, a broader look into the electric-bus option, and it was always somewhere in the back of my mind that the economy wasn't exactly booming globally back then either, and that things could get— [09:19] —economically tougher, which is challenging for big investments like this. And sure enough, without my knowing it, along came COVID, and then that horrific, appalling war in Ukraine, and now, economically speaking, there could still be surprises in the air. We Christian Democrats had this position the whole time: let's really, seriously hit the brakes a bit and take— —some time to think it over and so on. But now that people have seen the financial exposure involved for the municipal budget, almost 50% are saying a flat no. So people's awareness has clearly grown. Yeah. And before Petri jumps in, let me add one more correct observation: there wasn't really room to spare, and unfortunately Matias Mäkynen wasn't right that interest rates would stay permanently negative or at zero — money really does cost something after all. Yeah, money really does cost something. But indeed, this project isn't the same one the previous council decided on. Vantaa isn't in the same financial situation. So what's happened is the project has shrunk, it's become the— [10:27] —'torso' version. And it's grown by another 100 million or so. Meanwhile the city of Vantaa's finances have deteriorated fast. So the ability to carry out a megaproject like this has weakened, and now, like Jouko says, Vantaa residents have woken up to look at this, and three-quarters say 'no thanks' that strongly. So, in a way, so many things have changed here that now, in my opinion, every councilor should have the chance— —to reassess this calmly, rather than have it forced through. If you think back to [20]19, consider how much more remote work there is now, which of course ties back to that awful, unpleasant COVID business. Our whole thinking on this has been completely upended, and the ridership figures being measured now are clearly lower than at the start — clearly lower than originally projected. It really makes you wonder — that number could actually be even higher if it weren't for— —this option [remote work]. Yeah. Teams and similar tools became everyday tools right in this period. And indeed, if ridership — meaning tram usage — has, by some estimates, dropped by half, that lines up remarkably closely with, say, the state's remote-work guideline of 12 in-office days a month. And if we keep going with the rational reasons rather than just the emotional side, then think about how cities' cash flow has— [11:54] —weakened or changed, because the wellbeing services counties took away, what was it, 12 percentage points or so of tax revenue, and Vantaa was left with under 7%. So in terms of cash flow, there really isn't a lot of room to maneuver. It used to be that healthcare spending would run over, and it'd get covered through cash flow the following year — but the margin we're living in now is pretty narrow. Yeah, that's a really excellent point. And at the same time, employment services were shifted from the state mostly down to the municipal level, which, at least in this cycle, has been a fairly big negative. That's a really tough one for us in this cycle, because now unfortunate unemployment is really piling up on top of it. And on top of all that, there's one more really big, fundamental question: when we talk about the tram costing 750 million euros, that money doesn't buy you a single tram car. That money buys you the tracks. Right, that's the price of the tracks. Then if you want the actual trams and cars, plus a depot for them, that costs extra — a few hundred million more. So altogether we're talking about a billion-euro project. And what's extremely odd about the decision-making here is that elected officials are being pushed, at breakneck speed, into making a decision about the— [13:19] —tracks. Hmm. But the decision about the trams themselves, and the 100-million-euro depot they need, isn't being made as part of this. I don't know how an investment banker would look at an investment like this, where you build the tracks but decide on the actual vehicles some other time. Yeah. And then you look at the mess on the Helsinki side over this — Škoda Transtech versus the Swiss company Stadler — where it went right back to square one. We'll get into that same mess in just a moment. And I have to say, when these figures are shockingly large — both the rail project and the vehicle situation — if the chips on the table come in increments of 100 million, and that's not even counting the last stretch of the Patikka-Ratikka — because if you actually wanted to build that final kilometer and a half properly, with all the trimmings, you'd need to build bridges and probably bore tunnels — then that's going to cost— —really a lot, just for finishing that last stretch. It's such a strange situation, because alongside this tram decision, a three-year financial plan is being drawn up at the same time, and in that financial plan they're debating things like whether we should close the libraries on Sundays, because we'd— [14:37] —save 20,000 euros a year doing that. And then, on the other hand, we've got this billion-euro pot here, where this investment, along with other factors, pushes the city's debt up to two billion euros. Which means the interest costs alone run to 60-some million a year. And meanwhile we're debating 20 grand on libraries. And then, if we raise a bit of an emotional question, which is also an economic one — what's Vantaa's image? Vantaa isn't Helsinki, after all. And for all that, it isn't Tampere either. I actually lived here for a short while back in the late [19]60s. Maybe some of those impressions have stuck in the back of my mind. Our old name was 'Helsingin pitäjä,' a rural municipality. And now, if you think about what kind of taxpayers would bring us a bit more — I don't mean 'good' taxpayers, I mean the ones who bring in a bit more in tax revenue than your average good Vantaa resident — we're all good, of course — well, this tram isn't going to do that. I doubt anyone would even claim that the nearby housing stock, which is apartment blocks, is going to be— [15:51] —as attractive as that old, ancient memory of 'Helsingin pitäjä,' the rural municipality, with detached houses and nice living. This is going off in another direction now — but here's a good one — since Käärijä did that 'I'm from Vantaa' song, and since Vantaa used to be 'Helsingin maalaiskunta' [Helsinki Rural Municipality], I could write a song called 'I'm a Maalaisliitto man' [a member of the old Agrarian League]. Let's not drag politics into it up there in Northern Finland. Exactly. But the situation right now is that the Christian Democrats, the Centre Party, and the Finns Party have proposed sending the whole project back for further preparation. And at the city board meeting at the end of October, I made that motion on behalf of the three parties, and four— —members, out of the board's 15, backed it, and we lost the vote 4 to 11. The discussion continues this coming Monday, and sending the project back for more preparation — or even scrapping it — would really seem like the only sensible solution right now, given that the city's finances, the project costs, and residents' attitudes have all changed. So, that's really how I see it. But then, maybe a word in its defense — I haven't gotten as deeply into this case— [17:18] —as some people, but I'm coming at this from a gut-feeling angle, which is always really sensible with billion-euro projects. Maybe a bit more on those numbers though: we Helsinki folks are apparently chipping in something like 15 million as an initial cost contribution — thanks for that — and maybe the state kicks in around 100 million, and Helsinki residents maybe another chunk under some agreement. Then you'll pay too, when you come and ride the tram and rack up fares, you'll pay for that as well— —over the decades, one way or another. All of this flows through the HSL [Helsinki Region Transport authority] mechanism — either through taxes, or through fares, or through infrastructure compensation baked into ticket prices. But don't get discouraged, Sami, as a Helsinki resident, because we in Vantaa pay for your billion-euro bridges too. Yeah, and I might be a bit of an outsider here anyway, since I'm actually a Tampere guy who supports— —Tappara, a proper Tampere man through and through. But on the emotional side, let me open this up a bit: I lived in London for 13 years, and I had a boss there, an Austrian-Swedish guy named Bengt Hammar, and oddly enough, he once said — in this rather posh way — that he preferred taking the bus, because he couldn't be bothered with the dirty underground, where it smells of sweat and all, which felt a bit beneath Bengt. But then, when I think about myself, I've never liked— [18:42] —taking the bus either, I've always liked the underground instead, it's somehow just cooler — this from a Tampere guy where, back then, there wasn't even a metro or a tram yet, just the Nysse buses. So I've thought about where that comes from — I have a really strong preference ranking, where the metro is king for some reason, the tram is a strong second, then comes your own car— —and Ubers, and then the bus is pretty far down the list — I'd honestly rather walk than take the bus. I don't know how common that is, but there must be some kind of rail-fetish going on with me, because I consider myself a rational, hard-nosed investment banker and free-market guy, but the moment you start talking about building a fixed rail link, well — that might just be a fetish specific to investment bankers, I suppose— —or maybe the last time you rode a bus was back in the '50s, with the engine sticking out the front, and it never quite got you all the way there — maybe your memories are just a bit old, you got on the wrong bus, it turned off somewhere, and suddenly you're up in Northern Finland. Let's push the investment-banker idea forward a bit here at Vantaa: what if, instead of building this tram, you extended the metro from East Helsinki instead, so that it— [20:07] —could run in a kind of loop around the whole Helsinki metro-area labor market, I think that would actually make more sense from a transport standpoint, and residents might understand the logic better too. Right now it's really hard to understand — if you want to go from, say, Mellunmäki to the airport, you first come in on the metro, then transfer to the tram, and then at Aviapolis you hop off— —off the tram, and wait for a train coming from Tikkurila — a train you just passed on your way there, just to get to the airport. So, this kind of transport system really ought to be looked at on a whole Helsinki-metro-area scale. Yeah. Well, I immediately get excited about that, because since my clear priority is that the metro is king, I'd be all set to swap over — even at that billion-euro price tag — to this metro project instead, simply because it ranks higher in my personal preference order. Now we're talking about other people's money. Right, yeah. That's the ongoing problem here — as a decision-maker myself, and everyone else deciding this, we're not talking about our own money, we're talking about tax money, and above all, borrowed money. In Finland, [19]92 was, I think, the last time that in municipal politics, taking on new appropriations required a two-thirds majority — I don't recall the exact form of it. And I don't want to sound like— [21:33] —an old-timer here, but municipal debt has been rising — though of course it's risen far more at the state level. For projects like this, which are easily contentious, there ought to be some mechanism that ensures people don't just change their minds again tomorrow, or a third time after that. I don't know if a two-thirds majority requirement is the right answer here, but it would at least have made sure everyone had— Right now it's just a simple majority-or-not situation, and that could be broadened. I was actually really pleased and even a bit surprised that, well, they handled the Yle (the public broadcaster) license fee — froze the increases — through cross-party cooperation, which was quite painful, but we did get cooperation on the debt brake, with only the Left Alliance opting out. The state's debt brake, that is. Yeah. Should we get a debt brake at the municipal and wellbeing-county level too, however that would work? Since a supermajority requirement isn't currently in use, that could be reasonably justified to some degree. But actually, as three parties we've specifically proposed a debt brake for Vantaa — set at a level that would still allow— [22:52] —for investments, just not this tram investment. So in a way, a debt cap, exactly, would be a useful tool, and one that's also needed for municipalities, because municipalities are strange creatures — they take on debt both at the parent-municipality level, but they also rack up debt through the municipality's— —owned subsidiary companies, for instance Vantaan Energia (Vantaa's municipally owned energy company), or in Helsinki's case the housing company, and so on. But municipalities don't necessarily think in terms of the whole municipal group — they tend to just think of the parent entity. And these subsidiaries — well, the law technically requires you to think of the whole group, but in practice, de facto, there just isn't a mechanism in place to look at— —how much financial liability or debt the municipal group as a whole is carrying, and what that means. Instead, these big municipal subsidiaries basically live their own independent lives. And that's a whole area that needs work — municipal ownership steering is really, really thin on expertise at the moment. [24:12] Yeah. And speaking of innovation, when you mentioned Vantaan Energia — Espoo, for instance, once sold Espoon Sähkö, first to E.ON, and at first their investment returns from that were kind of underwhelming. But now they've discovered index funds as an innovation, so returns have picked up a bit. But these energy companies and so on are big pools of money — let's take an example— —someone might think that Vantaan Energia is a company that just handles the energy supply for businesses and residents in Vantaa. But it's not like that at all — if you look at Vantaan Energia's strategy statement, it says, roughly, that the company aims to become the leading circular-economy energy-solutions provider in the Nordics. A billion— —euro investment program, and just this week it came out in the paper that they're building some kind of bedrock-excavated energy storage cavern. 200 million was the original investment plan, but it's now been updated upward — by another 100 million again. So, in a way — and I think that state— [25:29] —ownership steering has its own challenges, but at least there's culture, expertise, methods, and people there. Municipal ownership steering, though, is still very much in its infancy, which is why I proposed this week that some structure should be created to give ownership steering of municipally-owned companies more expertise and drive. And in these municipal companies, where the municipality plays a decisive role— —40% of the energy company was sold to Helsinki, back in the day. There were some debt issues and so on at the time too. I still remember we were quite pleased about it — sorry, I wasn't even the city director back then — but actually, looking back now, I think I was pleased at the wrong moment. Why did we sell 40% to Helsinki? Why didn't we keep the whole thing for ourselves? Well, and here's my question about a limited company, where you have— —a board, and its executives carry much heavier legal liability than what's normal in municipal politics — they can't just hand out, say, extra profit, or any kind of special discount, to all Vantaa residents. [26:39] That's just not possible — prices are the same for everyone. The city can demand a certain amount of dividend, sure, but beyond that it's really no longer the city's business, it belongs to the shareholders. And in my view, that's exactly what's problematic about this setup: the city is still the owner, but if you say it's not the owner's business, then that's exactly when you end up with, in effect, a state within a state— —and these municipal subsidiaries easily end up living their own separate lives without ownership steering, and then there's a real risk that you end up taking on risk with taxpayers' money — for instance in international energy business, the way Vantaan Energia does. And remember, even a company like Fortum (the Finnish state-controlled energy company), which has really strong expertise and a really strong balance sheet— —and really strong resources, still took a bit of a beating in this international energy game. So I'm genuinely worried whether Vantaan Energia can hold its own. Yeah, and speaking of the Uniper (the German energy company Fortum bought a majority stake in) deal, there was that Tuppurainen woman involved (the minister then responsible for state ownership steering), and by the way Sanna Marin (the former Finnish PM) has a book out now — I don't know how long the chapter on the Uniper deal is in it, but probably not very long, since they're probably trying to keep quiet about that multi-billion-euro loss that came out of it. I haven't read— [28:04] —the book, but if I had to make a wild guess, the Uniper deal probably gets about a text message's worth of coverage in it. Yeah, but that's a good point. This could actually be examined theoretically too. Actually, let me throw this in — I was on the Vastuu Group podcast right before this, and they asked me: shouldn't a shareholder in a market economy just demand profit from a market-economy company, rather than some kind of 'impact' — is that even necessary? And I quoted Milton Friedman, this brilliant— —right-wing economist. Milton Friedman wrote, 55 years ago now, back in [19]70, this widely cited column, in which he argued that — well, because shareholders can be a very diverse bunch — take Helsinki and Vantaa here, that's a pretty divergent group too — it's dangerous to start guessing at what the company should do based on their individual preferences. But it's even more dangerous if— [29:06] —the company itself gets to decide where the money goes, and then you start getting things like 'let's put it toward making the world a better place' and hiring some buddies to go pursue some completely different agenda than the market-economy pursuit of profit and customer benefit. There's a certain tension here, in that companies need to be able to sense what society's priorities are, and— —values and so on, and genuinely live by them. But the risk I see is that once this goes too far in that direction, companies start behaving politically. And if companies start behaving politically, then who exactly is doing the politicking? Very often it's the executive management — it's not the owners starting it, and they don't even want it, but— —it becomes a difficult equation, in the sense that, on one hand, you should be able to sense society's will and live by it beyond just following the law — but then, once you go down that road, you get overreach, and you lose sight of what a company's function in society actually is. And a company's function in society, in the end, is above all to create jobs, economic— [30:29] —wellbeing, growth, resources, and to serve customers as well as possible. Yes. Yeah. But in a way, Milton Friedman had, if I remember right, this brilliant two-by-two matrix: are you spending money that's your own, or someone else's, and are you spending it on yourself, or on someone else's projects? And unsurprisingly, when other people's money gets spent on other people's projects, that's when things go badly — money gets thrown around wherever, and there's basically no accountability. And the most— —accountability you get is when you use your own money on your own projects. And it gets a bit more problematic with other people's money on your own projects — isn't that the riskiest of all — that's where you're exposed to corruption. And I'd actually raise that point, because whenever the stakes are 100 million euros, that's going to attract a lot of people who'd be quite happy to have that 100 million, and it can be broken up into all sorts of projects — and yes, corruption risk is close by there, and what can you do about it, well, in this— [31:30] —case, specifically that Helsinki tram-order decision — because in that case, the justification used was that Transtech was disqualified, and it looked like people were trying to sway that particular deal, and now they got that decision overturned. But when hundreds of millions are on the table, the corruption risk really is quite significant. There's one really important thing worth remembering here: sure, there has to be some budget figure, or at least a sense of how much it is, but you shouldn't lock in that sum as though you're now ordering goods for