Thoughts on Finland

by D.J. Webb

Finland is a country that I have mixed feelings about. One of my great-grandparents was Finnish, from the Swedish-speaking minority (the other seven great-grandparents being English and Irish by extraction), and so I am interested in the country. Yet try as I might, there seems to be some kind of barrier preventing me from really admiring the country and its culture. Finland’s demands for “collateral” when taking part in eurozone bailouts are a pointed reminder that this country is quite different from the UK culturally, taking a full part in the EU structures, but demanding the right to defend its own interests all the same. Surely if you’re in the eurozone, you should either meet all your obligations, or just leave? Finland’s troubled relationship with Russia is also worthy of analysis. In the end, I feel that Russia is the long-term strategic partner the UK should be focusing on, at the expense of EU nations such as Finland.

A backwater historically

Before the Russian conquest of Finland in 1809, Finland was part of Sweden, and had been so for many centuries. The official language was Swedish; the established church was the Church of Sweden; and the nobility and educated people everywhere in the country spoke Swedish. The 80% or so of the population who spoke Finnish as their native language—a proportion that has risen to nearly 95% today—left almost no cultural achievements: the fact that Finnish is now a written language is purely down to the efforts of a Swedish-speaking bishop, Mikael Agricola, who translated the New Testament into Finnish and thus established early written norms for the language, in the 16th century.

Anyone of consequence in Finland before the modern period was from the Swedish-speaking minority, including Anders Chydenius (1729-1803), an 18th-century priest whose writings on economics have been compared with those of Adam Smith; the botanist, Pehr Kalm (1716-79); the chemist, Johan Gadolin (1760-1852); the mathematician/astronomer, Anders Johan Lexell (1740-1784); the wartime leader, Gustaf Mannerheim (1867-1945); the composer, Jean Sibelius (1865-1957); the poet and author of the Finnish national anthem, Johan Ludvig Runeberg (1804-77); and the author of children’s stories, Zacharias Topelius (1818-98).

Given the total lack of any cultural achievements of the Finnish-speaking population, it is no surprise that, despite the fact that it was part of Sweden, the country was a backwater in terms of the European economy. There are almost no old buildings in Finland—the cathedral in Turku, built in 1300, but largely restored after a fire in 1827, being a significant exception. Houses were wooden, and frequently burnt down. Drunkenness was common in 17th- and 18th-century Finland, and, well into the 20th century, Finnish immigrants to the US faced a hostile welcome owing to their clannishness, drunkenness and habit of engaging in fighting with knives (see The History of the Finns in Michigan, by Armas Kustaa Ensio Holmio). The much higher rate of crime in Finnish society until relatively recently is discussed in Heikki Ylikangas’ book Five Centuries of Violence in Finland and the Baltic Area.

In some ways, Finland’s history bears a curious resemblance to that of Ireland. Around one-third of the population died in the Great Famine of Finland in 1695-97, and a further 15% of the population died in the famine of 1866-68 (around 270,000, 150,000 in excess of the normal death rate), exacerbated by the reluctance of the finance minister, Johan Vilhelm Snellman, to borrow money to alleviate the famine lest the currency, the markka, depreciate in value.

Similarly, there were great losses in warfare and occupation. The 1714-22 occupation of Finland by Russia, known as the ‘Great Wrath’, was accompanied by a scorched earth policy that reduced the Finnish population from 400,000 to 330,000. Around 60,000 Finns served in the Swedish army during the Great Northern War at the time—a large percentage of the population—of whom only around 10,000 survived the war. Finally, in 1808 most of Finland was occupied by Russia, and the cession of the country to Russia in 1809 left Finland as a backwater in wider European terms, certainly, but as a more progressive part of the Russian Empire between 1809 and 1917, when the country declared independence.

Angus Maddison’s calculations of historical GDP per capita for a large number of countries, using 1990 international purchasing power parity dollars, give a world average of $666 in 1820, with the most prosperous countries being the Netherlands and Great Britain, at $1,838 and $1,706 respectively. At $781, GDP per capita in Finland was the lowest in Western Europe, even below the $877 for Ireland, although well above the $688 estimate for the Russian Empire. By 1914, Finland’s GDP per capita had risen to $2,001, but far below the $5,189 for highest-placed New Zealand, and well below the $4,927 estimated for the richest country in Europe, Great Britain. (Maddison’s estimate for the Russian Empire in 1913 was $1,488.) Finland caught up considerably in the 1950s and 1960s, but it was not until 1989 that the country’s GDP per capita finally exceeded the average for the 12 leading Western European nations, as calculated by Maddison. The country is now one of the better-run parts of Western Europe, with an AAA credit rating.

Finland’s culture and its success

Clearly, Finland has by and large done well for itself in the modern era. Interestingly, the estimate of average IQ for Finland given by Richard Lynn of the University of Ulster and Tatu Vanhanen of the University of Helsinki is not stratospheric, at only 97 (, behind Sweden’s 101 and ahead of Russia’s 96. Yet Finnish educational scores are very high, leading some liberals to try to analyse the Finnish education system to see if anything can be learned therefrom and transplanted to ethnic-minority sink schools in the US and the UK. However, Steve Sailer has argued (at that Finland is successful—because it is Finnish. There are very few Africans and Asians in Finland. Most of the foreigners that there are there are Russian or Estonian.

