Economics Instead of Number Magic | Martin Paasi, Elina Valtonen | Neuvottelija 183

A note on reading this

An election episode recorded ten days before Finland’s April 2023 vote, in which two candidates from the same party speak in their own names. Views are attributed by speaker below, forecasts are marked as forecasts, and since both men are criticising the incumbent government the other side is not represented here.

Summary

Martin Paasi, an economist at Nordnet standing in Uusimaa, and Elina Valtonen, a sitting MP standing in Helsinki, came on shortly before the election.

The best passage is about a concept, not a campaign. A televised debate had attacked the Coalition for increasing health and social spending over a term by three billion rather than four, and had called that a cut. Paasi separates the terms: making something more efficient means doing it more intelligently, not making people work harder or longer. His example is a health centre with three-month queues where the staff themselves decided to handle everything possible by telephone — six nurses around one doctor in the mornings, freeing afternoons for anything serious. Valtonen’s parallel inverts the usual assumption: if a health system improved with money poured in, American healthcare would be the left’s dream.

On the tax rate, Valtonen refuses the easy comparison. Presented with Finland passing Sweden and approaching Denmark, she notes that comparing a single country to Finland’s situation is problematic. Miettinen deepens it from the other side: Denmark’s VAT is flat at 25 per cent, its top rates are lower and its lowest higher, and nobody here wants Denmark’s near-absent protection against dismissal. The aggregate rate conceals how the tax is raised. Paasi’s context is that GDP and productivity have both been flat for fourteen years.

Paasi’s proposal is the episode’s most concrete idea. Telephone the hundred most growth-hungry companies in the world, ask directly what it would take for the next investment to come to Finland, collect the answers, work out which commitments buy the most investment, and agree it in writing. The point is to replace guesswork with information. He expects the three commonest answers to be connections, work-based immigration or the right to recruit directly, and lighter regulation.

On defence, both criticise promising Hornets to Ukraine. Valtonen argues it technically — the aircraft are at end of life, which is why replacements are being bought, parts support is limited, and the horizon is years away — and procedurally: such a thing should not be promised to a country at war in a term’s closing weeks. She would instead establish the bottlenecks in scaling Finnish defence production, with the state as bridge financier, and widens the frame to dual-use goods and the American market that NATO opens. Paasi adds the point he says has drawn least attention: NATO membership also lowers the political risk a foreign investor prices into Finland.

On ministerial competence Paasi’s formulation is that a minister need not understand everything, but must understand that they do not — and must then turn to those who do. His examples are the Fortum–Uniper affair and EU money left unclaimed, including whether rail gauge conversion could have been funded region by region. Those are the speakers’ own assessments of what might have been obtainable.

Work-based immigration produces four separable proposals: abolish labour market testing, shift from ex ante to ex post supervision, certify trusted employers with a fast lane for permits, and issue a recruitment passport with follow-up monitoring. Sweden’s abuse cases are addressed directly rather than dodged. Valtonen calls talk of a salary threshold for entry irresponsible, since it would exclude nurses, bus drivers and restaurant and factory workers.

Two figures endure: Estonia’s flat tax means ten times the salary pays ten times the tax where Finland’s marginal rate makes it roughly thirty; and a quarter of an employer’s wage cost in Finland goes to maintaining the pension system. The episode ends personally, with Paasi describing his own period of unemployment and arguing that the obstacle is not willingness but a benefit system nobody can anticipate — and with the discovery that Paasi, standing in Uusimaa, will be voting for Valtonen in Helsinki.

Watch

The recording lives on the Neuvottelija channel: Talous numeromagian tilalle | Martin Paasi Elina Valtonen | Neuvottelija 183. A Finnish edition of this episode is published at www.neuvottelija.fi.