exactly that amount. The competitive tendering process needs to be extremely rigorous — we've allocated enough for this, but now we're actually looking for the real, right price. So, s"}, {"slug": "687-vasemmisto-ei-ymmarra-vaurastumista-tere-sammallahti", "title": "The Left Doesn't Understand Wealth Creation | Tere Sammallahti", "titleOriginal": "Vasemmisto ei ymmärrä vaurastumista Tere Sammallahti", "guest": "Tere Sammallahti", "guestsCanonical": ["Tere Sammallahti"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/tere-sammallahti/"], "episodeNumber": "db-687", "publishedAt": "2026-04-07", "duration": "00:21", "format": "short", "topics": ["ownership_capital_tax", "finnish_economy_policy"], "description": "Finland's biggest mistake: equalizing income differences. Why is Finns' deep-seated envy the wrong way to think about wealth?", "page": "https://www.neuvottelija.com/podcast/episodes/687-vasemmisto-ei-ymmarra-vaurastumista-tere-sammallahti/", "text": "[00:00] Tere Sammallahti: People who hate the idea of getting wealthier think of it like this: this kid has more, that kid has less, and Finns are pitted against each other. We have to even out income differences within Finland, and so on. But this isn't some Finn-versus-Finn competition — it's Finland versus the rest of the world. Once you understand that perspective, you can start to see why building wealth across generations is so damn important. "}, {"slug": "706-nyt-voi-olla-30-vuoteen-paras-hetki-ostaa-asunto-juho-romakk", "title": "Finland's Best Time in 30 Years to Buy a Home? | Juho Romakkaniemi", "titleOriginal": "Nyt voi olla 30 vuoteen paras hetki ostaa asunto | Juho Romakkaniemi | Neuvottelija 386", "guest": "Juho Romakkaniemi", "guestsCanonical": ["Juho Romakkaniemi"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/juho-romakkaniemi/"], "episodeNumber": "386", "publishedAt": "2026-05-22", "duration": "37:35", "format": "full", "topics": ["investing_markets", "finnish_economy_policy"], "description": "Finland's economy is turning a corner, and Europe is waking up. Juho Romakkaniemi, CEO of the Finland Chamber of Commerce, visits Neuvottelija to discuss Finland's economic turnaround and what sets this moment apart from past disappointments. The episode covers the latest economic figures, consumer and business confidence, and how the government's structural reforms are affecting the labor market and incentives. Romakkaniemi and Sami Miettinen consider the effects of Trump's tariff policy, European defense cooperation, and the euro's potential as a global reserve currency. The conversation also raises a concrete proposal to replace inheritance tax with a two percent gift tax, as well as the outlook for the housing market in the Helsinki metropolitan area. The takeaway is upbeat: investment is picking up, GDP is growing, and it's the best time for entrepreneurs in years.", "page": "https://www.neuvottelija.com/podcast/episodes/706-nyt-voi-olla-30-vuoteen-paras-hetki-ostaa-asunto-juho-romakk/", "text": "[00:01] All right, welcome to the Neuvottelija channel. Good signs in the Finnish economy. Finland's economy has turned a corner. First-quarter growth this year came in at 0.9%. My guest is Juho Romakkaniemi from the Finland Chamber of Commerce, and he points out that, American-style, if you annualized that by multiplying by four, we'd be well over 3% annual growth. That's not exactly likely, but there are plenty of good signals. Consumption is rising. Juho says the real estate agent (LKV) qualifications the Chamber of Commerce administers are seeing strong growth. So it could be that sensible people are sensing the property market is on the rise too. VAT revenue has been climbing. The slight uptick in interest rates doesn't seem to be that big a deal. People are spending a bit more again. Card data from Nordea is trending up. People's activity is increasing. Trump's odd politics, the Iran war, the tariffs — turns out they're not as big a shock as they seemed at first glance. [01:12] The YEL bomb has been partly defused by this kind of structural fix, and yeah, there's just this momentum now. The stock market in Helsinki already rose nicely last year among the big companies, so this is a bit of a boost period for once. Vote with your wallet, and let's get Finland back on the rise. And there's still the public sector that needs to be reined in, to head off this kind of... ...socialist backlash. But it looks good, so let's get into the episode. All right, welcome to the Neuvottelija channel. Juho Romakkaniemi. Hey there. Thanks for having me, Sami. And we were talking backstage about how it'd be nice if you just represented yourself — but can a person ever really do that? As CEO of the Finland Chamber of Commerce, I also represent my organization everywhere. But I do have a lot of freedom to speak my mind. [02:12] That's a nice position to be in — when you represent an organization whose views largely line up with your own, it's easy to operate. Yeah, but that's not always how the media wants to see it: whenever some side remark can be twisted, it gets pinned on the organization as a sin too. But if that happens, I'll absolve you of the sin anyway, even if the media doesn't deserve... ...to deserve it, but I don't think we have hugely differing views. I'm also an unaffiliated right-leaning guy myself, so I'm sure we'll find common ground. It's an interesting time to think about how these right-leaning structural reforms in Finland get moving — once the upturn comes back, that's when these supply-side reforms should really give the economy a proper boost. The upturn... ...is coming back. Aki Kangasharju flagged this earlier in the year [unclear], and now Nordea's economic review has also seen positive signals in credit-card data. But what's the Chamber of Commerce's signal? [03:16] Well, the Chamber of Commerce's signal is that our goods exports to third countries haven't done very well so far this year — a bit of a step back from last year. But Finland's services exports to the euro area have done quite well. Our exports to the EU area have grown; last year they were positive. So yeah, this downturn has really come down to general uncertainty, which has led to... ...both consumer caution — in the housing market, in spending — but also caution in corporate investment. Now there are a lot of signs that this might be changing. Yeah. And we treated ourselves to some fancy desserts at lunch there — that's always a nice little extra. So that feeds a bit of VAT revenue too. VAT was raised to 25.5%. That's been more of a brake, but now came the big change: the moderation of marginal tax rates for high earners. I think it definitely shows. It clearly shows in consumption early this year — card payments have picked up a lot, and the economy has, in a sense, started moving. VAT revenue has actually been growing faster than forecast so far this year. So, yeah... [04:33] ...that shows up in the state's tax take too — that consumption has picked up. Yeah. Then, whether it was the mid-term budget review or the annual budget, there was some grumbling that the real estate transfer tax wasn't scrapped, but still, I think it's now at a fairly reasonable level by global standards. But what about the property side? Do you have anything on that? Yeah, we held... ...LKV exams — the Chamber of Commerce administers these qualifications for real estate agents — and normally there are about a thousand candidates a year, but for the past couple of years it's been down around 500, so it's dropped by half. That's a sign that when the housing market isn't moving, people aren't interested in the LKV qualification either. But now, early this year, after two exam rounds, we're looking at about 40%... ...growth in exam participants compared to last year. 40% versus last year definitely tells you something — there's activity in that sector now. Yeah, that's more than one would have hoped for. Globally we have a pretty odd interest-rate structure — or maybe it's market-driven — where many borrowers again base their mortgage on the three-month Euribor, or the six-month or 12-month Euribor, and then the winners are... [05:57] ...on the one-month Euribor, like me. But the downside there, in terms of how interest costs are managed, is that when rates rose in recent years, it passed straight through and ate into demand. So I don't see an interest-rate shock as very likely. Maybe not — well, that Strait of Hormuz situation does push prices up, and we ran a business survey a couple of weeks ago — 1,300 companies responded — and all of them had seen signs... ...still fairly positive expectations for the rest of the year on revenue growth, exports, and labor needs, but profitability was seen as developing a bit weaker than before. Companies are reading this exactly right: that oil prices and gas prices will come through as rising costs here in Finland too. Even though Finland and the Nordics are actually in a relatively favorable position in terms of direct effects, compared to... ...competitor countries, since we have a fossil-free power system, and on top of that, in transport, the share of electric-powered mileage is world-class in the Nordics. Oh wow. Yeah. The Norwegians might be sitting on gold, and the Ukrainians have run something like 'kinetic sanctions' — really wrecked the Baltic Sea ports for the Russians — so they don't get much benefit from this fossil-fuel shock. No. And now it's... [07:19] ...interesting to see, overall, how this Strait of Hormuz situation, this Iran affair, has stirred up market uncertainty, and it's already being estimated that it has cut at least half a percentage point — maybe even a full point — off this year's growth that would otherwise have happened. At the same time, our preliminary growth figures for early this year have been pretty wild, so it comes down to how these two things weigh against each other, and where we end up — because if we Finns decide to invest and spend, then we really can get this economy growing. That's right. And I myself just took a fair amount out in dividends, so I can cover this spending and vacation trips — some of it's going to the Greeks now. We're heading to the island of Kos again this time, but yeah, some of it flows into the domestic economy too. I'm personally fairly confident. And also — I was a guest on your show, I don't want to jinx this with AI talk, but I've bought a ton of AI hardware, computers and so on, so that shows up in VAT revenue too. Thanks, by the way, Sami, for coming on the Romakka Podcast. That was a very popular episode — apparently there were visitors from the Neuvottelija side coming over to the Romakka Podcast too. Everyone's welcome to follow both. [08:37] Yeah, let's keep doing this. I mean, I'm always very happy to be a guest on other people's shows, because they handle the editing and everything, and you just get to show up at the set table and hold forth. And I think your podcast is good — you're an interesting person, and I think this is a tip for anyone watching companies and so on: it's worth centering things on one charismatic person and building the podcast around them. If you built, say, a 'Chamber of Commerce Association' podcast, sure, someone might watch it, but I think it's better to personalize it, and I think... ...it works pretty well for you. Well, of course my joy is getting good guests — that's where the interest comes from too. Actually, the whole idea for the podcast originally came about because, in my current role as CEO of the Chamber of Commerce, I met so many interesting people, had really interesting conversations, and many times thought, damn, I wish I'd saved that for myself — or it probably would have interested other people too. So that's why I started the podcast, and apparently... ...people are interested. The best episodes have racked up a combined quarter of a million viewers, or views, across different channels, and even this spring — take, say, the Jari Sarasvuo episode — that's already at around 35,000 views right now. So clearly it interests people. [09:54] Yeah, and you know, you can actually scrape that with AI too. I've got some scripts for that. Sami, by the way, your episode is the fifth most-watched in the podcast's entire history. Yeah. Nalle and Sarasvuo are still a little outside my league, but not by much. It'll definitely keep climbing from here. Well, let's get back to the economy. So, this Orange Man. I've tolerated the Trump movement and the Republicans quite a lot myself, but now I've just made this call: the guy has simply gone senile, and he went and started this war at Israel's instigation, and that doesn't fit his MAGA line at all. It's kind of another nail in the coffin — it's a bit, a bit sad, if over there... ...things in the States go too far away from democracy, because that would still be left-wing behavior, in a sense. So let's move on to politics — in Finland I'm actually fairly satisfied. I do want to say one thing about Trump, though: the biggest thing I expected, and which was positive, was paring back the public sector and putting America's chronic budget deficit in order. That was a big theme, and then... [11:02] ...then Elon Musk and his coders, and the DOJ, were brought in. And it was done completely like an elephant in a china shop — cutting costs here and there however it happened, with no strategic approach at all, and a lot of good things got wrecked along the way — for instance, really well-functioning intelligence-agency units, or State Department expertise that had been world-class... ...in the US. And yet the end result right now is that the federal government is running record deficits across the board — so the debt buildup hasn't slowed at all, it's actually accelerating. Yeah. So the intention was good, the execution was bad, the outcome is dismal. Well, that's how it is. And I have to say, about this tariff business too — I had a lot of sympathy for the idea that it's just... ...because they don't have a federal value-added tax, so they have a really low tax burden on consumption. State taxes are quite small, sometimes even zero. So they were basically trying to get something like a VAT on imports, and they did pull it off — if only there hadn't been all this Trump chaos, with it being 100% one day, 30% the next, and now 15%, if he'd just brought it in steadily. Now his own Supreme Court has to walk back his own move here, because he, he... [12:21] ...wanted to do it himself, wouldn't listen to anyone else, and then used legal grounds that weren't actually lawful. Yeah, so if he'd worked with Congress instead, say — since Congress is ultimately the one the Constitution gives that authority to — he could have made a clear proposal: 15% for everyone, say, except you can still negotiate separate trade deals, but there's a general tariff, so that... ...it's meant to replace these kinds of taxes and so on. I think it would have sailed through Congress easily with the Republicans, and the legal basis would have been clear. And the process would have been clear too. But instead there's been all this flip-flopping again, and everyone else has had to pay for it, and the world economy is suffering. That's right, and in a way it's also kept the dollar weak and interest rates high in the US, which doesn't help Europe either. But Europe has finally grown some balls. So now we've got this kind of defense cooperation, and money is being spent on defense. Now if we could just get qualified-majority decisions in foreign policy too, so that countries like Hungary, or others, can't just extort... [13:34] ...one or two countries there holding the whole Union hostage. We can't build a coherent foreign-policy line. That would be a great thing. And Trump, with all his flip-flopping, has also achieved one positive thing: big trade deals that had been stuck for decades have started moving in just a few years now. The Mercosur agreement with Latin America, a trade deal with India, Indonesia, Australia... ...these are really massive things, because I just remember, back in the last decade, when Finland — sorry, the European Union — and South Korea signed a trade agreement, trade between the two grew 55% over five years, and growth in trade means growth in prosperity, improved productivity. Yeah, that's certainly something to hope for. I remember, by the way, back when it was still, in a way, the Katainen government... ...and we sometimes argued about the structures of the euro back then. I've been on a pretty winding journey on this myself — I co-wrote, with [unclear] and others, something like 'The Future of the Euro — Finland's Options,' and then also how Finland could be saved for liberalism. And back then I was very much a fan of the decentralized model — going back a bit to pre-euro-style arrangements, and a bit to the Sweden and Poland situations. And I still think their growth rates are strong there, because they have their own currencies. But now I've become a bit — because this... [14:57] ...the security situation is so harsh, both from the US side and from the Russian side, that maybe Poland and Sweden should be forced into the euro, and we should build something like a 'Fortress Europe' — basically cutting out this free-rider going-it-alone from the edges. I think that's kind of the same phenomenon as Hungary, in foreign policy again — I don't know, maybe. And when it comes to the euro, you have to understand that currencies and currency areas are always imperfect. They're compromises. I think the euro, despite its problems, has been a net positive for Finland, and especially for Europe — and especially for Sweden and Poland. Well, when it comes to Sweden's competitiveness — and actually Poland's too — having their own currency wasn't a major factor. It brings flexibility during cyclical swings, but it doesn't deliver structural advantage over the longer term. They've made the right policy choices there, by the way, which Finland could learn from too. But the euro... [15:57] ...area, a big opportunity has also opened up now, because dollar hegemony is on its way down. The dollar's share of world trade is trending downward now, and the euro's share is rising. Yeah, so if we make the right moves, and the euro becomes a global reserve currency at some point, that will bring our economy the kind of benefits the US has enjoyed for the past few decades... ...but those only work if you have a federation that can create that demand — that is, create the euros used to buy demand into the euro area. If we just have a kind of union of states with a strong currency, but no central mechanism that actually taps the reserve-currency status, then it's just a drawback. We won't be able to capture those benefits even though they're within reach. Right, but in practice that would mean the federation getting the right to borrow and to spend. So that's why we come back to this: in that situation, we can't have a free-rider side like Poland and Sweden — they'd have to be told, you need to join this federal mechanism, or you're out. So that's my current thesis, and it's pretty radical talk coming from me, since I've always been a fan of a decentralized setup. [17:09] Right, but take, for example, this rapid ramp-up in defense spending — how fast we as Europe now need to prepare — it really would have made sense to have a much bigger European instrument that raises money on everyone's behalf, allocates that debt on everyone's behalf, and channels it into growing member states' defense spending, so this could be rolled out quickly. Right now we've got a pretty awkward situation, even for Finland, where our debt brake kicks in at the same time as defense spending... ...needs to increase. Well, that's exactly right. So in that sense, I'd say specifically that reserve-currency status should be leveraged for things like defense-debt structures at the EU level. And then there's just the problem that once you start building that federation — right now the EU budget is one and a half percent of GDP. So a really, really, really small share. The EU's budget — in the US it's 20 percent. So if we actually move to that reserve-currency system, where we have the euro and we take on joint debt at the EU level and spend it on EU structures, then we also need to push that down to the local level. In the US right now, state-level public finances run around 10 to 15 percent [of GDP]. For us it's 40. Well, that's how it is, but this is all completely theoretical talk at the moment, but... [18:29] ...it's worth bookmarking for the future that, with the right choices, the euro becoming a global reserve currency would benefit EU countries. Yeah, that's right. If you can create that debt and put it to use, you could basically finance deficits without any problem in practice. That's exactly what the Americans have done with their reserve currency. Okay, good — but the Strait of Hormuz, hopefully that's... ...a passing phenomenon. Because unfortunately, here, Iran is learning that it's a lasting leverage