This may be because the weather in Finland is cold and the language forbidding. But the culture of Finland is also impenetrable. Finland is most certainly not an open and welcoming multicultural society, but a tight-knit society of people who are generally opposed to giving jobs to foreigners—and unafraid to say so over the phone to foreign job applicants. Finland has not, therefore, sought out the serious social problems of countries like the UK. Although membership of the EU does require them to allow freedom of movement to EU citizens, there are significant bureaucratic hurdles faced by UK citizens who move to Finland, requiring lots of pieces of paper and permissions to be applied for in the right order. Englishmen seeking to rent an apartment in Helsinki may simply be told that the agency doesn’t want to deal with non-Finns. So whether friendly or not, the closed nature of the society has served to insulate Finland from immigration and multiculturalism, which possibly forms part of the explanation for Finland’s success, even if only in a negative sense, that this was a trap Finland did not fall into.

Nevertheless, Finland’s success remains a little perplexing: after all, this country did not make any contributions to the Industrial Revolution pioneered by countries like the UK, Belgium and the US. The fact that the electric light-bulb exists in Finland is purely down to the efforts of inventors and scientists in the UK. And yet, much as the Japanese have been able to do, Finland has mimicked and mastered technology developed by the earlier economic frontrunners. Many observers see some kind of parallel between the cultures of Finland and Japan. Both countries have been relatively unaffected by the Western mania for multiculturalism and low academic achievement, and both have been able to snatch up the economic achievements of other countries and turn them into their own. Even the quietness and taciturn nature of the Finns bears a distinct similarly to the Japanese. The Finns seem to be able to knuckle down to work with a Japanese sense of efficiency, in a culture that is more collective than the individualistic cultures of countries like the UK.

Finally, a note on language policy, reflecting my own interests: Finland seems a country that trumpets its achievements in a way that is less common in the more multicultural states of Europe, and in this regard Finnish people often claim their language policy is the most enlightened in the world, as Swedish speakers are entitled to education in their own language. Yet the Swedish speakers have dwindled in the population as a whole, because the national policy is that as soon as the Finnish-speaking population of a municipality passes a certain threshold, the whole municipality goes bilingual, and then beyond a certain higher threshold, unilingually Finnish. There is no attempt to maintain the Swedish language as the language of administration in the entire area that was Swedish-speaking up until recently, with the result that only small rural areas are unilingually Swedish-speaking today. It would be more honest to say that Finland’s long-term policy has been to scale down the Swedish language, other than in the island province of Åland, where language policy is governed by an international treaty, requiring the administration to remain Swedish-speaking regardless of population movements from elsewhere. The fact that the Swedish language is on the curriculum at all in Finland is the subject of great resentment and anger from most Finns, showing that this country is actually jingoistic and unbending in its fundamental culture. Smiling Finns with fluent English considerably misrepresent the brooding nature of Finnish culture—and its resentment of outsiders, including those in Sweden.

The EU and Russia

The cultural factors that aided Finland’s catch-up economically are not a function of the EU, as Finland was a late joiner. Interestingly, it is the only Scandinavian country to use the euro—most Finns get angry at any attempt to depict their country as part of Scandinavia, claiming it is only part of an entity called Fennoscandia, but I will call it Scandinavia here—and it seems its willingness to join such a hare-brained project reflects its search for allies against Russia. Just as Finns define themselves against Sweden, they also define themselves against Russia. It remains to be seen if the backward-looking stance of joining the euro as a move against Russia will have serious negative consequences for Finland in the event of a collapse of the eurozone. A parallel can be drawn with the way the Republic of Ireland joined the euro to mark its economic independence from the UK—at great ultimate cost to that country.

Finland established its independence in 1917, but found itself invaded once again by Russia in 1939-40 in the Winter War. The proximate cause seems to have been the Soviet concern to prevent Finnish territory from being used by Germany in the forthcoming war. Yet Russia found it far from easy to defeat Finland, and the final Russian casualties (126,875 dead or missing and 188,671 wounded) far exceeded the Finnish casualties (25,904 dead or missing and 43,557 wounded). Very little international support was received, and Finland was forced to sign over its second city, Viipuri (now Vyborg in Russia) to the Soviet Union. In all, 11% of Finland’s territory and 30% of its economic assets were handed over to the Russians. The entire Finnish population of the ceded area, more than 400,000 people, was evacuated and resettled in the rest of Finland, which is why the population of Vyborg is totally Russian today.

Fifteen months later, Finland joined the German war against Russia, in what is known as the Continuation War. Finland clearly gambled on a Nazi victory. Finland drove the Russian forces back to the pre-war border 30 km from Leningrad, thus aiding the German siege of Leningrad, and occupied a large swathe of Russian territory in Eastern Karelia—territories that had never been part of Finland, but where minority ethnic groups had an affiliation to the Finns. The Finns estimated that in 1941 the population of the occupied territories was 85,000, mainly women and children owing to warfare conditions, of whom around half belonged to ethnic groups, such as the Karelians, that could be absorbed into the Finnish population. Of the other half, most were Russians or Ukrainians, 24,000 of whom were interned in camps by the Finns, of whom between 4,000 and 7,000 died of hunger and harsh conditions. The Germans and Finns also attempted to capture the northern Russian port city of Murmansk, albeit unsuccessfully.

