The lost entrepreneurial spirit of Finland
Welfare without wealth creation
The situation was this bad for small entrepreneurs last time in the early 1990s, when the trade with the Soviet Union ended, and with it the casino years (1980’s), when banks speculated and small businesses were sacrificed (banks were bailed out).
History doesn't repeat, but it rhymes. In the 1990s, we sacrificed entrepreneurs to save the banks. Today, we sacrifice them to feed the bureaucracy. The method changes, the victim remains the same.
More government = More entrepreneurs dying.
Why? Entrepreneurs lack calculation. How do you grow when taxes just keep rising? Or you get tax surprises like a VAT hike in 2024? Bureaucracy keeps increasing; we have nowadays even compost inspectors for average citizen, try to imagine the bureaucracy in small businesses?
Finland is heading to a system where the government decides what businesses deserve to survive. (Finland start-up scene, anyone? Who gets the subsidies).
The Death by a Thousand Cuts
Debt will grow, and bureaucracy will only increase, no matter what government we have. As a small country, we could bravely try new things. More debt, more government is simply not working. The choice is simple: trust people with responsibility and freedom, or keep feeding the bureaucratic monster until it devours everything productive.
We currently have the most “right-wing” parliament we can ever have on paper, and still, they are just fiddling with taxes. Again today, celebrating that the inheritance tax is lower, see picture below.
Am I supposed to celebrate this? As a small business entrepreneur, this feels like mockery.
Inheritance tax remains legalized theft - the most economically destructive tax on the planet. Your family builds something over generations, and the state confiscates it when you die. Pure parasitism.
Taxes keep rising (VAT is the highest in Europe, 25.5%). Corporate tax will drop from 20% to 18%. The highest capital gains tax in Europe (34%). Property tax will rise…
YEL pension contributions - legalized extortion. Pension companies demand contributions on imaginary salaries they invent, not your real income. One Tampere entrepreneur earning modest wages was hit with €1,600 | 0.02 BTC/month YEL demands - over half her actual salary. The message is clear: we don't care if you're profitable, we'll decide what you "should" earn and tax you accordingly. It's like paying property tax on a mansion when you live in a shed (this is coming too). Pure bureaucratic sadism disguised as “pension insurance”. (1)
Corporate tax drops from 20% to 18% - As a small business owner, does this change anything? No. Helps big corporations. Why not take Estonia's model, where profits are taxed when you take them out of your business? Zero corporate tax on reinvested profits.
Big talk of big reforms, have you noticed anything? We were supposed to update our employment laws from the 1960s to this date, but what gives? Thank god, after COVID, I have only three people on the payroll. I used to have 14 and it was a nightmare. I did wonder in the past why the majority don’t want to “grow” and employ only themselves. This is the way in this mess.
The Golden Cage
Why bother? It's not just entrepreneurs who are suffocating - it's the workers too. The majority of my peers have been with the same employer since graduation, earning modest salaries. Why bother earning more? It doesn't really make a difference - whether it's €4k | 0.04 BTC, €8k | 0.09 BTC, or €20k | 0.22 BTC, you just work more with diminishing returns.
No wonder most of them become pro-level triathletes, marathon runners, or passionate golfers by 40+. When the system kills financial ambition, people channel their drive elsewhere. Is that wrong? Maybe not for them, but it's economic suicide for a nation.
I get it personally. My business runs better at €300k | 3.28 BTC yearly revenue than it did at over €1 million | 10.93 BTC. Less stress, fewer employees, fewer bureaucratic nightmares. The system literally punishes growth, so why grow? Why earn more?
Mises: In a free market, workers should be mobile entrepreneurs of their own labor - constantly seeking better opportunities, switching jobs, even starting businesses. That dynamism benefits everyone: workers get higher wages, companies get motivated talent, and consumers get innovation.
Here in Finland, it's the complete opposite. Then we wonder "why zero growth for 17 years?"
I know, leftists out there (97% of Finns), you think "growth isn't everything." For your own sake, it's better when the pie grows for everybody. Growth isn't just consuming more - it's doing things more effectively with less so we can have more well-being. Nature feels better too when we're efficient instead of wasteful.
But Finland has chosen comfortable stagnation over dynamic prosperity. The golden cage is comfortable - until it isn’t.
Twenty years of creeping socialism have left their mark here in Finland. This is slowly turning to shithole, just look around. Go visit your childhood neighbourhood, is it looking better or worse?
Well, anyway, I haven’t heard anything from Finnish media or my fellow economists. It's funny how they stay silent when someone actually tries to cut government spending instead of endlessly expanding it.
On top of this mess, Finland is now in NATO, and defense spending has to skyrocket to 5% of GDP, which means only more taxes, more debt, and more bureaucracy.
Same poison, same insanity. When will Finnish people say this is enough?
Sadly, I don't see this happening. The majority is fine in their golden cage.
Sources and good reads:
Talking heads are lost.
https://x.com/JuhanaBrotherus/status/1938471428959178912
Inheritance tax
https://x.com/willerydman/status/1938499331633406286
YEL maddnes
https://www.yrittajat.fi/uutiset/tamperelaisyrittaja-oli-menettaa-malttinsa-lukiessaan-elakeyhtion-yel-ehdotusta-toinen-tyontekija-pitaisi-irtisanoa/ (1)
https://www.yrittajat.fi/uutiset/lopettaneiden-yritysten-maara-korkeimmillaan-30-vuoteen-alv-huojennuksen-poisto-voi-selittaa-yksinyrittajien-vahenemista/
Quitting intensifies:
https://www.suomenmaa.fi/uutiset/lopettamisaalto-jarkyttaa-yrittajia-kurittavat-nyt-todella-monet-asiat/
Argentina
Heading to the right direction?
https://hanshoppe.com/