mechanism. Yeah. Strategically, Iran's position has actually strengthened here — even though they lost militarily, they won strategically. So this is a worse outcome in almost every conceivable scenario — for the United States, for the neighboring countries, and really for the whole world — except perhaps for Iran's partners... ...aside, because Iran now knows it can develop nuclear weapons in the future without facing any real military pressure to stop it. Yeah. So, I think Finland and Sweden should launch a 'Stockholm Project' and develop a nuclear weapon, because this is clearly a bargaining chip, and a pretty powerful one — and we'd have the technological know-how for it anyway. This is of course pretty radical talk, but I think we're living in times where, if these old... [19:52] ...truths no longer hold. So I think it's worth — I've got Pekka Virkki coming on later to talk about communism in Finland — Finland still has a bit of this old-fashioned thinking, these really strange ways of thinking from the '70s, '80s, '90s, and early 2000s that are still around. And in a way, when these geopolitical changes are this massive, they also change a lot about what we as Europe need to do. Yes. Yeah. To me it shows up culturally, for instance, in feminists who champion the Palestinian cause, or the LGBT community championing the Palestinian cause, in a place where women have essentially no rights, and homosexuality is a crime punishable by death — that strikes me as... ...a completely illogical cultural phenomenon. That's how it is, and it's fading a bit too, by now. But as someone who speaks up for individual freedom, equality, and equal rights for everyone, I find it hard to understand when Western countries, liberal democracies, get blamed by these communities relative to autocratic, conservative states. [21:12] Yeah, I've had Jarkko Tontti on many times — his classic line was that the left's long march through the institutions has indeed happened, and in a way it partly shows up as this cultural confusion, but also as a kind of left-wing hegemony. And to touch a little on Finnish politics too — we now have a right-wing government that, in the view of a lot of my friends and past guests, has been pretty toothless in making these kinds of cuts. But compared to the alternative, say... ...the previous government — actually quite a lot has been done here, specifically these structural reforms. I think they've been fairly sound. So, 9 billion euros needed to be consolidated by the Chamber's measure — 3.5 billion euros have been consolidated so far. But let's say these structural reforms — dismantling the income trap, cutting taxes, and reforming the labor market... ...will certainly bring, over the long run, 6 billion euros — 5.5 billion euros — more in economic growth than a society without those reforms would have been able to generate. So the growth is there over the long term too. But take, say, the labor-market situation — it tells the whole story: right now we have a record amount, a record-high level, of labor available to the market, which came about because... [22:35] ...cuts were made to social security so that it doesn't pay to be unemployed and passive in a situation where you could be available to the labor market. Mm. So our unemployment figure has risen to a record because people have moved from passive benefits over onto unemployment benefits, in effect, since that supply has been massively increased at the same time we've had a recessionary environment with no strong demand in the labor market. Mm. So we've had both the number of employed people holding steady and the number of unemployed people growing. And the benefits of that will show up once demand also picks up in the labor market. Yeah. Lack of available labor won't be the bottleneck. Yeah. And that's also been a pretty good change, I think — shifting the employment obligations, and the penalties that come with them, from the state down to the municipalities, so that they, in a sense, have to fight that battle locally. Think about it — before these reforms, we had a situation where, say, in the service sector — take the worker at the restaurant we just ate at — if she had two kids, Mm, and was a single parent, her net income was the same whether she worked a three-day week or full time. [23:52] Mm. Or if there was a middle-income spouse too — a proper standard family, two parents, one middle-income, the other in the service sector, two kids — the difference between a three-day work week and full-time work was 93 euros net per month. Yeah. Completely absurd. With good intentions, a system of various social benefits was built in Finland that has, in effect, created incentives telling rational people it doesn't pay to work full-time — that you're better off part-time. And what does that do, not just to work ethic, but to this society's growth, when the incentives push people toward working fewer hours? Yeah. Neutralizing that cash-flow effect is honestly one of the dumbest ideas you can implement politically. That's why, at the dawn of this AI era, I no longer believe we could ever go back to a universal basic income either, because its basic idea was that the basic income would be funded through earned-income tax, but I have a pretty negative view of the future of earned-income taxation. Another thing — there's been a lot of criticism that the unemployment benefit's protected income threshold was scrapped... [25:11] ...and I myself was in government service back in the dark ages, when it was created. The idea was that as an unemployed person it should pay to do a bit of work — you could do a little work and keep all of it, without your benefits being cut. Good idea, positive thinking. It just wasn't realized, when that earned-income threshold — the protected-portion limit — was raised at some point, what that would create within our whole benefits-and-tax machinery, relative to... ...quite a monster in the end — such that, while unemployed, it paid to work one day a week at a really low tax rate, essentially tax-free for that one day. But if you jumped from that into full-time work in a service job, your net income only rose by 200 euros. Yeah, yeah. Right. So a huge income trap got built in there, and I don't think it's been properly communicated that bringing that back would be crazy, since it effectively created a kind of reasonable standard of living — not a comfortable one, but a reasonable one — with very little work, and it didn't pay to take a job. Yeah. And this is also, in general, that same left-wing thinking — that start-up grants as tax-free income... [26:25] ...somehow affect incentives at the low end, but supposedly don't affect things at the high end, at that 59% former marginal tax rate — I've always found that really odd. You should always chart these kinds of cash-flow curves: this much cash flow comes to you in this situation, that much in that one, and taxes affect cash flow like this. People obviously don't run the numbers in Excel or with AI, but they do react to incentives subconsciously. Yes. Yes. And on average, people in this society, and within people's social circles, react to incentives quite well. And this is a mistake people make: when we talk about 'homo economicus' — the rational-choice actor in economics — that's not referring to any specific individual. Individuals go off and do all sorts of random things, and there are a hundred other motives behind any choice. What's being discussed there is, in effect, the average economic actor, who actually... ...when you study macroeconomics, does react very efficiently to the incentives society provides — whether that's benefits, taxation, or anything else. Yeah. And this is also, by the way, an international cash-flow game, in that some of us can move our residence, our family, and our company outside the country. And the exact same thing happens here: we can't act like some kind of [unclear] where we have the world's third-highest taxes in every bracket and expect that people won't... [27:46] ...react. This too has started being dismantled. So, I was glad to see that the stock-option tax treatment turned out reasonably well. Then there was the YEL bomb — an absolutely terrible thing the Marin government did as its parting shot. We got a pretty good fix there, given the parameters available. Yeah, it's maybe a bit back-loaded before it all fully kicks in, but on the other hand, we now know the path through to 2028, and those Kafkaesque examples will disappear, which was a bad thing, in that... ...it didn't necessarily affect a huge number of people, but it affected enough that they got such absurd decisions that it created a broader fear that none of it made any sense. Yeah. Fear of arbitrary tax assessment is truly awful — that's an echo of totalitarianism. Now, by the way, I actually didn't like this tax director's data-center jab, where a civil servant starts telling you how the market economy should work in Finland — that's a bit like being back in tsarist times, if you ask me. Yeah, and on data centers too, honestly... ...that debate is silly. Honestly, quite a few construction companies would have gone under in Finland in recent years if we hadn't had data centers and public construction filling in for construction demand, and the knock-on effects would have been really bad. And sure, data centers aren't some super-high-value-added industry, but we can't... [29:09] ...expect the top of the world to come from just anywhere. It's not that investment should be turned away — no, no. There are different shades of gray, so to speak, in terms of what's more productive and better and so on. For those, you need to come up with their own separate incentives. But if we start heavily sorting these into sheep and goats, pretty soon nobody will invest in that sector at all — not even the ones we consider good. That's right. And there too, you could sort of see it: okay, if this guy's argument is that VAT revenue is even negative — because once investment costs are refunded, the VAT goes back to the company — so it might look like zero for the state's finances at that moment. But then, clearly, he's not remotely interested in... ...municipal finances, which then rake in huge revenues from it. So somehow this kind of sub-optimization needs to be taken out of the system. All these systems — Finland consists of several levels of government, plus the international economy on top of that, and we can't think of ourselves as some isolated little tin can here. Exactly. But coming back to Finland — these investments really are starting to move. And the economic data is really good. In fact, we've got industrial output growth of over 7%... [30:19] ...measured by working days, and cyclically — or working-day adjusted too — growth was over 5% back in March. Those are staggering numbers. Or GDP growth from the previous quarter, according to preliminary figures, was 0.9%, which, since Americans always project this out to... ...an annualized rate for the following four quarters — so if this trend continues, it would point to 4% economic growth for Finland this year. Incredible, at the same time. In the US it was 2% — half of that. And Finland, which had been at the very back of the whole EU for the past few years, alongside Germany and dragged down by Germany, was actually at the top of the EU's growth rankings in the first quarter now. So this could be it — Finland's stock market also rose 35% after a long stagnation, so that kind of forward-looking signal was an honest one. Though, for small companies, that hasn't held — they haven't done well at all. This has mainly been driven by large companies... [31:29] ...driving this rally. But now comes the GDP signal. Then come these quiet signals — the real estate agent exam number"}, {"slug": "709-kun-twiitista-tehdaan-rikos-roni-arvosen-tarina", "title": "When a Tweet Becomes a Crime: Roni Arvonen's Story", "titleOriginal": "Kun twiitistä tehdään rikos: Roni Arvosen tarina", "guest": "Roni Arvonen", "guestsCanonical": ["Roni Arvonen"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/roni-arvonen/"], "episodeNumber": "db-709", "publishedAt": "2026-05-26", "duration": "00:26", "format": "short", "topics": ["free_speech_society"], "description": "Roni Arvonen describes how old tweets were reinterpreted within the National Coalition Party (Kokoomus), and how isolated remarks were built into far more serious accusations.\n\nWas this genuine outrage, or an insider power play?", "page": "https://www.neuvottelija.com/podcast/episodes/709-kun-twiitista-tehdaan-rikos-roni-arvosen-tarina/", "text": "[00:00] I wrote something like, 'Gas it and bury it' — put my phone in my pocket, kept working, and then I get a call from the National Coalition Party's party office saying I'd been tweeting a bit. Oh really, I've tweeted a lot, have I? Well, this is what it got turned into: that I want to run people over with my car [music], and 'hippies into the gas chamber,' and all that. So I just thought, what on earth are they even talking about. Another time, I said the social democratic ideology is 'crippled' — and apparently that was supposed to be a dig at woke culture, or ableism. Neither of which is true. That was the National Coalition Party's inner circle. "}, {"slug": "710-kommunistit-keskuudessamme-pekka-virkki-neuvottelija-387", "title": "Communists Among Us: Finland's Soviet Ties | Pekka Virkki", "titleOriginal": "Kommunistit keskuudessamme | Pekka Virkki | Neuvottelija 387", "guest": "Pekka Virkki", "guestsCanonical": ["Pekka Virkki"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/pekka-virkki/"], "episodeNumber": "387", "publishedAt": "2026-05-27", "duration": "01:10:07", "format": "full", "topics": ["free_speech_society", "finnish_economy_policy"], "description": "Pekka Virkki has written the first comprehensive account of Finnish communism and its relationship with the Soviet Union. The episode traces how the movement took shape right next door to the East even before the Soviet Union existed, why Marxism-Leninism was at its core an ideology of Russian serf society, and how Soviet influence reached beyond the Finnish Communist Party (SKP) into other parties — from the Centre Party's Soviet-leaning 'K-line' faction to the Social Democrats' TPSL splinter wing. The conversation asks why Finland, unlike the Baltic states, never carried out a lustration process, and why the so-called Tiitinen list remains sealed. Sami Miettinen and Pekka Virkki also discuss who today's 'fellow travelers' are, and how Lenin's theory of imperialism explains why Iran's or China's role is so often left out of public debate. Finally, the conversation turns to the current state of Russian imperialism and whether Russia can hold out against Ukraine's drones.", "page": "https://www.neuvottelija.com/podcast/episodes/710-kommunistit-keskuudessamme-pekka-virkki-neuvottelija-387/", "text": "[00:00] All right, welcome to the Neuvottelija channel. Today we're doing something that's never been done in Finland. We're doing an autopsy on Finnish communism. We'll also ask the question you're not supposed to ask: why has this country never cleaned house of the people who whispered on Tehtaankatu (the street where the Soviet embassy stood), pocketed rubles, and built their careers on keeping Moscow happy? They got back into the establishment once the Soviet Union dictated the peace terms after World War Two. When East Germany fell, they carried out a lustration. When the Soviet Union fell, our Baltic brothers said never again and opened the archives. In Finland, we opened the state liquor stores and shut our mouths. The Tiitinen list is still locked away. Money flowed in from the East into party coffers and election funds, and Centre Party people, Social Democrats, and communists competed over who could get closest to the Kremlin, and nobody has ever been held accountable for any of it. Today's guest is Pekka Virkki, who has done what no Finnish historian has dared to do as a whole: written a book laying bare the entire history of Finnish communism and its fraternizing with the Soviet Union. Lenin hid out here. The SKP [01:13] was founded in Moscow. The Taistoists (hardline pro-Soviet communists, named after Taisto Sinisalo) sang songs of peace while the Red Army rolled over Prague. Listening to Pekka, you understand why Soviet communism is really an imperialist, racist, Russian serfdom-based system, not some European labor movement. In this episode we also ask the awkward question: do we still have communists in parliament? And if so, what name do they go by these days? If you're curious why Finland never settled its accounts with the East, and why that still has a price today, skip ahead. This is Neuvottelija. Let's get started. All right, welcome to the Negotia— the Negotiation Club— the Neuvottelija channel. Every now and then I wonder a bit about my own identity, just like the communists do. So — Pekka Virkki, An Autopsy of Finnish Communism. Welcome. First time here, actually. Thanks. Good to be here. Yeah, and I sent you a brief and asked if you had any questions about it, and my first brief was something like — why are the commies wrong? Why are the commies wrong in Finland? [02:25] Why — why hasn't anything ever been done about this historically? Why isn't anything being done about it still? And should their backsides be tarred before they reach heaven? That was roughly, freely recalled, my first brief — but let's do this a bit more seriously, since that shows why Finns now need yet another book like An Autopsy of Finnish Communism. Well, I won't say there can never be too many books, since time famously has an opportunity cost, but I will say this much: this is still a topic where a comprehensive account has been missing. Up to now, I'd say, pretty much entirely missing — a history of Finnish communism and, above all, its relationship with the East. I don't mean there's no general history of the Finnish communist movement, but rather a history of the relationship between the Finnish communist movement and the Soviet Union — a history of that movement's spiritual legacy. And it deals quite a lot with what the relationship was, in a sense, between the Soviet Union and Finnish communism, which grew up right alongside the Soviet Union — actually grew up at the same time the Soviet Union was born, since Lenin hid out here in Finland, and there were a lot of what you'd call horizontal connections even before the revolution. So our communist movement has had extremely deep ties eastward even before the Soviet Union itself came into being, so [03:48] what, in a sense, is the relationship to Russianness on one hand, and on the other hand the relationship to communism, which is nonetheless first and foremost a German, British, Central European and Western European idea [scoff] — so those are maybe the main factors I focus on there, and not much has been written about it in that way. Well, that's God's honest truth. By the way, Russia ties into this — there's Lenin— Ilyich, on the cover here, drawn with somewhat Asian features, since Finland didn't have a chief communist — some Otto Ville Kuusinen or someone else — who could've been put on the cover instead. Well, let's put it this way — OV would of course have been a cliché choice, but I think OV's looks are also such that people wouldn't really recognize him. — on the book cover, I admit. It's supposed to sell, after all, and, well, maybe that partly shows why there's a need for this book — that even someone like Ville Pessi, for instance, is a very central figure during the Cold War, with Jaakko Laakso later as his heir. But I don't know if — well, yes, Lenin is probably the person people know best, after all. Yeah, both for good and, above all, for bad, of the people I've mentioned, [05:02] nobody recognizes these SUPO directors and the big whisperers of Tehtaankatu — nobody recognizes any of them, and no such lustration was ever carried out in Finland regarding these careers. There was no walking anything back at all. And I think that's another reason this matters — that a lustration will happen at some point. What's your take on lustration now? Well, it's a process, in that— — I think you could say it's underway in Finland in a certain sense, and I'm really looking forward to the Tiitinen list at least being opened up to researchers. Hopefully with as clear supporting background material as possible. And I've explained a bit in the book why that would be needed. As SUPO chiefs, there haven't really been any actual Soviet-style communists, but as heads of the State Police, yes — as chief after the war, which was SUPO's predecessor, there were people very closely tied to the communist movement, both in the leadership and further down the ranks. And actually, while writing, I got access to Alpo Rusi's notes. Rusi has, I believe, been a guest on this show at some point too. [06:20] And there was a comment from Juhani Väänänen, former head of SUPO's secretariat — it emerged from