In 1944, the Soviets finally drove the Finns back from most of their territorial gains, but the Finns still fought them to a standstill. At the time of the armistice in September 1944, Finland remained an undefeated power, with the front line still in Russian territory. The Finns had lost another 63,204 men dead or missing, with 158,000 wounded, and the Soviets had lost around 200,000 men dead or missing, with 64,000 captured (18,000 of whom died in Finnish camps) and 385,000 wounded. These brought total Soviet casualties over the two wars to more than a million. In the subsequent peace treaty, Finland lost more territory (its Arctic port of Petsamo) and was forced to pay reparations equivalent to half of its 1939 GDP. Finally, 260,000 Finns who had moved back to their former homes after territories were recaptured in the Continuation War were evacuated back to the rest of Finland once again.

This forms the backdrop to Finland’s maintenance of its independence and its economic growth in the post-war period. Finland remained a neutral country, albeit with a unique relationship with the Soviet Union, and the country benefited from a close trading relationship with Russia. The collapse of the Soviet Union has, however, given Finland an opportunity to move out from under Russia’s shadow, joining the EU and the eurozone in a considerable sign of a less neutral geopolitical stance.

Clearly, invasion by Russia continually held Finland back in history, and the history of the Second World War provides a reminder that proximity to Russia will always be the most important geopolitical threat to Finland’s independence. The Finnish government’s official stance is that it does not claim territories ceded to Russia, although the Russian leader, Vladimir Putin, is often asked about this question by Finnish journalists, provoking a less than friendly response. It seems clear that Finland’s decision to join the Nazi attack on Russia, and to go further than the original borders in its occupation of Russia, not to mention the one million Russian casualties of the war, amounted to a poor decision. Russia’s invasion of Finland was provocative, but a large country can allow itself some latitude of bad behaviour; Finland’s invasion of Russia was an even greater provocation. Consequently, although around one-third of the Finnish population would like the ceded territories back, it is hard to agree that Finland should have any valid claim on Russian territory today.

What is even more concerning is the way that countries with grievances towards Russia, including Estonia, Latvia and Lithuania, as well as Finland, have joined the EU as part of an insurance mechanism against Russia in the future. This attitude of allowing the events of the 1940s to dictate economic policy today could well be the Achilles’ Heel of Finland in the future. Finland is a net contributor to the EU budget, in fact a larger one in terms of the proportion of its contributions to its own GDP than in the UK. Finland has also taken on the regulatory legacy of the EU and joined the eurozone.

Rightly or wrongly, by joining the euro, Finland has gained responsibilities towards the other eurozone members. The very meaning of the euro currency is that Finland regards its long-term future as in some way joined with the likes of Greece. So it is a little perplexing that Finland has been the one country to insist on collateral before taking part in the various bailouts of Greece. Finland’s consciousness of itself as a country that is linguistically and culturally isolated has traditionally informed a much more determined and almost boorish assertion of its own interests than is the case in countries like the UK, which like to play the soft touch in the international arena.

Britain and Finland

This brings us finally to relations between Britain and Finland. Britain did not lift a finger to help Finland during the Winter War with the Soviet Union, but in more recent times you would think that they have become allies of a sort. Yet Finland is an odd sort of country—a country of unwelcoming and unfriendly people, who support all sorts of politically correct causes, although often failing to implement them fully at home (see immigration and multiculturalism). They give the impression of pretending to understand and keep abreast of the cultural developments abroad, an impression enhanced by their good English-language skills, while in fact nursing xenophobia and clannishness at home in a way that would be regarded as unpalatable in England or France. It is worth noting that I am against immigration into England, but don’t see why that should be incompatible with a generous and open attitude towards other cultures where other nations are not seeking to overwhelm us. The fact that a former Finnish prime minister, Harri Holkeri, was prepared to serve as co-chairman of the Northern Ireland peace process that made so many concessions to the IRA needs to be factored into our relations with Finland. The actions of any country’s former prime ministers are not the acts of private citizens, and it is hard to avoid the conclusion that Holkeri was more than happy to take steps to dissolve democracy in Northern Ireland as he hailed from a country that had a “consensual” style of politics, where everything is settled by the politicians behind closed doors without popular discussion.

I think in this regard we can cite the recent comments of Finland’s Swedish-speaking Europe Minister, Alexander Stubb, who condemned Britain’s attitude towards the EU in the following terms:

I think Britain is right now, voluntarily, by its own will, putting itself in the margins.

We see it in foreign policy, we see it in economic policy, we see it linked to the single currency. And I, as someone who advocates the single market and free trade, find that very unfortunate, very unfortunate.

It’s almost as if the boat is pulling away and one of our best friends is somehow saying ‘bye-bye’ and there’s not really that much we can do about it.

This was a hostile comment by a minister of a nation that is technocratic rather than democratic in its internal affairs and joined the EU in order to drag the EU into any disputes with Russia in the future. The EU has become an albatross around our necks, turning allies into foes—if that is what nations who oppose our independence are—and it is high time we valued personal freedom, a small state, low trading barriers and genuine civil society in our international partners. Finland has none of these things, but is in fact the poster child for extreme state interference (for instance, government-run off-licences), a kleptocratic tax system, political conformity, and Europhilia (albeit a Europhilia informed by hostility to Russia). I would like British foreign policy to orient itself towards Russia and not the EU states—most forecasts show that Russia will be richer than Western Europe at some point in this century, and, in the end, Russia is not a country trying to dictate our laws to us. Consequently, I value Finland and its culture less and less. As for the euro crisis, I say, “bring it on!”