those notes that Seppo Tiitinen, SUPO's long-serving chief during the Cold War, had allegedly been on the FSB's payroll. So, hypothetically, if this were true, we're talking about a time even after the Cold War. Yeah. And then you get to questions like why rascals named Jaakko Laakso and company have gotten off this lightly, in terms of public — and possibly other — scrutiny, at least as far as what's publicly known goes. Yeah. So in my world, a properly Finlandized Social Democrat and a communist start to become pretty much the same thing. I apologize — you're of course very precise as a researcher, so if a communist wasn't in SUPO, then fine, that's that — but if a thoroughly Finlandized Social Democrat is there, then in my world, that's the same thing to you as well. [07:24] And at its worst it wasn't even the case that someone was specifically in the SKDL, or among the Taistoists, or in the Communist Party — that wasn't the point. It was simply about who was mixed up in the Tehtaankatu muck, and how much compromising material they were picking up, and how often they went down to Tehtaankatu to hear instructions. Yes, that was largely the actual substance of Finlandization — of course the communists had their own outright violent aims of overturning the social order, though at some point parliamentary activity came into the picture too, but the way Soviet influence shows up in Finland shows up exactly in that way. I try to be very careful with terminology myself, because if you start using these terms half-heartedly, without it clearly being ironic, then it very easily ends up nullifying the whole message, and I myself am against that in that sense — of course you talk about it, and then there's also this: there's a bit of a traumatic background here too, because in Finland there was also [08:34] genuinely right-wing radicalism. That's not some invented thing — it existed in the interwar period. And back then there was this idea that basically all leftists are the same bunch, when in reality they really aren't — the Social Democrats, at a certain point in history, you could say, helped save Finland's free social order after the war, and they deserve credit for that, no question. But then, the further the Cold War went, Finnish Social Democrats were fitted into a role that was both ideological and geopolitical: when the Soviet Union occupied Czechoslovakia in the late '60s, communism suffered a crisis of credibility. And that's when the Soviet Union started trying to build alliances out of Western Social Democrats, but above all Finnish ones — and of course there was a certain crowd that jumped on board very eagerly. I write there, for instance, about the Pälkäne movement, among other things, which was essentially the SDP's own Taistoists. And while the Social Democrats have their merits, there was also a significant group among them who never learned to draw that line. I don't know if Lasse Lehtinen has been a guest of yours — he hasn't. Lasse Lehtinen — I like his book on Väinö Tanner right up until the halfway point, when he starts talking about Kekkonen, and then we know what he's going to [09:58] write, because his view of Kekkonen turns pretty grim — it basically takes that fine account of Väinö Tanner's great career and steers it into how lousy a guy Kekkonen supposedly was. But we can come back to that too. Everyone here is guilty, guilty, guilty — Tanner was the purest Finnish patriotic social democracy there ever was, but after the war he became persona non grata, and then the Social Democrats drifted off, and eventually we ended up at Alpo Rusi, when you mentioned, from quite modern times, [unclear] and others who still seemed to lean toward that old left-leaning wing of the Social Democrats — and so, well, Alpo Rusi in turn stumbled over the Ahtisaari affair. So this really is a strange continuum. Actually, we could start a bit from history. Since we've got Lenin here, and he — well, from the Pet Shop Boys song 'West End Girls' that we all know, there's the line 'from Lake Geneva to the Finland Station' — so, through Finland, on to Petrograd, to go fight with those guys — is that where communism actually got started, or should we go back to Karl Marx instead? Well, I'd actually start with the French Revolution. So yes, I do cover [11:18] communism's intellectual-historical roots quite far back there. And then, of course, one factor was Europe's 'mad year' of 1848 — there was already famous artist-communism back then. Richard Wagner was famous — among the famous early communists, or at least someone who declared himself a communist, at a certain stage of his life. So is this some kind of mutation of Hegelian dialectics, or what? You'd have to ask Wagner that. [laughter] Maybe you can find some spiritual connection to him there, but actually, from that same year, 1848, there's a very similar quote from him as from Marx himself — this idea of the specter of communism haunting Europe, and that everyone must, as it were, take a stand on this new movement. And in that sense, the original European Western communism, and Central European communism, is really just an extreme form of left-wing socialist thought. And as we know from the French Revolution, socialist thought — leftism — was one of these three or four, depending on how you count it, [12:31] basic ideologies — socialism, liberalism, conservatism, nationalism — and it's one form of those, and in Europe it's clearly, in its own way, part of the intellectual-historical heritage. Then, among economists, as I understand it, there's disagreement about what Marx's role actually was in that field. I've understood there's some kind of consensus, or at least a fairly common view, that on the supply side, Marx did have certain insights that hadn't been made before in economics, but it was pretty thin. And [throat-clearing] with Engels there was some [unclear] mixed in — they certainly aren't living under communism now, more like heading toward some kind of oligarchy, as I understand it. But — no, but the Hegelian angle, the philosophers, is what interests me, because I think the problem with communism and the far left is this kind of collectivist illusion, that we have this kind of zeitgeist that, through technological determinism, somehow inevitably ends up in that damned communism. I think that's just — it's like a fairy tale, that the collective somehow just ends up in pure communism, and along the way tens of millions of people happen to die. Somehow this is really childish nonsense, if you ask me. [laughter] It's the same reason engineers and artists should never be let anywhere near [laughter] government [13:55] on their own, because they think too highly of themselves. And I guess there's a bit of that idea in the dialectic too, that everything can be calculated — and of course, even if everything could in theory be calculated, even if we did have that kind of computing power, that would require us to also have all the information, with nothing ever approximate and no errors ever occurring. And that's the fundamental problem of totalitarianism and collectivist thinking, but above all, the basic problem of state-led totalitarianism is that if there's no decentralization of decision-making information at all — and that doesn't just apply to the market economy, it applies to politics too — which, since we don't currently have a night-watchman state and never really have had one, still has certain regularities in how markets get regulated politically. And in a sense, if this kind of political-administrative competition is eliminated entirely, then I don't know that it's ever led to anything other than tyranny. It can take somewhat different forms — nowadays, of course, it's maybe a bit different than it was in the Soviet Union or Nazi Germany, but fundamentally there's an awful lot that's the same. Yeah. But this whole progression — feudalism, feudalism, something else, and then capitalism, then real socialism, communism — it's somehow like these [15:20] — silly stuff about it. And what's missing — I had this guy, Binga Tupamäki, who tried, in his master's thesis, to map out this leap of technological determinism into communism. But that's just it: this requires removing democracy, and then some [unclear] 'enlightened' types stepping in between — so who thinks that's a good idea? Why did we have this kind of cult that wanted to voluntarily join Finland to the Soviet peoples? It just feels like [laughter] — where did this kind of cult even come from? But let's go through a bit of that, from Lenin's time — we had this feudal government that lost a war to the Japanese, and then we got lucky in that we managed to slip away, and then our Reds didn't quite manage to reattach us to the Soviet Union during the Civil War — but that was actually pretty close. We did, for some reason, have really close ties to Russia's communist party here in Finland too, right in the early years of independence. Mm. Well, you can of course always debate how close that was and how close it wasn't, but in Finland there was specifically this Western, industrial-working-class-based, European-spirited labor movement, and of course it operated institutionally largely within the same organizations as those who became Social Democrats. [16:49] Mm. The SKP was founded in the Soviet Union, and it became the revolutionary, violent wing. Uh, going back to that thesis for a moment — it's actually an interesting piece of work. I read it at some point and liked it a lot. If I recall, it got the top grade, and I think Jukka Kekkonen was either the supervisor or, in fact, the examiner — and you couldn't really call him a right-winger either — but the Marxism-Leninism angle, he was quite central to it as a concept. And Marxism-Leninism's thinking on the rule of law — Marxism-Leninism is specifically the Soviet Union's own version of this communist far-left thought, which combined the idea that, since Russia wasn't and hadn't developed into an industrial state, there's instead this alliance of workers and small peasants — that is, against landowners, estate lords, and also wealthy farmers — that is, the middle class, the independent middle class, insofar as one existed in Russia at all — and the working class was just part of that revolution. And Marxism-Leninism was, in a sense, originally a very Russian idea, because at that stage the economic structure of European states was different, and it stemmed from that serf economy and its legacy, so the mental [18:12] leap to Marxism-Leninism was actually quite small. If we talk about how serfs were bound to the land well into the 19th century in Russia, and what happened right after that — was it '28, someone can fact-check that, I don't quite remember — but soon after Lenin's era, Russia introduced this internal passport system, meaning in reality there was no getting into the cities at all without proper business there, and no permission from the Party, and no permission from the kolkhoz boss, the political commissar. And in effect, the same way there used to be estate lords, now it was just the Communist Party representative in their place. And on top of that, of course, came the kulak persecutions — the destruction of independent farmers, quite literal, physical destruction — but also, of course, persecution based on nationality. If we talk about what Russia is doing in Ukraine right now, that's Great Russian chauvinism, that's Great Russian imperialism, but it's also part of communism's ideological legacy, because Ukrainian national identity is very much tied to being independent farmers. In the same way, how Russia had [19:33] anti-Semitism — Jews largely made their living from trade and entrepreneurship, and those were hugely suspect groups from the communist regime's point of view, often without even having to say a word about it. Though sometimes it was said outright too. Yes, sometimes the Soviet Union engaged in outright ethnic — this kind of ethnic hate speech, to use today's terminology — but, in effect, that communist ideology justified the genocide of entire groups of people. Yeah, yeah. That does paint an interesting picture. I think, starting with Marxism-Leninism, it's always struck me as an attempt to slap some kind of ideology on top of the horrific mess of Stalinism, so it can be discussed in these vaguely technical, scientific-sounding terms, so it doesn't sound as stupid as the plain fact that it was totalitarian Stalinism, where the Gulag system and state terror were taken to the next level — where people were murdered quite methodically, [20:35] including their own people — not just the Jews and other well-off farmers who happened to still be alive at that point. But an interesting angle — I had Sofi Oksanen on, who's written several books about Russian imperialism, and she had a somewhat similar view — that this kind of Russian authoritarian imperialism has indeed become intertwined with this bizarre nationalism, and then there's this endless game of terminology, where Ukrainians are supposedly still, in their word for it, Nazis — sort of like the villains of World War Two. The terms used in Russia are just bizarre. And of course [laughter] — they love using the word 'fascism.' It's a bit of a cliché now to get into whether National Socialism was left-wing or right-wing — I probably had those arguments back when I was fifteen and thought I was some kind of high-school genius. But it is true that even there you can see how the ties to socialism got conveniently dropped once it became clear the Molotov-Ribbentrop Pact wasn't going to work out. [21:58] Yeah. And, well, it's true that the National Socialists and the communists actually did share a strong common ideological foundation, even though they later became enemies — and that's also something that maybe helps explain what's happening in Russia today. Yeah. But let's go back to this Finnish communism — okay, so there was the Civil War, the Reds and Whites fought, and then there was a bloodbath, and then the White tyrants, as the communists would probably see it, took power. Then, in a sense, came Väinö Tanner and people like him, who I think were, in a sense, good Social Democrats — they brought over sensible cooperative ideas from Germany, and things like the earlier Forssa movement improved workers' conditions, building this kind of good social-democratic foundation, which the Russians and the communists probably found kind of bland. So — was there any interesting movement within this communism in the interwar period? Yes, in a sense there was, because once the SKP went underground across the border, its leadership operated from there. In Finland there was this underground SKP communist movement, which in the end was fairly small, but it did operate right alongside the Soviet Union, [23:15] funded by it — and it's fair to say that by the time we got to the Winter War, the SKP's secret intelligence activity in Finland did have, or would at least have had, if the Red Army had gotten further, an effect that would have made its operations easier. So, in that sense, it really was a full-blown fifth column. And then there were communists operating in Finland, and communist fellow travelers, which is a fairly commonly used term. I don't mean leftists in general, but people who genuinely operated in very similar contexts, with similar ideologies, but through different parties. There was, for instance, a short-lived attempt called the Finnish Socialist Workers' Party, which was then banned by the authorities in the '20s, and then they operated through various electoral organizations up until 1930, when it was banned outright. Social peace also started to become shaky more generally around then, because there were fears of a far-right backlash to all this too. And this brings us to — since Urho Kekkonen's already been mentioned — Kekkonen wrote a pamphlet called Democracy's Self-Defense, in which [24:34] he actually laid out, quite thoroughly, the ideas of the young Kekkonen, back when he was still a bit of a right-leaning Kekkonen — but by that stage he'd already, mentally, moved away from that; he certainly wasn't a right-wing radical, in fact the pamphlet is also very strongly directed against right-wing radicalism itself. Okay. That text — if you're looking for a point of comparison — is more like Karl Popper, a few decades later. So now this is starting to sound like — Lasse Lehtinen, Kekkonen. I'm not — [laughter] — but you know why Adam Smith is celebrated instead of, say, Anders Chydenius: Smith wrote in what was, in effect, the lingua franca of his day [unclear], whereas Democracy's Self-Defense is, above all, a political pamphlet. Of course it didn't contain the kind of philosophical system that Popper later built [throat-clearing] — in the '70s, but a few decades on. But in a sense, the idea is the same. [25:35] Yeah. Well, Kekkonen was a sharp guy, and he later ended up in something close to the position of a communist-style dictator himself. But he does have an interesting arc of development. Then came the Winter War. That's the classic story of Reds and Whites uniting. The government too had Ryti and Tanner and Kekkonen there, all in perfect harmony, and at the front there were both Reds and Whites — against that first, unadulterated wave of the Winter War, the nation united, at least according to the myth. And even the communists fought back then — those, that is, who weren't over in the Kuusinen camp keeping up the fifth column — so at least the more moderate wing came together. But was the alignment with Germany — the Continuation War — something that reignited that communist hostility? Well, you have to remember that the traumas of 1918 didn't just disappear on their own, and the divide didn't either — that Finland experienced the [26:42] Soviet attack, across very broad segments of society — including among the left — simply as outrageous. So there really was quite broad unanimity, especially during the Winter War, but yes, these old traditions and divisions were still there underneath. I don't know that the Continuation War itself was something that changed this basic divide much. What it certainly did affect: Finland had a small far-left resistance movement, especially in the Tampere area, that operated specifically against cooperation with Germany, and I've written about that in the book too — in Hämeenkyrö. Yes, there was a surprisingly large group there, who went, so to speak, AWOL, into the woods, really. [throat-clearing] But then, from that Winter War-era episode we learned that we narrowly ended up second best, and then the Soviet Union started dictating terms — the Porkkala lease came, and so on — and among the very first measures, the communists were rehabilitated; [28:02] communist activity could no longer be banned — that was after the Continuation War. And then Ryti was thrown into a penitentiary, and Tanner ended up on some list of suspects over in the Soviet Union, and then things started rolling — election funding started coming in fairly directly, and in effect they started propping up the left wing. Yeah, I also got quite a lot of material from the Security Police, archive material, for the book, specifically related to this — to how the SKP's money flows were organized — and I've brought some of that to light in the book. There's been information on these things in other sources too, and I also go through how the Soviet Union influenced other parties, because even though this isn't a general history of Finlandization, my aim is still to shed light on what the communists' mental and real-political influence was on other parties, and how the communists' Soviet-friendliness — or at least the perception of it — [29:08] forced other parties to build these relationships too, since nobody wanted to let the SKP have a monopoly on friendship with the Soviet Union — and that suited the Soviet Union, because the Soviet Union always had both minimalist and maximalist goals in Finland. The minimalist goal was that Finland would remain geopolitically within the Soviet sphere of influence, and the maximalist goal, of course, one could see, would have been revolution — but even that revolution shouldn't really have been carried out in a way that undermined other goals, if there was a risk it would fail, or, for instance, that Sweden would be driven into NATO as a result, with an iron curtain ending up running across the Gulf of Bothnia. That's actually been considered one of the major factors in why the Soviet Union never fully committed to backing a Finnish revolution. And, yes, that probably also explains why our special relationship with Sweden has remained so strong right up until quite recently, and still today. Of course we have a long shared state history and so on, which shouldn't be underestimated, and plenty of cultural ties, but there's also been a hard geopolitical core to it — that Sweden's and Finland's positions have [30:32] always, in this sense, depended on each other too. Yeah, yeah. But then, Finland's political system was, for a long time, president-led. We had the Paasikivi-Kekkonen line, under which both of them first tried to minimize the damage of the war and get the Russians off Finnish soil, and they did partly succeed in dismantling structures in the occupied areas — bunkers and so on. Karelia wasn't recovered. There was, at one point, a genuinely viable opening to get back some of these ceded areas, in a way that — back, but those then slipped away. But then the Paasikivi-Kekkonen line, the realpolitik of it, ended up going in the direction that, especially with Kekkonen as president, he could dissolve governments pretty arbitrarily — and that, I think, turned the Centre Party into this strange kingmaker leaning eastward. I also have Russian archive material there, which some researchers fetched back in better times, which brings out the election funding received by Kekkonen's inner circle, and related documents, and how, in fact, Arvo Pentti — who once served as head of the Security Police, rest his soul, an old Mannerheim Cross recipient and a war veteran, and in that respect a man deserving of respect — [31:47] but unfortunately, the archive material reveals that he was granted a certain sum of money from the East, and besides being SUPO chief, he also, for a long time, served as treasurer of the K-line's election fund — that is, of Kekkonen's supporters. It was an organization called something like the Rural Joint Committee Foundation, which I believe still exists today, but it would be nice to know where that money ended up flowing. And I have a bit of a hunch that it isn't necessarily all just in the Centre Party apparatus. Because in the big picture, people often say that after the 'years of danger' in the '40s and '50s, it was supposedly the case that the West backed the Social Democrats and the National Coalition, while the Soviet Union backed the communists and the Centre Party — but that's not actually how it was. In fact, yes, the US and the CIA did support the Agrarian League as a party, but it was really Kekkonen's inner circle, the K-line, this Rural Joint Committee Foundation — in effect, the Soviet Union carved off its own slice of that party. Similarly, later, when Väinö Tanner was elected chair of the Social Democrats in the late '50s, the TPSL faction split off from the SDP, and even though they weren't communists, the Soviet Union still saw fit to, in effect, take them [33:14] in, right then and there. And then, once the SDP's internal peace was restored a few years later, Kalevi Sorsa's SDP was already something quite different — because Soviet influence had entered, in effect, through "}, {"slug": "648-tuliko-greta-thurnbergista-islamisti-atte-kaleva", "title": "Did Greta Thunberg Become an Islamist? | Atte Kaleva", "titleOriginal": "Tuliko Greta Thurnbergista islamisti Atte Kaleva?", "guest": "Atte Kaleva", "guestsCanonical": ["Atte Kaleva"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/atte-kaleva/"], "episodeNumber": "db-648", "publishedAt": "2025-11-30", "duration": "00:56", "format": "full", "topics": ["free_speech_society", "geopolitics"], "description": "Did Greta Thunberg become an Islamist? This clip is from the episode \"Trump, Israel, Hamas\" | Kaleva | #neuvottelija 354. Member of Parliament Atte Kaleva maps out the key players and power dynamics in the Middle East — Israel, Hamas, Fatah, Iran, and the region's Sunni states. He unpacks the logic behind the Palestinian Authority's prisoner and \"martyr\" payments, and how Israeli domestic politics shapes decisions. Kaleva assesses Trump's Gaza plan as a ceasefire- and hostage-focused first step, one that can move forward if Hamas is disarmed, Netanyahu's room to maneuver is constrained by U.S. pressure, and Gaza accepts the opportunity to develop through a market economy.", "page": "https://www.neuvottelija.com/podcast/episodes/648-tuliko-greta-thurnbergista-islamisti-atte-kaleva/", "text": "[00:00] Alright, welcome from Parliament, Atte Kaleva. Since we're filming this on a Friday — you were on A-studio, Yle's current-affairs program, on Thursday, and you released that clip, which Yle (Finland's public broadcaster) also picked up, where you talked about the bounty money Hamas uses against Jews. In my opinion, that discussion went pretty reasonably. Would you agree, and can you explain this bounty money for a start? Yes— —it was a good discussion. I was allowed to speak and no one talked over me, so thank you for that — and I also got to visit Yle after a long time, so maybe I'm not on some blacklist after all. But it's actually not Hamas that pays this bounty money — it's whoever's in power in the West Bank, the Palestinian Authority, meaning the PLO and Fatah, Mahmoud Abbas's group. They call it a 'Martyrs' Fund' themselves, but 'pay for slay' is the more common term for how it's described. There's a set tariff: if an Arab kills a Jew — an Israeli, that is — they get a reward under that tariff, a payment, essentially bounty money. If the attacker dies in the attack — becomes a martyr — the money goes to their relatives instead. [01:14] Or if they end up in an Israeli prison, then — the relatives get a kind of monthly allowance. And there are clear tariffs for all of this. The UN has a lot of documentation on it. They have statistics on how it's paid out. And Israel, which collects tax revenue in the West Bank and remits it to the Palestinian Authority, deducts from that tax pool an amount — many, many millions — matching what the PA has paid out in bounty money. So, in a way, Israel ends up being part of funding this bounty money itself too. Right, thank you — and on my own mistake: I immediately assumed this was the work of the murder squad that organized October 7th, meaning Hamas, but there are nuances here. As we're recording this, Trump and Netanyahu have apparently reached some kind of agreement and given, well, Hamas — hopefully neither Hamas nor Fatah — this kind of deadline for the 20-step plan. But in a way, since that [02:19] background got muddled, since I have those Middle East researchers — the best experts in Finland — let's have you explain the different factions here. In a way, Netanyahu has successfully crippled Iran's military but left its theocratic regime intact. Then there's Abbas and Fatah. No — Iran's military hasn't been crippled, but Iran's air defense has been. Yeah. And then, in a way, these are the pieces on the Middle East board — who's currently against Israel and the Jews, and who's with Trump, or the Americans. Yeah, this is a long story, but I'll try to condense it a bit to spare you and the listeners. If we look at Israel first — Israel has a rather peculiar electoral system. The whole country isn't a single constituency in parliamentary elections, and the threshold for entering parliament is quite high, which — for this and other reasons — means the system produces a lot of small single-issue parties in the Knesset, the Israeli parliament. They don't have many seats, but they can hold very firm red lines on specific issues — both from the liberal side, but also [03:27] from the very fundamentalist, ultra-Orthodox Jewish side, as we now see in Netanyahu's governing coalition. So there are these small movements. These very radical figures — like Smotrich and Ben-Gvir. And since there are many of these small parties, each able to set their own red-line issues, once you get enough of those red lines, governing the country becomes quite difficult. So in a sense, you could say Netanyahu is a hostage of these small extremist movements in his government. But Netanyahu himself has long opposed the two- state model. Netanyahu has supported Hamas — or allowed Qatar to support Hamas — because he's known that as long as Hamas holds power in Gaza, it's hard for Western countries to recognize a Palestinian state and say there's a commitment to a two-state solution, since you can't commit to a two-state solution where one state, Israel, is a democracy and the other, Palestine, is run by a terrorist organization. So that's Netanyahu's calculation. But now that's shifted a bit. Let's look at [04:34] the Palestinian side. Elections were held there, Palestinian Authority elections, in 2006. Israel had withdrawn fully from Gaza — there were thousands of greenhouses, a lot was produced there, they were very successful businesses, and many Palestinians worked in them. Israel withdrew, left the greenhouses and everything else behind, and they were immediately looted, and that business came to an end. But in those Palestinian Authority elections in 2006, in Gaza, free and democratic elections put Hamas in power, and on the West Bank, Fatah, the successor of the PLO. Well, Fatah disputed those results in the Gaza area too, and it turned into something close to a civil war between them — Hamas and Fatah — and Hamas members killed Fatah members and drove the rest out. They took control of Gaza, and Fatah governs the West Bank. So these are two completely separate things: Gaza and the West Bank, Hamas and Fatah. [05:35] Quick question — have there been elections in either since? No, not since then. So this is one where — well, the terrorist organization Hamas has of course ruled Gaza very authoritatively, but Mahmoud Abbas, who's there — he's already 89 — is also quite unpopular. He's accused of corruption, the leader of Fatah on the West Bank, and the grounds for those accusations are probably fairly solid. He's not liked. He's also an extremist thinker — not particularly moderate, even though he presents himself that way. Back when he was studying in Moscow in the '80s and wrote his dissertation there, he stated, among other things, that the Holocaust was a conspiracy between the Nazis and the Zionists to get Jews to move from Europe to Palestine. So, in a way, it's as if the Nazis and the Zionists had orchestrated the Holocaust together. and then against the Palestinians — it's pretty delusional material, what comes out of there. But of course, back then, after '67, these were Russian-backed Arabs. When Israel was founded, the Finnish left also looked very closely at Israel, because it had pioneered the kibbutz system, and the left saw it as a kind of collective farm. [06:51] A bit like a collective farm — over there, socialism was working, doing well, even producing pretty good results. Unlike the collective farms, the kibbutzim actually produced. But all that changed in '67, and what's probably behind it is this general leftist view where the Soviet Union, during the Cold War, was 'good' — the Soviet Union supplied 'peace weapons,' while the United States was 'evil' and U.S. weapons were 'offensive weapons.' So everything the United States supported was bad, and everything the Soviet Union supported was good. And since the United States has traditionally supported Israel — the Soviet Union, although it never particularly loved the Arabs, automatically positioned itself as the opponent of the U.S. to contain American influence, and started supporting this Arab group, out of which the term 'Palestinians' was later coined. And that's, in a way, the reason why even Finnish and European leftists today support Palestine so strongly and are anti-Israel. But there's also the fact that there are jihadist groups active in the Palestinian territories as well — Palestinian Islamic Jihad among them — and there are a huge number of others across the whole region, but these are the main groups: Hamas, and then Fatah. [08:03] Is jihad a holy war, by the way? Yes, jihad means holy war, a kind of struggle. The Quran recognizes two types of jihad. There's the greater jihad, meaning a person's internal struggle — as Christians might put it — against un-Islamic urges. So if, say, someone wants to drink beer but doesn't, that's fighting the greater jihad against that un-Islamic impulse. Then there's the lesser jihad, the external jihad — and if the Islamic community, the Ummah, is threatened or attacked, then ultimately every able-bodied Muslim man is obligated to defend the Ummah against that outside aggressor. And this concept of jihad — we could make a whole podcast episode just on how the concept of jihad has evolved. I also want to get into the internal divisions among Islamists, because right now we've covered sort of the inner layer, the geography of Israel — but if we zoom out from there to the bigger picture, now that we've covered Israel and Palestine, there are these other surrounding countries. There's Iran, which of course exerts influence through proxies — Hezbollah, Hamas, and the Houthis in Yemen — and traditionally also through Assad's Syria. Assad was an Alawite, not Shia, but was counted as Shia. So when we talk about the 'Shia axis' in the Middle East, that's Iran, Syria, Hezbollah. Well, now Israeli intelligence has crushed [09:29] Hezbollah's operational capacity — practically eliminated it, or you could say struck it down, with that pager attack. It was absolutely, incredibly skillful. Among others, the Iranian ambassador's pager also exploded in that operation — I wonder where he'd gotten a Hezbollah pager? Well, then there's Hamas, which has now been neutralized, or is in the process of being neutralized, and then there are still the Houthis in Yemen. But the Saudis are very afraid of Iranian influence, because the Saudi Shia population is located on the Persian Gulf coast, in the Dammam area, where Saudi Arabia's oil and gas are produced. And they fear that if Iran manages to stir up separatism there, it could jeopardize Saudi oil production — which would be an existential problem for them. So Iran, Assad's Syria, and these proxies were one side. Well, since then, Assad has fallen — he's been ousted from power. Hezbollah has been taken out of the game. Russia has been part of this imperialist— why? Well, not really. Russia did fight in Syria, but on Assad's side, because they have a naval base there — the last Russian naval base in the Mediterranean — so they wanted to keep Assad in power to maintain a foothold in the area. But once Assad fell, Iran's influence there has now been fairly effectively contained. [10:45] Then there's another group — basically Saudi Arabia, the United Arab Emirates, Jordan, Egypt — Sunni Muslim countries that oppose Iran. It's a fairly loose coalition, but Israel also belongs to it in effect. So these are Iran's enemies, or the countries Iran regards as its enemies. And then there's one more group: Turkey and Qatar, which lean more toward the Muslim Brotherhood — or, well, they're not the Brotherhood exactly. You can't really say that, but there are certain sympathies toward the Muslim Brotherhood, which, in turn, other Sunni countries in the region view as a terrorist organization — in some countries, as a revolutionary terrorist organization. So this whole cocktail is quite a mess, you could say. Hopefully listeners can keep up with this at least somewhat — but yeah, I'm also curious about this Sunni-Shia divide. No worries, this is always good, you can summarize it if you lose the thread. So, this Sunni-Shia divide within the Islamic world — and actually, even Iran... I think when Israel carried out that strike and left the theocrats, the old men, alive, it was in the hope that maybe there'd be an uprising and [11:51] the people themselves would topple that theocratic tyranny. But there's also the old Persian Empire — in a way, Iran has apparently always been the dominant regional power. Yes, Persia has long been a very dominant power, and Iran also sees itself as the leading state of Shia Islam, the torchbearer, so to speak — and that's surely part of what weighed on Israel's calculations too: that if they'd eliminated the entire leadership and the country had slipped into the kind of chaos Iraq slipped into, that would have been a disaster for everyone, because then no one knows what comes next. So I do understand there needs to be something a bit better — someone able to lead the country rather than total chaos. Yeah. Netanyahu's power right now is really substantial. Haven't the Israelis also gone in to rescue Christian minorities? Yes — and the Druze. Yes. Many Druze live in Israel, on the Golan Heights. I've actually been to a Druze village there, and they seemed very satisfied with their lives under Israeli rule, because they get full civil rights and can live in peace — unlike in Syria, where they were oppressed. And now that this Islamist — well, Sunni Islamist, former jihadist... though how 'former' he really is, that's what we're [13:15] not able to say for certain yet — but this Assad, who was Shia, oppressed Sunnis and also the Druze. Even so, Christians actually had a fairly decent situation under Assad. But now the Christians and the Druze are afraid of this new administration. So it's not like — the Middle East is just that kind of place, there's no such thing as the Americans always being the 'good guys.' Yeah. Let's also bring in the American angle here — in Trump's first term, I think it was his son-in-law Jared Kushner who made a genuinely significant achievement, in my opinion — the Abraham Accords. In a way, they managed to bring at least part of this Islamic bloc quite close to establishing bilateral relations with Israel. Yes — if it had been anyone but Trump, it probably would have been a Nobel, a Nobel Peace Prize worthy achievement, the Abraham Accords. But that was also one reason for Hamas's terrorist attack. There were several reasons behind it, but one was surely that they wanted to disrupt the Abraham Accords process — they didn't want the Saudis and others normalizing relations with Israel. Another reason was that Hamas quite cleverly calculated that if they carried out a sufficiently brutal terrorist attack, it would provoke Israel into such strong retaliation that world sympathy would swing toward the terrorist organization, [14:37] which in itself sounds foolish. But now we see that's exactly what's happened — Hamas's strategy has actually produced pretty good results for them, since so many European countries have now recognized Palestine, giving them what they wanted. So here we have this really, perhaps, unholy alliance. So — didn't the Khomeini revolution, which turned a fairly progressive Persian state into a strict theocracy, actually happen with strength provided by the left? It did, it did. Specifically, it involved progressive university youth, then the Marxists, and then Khomeini's Islamists. and once they'd ousted the Shah — and there were these other Mujahideen groups too — once they took power, the revolution ate its children, as it usually does, and Khomeini's faction killed, imprisoned, or exiled the other Islamists, the Marxists, and the progressive university crowd alike. And it feels really jarring that people like Greta Thunberg join a leftist flotilla [15:42] to promote things like rainbow rights there. It feels, frankly, really naive. Well, that's exactly what it is. Just look at these protests — they carry the Palestinian flag in perfect harmony with the hammer and sickle and the rainbow flag. So in Greta's flotilla, you've got Islamists, communists, and LGBT activists literally in the same boat — without realizing, especially among the LGBT activists, that once the Islamists come to power, they kill the LGBT activists first, then the communists. If the communists — the Marxists — come to power in that region, they'll kill the Islamists first, then the LGBT activists. And if the LGBT activists come to power, they'll do everything they can to stop either of the other two groups from rising. Yeah, it's very strange. But now, with this second Trump administration — well, as we're recording this, apparently Netanyahu and Trump have reached some kind of 20-point peace plan, some sort of understanding, and Trump has strongly hinted that at least some faction within Hamas is already on board. Trump gave Hamas a very Trumpian deadline here, and at least according to BBC [16:59] sources, Hamas isn't quite close to accepting it yet. But we could move on — or do you want to explain more of the pieces on the board in this region first? Well, no, I think that's basically covered — it's quite confusing, and especially the fact that if an ordinary person, who hasn't dug into this deeply, just reads the news feed, it can be very hard to understand why different countries or actors behave the way they do. It takes a fairly deep understanding of the region to see how it all fits their way of operating. It works logically, even if that logic isn't obvious just from reading the news — but once you understand the basics of their thinking, their actions make sense. Yeah. I've got maybe two small points. I had Keir Giles on as a guest, and he described this incident — the WhatsApp leak, where JD Vance and American war decision-makers' WhatsApp group leaked, and Vance said something like, 'we'll smash these Houthis to pieces with bombs, and the Europeans should really handle this.' So, in a way, that shipping-disruption group has been dealt with