62 responses to “Thoughts on Finland

  1. I do not see how Russia could be a “partner” (indeed I am not sure what that means) – even if the Putin regime was not in place. And, sadly, the Putin regime is in place – the hopeful developments of the Yeltsin period (an independent media, directly elected Governors, even proposals for trial by jury) were destroyed by the great inflation and bank collapse – and Yelstin himself helped put Putin in power (much in the way that a drowning man cletches at a snake). Marxism did not (repeat not) return to Russia – but what emerged under Putin is not even the “half free – half unfree” society one sees in most of Europe (including Finland) and elsewhere (including the United States – which is no longer even the mostly free “functional” society it was in the 1950s).

    Russia does not really have an independent civil society – it looked like it was going to get one, but it all ended (at least for the present) in “might have beens”.

    As for Finland. As the “True Finns” point out – Finland would be much better off out of the European Union (both in economic terms – and in terms of its political independence), but (as with Estonia) the local chapter of the international establishment elite (political, academic, media, and even financial) uses various tactics (including fear of Russia) to keep Finland chained to the E.U.

    It is a double lie.

    Firstly, vile though the Putin regime is, it has no designs on Finland.

    And even if Putin did have such designs – the European Union would (and could) do nothing about them.

    The idea that the E.U. has “kept the peace in Western Europe” (the basis of the recent Nobel Prize) is just a vast lie (taught in the schools – and pushed by the msm).

    What has kept the peace in Western Europe since World War II has been NATO – i.e. the United States armed forces (who did not go home after World War II as they had gone home after World War One) and the allies of the United States – such as Britain.

    Should the United States go, de facto, bankrupt (as seems likely over the next few years) things will change in the world – and not for the better. When Britain failed economically the United States was there to take over much of the burden – no such friendly power exists now.

    And this will hit Finland – as well as the rest of the world.

    In general I would advice people not to be in Europe (if you can avoid it) over the next few years, as this area is likely to be harder hit than (for example) New Zealand.

  2. By the way the Finnish refusal to go beyond the Finnish border in the Russian Civil War may well have paid a part in the failure of the Whites against the Reds (although, to be fair. the Finnish position was that they had quite enough Reds within their own borders to worry about).

    As for the de facto Soviet account of the Continuation war given above (not even mentioning Soviet mass murder of Russians as well as Finns and, absurdly, attacking the Finns for mistreatment of Russians) – it is best that this pass without much comment.

    Other than to make the military point that the Finns refused to help in the siege of St Petersburg (called by the Communists “Leningrad”) indeed technicaly it was not a siege at all – as enemy supply lines (over Lake Ladoga) were never cut (although the Soviets choose to mainly supply ammunition and so on – rather than food for the civilian population).

    The situation was oddly similar to that in “Stalingrad” – when the German army originally arrived (in 1941 in the case of “Leningrad” and in 1942 in the case of “Stalingrad”) they could have just walked in (with little, if any, resistance). However, in both cases the Germans (or rather the National Socialist leadership) choose not attack at once (indeed in the case of “Stalingrad” they wandered off southwards – only later returning and launching a full scale attack) thus giving the Soviets time to massively rush in men and military supplies.

    Also in neither case were Soviet lines of (military) supply cut (the first rule of any “siege”) – for example in the case of “Stalingrad” the lines over the Volga river were never cut.

    Adolf Hitler clearly showed his lack of a basic military education. As he did in so many other ways – as with his demand that German bombers have two engines (rather than four).

    The German military should have killed Hitler – and the rest of the National Socialist leadership. Especially Himmler – whose demands for trains and so on (for his extermination activities) doomed large numbers of German soldiers to freeze to death, without supplies, on the Eastern Front.

    The overall Nazi policy of treating Slavs as subhumans aliented the massive support the German army could have had against the Soviet regime.

    In the end – race based socialism is as insane as class based socialism.

  3. What a bitter little commentary.

  4. Paul Marks, Russia can easily be a geopolitical partner – it is not trying to dominate us politically or legally as the EU states are, and it is an economy with long-term prospects, and one that allows self-employed to register for very minimum taxation (a set fee per year). The IMF’s figures show that non-oil revenue in Russia is 26% of GDP (they get another 11% from the oil sector – but for most ordinary people the fact is the tax burden is still low). Russia does not have an independent civil society – but neither do we, and nor does Finland.

  5. When you talk of Finns supporting “progressive” causes abroad, it may be just their rulers, or at least the sort of minority you find in any country that gets involved in meddling do-goodery.

  6. Mr Webb your failure to see a difference between the Putin regime and Finland, or Britain, is not good. In fact it is very bad – and indicates terrible judgement. Although, of course, the real victims of the Putin dictatorship are the Russian people (he has no interest in Finland).

    The failure to understand the difference between a social democratic country (like Britain or Finland – half free and half not free) and a dictatorship in which civil society is crushed, is such a crass error that it is hard to overstate it.

    Rob – Mr Webb actually hints at what you say (although he may not know he does) as he says that Finns tend to be, in some ways, conservative and wary of outsiders.

    Of course the people I know who have actually been to Finland say the Finns are very friendly and helpful (apart from when drunk – Finns can drink to a level that even shocks Russians).

    However, anti Finnish accounts may be following the example of Lillian Hellman (the Soviet apologist – and famous Hollywood personality) whose response to the Soviet invasion of Finland was to mock those who expressed support for Finland and to say “I have been there and it seemed a nasty little Fascist Republic to me”,

    Dear Lillian had, of course, not been to Finland.

  7. For those uninterested in political dictatorship or in human rights in general, and only interested in economic policy (although, like Rorthbard, I tend to believe that human rights are property rights).

    See the Heritage Foundation’s Index of Economic Freedom. Putin’s Russia does not score highly.