fairly well. And, in a way, Netanyahu has [18:09] very aggressively dismantled Iran's regional threat with this direct strike. And now, in a way, it's — you can't really call it a power vacuum, but the pieces are starting, in my view, to fall into place the way they did around the acceptance of the Abraham Accords. Yes, I see it the same way — I now dare to be, let's say, cautiously optimistic about this Trump peace, or rather — this isn't really a peace plan from Trump, it's a ceasefire plan. It aims to stop the killing, get a ceasefire in place, free the hostages, and disarm Hamas. Then the actual peace plan comes after. Earlier this summer, France and Saudi Arabia made a joint statement that the Arab countries of the region signed onto — Finland joined too — and it looked a bit further ahead at these steps. But what's exceptional about this Trump plan is that it involves all the regional actors in some way — excluding Hamas for now — because if you look at the Oslo Accords in the early '90s, the surrounding Arab countries weren't involved. [19:13] Peres and Arafat — well, somehow it still came close to succeeding. It was close, but you have to remember that right around the early '90s, after the Soviet collapse, a huge number of very fundamentalist, ultra-Orthodox, extremist Jews had moved to Israel from Eastern Europe, and they couldn't accept making any agreements with the Arabs. And since that group is fairly influential, and there are quite a lot of them in Israel already, Netanyahu has to take them into account. So pressure is needed on the Arab side, the Palestinian side — and that's provided by the Sunni Persian Gulf Arab states, now that Iran's influence has been largely snuffed out. But pressure is also needed on Netanyahu and his administration. And the only person in the world who can pressure Netanyahu is the President of the United States. If Trump puts his own prestige on the line — if he says he'll become the figurehead of this transition government — then his [20:15] prestige is fully staked on seeing this process through. So it doesn't really matter if someone like Netanyahu says 'I don't accept the two-state model,' as he stated in Hebrew after their joint press conference. First he says in English, 'yes, yes, we're in,' but then immediately turns around and tells his own supporters in Hebrew that they don't accept the two-state model. Trump is such an unpredictable actor, which at this point might actually be a real asset, because you really shouldn't anger him — nothing good comes of that. Netanyahu knows very well that, to use a mafia term, Trump is someone capable of making him an offer he can't refuse. Mm-hm. In a way, there's a kind of one-and-a-half-state model here. At the time of this recording, Finland hasn't recognized Palestine, and there's a real question of what could actually be recognized when the criteria for statehood aren't met. There's this duality — but in a way, there could be a one-and-a-half-state model, where Gaza and the Palestinian areas are handled separately, and then you bring the surrounding Arab states into it. And now let me bring in a Finnish [21:19] angle to this whole mess — Tony Blair is apparently being considered as a kind of state-monitoring commissioner to lead this oversight commission. And as we know, Sanna Marin works at the Tony Blair Institute, so maybe we'll soon see Sanna Marin as a peacemaker in Gaza, maybe even playing some role there. So could it be that after being Finland's Prime Minister, the next step is the premiership of Gaza? But — I mean, I... I lived in London for 13 years, and I was there during Tony Blair's New Labour era — and then, when he made that deal with Gordon Brown, things went downhill, and really it was just before he went off with George W. Bush to do the Gulf War. But up until then, I thought he was a brilliant politician. And actually, I interviewed Martti Ahtisaari (Finland's former President and Nobel Peace laureate) for my thesis on negotiation, and he seemed to admire Tony Blair's style in the Good Friday Agreement in Northern Ireland, so, I have a soft spot for Blair — not a Sanna Marin fan, but sort of a Tony Blair fan. Well, I'm not — I'm not a Sanna Marin fan, and I'm not really a Blair fan either, but I will say Blair achieved quite a lot. He made some mistakes too — big ones, like the whole business of the intelligence reports claiming weapons of mass destruction in Iraq, and others — those were mistakes. But he's also achieved good things, and I'll [22:42] say that if Sanna Marin — if her partying has calmed down a bit now, I don't know if it has or not, but photos still seem to turn up on Instagram fairly often — but if, say, Mapio's turnover is in the millions, then, well, she's a proper capitalist now. Yeah, yeah, like a socialist who got rich and realized it wasn't so much fun after all. But yes, yes — if she can play some kind of role as a player in this, then as a Finn, I welcome it — because it's good for our country's brand and everything, it's worth it for us. Or I mean, I'd say that when Sanna Marin is there, through the Tony Blair Institute, implementing the agreement Trump brokered, I at least won't be reminding her, 'hey, weren't you a socialist just a moment ago — what happened?' Yes — but to get this 20-point plan to the finish line, Netanyahu needs to put pressure on — well, the Jewish-conservative... no, sorry, the ultra-Orthodox bloc — and get them to tolerate this. Maybe the West Bank piece will be handled one step at a time — Gaza first, then the West Bank later — to push Hamas out, since there's probably no benefit to anyone but Hamas in that, because the hostages are probably mostly [24:01] dead by now, but there's presumably someone left there. And then Israel will probably release some Arab prisoners in exchange, and if we can get the surrounding Arab states to support and take part in this monitoring committee, then the pieces are starting to fall into place — and Netanyahu was already made to apologize for that missile strike, and he did apologize. So, yeah, it really does look like — for the first time, like I said, maybe for the first time in history — there's now a kind of genuinely serious prospect that this conflict could actually be resolved sustainably. There's one more thing, though — the people of Gaza have suffered the most under Hamas's rule. They've been battered by Hamas, and then they've also been the target of Israeli countermeasures. There's a lot of bitterness, resentment, hatred of Jews, antisemitism, and a sense of hopelessness there. The population there is very young on average. So, in some way, we should be able to — or rather, not us, but the international community, this coalition running the transitional administration — create economic incentives for these Gazans, young people and older people alike. It's in their interest to stop terrorism and move toward a market economy. [25:19] In Gaza, it could actually become, say, the Dubai of the Mediterranean. They could declare a free-trade zone, start trading, and once people see that kind of economic outlook — that this brings prosperity, that our standard of living rises when we're part of this — then the appeal of going out to the desert to wage jihad shrinks quite a bit, once you realize you actually have something to lose. So Trump's real-estate project, even though it was mocked, has a small kernel of truth in it. Yeah, it was again this 'Orange Man Bad' narrative — whatever Trump says, you're supposed to laugh at it to prove you're a good, conscious person. But actually, that local 'Riviera' idea — of course the population can't be forcibly relocated, that would be a war crime, it can't be done. But why couldn't Gaza become a Riviera, or a Dubai? What's stopping it? Right now that area is full of killing, misery, poverty, death, and suffering — but it doesn't have to stay that way. It's enough that Hamas is pulled out of there and the mindset of Gazans shifts — that they say, 'okay, we no longer want to hold onto hatred, because we're the ones who suffer from it. We accept Trump's plan.' Trump is, after all, a highly credible actor in that region — in the Arab countries, and you have to remember that in Israel he's [26:34] more popular than Netanyahu. Mm. By the way — I've been following Lebanon through Nassim Nicholas Taleb, who's a really sharp — well, mathematician — but a pretty annoying political commentator. So, in a way, is the Levant this kind of somewhat unifying region, with a positive culture of its own? The Levant is exactly that kind of thing — the Levant region is known from the Quran, referred to as part of the Fertile Crescent areas. So it stretches from the Mediterranean, through Jordan and Syria, along the twin rivers, the Euphrates and Tigris, to the Persian Gulf. So it was, in a way — well, in the time of the Quran they obviously didn't know these modern states, and very fundamentalist Muslims might refuse to even talk about Syria, for instance. To them, this whole area is 'Sham,' meaning the Levant region in Arabic. That's why ISIS — or Daesh — was 'Dawlat al-Islamiya fi ash-Sham,' meaning the Islamic State in the Levant, not of Syria, not of Iraq, but in the Levant region. And this — but it's still like that among Muslims in that area, so the influence runs [27:52] deep enough that when Syrians cross the border, they don't really see it as a man-made, secular border — it feels different to them, more fluid. Yeah. Is there, again, for this piece — well, Jordan and Egypt? Because here in Finland it's always forgotten that Gaza actually shares a border with Egypt too. Yes, but in a way — Egypt and Jordan probably don't want those people from there to then form, say, an opposition movement — absolutely not. Both countries have quite big problems with the Muslim Brotherhood. As I said, Hamas was never really organically part of the Muslim Brotherhood, but was founded in very close connection with it. In Egypt, after Mubarak fell, the only functioning opposition force was specifically the Muslim Brotherhood, which then got elected to power in free elections. And after that, the Brotherhood grabbed even more power for itself than Mubarak ever had. And then the army had to overthrow the Brotherhood when they were already seizing power for themselves. Sorry — in Jordan there are many Palestinian refugees, and they pose a clear threat there, a clear opposition, and also a kind of revolutionary movement. The Jordanians don't want any more Palestinians in their own country. The Egyptians certainly didn't want any more Hamas sympathizers either. And really, no country in that region [29:16] views the Brotherhood very positively, except perhaps Qatar and, to some extent, Turkey. Everyone else feels this is a revolutionary opposition force whose influence needs to be contained within its own borders. Yes — and all this, from Trump's earlier real-estate proposal, there was also that other point behind the Abraham Accords, that some part of the Gaza population should be relocated. In this new plan, that's no longer mentioned. So, in a way, for Gaza they now want, specifically for the current population, functioning conditions. Trump, after all, operates in foreign policy the way he does in everything — a bull-in-a-china-shop approach, where he goes crashing through and sees how the pieces land. I've noticed a pretty clear pattern in how he acts: first he throws out something completely insane, something everyone knows is impossible, and everyone's horrified by it — but then once it's walked back a little, it already sounds much more reasonable, because there's already been discussion about the completely insane version. It's a bit like a negotiating tactic, and Trump is a dealmaker — he wants to make deals, he's a strongly transactional actor. So now, if we could — if we got a solution out of that area, the Gaza Strip, that would benefit Gazans, Israelis, the surrounding Arab countries, and the United States, and the only losers would be [30:39] Iran and Hamas — well, that's starting to sound pretty attractive to me, and a lot of actors in the region feel this is such an attractive prospect now that a better deal really isn't achievable. And Iran has been brought pretty much to its knees in this whole affair. Iran — well, the Iranian military is surely still fairly capable, and, as you said, the ayatollahs are still alive and still running the country. But what's really notable is the fact that Israel has managed to paralyze Iran's air defenses almost completely. Right now, the Israeli Air Force — or the U.S. — can fly over Iran pretty much as they please. That leaves some very, very vulnerable targets in Iran — fixed targets, uranium enrichment plants, other nuclear-"}, {"slug": "662-mokki-pystyyn-kivuttomasti-veli-matti-kurkela-369-neuvotteli", "title": "Building a Cabin Without the Pain | Veli-Matti Kurkela", "titleOriginal": "Mökki pystyyn kivuttomasti | Veli-Matti Kurkela | 369 Neuvottelija", "guest": "Veli-Matti Kurkela", "guestsCanonical": ["Veli-Matti Kurkela"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/veli-matti-kurkela/"], "episodeNumber": "db-662", "publishedAt": "2026-01-27", "duration": "48:48", "format": "full", "topics": ["finnish_economy_policy"], "description": "Building a cabin without the pain | Veli-Matti Kurkela | 369 Neuvottelija. A construction industry in upheaval, and effortless leisure-home building. How is industrial modular construction changing the way Finns build cabins? Veli-Matti Kurkela of Salvos explains why traditional construction is struggling and how turnkey solutions make cabin dreams easier to realize. The conversation covers everything from Lapland's tourism accommodation needs to Finns' changing demands for quality and amenities. Commercial partnership with Salvos Oy.", "page": "https://www.neuvottelija.com/podcast/episodes/662-mokki-pystyyn-kivuttomasti-veli-matti-kurkela-369-neuvotteli/", "text": "[00:00] Alright, welcome to the Neuvottelija channel. I have Veli-Matti Kurkela as my guest. You came all the way from — is it Pyhäntä? No, I actually came from Oulu, even further north. Ah, okay. Right. But don't you have several locations? So you're Salvos's CEO? Yes, yes. Well, in Pyhäntä we have our factory, but then we do have offices. We have them a bit all around Finland. We have some of our administration in Kempele. Right — mainly just to cheer you up, I brought out this Tappara mug. Now we're really twisting the knife in the wound, yes, yes. Tappara keeps steaming along — from an Oulu perspective a little too well. It's wonderful, wonderful! But our topic is the construction industry's distress — though couldn't you say that your business, this kind of garden and leisure and summer cottage construction, isn't quite as dreadful — but could you share a couple of observations about the construction sector in Finland? Yeah, well, construction has really taken a beating in recent years, and [01:02] the market there has been carved up anew — there's been an absolutely staggering number of bankruptcies. Especially single-family home and residential construction is still in a pretty difficult situation, but then on the other hand there are certain sectors — road and infrastructure construction seems to be going quite well, and it sounds like commercial premises and these wellness facilities are doing more or less okay. And then of course, in our market, garden buildings, and in leisure-time buildings too a certain segment, are still, let's say, okay — so the situation is somewhat polarized, let's put it that way. Yeah, that's how it is. So everything's just awful. I mean, as someone who owns an apartment in central Helsinki, it's a bit nasty to look at that minus 20 percent we've seen here. But since it hasn't been realized, it doesn't affect my life. This episode really is made in commercial collaboration with Salvos. But let's discuss that a bit more, then, [02:04] from a personal angle. Over the years I've been having discussions with the board — that is, my wife — about whether we should have our own summer cottage too. So the situation we have is — greetings to my mother, by the way — there's a zoned waterfront lot over in Sysmä. There are a couple of cousins' summer cottages already standing there, and okay, it's about — is it 2 hours 40 minutes — so I suppose it wouldn't be a completely unbearable trip. You probably see situations like this quite a lot — so how do you tackle something like that? Well yes, I can certainly say that I can take your wife's side. Yeah, probably — even Mauno the dachshund would like this. Absolutely. Absolutely. Yeah, for sure. And maybe, well, yes — especially now that there's been migration toward these urban centers -- I mean housing is concentrating and the countryside is emptying out, and that trend seems like it's just continuing. So there's this thing where there's an inheritance [03:07] plot, or there's an old family homestead, if you have good memories and you'd want to build something there, or, let's say, there might already be a cottage there, or an old detached house, or something like that. But that distance of yours is actually pretty normal -- I don't remember exactly. That cottage barometer came out from the Council of State just recently, and I think it actually defined the average distance to the cottage. I don't remember -- it probably wasn't quite that long, but it was, I believe, well over 100 km on average, if I recall, so we're well within, let's say, the margin, so to speak. Yeah -- Petri Roininen, who's been my guest the most times, well, I've joked a bit that my idea of a Northern Finland holiday is going to the Flamingo Hotel in Vantaa. But, well, I am a bit of a village nature person, so to speak, and I do have good memories from there, but then during COVID there was this huge boom, and back then it kind of tempted me -- wouldn't it be great to do this kind of second-location work [04:07] out there in nature. But hasn't that trend faded a bit -- at least a little, that trend has turned downward a bit. Well, maybe from its very peak, but if you think about it, when it comes to living -- living in growth centers, these days, when the per-square-meter construction costs are genuinely still really, really high, and consumers still prefer to live in the centers, want to live close to services, and then they're willing to compromise on square meters, and then things like these extra little conveniences are pure luxury in a growth center, so then as a counterbalance to that, the payoff is that you get outside the growth center, so that you have your own beach or something like that -- these days that's quite a luxury thing, yeah. And there's just a bit of a peaty, humus-type bottom there, but I suppose you can dredge those too. And -- well, maybe we'll get to that 30-square-meter rule later, but there I had a friend and board member and owner, Petter Fredman -- he, in one [05:08] earlier episode this year -- it hasn't even been a year yet, but he was raving about northern Finland, and then I happened to read that Helsingin Sanomat article about the Rovaniemi Airbnb dispute, so maybe there's maybe something to that too, apparently -- when people want more usage efficiency out of these apartments and then maybe bring in garden buildings and other things too. But at the same time our decision-makers don't really know what kind of laws to put in place for these. Have you looked into that? Well, yeah, that's of course a bit related to my own question -- it's more about the accommodation business not quite directly about the cottage business itself, but yeah, that's -- well, the situation in Rovaniemi is quite peculiar. I mean, the same situation exists in bigger cities too, generally, when it comes to short-term rentals, but in Rovaniemi it's really escalated, because the problem there, as I understand it, is that the tourism business is so seasonal -- let's say it's four months, say, but that's still such a short time that if [06:09] you look at it from a hotel developer's perspective, then, because of that season, it's not really sensible to build. And then again, on the other hand, no hotel capacity gets built, which then leads to these resort-type alternatives being used instead, which have of course increased a lot. So someone buys a piece of land and there invests in these separate small cottage-type units, sort of studio-apartment-sized or a bit bigger with panoramic windows, and then there's some bigger -- say some restaurant-and-spa facility there where people go to eat and so on. So that's another concept -- a whole story in itself as to why it's really taken off, but even that capacity has grown too slowly relative to visitor numbers, which somehow leads to a situation where, since demand is greater than supply, it drives up short-term rental rates. Mm. which of course, in an extreme case, leads to there not being enough other capacity there, and then of course there are also these side effects -- if you live in the same