  8. Entering the continuation war may have saved Finnish independence because Germany would probably had attacked through Finland anyway. It was better to be an ally of Germany than a conquered province of Germany and later the Soviet Union like the Baltic states.

    I as a Finn living in Finland found your depiction a bit odd. Finland is actually quite a multicultural state nowadays with a growing number of third world immigrants. It has never been very xenophobic. Many if not most employers are happy to employ foreigners. Finland is also relatively liberal by world standards although statism and socialism have of course made inroads in Finland, too, as well as in England.

  9. Where someone comes from and what the colour of their skin is does not matter – what matters is the loyality in their hearts. If someone loves Finnish culture and if politically loyal to the idea of the Finnish nation state it would not matter if they were bright green and from the planet Mars.

    However, I rather doubt that many of the immigrants are motivated by the above. More likely they are there for the more than 50% of GDP that goes on government spending in Finland. And, of course, the situation is the same in Britain and Ireland.

    Finland has suffered terrible economic collapses in the past – for example the mid 19th century famine that hit so many nations (although the Irish one tends to overshadow all other – due to scale). Sadly if the government spending (the Welfare State) can not be rolled back, history will repeat itself.

    I think Mr Webb’s point is that although Russia has a state controlled economy (Putin crushes any business that does not support him – and even state ownership is quite common) its level of government spending is low (ish). The Russian people get little – so they will not miss it (so much) when they do not get it anymore. People in Western Europe (including Finland – and Britain and Ireland….) may find it much harder to adjust to not having free stuff.

    Of course Putin promises higher pensions, more free health care (in Russia health care is theoretical free – but ordinary people who do not pay bribes and so on get little or nothing, just as was the case in Soviet times) and so on – but, for once, I actually hope this liar is lying. For the good of the Russian people one must hope he is lying (as getting them dependent on free stuff would be a terrible thing – as the age of free stuff is soon comming to an end).

    I remember listening to a Finnish grandmother who had faught in the war with the Soviets (the lady personally killed many – although not officially part of the combat army) – she could ski (as all Finns could then) and lived off the products of the products of the forests and lakes (even in winter there are things to eat – if one knows what to do).

    How many Finns still know how to do it? Hopefully more than British people – we tend to know nothing about how to survive.

    On the Continuation War – Mr Webb speaks of the attack on M. But it was half hearted.

    The Finns were not really interested in operations outside their borders (reclaiming Finnish land). And the Germans were dominated by a man, Adolf Hitler, whose mind always drifted south – making the same mistake as his Japanese allies.

    One can have vast victories in the south (the Japanese took huge areas of Asia and the Pacific – the Germans took all of the Ukraine and beyond it), but it is the north that really matters. If Germany could not take St Petersburg or cut the artic convoys to M. (the “factories beyond the Urals” were really, of course, in Coverty and Detroit) then Germany was not going to win the war. Just as all the victories of the Japanese did not matter – if they dare not even face the tank armies in SIberia (of course the Soviet raid in August 1939, yes a month before the Nazi invasion of Poland, showed the Japanese their weakness – but they did nothing to correct it).

    If an army fears the north wind from the Artic in winter, then it has no true strength – not for the domination of Europe or of Asia (for Korea and so on face winter also).

  10. I don’t think anyone should complain about the collateral the Finnish government is demanding. The eurozone bailouts should not happen anyway because they are illegal and just kicking the can and growing the debt. Finland has no legal obligation to participate in the European Union’s bailouts but rather an obligation to block them as illegal and harmful to the Finnish taxpayers, which obligation the Finnish government is unfortunately shirking. The Finnish taxpayers deserve some ease.

  11. Yes I ignored the complaint about “collateral” as the complaint was too absurd. There should be no bailouts.

    As for Ireland – when the Anglo Irish Bank got into trouble the government of the Republic should simply have said “this is a private bank – it, and its depositors, are not a financial liability of ours”.

    However (our of fear of the Germans – or because members of the F.F. party had been entertained by the big men at Anglo Irish bank one too many times) the government of the Republic decided to underwrite (100%) every liablity of a “private” bank. After all when the Presbyterian mutual went bust in Ulster no one came riding to the rescue – some people I know near Antrim lost their savings (and no one has ever given a f….. about these “Rednecks” on either side of the Atlantic as much in West Virginia or Kentucky as in Antrim or Ballymena – Dublin hates them, but London hates them also, and so does Washington D.C. and always has, they are the only people on Earth even more hated than Jews, and they secretly love being hated ).

    The Irish government bankrupted itself (the political “class” betrayed the Irish people – as “enlightened elites” nearly always betray ordinary folk, everywhere) – its bankruptcy should be of no concern of anyone else.

    Either the Republic of Ireland is an independent nation or it is not. If it is – it should have told German creditors (and the big men at Anglo Irish bank and so on) to go jump in the nearest lake (“what part of the word p-r-i-v-a-t-e bank do you not understand lads”).

    If Ireland is not an independent nation (if it wants bailouts and such) then the schools should stop teaching about the “noble struggle for independence from 1170 onwards” – Brussels is no more an Irish city than London is. Rule by the E.U. is not “independence”.

    Not for the Republic of Ireland, not for the United Kingdom, and not for Finland.

  12. Matti, you are in the euro. You made the decision to join – so you have to defend your currency. In fact, it is not Greece, but Finland asking for handouts in the form of this bogus “collateral”. Pay up – or leave. Stop asking for special terms.

    As for multiculturalism – well up until the 1990s there were very very very few non-Europeans in Finland. Bearing in mind it takes 8 years to get citizenship in Finland, most foreigners not born in Finland don’t have Finnish citizenship. These figures are from

    of a population of 5.4m in 2011, there were 183,133 foreigners – a small proportion compared to the UK, but up by 9% compared with 2010, so Finland probably will eventually catch up with the UK in terms of multiculturalism. The largest group of foreigners are Estonians, 34006, followed by Russian 29585 and Swedes 8481. The largest non-European foreign groups are Somali 7421, Chinese 6159, Iraqi 5742, Thai 5545, Turkish 4159 and Indian 3793. Note that Finnish figures are more reliable than British ones owing to the population database, where you can’t get utility services unless you are in the database. By contrast, in the UK, even the police don’t know who lives where.

    These figures don’t include foreigners who have Finnish nationality (therefore not “foreigners” in bureaucrat-speak), whether by naturalisation or by being born in Finland. In 2011 4375 citizenships were granted, of which 1646 to Russians, 299 to Estonians etc – relatively few such applications were granted to non-white nationalities, eg the 90 citizenships granted to Somalis in that year.

    Another way of looking at it is this ( of the 5.2m Finnish citizens, 5.142m had either Finnish Swedish or Lapp as their native tongue, and 75,000 had another language. This indicates there are around 75,000 citizens of non-Finnish extraction, in addition to the 183,133 foreign citizens in Finland. Say 258,000 non-Finns (I am talking about their real ethnicity, not citizenship status) of a population of 5.4m.

    However this link ( shows that Russian-speakers are about 57,000, Estonian-speakers about 33,000, English-speakers about 13,000, German 5,000, Spanish 5000, French 3000. The largest non-European language is Somali, with about 14,000 speakers. So it seems fair to say that of the 258,000 non-Finns around half are from elsewhere in Europe and the country is about 2.5% non-European – with nearly all immigrants in Helsinki and Turku – and very very few elsewhere.

    The country’s multiculturalism is on a wholly different level to the UK – a comparison of Helsinki to London would show that. But the legal enforcement of multiculturalism is what I was talking about – because the presence of non-Europeans in a country doesn’t make it multicultural per se – in the UK to refuse a job to a foreigner simply because he was a foreigner would be a major offence, and the same thing with housing. But foreigner forms (eg The Finland Forum) show that even European foreigners with fluent Finnish are frequently knocked back for low level jobs (eg floor cleaning) because they are not Finnish. This simply could not openly happen in the UK. A friend of a relative of mine in Helsinki looked for a flat in case I moved to Helsinki – we found one, only to be told the agency refused to deal with foreigners. This is just not possible in the UK.

    I would guess that Matti is aware that foreigners are refused jobs and accommodation in Finland very openly because they are foreign. This is actually what ought to be legal to happen in the UK too, in a libertarian sense. But unless Matti lives in Finland without speaking to any Finns or reading any of the newspapers or watching TV – unless he lives in a hole as a hermit – he must know what happens in Finland. Similarly, reading the Finland Forum – foreigners who take up EU rights to social welfare in Finland are told to get lost by the KELA office. This is also what OUGHT to happen in the UK – but it is not what actually happens. On the ground, the Finns are firmer than it appears on paper (they have the same laws as us as they are in the EU too).

    I have been told by many Finns including relatives that the Finns are “reserved” etc. Some foreigners in Finland told me they live fairly isolated lives in blocks of flats where all the Finnish neighbours speak English and they all refuse to even say “hello” to the foreigners. I know smiling and saying hello to strangers is an English habit – but they told me of hostility from neighbours if you try to say hello, along the lines of “I don’t know you, so why are you smiling at me and saying hello to me?” This is not “reserve”, but unfriendliness. I would say “I am bloody smiling at you because I’m your neighbour, we belong to one community, and I recognise you: get over yourself!”

    • Matti Linnanvuori

      Defending the euro would rather mean defending the original relatively sound principles of no bailout and inflation targeting instead of unsustainable constant bailouts and money-throwing. I agree that the collateral demands are silly political stunts and Finland should rather block the bailouts but they could theoretically protect taxpayers.

      The required residence period for citizenship has been shortened to four years. I have no experience of discrimination but multicultural workplaces. Governments even practise affirmative action. Surely there is discrimination but it exists everywhere. It is illegal in Finland, too.

    • I have not heard of social security officials illegally refusing welfare payments to foreigners but I have heard a lot about foreigners getting welfare. People can make an official complaint or report to the police if they are illegally refused welfare.

      There is this myth of the reserved Finns but it may be just a myth. I have heard similar stories about New Yorkers being rude. So it could be common for such big cities. The Finns respect the private space of others more than many other cultures and that can be interpreted as hostile.

  13. Mr Webb you appear to be under the impression that having the same currency means that one government should pay another government’s debts.

    You are quite mistaken. The debts of California are not the debts of New Hampshire – and the debts of Greece are not the debts of Finland.

    The bankruptcy of California should not mean that the Dollar can not be used as a currency any more. Indeed some States (in the 19th century) did go bankrupt – for example Pennsylvania (then the second most populated State) went bankrupt in the early 19th century, this did not mean the Dollar was not used as currency anymore.

    When the Greek, or any other government, asks the Finnish government for a bailout the Finnish government should simply say “no”. It has got nothing all to do with “defending the currency”.

    As for Finnish welfare offices turning immigrants away. Well surely that is a good thing?

    Do you want Finnish taxpayers to pay for millions of people? They would if the idea that “anyone who comes via an E.U. country, with E.U. papers, gets welfare” becomes accepted practice.