apartment block that has 25 units, [07:13] of which 20 are used for short-term rental, that can make your life quite unsettled, which partly disturbs the residents. And then, on the other hand, you also run into zoning regulations and things like that -- whether you're even allowed to run this kind of accommodation business there. These are really awkward, difficult yeah, difficult situations, and there it's now threatening to escalate quite a bit in Rovaniemi. Yeah, and I was recently I always do a long trip every couple of years, usually a bit around Norway, hiking, and up there in the northeast, [unclear] -- in northwestern Finland -- actually, this is embarrassing, I still have to admit, I just -- well, anyway, we traveled through there, right around the Levi area, and there was exactly the kind of thing you mentioned -- it's sort of a hub like that, and then cottages around it. But isn't this -- by the way, isn't 'salvos' itself some kind of terrible log-construction term? Yeah, it's like, well, logs need to be joined together at the corner somehow. There are [08:15] dovetail joints, cross corners, and then there's a miter corner and all sorts. So that joint is called a 'salvos' [a corner-notch log joint]. Yeah, folk tradition. Right, right. But doesn't this concept, in principle, fit that too a little? It's sort of like -- well, I don't know, at Vierumäki I visit sometimes. I'm not very athletic, but in a way it's a nice sort of cottage-village thing too. Yeah, yeah, yeah, yeah, yeah. And we, this year, actually just -- well, delivered -- a 40-accommodation-module complex -- or rather, we delivered the modules, it wasn't built on-site. That's the more precise term, but anyway, to Ounasvaara in Rovaniemi, for this kind of use, and yeah, exactly. Well, this year -- last year we had 600 modules come out of the factory finished. We have quite good capacity to make solutions like that, so we were able to deliver -- if I remember correctly, it was maybe at the end of March when we reached the agreement with this client, and then it had to be delivered by the end of October, so that's a pretty [09:17] fast pace. And we made it in time -- it worked out. Mm. But that's exactly the point there -- the investment in that room capacity, compared to when you build a hotel, mm, the per-square-meter cost -- the return on capital is completely different in this kind of less heavily built space, which nevertheless is a very luxurious, good solution. So that's the point -- that's exactly why it tends to go toward this resort model, especially given a season like this, toward this kind of resort-type approach instead of that hotel investment. Of course, one solution could be that up in Lapland too, I've thought about this a lot -- how you could get -- because right now winter is the big thing there, but Finland's nightless night [midnight sun] is quite a unique case, especially since Central Europe seems to be having pretty hot summers. Mm. so there's already some amount of foreign tourism just because of that, since conditions there are humane. Yeah. That autumn-foliage ['ruska'] tourism is totally top-notch. That's exactly when the midges have died off. It's sort of the perfect, perfect moment. I haven't [10:18] actually been there during summer, during the worst black-fly season -- I haven't visited then -- but I do hear some stories about it, so that's maybe a small downside. Yeah, but that autumn foliage tourism is at least totally top-notch, and it is definitely growing. But actually what interested me there was that production model. Maybe we could play that a bit in the background here. So in Petter Fredman's video, this was shown. We had set up these sort of robotics for coffee filters and things like that. But isn't that kind of modular leisure construction of yours probably -- sorry, this is around when he was a guest -- sorry, this question jumps around a bit, but I just thought of that Lapland concept -- those were like Lego-type things. Don't you have a bit of the same kind of setup? Well, yeah, with the difference that we finish the buildings completely, but it's the same in the sense that this industrial manufacturing is interesting, because it's been tried, and it's been [11:22] developed -- it's been developed a lot in recent years, I think, but the challenge there is exactly this: logistics -- if we're talking about bigger buildings, like a residential solution for your own home, some of that is done -- they're brought in ready-made, or ready-made modules are brought in. That's been developed, but there's exactly this challenge -- the logistics. Logistics are challenging and really expensive, so the industrial-manufacturing cost benefit gets eaten up by that logistics, and then still you end up having to do on-site construction anyway. But then when we move to leisure construction, if we think about, say, the average floor area of new leisure buildings, based on Statistics Finland's data, was something like 60 square meters. Mm, which for us too is kind of our so-called bread-and-butter work in cottage buildings. Yeah. So that's a solution that can, in turn, be industrially manufactured quite well. And then of course, when we connect modules, we have the ability to join them in a properly sealed way, so we can combine two spaces into one, and then we get those [12:25] parts small enough that we can transport them cost-effectively too. So we get the benefit of industrial manufacturing, and then the transport as well. And if you think again about traditional single-family home construction, prefab building has been around there for a long time. But move-in-ready suppliers, in turn, aren't hugely interested in -- sorry, this leisure-home construction -- for the reason that there are actually a couple of reasons. They're quite small, and then leisure construction is located out outside the growth centers. So you have to haul materials and labor out to the countryside, the regions, which is really expensive, and so it hasn't really been made cost-effective that way, so this industry has traditionally been pretty conservative -- it's been about traditional materials supply, where materials are delivered and the customer themselves then organizes the construction, either themselves or through subcontractors, or however they organize it. So this has really been fertile ground for this kind of industrial manufacturing, which is what we've gone into -- we [13:25] -- but we started this first with garden buildings, garden saunas, these kinds of storehouse-type buildings, and from there we then quickly started developing cottage solutions too -- this has changed. So I remember -- greetings to my mother's brother, uncle Pate -- I remember in my childhood, out there, it was completely built by hand from logs, sort of put up as a square. Their cottage, out there -- it's still there, and I remember how the guys just hauled those long logs there themselves, and then some help came along, and they were dragged around the cottage site with a tractor, but of course today's people couldn't handle anything like that, no way -- you'd have to be quite Rambo to build something like that yourself. But isn't this -- couldn't you say it's actually become incredibly easy now. And in a way, hasn't the municipalities' attitude improved too -- that the zoning processes and systems have become more sensible -- not to sound too encouraging as a word choice, but [14:29] it's not that big a deal, even though many people fear it'll turn into financial ruin and a long project where every budget overruns. Of course that can always happen in construction, but it is reasonably easy, this kind of leisure-home -- well, if you think about it, today we're able to -- part of our own service concept, in marketing terms, a genuinely turnkey concept -- we apply for, say, a leisure home permit, which is still subject to a permit -- we apply for the permit on the customer's behalf and take care of the necessary groundwork, foundations, and deliver a completely finished building. The average delivery time from order to handover is roughly about half a year, so that's the timeframe, and all the costs are defined in advance. So that product -- this manufacturing approach has brought that. But imagine, for example, a situation where you started building out there in Heinola a cottage, and tried to organize it constantly from here. Then, say, materials get taken to the site, and this too is a challenge -- this material management. If you think, say, that you [15:30] have a felt roof going in there, you need to order enough of that felt, well, Heinola doesn't sound too remote yet, but you still have to order enough of that felt, say, in such a quantity that it doesn't run out, because if it runs out, that's an insane cost. Then if you have to go in the best case hundreds of kilometers to a hardware store to get that material, that's expensive, so you end up ordering extra of it just so it doesn't run out. Yeah. And then there's the question of how cost-effective the whole thing is, and then also how much waste gets generated and how problematic that is in that sense. So -- yeah, in that sense, if we think about our own operations, we're still able to -- well, take that roll of felt: when it runs out, we cut the roll right where it's enough for this building, and then continue with the next one. It's just so much more efficient and handy with an industrial process to do that. That distance really often makes organizing leisure-home construction really challenging, if you don't get it delivered fully finished. There might already be cottage-road infrastructure there, but in our [16:33] situation, everything would already be done, so in that sense it sounds pretty scarily easy. Just great. We can talk about it in more detail over lunch. Yeah, I'll have to look into it and fine-tune the budget a bit. Speaking of budgets -- a while back, or a bit further back, when I came back from London, I bought, out in Suvisaaristo, back then, together with my wife, a plot, and had a house built on it by, I think, a competitor of Pohjola's design-house company -- Kannustalo -- a mansard-roof house. And then there was a surprise: since we got a sloped plot, an extra 100 [square meters] suddenly popped up in the basement, and there was a site foreman who worked all that out, but I remember it would definitely have been bankruptcy for young Sami, but then help came along, and the plot was sold, already zoned, at a profit, and then the next owner made a somewhat smaller, somewhat less grandiose setup out of it. Yeah. But I do remember there was [17:34] -- even though there was that site foreman -- it was quite painful, because you still had to weigh in on pretty much every single thing and sweat over it -- like, where's some block-built basement going to be built here, and who's going to dig it, and so on. There's a lot of advantage, then, in your model. Absolutely. Yeah. So, generally speaking, what's a typical customer like? I've been rambling on a bit here, but when I was thinking about this most actively, like 10 years ago, I thought, well, I'm 55 now, so is this maybe a bit too late -- right in the core age bracket. Exactly in the core bracket -- actually even a bit young for this. Let's wait a couple of years. But yeah. What was that thing you mentioned earlier? Uh, that was the interesting Council of State's cottage barometer that just came out -- was it that over 50% of cottage owners are pensioners, and 80% are over 50 years old? That's interesting in itself -- there's a pretty big generational shift coming on that basis, so to speak, [18:38] but yeah, as for the question of whether you're 'too late' -- well, that's an easy word to use. So is this a typical situation -- a lot of people think about this: the cottage stock is old, but it's such that some of it was of course built with great care, using traditional methods, but expectations have risen quite a bit too, since people want, for instance, year-round livability, and electricity, and heating, and fiber-optic internet, so yeah, yeah, well, especially this remote-work thing has brought that along, and then there's this consumer attitude where, even if people say they're not going to live off hauled water, they still want a fairly upscale solution. Well, exactly -- on cottage condition -- since about a third, according to this same cottage-barometer study, still -- and it's a really good study, worth reading -- are, so to speak, only in use for a few months a year, meaning they're left unheated in winter, and especially if it's a board-frame type of construction, at best there's mineral wool insulation or [19:41] something similar -- so a large share of them probably aren't in great condition, which really raises the question of whether it's worth renovating or whether you need to replace it. This has quite often been the case where we've handled the demolition through some subcontractor, and brought in a completely new solution. But yeah, it's clearly -- COVID definitely added to that -- people want exactly this: good internet connections, and these kinds of -- there are these directional cottage antennas, so that you can get 5G reception a bit farther out, and so on. So it really -- people probably want a better level of amenities, but then the size doesn't need to be so big -- people accept smaller. Of course families are smaller too, so you don't need that much space either. But small is actually quite a luxury these days -- small, so -- actually, didn't this come along -- this new Building Act, so Finland actually got something done -- under 30 square meters it's now easier to build. At first that 30 sounds like [20:43] quite a small [area], but it turns out to be enough. Well, it's not just the only one who'd say so. We do get some of that, where people want that garden sauna or garden building, and it's 30 square meters and then, say, a garden sauna of 30 square meters -- okay, so what -- well, then you don't need much beyond the sauna itself and maybe a small changing room. 30 is pretty generous, so here you'd have this sauna-cabin thing, with a living room and then a sauna. Ah, yeah, this is really good, but this is 60 [square meters]. This is half of what we were talking about, so hopefully we'll often see it done with something smaller too, but yeah, I do have to say about that -- lawmakers always get criticized, but in my opinion that -- I think that relates to the new Building Act and the related bureaucracy-cutting drive, so I'd assume it relates to the Sipilä government's bureaucracy-cutting effort -- that it's a remnant from that, or an end result of that. So I have to say it's a great reform, and there had been a lot of worry about what it would [21:43] cause -- whether it would make construction go wild and so on -- but at least so far there's no sign of that. There was just an article -- I don't remember which paper -- saying nothing of the sort has been observed. I do think this kind of thing should be done more boldly in general too. So indeed, the new Building Act came into force at the start of the year -- January 2025, so a year ago, at the start of the year, to clarify. And the point there was that of course a big reform covers a lot, but the part that's maybe relevant to this context is that these under-30-square-meter utility buildings are exempted from the building-permit requirement, meaning if you have building rights, you can build a garden building under 30 square meters without a building permit, of course while following the building regulations, and that's a really great thing -- it shows in the market too, demand grew, and I think Sweden did a similar reform earlier and it's been a good thing, and as a result, purely good things happened -- everybody wins, so the load on municipal building-control departments eased, and [22:47] demand grew, because applying for a building permit is now easier these days. It's actually a pretty bureaucratic process -- back before, if you went straight to the local building office and said, 'Hey, I want to build this, how do I get a permit,' that doesn't happen anymore today. Now you can go to various services, permit points and the like, where you then apply for the permit, and there are still quite a lot of steps, and many people do it for the first, and only, time in their life, so that's a pretty difficult thing. Here we saw that when that bureaucracy was cut on this smaller end, vitality increased, everybody wins, demand grows, and in my opinion it's just a great, great reform. Whenever lawmakers get blamed for adding bureaucracy, here they really deserve credit -- it's just a great thing. So does this apply in urban, built-up areas too? Yeah, yeah, yeah, yeah, yeah. Okay. See, I remember that about Suvisaaristo. It was just completely megalomaniacal. There we had a 5,000-square-meter plot. Back then the zoning allowed 10%, meaning 500 square meters. So then I did it so that I set it up so that [23:47] I somewhat assumed it would rise to 20 [percent] at some point, so you'd get a free extra half, sort of. Okay. Yeah. And then I remember thinking about it, well, cars -- this megalomaniac place of mine was 274 [square meters] plus a basement, on top of the 'giant' concept, so I figured we'd probably need to fit a car in there too, and so on -- and now you can actually do things like that pretty freely. And this has also increased -- think about your own home, for instance -- this is, first of all, this remote-work point there too, where people want to be working remotely, but then a separate, say, garden sauna building with a remote-work space, mm, so, for example, in a family with kids you can go out there to work remotely and then come back home. It's not a long commute from your own plot. And there's maybe a sauna too, or otherwise you could use that same garden building -- say when the teens grow up and you don't want them hanging around at the ABC [gas-station chain] in the evenings, they can stay there instead, but they're still under the parents' eye. So that's this kind of extra space in the yard, and they're really versatile hobby spaces -- band-practice rooms, some use them for painting, some as a podcast studio, [24:49] a home gym, yeah -- there are various uses for it. But the point is that if you have building rights, you can build it without a building permit, and that's just a great thing, and this reform is definitely worth taking advantage of. Well, that's really something -- I'll have to look into that a bit. I'm actually already pretty content with this urban life here in central Helsinki. I did live in London for 13 years. Over there, actually, it's surprisingly free -- people have been able to build things like townhouse basements and other stuff in a pretty random way. Whereas here in Finland, the old culture is that everything has to be really strict, so that's actually a bit of an outlier globally. Yeah, it's good if it moves in that direction, because you could of course think, that if you have, in a way, the cost-effective solution, and then maybe the other related construction work is a bit cheaper now that demand has dropped elsewhere, [25:52] this could actually be quite a favorable moment. And then maybe the project's conceptual risk is a bit lower too, since there's more capacity out there outside your own operation, so it could be a pretty good moment, so you're not in a boom period where everyone's fighting over the same resources, so you don't end up watching the costs tick away absolutely. Yeah. And that's also, in a way, -- I was just at, uh, Mikko Nurminen's table over at FiBAN, and about that Airbnb thing we were discussing, that in the apartment-block side, as a side effect, things like cottage-sharing groups and so on -- if you're not using it yourself all the time, it's become pretty painless to rent it out too, actually. Yeah, yeah, yeah. Funny -- I have, out in Puolanka, this small little sauna cottage, and well, I bought a plot out there at some point, and then I built, on-site, out of solid logs, this [26:54] well -- 'the cobbler's children have no shoes' -- of course it wasn't industrially prefabricated, it could only be built on-site, but it was this kind of solid-log solution. And I built into it a sauna cabin, meaning there's, say, a ten-square-meter living room, a small kitchen, and then a sauna and washing facilities. So I thought, I'd build that first, so that our family would have some kind of base there, and then maybe later a cottage solution on top of it, and well, then, because of the busy family years, in the end actual visits out there have been pretty rare. So I tried it out once I got the place into shape so it could be rented out, and I've since listed it on Airbnb and rented it out there. There's really been very good demand for it, in that of course you need electricity and drinkable water and so on, of course, for it to actually work. But I was genuinely surprised, because I thought it was such a small space -- okay, it's about 