    “But that is what we do in Britian and Ireland”.

    Well then, Mr Webb, we should not – E.U. regulations go hang.

    Get a grip man.

    One vice the Irish have never been accused of (till now it seems) is having an obsession with obeying rules and regulations. Do not go all Prussian on us.

  14. As for Finns prefering to employ other Finns – that is an example of something called “freedom of choice”.

    You may have heard of it Mr Webb.

    Specifically this comes under “freedom of association” which must include the freedom to not associate (to “Boycott” – heard of that have you?)

    You are not asking for some sort of “anti discrimination” principle are you?

    I still can get over your (daft) idea that it is Finland that is asking for “handouts”, as using the same currency means being responsible for the debts of everyone else that uses it, that this is “defending the currency”.

    I see – so if we both use Pounds and pence, then I am responsible for your debts and you are responsible for mine.

    This is not “defending the currency” this is cracked-in-the-head stuff. The sort of thing one can hear on BBC programmes.

  15. Paul, the euro currency has allowed efficient northern economies to benefit, as otherwise they would have had appreciating currencies. Clearly, Finland is prepared to pocket THAT effect, while claiming that what has happened to Greece is nothing to do with them.

    If the ECB and EU have made loans to Greece, then if Greece goes bankrupt, Finland should suffer the consequences via its share of the ECB and EFSF funds. It should maybe have insisted that no bailout were given in the first place, but not that a bailout took place using ECB funds and then that Finland should be the only country that could not suffer the results if those loans went bad.

    If the southern eurozone countries default, that will effect the northern banks, including the Swedish etc banks that are operating in Finland.

    Matti, you said: “I agree that the collateral demands are silly political stunts and Finland should rather block the bailouts but they could theoretically protect taxpayers”. Yes, you formulated that correctly.

  16. On the point of freedom of association: yes, there ought to be freedom of association. There are actually some good reasons for not wanting, e.g., to rent a flat to foreigners. For a start, foreigners who fall behind on the rent and then disappear abroad are untraceable, and the money will never be got back. Whereas, locals can be traced and forced to pay if they have enough money to do so. Also, foreigners in Finland may act badly, e.g., with loud music, and some accommodation agencies may have got fed up of dealing with bad behaviour by tenants who don’t adapt to the local culture. So there are good reasons why someone might not want to deal with foreigners – and libertarians do support freedom of association. But on the other hand, to support it as a right is not the same thing as saying libertarians have to admire it or like it in all circumstances. E.g., if a local shop had a sign on saying “no black people allowed in the shop” – I would support their RIGHT to do so, but regard them as more than a little culturally inferior for having such a sign on the doorway. A guesthouse that didn’t allow homosexual men to book in – that is their right – but libertarians who support their right to do that don’t have to admire them for exercising that right…

    I wasn’t planning on moving to Finland, but this person speaking to me on Skype got enthusiastic about the possibility and she started looking for flat near her, and found one for me – although I said I wasn’t going to move there – but she phoned up the accommodation agency and found out they didn’t take (European) foreigners anyway – I would regard this as their right, and would understand they might have reasons, including previous bad experience – but it is not a concomitant conclusion that I would have to like or admire an accommodation agency that had such a “rule”. I could look down on them for it, actually, if I felt like it. I might draw conclusions about the people their or their national culture. Nothing in freedom of association forces me to LIKE every exercise of freedom – this is what Paul misunderstands.

  17. the people their —–> the people there

  18. Pingback: Randoms « Foseti

  19. So you support segregated restaurants and making blacks sit at the back of the bus?? What more could racists ask?


  20. “So you support segregated restaurants and making blacks sit at the back of the bus?? What more could racists ask?”

    I don’t support state intervention to STOP business owners from offering their services to whoever they wish. But, if you read my comments above, you will be aware that I am not saying I would admire all such policies by private business. You can’t really be a libertarian if you think the state should force businesses to deal with customers they don’t want to deal with.

  21. Finland and other northern European states could easily depreciate their currency at will just like Switzerland has done by pegging its currency to the euro, so adopting the euro has not been necessary for that. But I don’t think the inflationary euro has been good for Finland: the inflation is too fast, which has harmed euro savers. The Finnish government claims that the Finnish economy would go into a depression if there were no bailouts, so your claim about it is not true. I don’t think that claim is true but the bailouts hurt Europeans more than help because they further add to the already unsustainable indebtedness. Finnish banks and other institutions and individuals have not been very involved in the crisis-hit economies, so Finland could rightly argue that the bailouts are mostly just aid to central European banks and that Finnish taxpayers should not be burdened for that. Finland does not have collateral that fully covers the Finnish stake in the bailouts.

  22. The Northern European states could have pegged their currencies to a weak euro – but then there would have been no euro to peg to if the Northern states hadn’t taken part in the project.

    Finnish banks may not be directly involved with Greece and the others – but the interconnectedness of the financial system means that a collapse of German and Austrian banks would affect all banks in Europe.

    Look – the ECB – which Finland has a share in – has lent money to Greece. If those loans go bad, Finland should suffer the consequences. As you said, Finland’s collateral is not total, so they would suffer. It is totally wrong for a creditor to be 100% shielded from any possibility of his loan going bad – as the concept of “moral hazard” applies to creditors as well as to debtors. Creditors must take on some risk. As a creditor, through the ECB, Finland has taken on risk in Greece and other countries – and if Finland doesn’t want to take on this risk, they should be vetoing the bailouts before they get off the ground.