25 square meters of floor area there -- but there's really been a lot of interest, and even [27:59] foreign tourists. Really good reviews have come in, and lots of thanks for the place. I thought, no, this is too small for that, but on the contrary, it's been really, really good, and I've been surprised by it. Then maybe, something I've generally followed -- take, for instance, Puolanka as an example, which is quite a cottage-rich municipality, and where, say, Airbnb-style rental hasn't really been used all that much. It's interesting in that sense -- surprisingly, when you notice how popular it actually is on the demand side. Yeah, this Mikko Nurminen's business is Hostaway, which supports Airbnb -- so basically exactly those -- it handles just that cross-border management. I mean, a unicorn business -- the guy has really built an incredible business, and yeah, that's -- I had, as a guest, Holmström -- was it Timo -- who was a high-school teacher, and he does this young-entrepreneurs business, and writes books about it too -- a great guy. So we do have quite a lot of this kind of expertise in Finland, and maybe digitalization [29:00] in general too -- maybe I could do a little rant about Salvos and its subsidiary Lapeland Oy, in the sense of how you've organized things -- this instantly-finished concept seems to be at the core of it, but well, yeah, yeah, on the Salvos side we make leisure buildings out of logs -- log construction is our thing -- and of course on-site building, and the point -- the added value -- is precisely that we manufacture the buildings industrially to completion, which makes it easy for customers. And we've wanted to make the whole product-and-service concept as e"}, {"slug": "663-rakenna-30m2-ilman-saanto-suomea-kurkela", "title": "Build 30m² Without Red-Tape Finland | Veli-Matti Kurkela", "titleOriginal": "Rakenna 30m2 ilman Sääntö-Suomea Kurkela", "guest": "Veli-Matti Kurkela", "guestsCanonical": ["Veli-Matti Kurkela"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/veli-matti-kurkela/"], "episodeNumber": "db-663", "publishedAt": "2026-01-28", "duration": "00:48", "format": "short", "topics": ["finnish_economy_policy"], "description": "Build 30m2 Without Red-Tape Finland | Kurkela. Clip from the episode Cabin Building | Kurkela | #neuvottelija 369. A transformation in the construction industry and effortless leisure-home building. How is industrial modular construction changing leisure housing? Veli-Matti Kurkela from Salvos explains why traditional construction is struggling and how turnkey solutions make it easier to realize cabin dreams. The conversation touches on both the accommodation needs of Lapland tourism and Finns' changing requirements for quality and amenities. Commercial collaboration with Salvos Oy.", "page": "https://www.neuvottelija.com/podcast/episodes/663-rakenna-30m2-ilman-saanto-suomea-kurkela/", "text": "[00:00] didn't this new building act come in, that Finland actually got something done, that under 34... it's easier to build now, so, at first glance 34 sounds kind of small, kind of like [unclear]. Well, you're not- you're not exactly the only one who gets a say. -about that, like, yeah, that if you wanted that yard sauna or outbuilding, then that's 30 square meters and then say like a yard sauna, 30 square meters, so okay, so what well then you'd just need a sauna and then maybe some sort of changing room. 30 is pretty generous, so like here you'd have a sauna cabin, so here there's like a cabin and then there's the sauna. Ah right this is really good, but this is 164. This is half of what we were talking about, if you have building rights you can, like, build under 34 without a building permit [unclear] that's like a really great thing, that you can see it in the market too, demand- demand grew, and in my opinion Sweden made this kind of similar reform earlier and it's really been a good thing and, well, namely then like as a result it's been nothing but good, everyone wins, "}, {"slug": "713-tampereen-mielenkiintoiset-alueet-jocka-trasckback-neuvottel", "title": "Tampere's Big Urban Development Projects | Jocka Träskbäck", "titleOriginal": "Tampereen mielenkiintoiset alueet | Jocka Träsckbäck | Neuvottelija 148", "guest": "Jocka Träskbäck", "guestsCanonical": ["Jocka Träskbäck"], "guestPages": ["https://www.neuvottelija.com/podcast/guests/jocka-traskback/"], "episodeNumber": "148", "publishedAt": "2026-06-07", "duration": "14:19", "format": "full", "topics": ["investing_markets"], "description": "Jocka Träskback walks Sami through Tampere's major urban development projects. The conversation moves from the Nokia Arena and the Särkänniemi amusement park to the waterfront tunnel, the rail-yard deck projects, and the planned twin towers. They also discuss how Finland's most sought-after city is balancing strong growth against a tightening economy, and whether some of the big investments should be put on ice for a while. Träskback also addresses the situation of long-term unemployed people deemed unfit for work, and why the statistics need to better reflect reality. Finally, Miettinen offers his AI expertise to Tampere-area businesses.", "page": "https://www.neuvottelija.com/podcast/episodes/713-tampereen-mielenkiintoiset-alueet-jocka-trasckback-neuvottel/", "text": "[00:00] All right, Jocka, let's think back — or rather talk — about the Tampere region. That's your home turf, isn't it? Yes, yes — still Finland's spiritual capital. Yeah, and it really is nice to visit. Driving in just now, I was watching how Tappara wiped the floor with Ilves — but anyway, the Nokia Arena is just a magnificent monument. SRV — Kokkila, I think — built it in a bit under cost, so we ended up with a nicer venue than usual. But it really was great to see that all of this was built without, say, Jokerit's Russian money — done purely with Tampere people's own money and development muscle. Yes. But I'd bring up Särkänniemi — compared to going to Linnanmäki here in Helsinki, the rides are honestly better in Tampere. There was a bit of controversy — the poor dolphins there stirred up some bad press — and that issue was never really cleaned up, but the wristband pricing policy always seems to spark discussion every single summer. Is it, like, worth it? [01:01] That's always a good question. Of course, it's a city-owned company, so you'd probably have to ask the board and the CEO about that. Mikko Hautosaari became the new CEO there — he's a great guy and does a fine job — but there's always going to be some criticism, whether it's good or bad. Särkänniemi is just such a huge attraction, with families, families with kids, coming from all over Finland, so there's always going to be whatever it— —ever it is, someone gets their feelings hurt over it, but it really is a wonderful place. For a lot of families it's that once-a-summer trip to Särkänniemi, and it's not quite the same thing as, say, Linnanmäki, because it's a bit pricier to travel to Helsinki and so on. But we do have to say Särkänniemi keeps developing all the time. The dolphins left a while back, and we'll see what takes their place. There are some pretty good plans in the works, and they'll come out at some point, but right now... ...this huge new roller coaster is coming. Really, just massive — it's opening right around now, since Särkänniemi opens right around these very days, so by the time this episode comes out it may already be open — May Day is right around the corner after all. Impressive stuff — that creaky old roller coaster was actually more intense than this one, if you ask me. I don't get this wooden roller coaster thing — apparently they're putting in a new terrace, right in the middle of Linnanmäki's wooden roller coaster, from what I hear. [02:23] ...terrace — so that's the big news for this summer. Impressive. And of course Särkänniemi is an absolute legend — I went there a lot as a teekkari [Tampere engineering student], though the elevator was out of order [unclear], so you had to walk all the way up. Yeah, I've walked those damn stairs up there plenty of times as a teekkari. But yeah, that view, the terrace and the restaurant up there are amazing, and the food's good too. And then there's also... ...at least there's been the Sara Hildén Art Museum, so there's more to that complex besides the rides. And then there's the legendary alliance-model project — the tunnel that came out great, the one that leads there. Tampere was ahead of the curve on how these public projects get handled — it was the first alliance-model project in Finland, and since then it's been used in probably dozens of projects all over the country. It was great that people dared to give the alliance model a try, and back then it also had its opponents... ...and now it's held up as the model example, and it was great that the tunnel got built, because that's how we got — specifically, the politicians decided to build the long version — so we ended up with a whole new residential area out of it. Yeah, I actually walked around there. It's still a little bit like Jätkäsaari [the Helsinki district], still a work in progress, but coming along nicely — they keep building more, there are businesses, cafés, a bit of a riverside boulevard and so on. And then I've lived on Lapintie, close to Tampella — I actually had a summer job in Tampella, right on the bank of the rapids, and then we'd go... [03:47] ...down to Ala-Pispala, that is, Tahmela — and Pispala itself is such a lovely ridge neighborhood, with those stairs, and especially in summer that lookout spot, the rock up top — you take the family up there with a picnic and a blanket. Then there's the Rosendahl hotel area with its lookout tower, and the Pyynikki Brewery area — that's also a really nice valley. Back when I was in middle school there... ...we had to go orienteering in that forest, and I'm honestly terrible at orienteering, so I've got some bad memories from that. But I have to say, if you're any kind of theater fan, the Pyynikki Summer Theatre is absolutely amazing. Last summer we saw 'The Unknown Soldier' there — it's got that revolving auditorium, so they basically get to build four or five constantly changing stage sets: one scene plays, then the auditorium rotates, and suddenly there's a totally different set for the next scene. By Finnish standards, it's genuinely a spectacular place. Yeah. And then I ended up living in Järvensivu for a while [unclear], and there's real potential there, and in general that whole university area has developed beautifully. [04:53] Now Järvensivu is set to be developed further going forward. In the coming years it'll get even nicer — these deck-over-the-tracks projects are essentially extending along the rail line. Yeah. And this might actually be my favorite part of the whole Tampere development story — specifically this rail yard area. So now that the Nokia Arena is there, the next thing coming up is basically another building complex following on from the Nokia Arena — on the other side of the bridge, the North Deck — and then the next one, and the next. It's called the 'Asemakeskus' [Station Center] project, we're handling it in the city board, and going forward it'll get covered over more and more. So there'll be a whole new part of the city built right on top of the railway. Yeah. And that reminds me — since I live on Kalevankatu in Helsinki — that's when the Clarion... ...tower — well, that got 'toned down' a bit since apparently you're not allowed to have phallic symbols around here, but in Tampere they really committed to the 'Mordor Tower' properly — it draws people in [unclear] — yeah [laughs], and that was that right away. And just this past Monday — we're filming this on a Thursday, right? — on Monday, in the city board, we advanced the project for the neighboring hotel. A second tower is going up right next to it — Towers. So yeah, we'll have Twin Towers going forward. [laughs] Tampere is getting twin towers, basically. That got advanced just this Monday in the city board. They'll be impressive going forward — hopefully nobody, you know, aims a little Cessna at them or anything like that. But anyway, that's how it is. It'll be a great spot, with the deck too — Tampere's drone squadron will probably shoot them down, I'm sure. But then there's also the Ilves Club and the Ilves Hotel — I should give them a mention too, even though it's not really related as such... [06:22] ...to Ilves, but the hockey culture there is strong, yeah, and generally the whole sports scene — the football stadium and the Tammela Market Square area — is really lovely. And I have to say, part of the reason Tampere is a bit financially tight right now is those big projects, but on the other hand, we currently are, and have been for years, the most sought-after city in Finland. And speaking of the Tammela stadium, it really is... ...genuinely a great football stadium — easily the finest in the country. Same with hockey — we've got easily the finest arena in the country, the Nokia Arena. These are definitely the kind of draw factors whose real value won't be measured until maybe 20 years from now, because, for instance, KuPS even had to play their European match in Tampere [laughs] — so Tampere was, for a moment, the home ground of a Kuopio team. Yeah. That just goes to show... ...that we've genuinely dared to bet big up front on these large projects in Tampere. And that'll surely continue going forward too, although in the next few years we'll probably need to ease off the throttle a little, not push quite so hard. For example, right now everyone knows — probably the viewers too — the Hakametsä ice hall, Finland's most beautiful and, historically, maybe the most significant ice hall — well... [07:40] ...right next to it, a new arena is coming. There'll be a high school and something for maybe 3,000 to 5,000 people — a sports-and-concert-hall type venue. Not really a symphony orchestra venue or anything, but you could definitely put on a band gig there. Then the Hakametsä halls themselves are getting rebuilt too. So the whole Hakametsä area is developing really fast right now as well. Yeah. When I lived over in Järvensivu, we'd sometimes walk over the ridge to the swimming hall area, and that's genuinely great too, that it's developing. And otherwise, the route out to Hervanta has gotten its tram line now, and I've actually lived in Hervanta myself — it used to be sort of its own separate little enclave, but now that area's been connected in as well... ...into the rest of the city. Yes. And going forward, the tram to Vuores will run the same way, via Lahdensivu, and I have to say — there was a lot of debate at the time over whether trams even made sense, and Turku is debating it right now too — but currently 80 percent of Tampere's urban growth is happening along the tram line. Yeah. [08:40] So I think that these days you genuinely can't find good arguments against the tram anymore. That's a separate matter, of course — everyone has their own opinion on whether it's worth extending further, now to Pirkkala, what gets built out in Ylöjärvi, and so on. But when it comes to having a tram within the city of Tampere itself, I think even its fiercest critics have probably realized by now: wait a minute, this actually turned out pretty well. Yeah. And then there's that horizontal dimension — Tampere is, in a way, built around that rapids area... ...kind of squeezed in around it, so it's actually brought a vertical dimension too — and Näsijärvi and Pyhäjärvi sort of dominate the scene, so there's room for a real sailing culture as well, and the whole summer-city feel is just fantastic. Yeah, yeah, this is really... I'm enough of a Helsinki native that — hey, by the way — I've sometimes wondered whether I should just get a second place in Tampere after all. Yes, yes, that would be pretty... ...sensible. And I have to admit we've had a bit of tunnel vision, or let's put it this way — maybe we didn't really see the growth slowing down here in Tampere, because at the time we made decisions like, say, Näsisaari — building this so-called 'Tampere's Dubai,' an artificial island made of sand, which the tram will run through going forward, or already does run through now — but there are supposed to be quite a few more apartment blocks going up on both sides of it. That kind of artificial-island solution isn't going to get finished any time soon. But then again, there's Hiedanranta, over on the Lielahti side... [10:04] ...a brand new, gorgeous residential area is coming there, a culture house, and so on. So yeah, we definitely have plenty of investment opportunities. And I think, given the current economic climate, it would be the responsible thing for us — say, the city board and city council — to take a look at whether some of these big projects that haven't been built yet should be put on ice for a while, put on hold for, say, five years. Yeah. If it's still just in the zoning stage, then, speaking as a member of the National Coalition Party, I'd say it's about time to take a bit of a critical look... ...at that list. Yeah. By the way, I actually used to go to that beach there as a kid, and I think there was a Lapland Hotels spa there too. That's an interesting one — it's nice. There really are great neighborhoods in pretty much every direction. Yes, but the thing is, Tampere, like a lot of other cities, is definitely struggling a bit with its own growth. Mm. And it's a bit like — will that growth actually pay off in the future? And I think if you look 50 years ahead, or 30 years ahead, we'll probably look back and say it was a bit rough there in the 2020s, but thankfully we got through it. Yeah. It's nice to hear that the [unclear] mayor has still taken on some collective responsibility for this, but it's always a bit like that — it's easy for the left to push through those big projects — and speaking of which, you mentioned Turku, and... [11:28] ...and especially the Vantaa light rail — those were, in a way, easy calls a few years back, easy, easy — but now the money genuinely is starting to run out, and the health and social services reform has taken away the ability to funnel social security and healthcare cash flow into urban development, so now the use of that money is a lot more tightly controlled. Yeah. And then, maybe the biggest burden of all — Turku probably weighs on it some too, I don't know how much — but we've got these unemployment penalty payments, which come to 50 million, and you can do an awful lot with 50 million. Yeah. So this is really key. We need to be able to bring that cost down to a minimum here in Tampere, and in my view it was a pretty poor move by the state to go with a model where we're now, in effect, carrying responsibility for something that doesn't really belong to us directly. But we do have, for example, one really central initiative that I'm personally pushing, or trying to push forward wherever I can: we have a huge number of long-term unemployed people on the books who genuinely are no longer fit for work... ...haven't been for a long time, and yet they can't get onto a pension. So we, as a city — and other cities too — really need to be able to hire, say, doctors to assess whether someone is fit for work or not. If someone is clearly what you'd call a 'man of the woods,' living out there somewhere — well, maybe not literally under a bridge, but something along those lines — and is clearly no longer fit for work in any capacity, then we simply have to get them... [12:53] ...onto a pension. There's no point in them still being on the books at the employment office, reporting, you know, applications and so on. This is a really key issue, in my view, for the whole country, but especially for us here in Tampere — we need to clean up the statistics so they actually reflect reality. Yeah. Well, this really got me going — the hometown pride is flowing here — so please, do get in touch with me. It would be interesting — like I mentioned in the main episode — I could use some excuses to come... ...to Tampere more often, so one option would be joining some company there — say, a board, or an owner's advisory role of some kind — so don't hesitate, reach out. Any specific requests on that front? Well, no — I mean, AI work can basically be applied to anything. Basically, from what I've learned, you can automate or analyze even really difficult problems to the point where you already get a first-derivative-level solution, just by running confidential data sets through my whole AI arsenal. Yeah. So I [snorts] find that companies don't dare to do this, and yet they get an absolutely insane first-derivative benefit when I run some critical company problem's data through my systems. [14:03] So there you go. Yeah. This is just kind of a gift, in my opinion, that could be put to a lot more use going forward. Society thanks you. That's right. Yeah. But thanks, Jocka — and if this is how you found your way here, make sure to check out the main episode too. Yes. Thanks so much to our guest. Yeah. "}]