    Personally Matti, I would like to see a collapse of the euro, and I would welcome a large negative affect on all eurozone members, including Finland, because that is the only way politicians are taught not to play politically-inspired economic games like “monetary union”.

  23. Small point about freedom of association – if a company wants to receive some form of state benefit (e.g. limited company status) then the state has a right, neigh, an obligation to extract some form of recompense for the public good. I would suggest a policy of non-discrimination.

    Likewise, there is nothing to stop a local council offering an incentive (e.g. reduced rates) to any company that provides its service to the whole community. Assuming it has any right to impose rates in the first place…

  24. It’s dubious to say that something like limited company status is a “benefit” and thus justify State intervention in that company’s operations. We are all forced to participate in the State’s systems whether we like it or not. I have a limited company. It gives me no pleasure to have to pay an accountant, nor to submit details of all my financial dealings, etc, to the State. I have one because under the current statist system, I have to be some form of legal entity and being a limited company was the one i chose from the range of options offered by the State. I would prefer to make no such choice and have the government fuck off out of my life, but that option isn’t on offer, sadly.

  25. Ian B, that’s just bullshit. You could have been a sole trader. The personal advantage you get by being a limited company (and having it a separate legal entity from you) is enormous and the cost to society potentially huge if the company fails with huge debts.

  26. Keddaw, maybe. But the primary reason for it (since I’ve borrowed nothing) is simply that in a business ecosystem as it is, rather than as I might like it to be, is that sole traders look somewhat Mickey Mouse (man with a van trading as…) and it makes a “PR” difference to have “LTD” after the company name.

    I’m not entirely sure what the “cost to society” is if a company fails. There’s a considerable cost to its individual creditors. But they aren’t “society”, are they? All that limited company status does really is implement a formal system of saying “fuck off, I’m skint, you’re not getting any money, sucks to be you” rather than doing it ad hoc each time somebody borrows more than they can pay back.

    There is actually a very good Libertarian argument that debtors should not be legally liable for their debts, and instead just work on the principle that lending people stuff means you may not get it back. In other words, abolish limited liability by abolishing liability. The private sector could then implement a private policing system to punish debtors without wasting time and money in the courts; indeed, it already has. It’s called Credit Ratings. If you don’t pay your debts, your punishment is being barred from future borrowing. It’s a pretty good system too, and no need for a State or its courts at all. One can reasonably argue that the Credit Rating Agencies are anarcho-capitalism in action.

    But, this is way off topic now and DJ will get annoyed, so my apologies to him in advance.

  27. Sole traders have the least government overview, but you made a PR/commercial decision not a “government fuck off out of my life” one.

    “All that limited company status does really is implement a formal system of saying “fuck off, I’m skint, you’re not getting any money, sucks to be you””
    No, what it says is “my company doesn’t have enough assets to pay you off, so even though I would gotten all the profits if things had gone well I have transferred the risks onto you creditors so you can all eat shit and I’ll keep all the money I already have.”

    All of which, as you say, has little to do with Finland. Although we could get it back on track by comparing debtors’ prisons to the Gulags…

  28. Nobody is transferring risks onto creditors. Being a creditor is inherently a risk, and it’s that risk that creditors have to assess before lending. On that basis, it shouldn’t be a matter for the courts or the law unless one can make a case for deliberate fraud.

    The share of the profits “If things have gone well” that the creditors get is the interest. That’s how they set an interest rate.

  29. Ian, you mean creditors like staff who haven’t been paid for work done when the company goes bust? Or other firms who have sold items but with the standard 30 day payment terms? Or the taxi firm who sent in an invoice? Or the electricity and gas companies who haven’t received their bill? Or the VAT man who hasn’t received his payment, or the PAYE and NI your firm has been withholding hoping to make it through the current problem?

    Or do you think creditor only means banks who lend money at interest?

  30. How do you intend to pay these workers and taxi firms when there is no money to pay them, Keddaw?

  31. Well, as you drive off in your Jag to your multimillion pound mansion I was thinking that perhaps you should be sued since it was your company.

    But since it’s a limited company we’re stuck, workers are screwed, suppliers are screwed and the rest of us have to cover the tax and NI that your company didn’t pay.

    That’s the social cost of having limited companies and that’s why there is a valid reason (not necessarily compelling) to have society impose various requirements on such companies if you want these protections to exist.

  32. They’re screwed anyway, keddaw. The company just failed, remember. The lesson in such a situation is to demand prompt payment of bills and wages, and not allow large amounts of credit to build up.

    As to the State not getting its tax and NI, well, here I am with the world’s tiniest violin.

  33. And the owner is running away with millions (which may or may not have been taken out of past company performance) even though the company he owned promised to pay people and didn’t?

    Where’s the moral hazard? This is the corrupting side of capitalism and while there are good arguments for it being beneficial there are equally compelling arguments for society getting something for allowing this state of affairs to exist even if it’s as little as serving Jews, Irish and blacks in your limited company.

  34. I don’t quite see where forcing somebody to “serve Jews, Irish and Blacks” is going to help your poor workers who were left without a month’s wages. It seems a bit apples and oranges to me…

  35. 1. Keddaw is implicitly admitting that small businesses, e.g. corner shops that are not limited companies, should have freedom of association. They should all have freedom of association actually.

    2. Credit ratings – this is part of the financialisation of the economy that we are supposed to be addressing with reform of the banks. There is something wrong with a society where so many millions are living on credit as a matter of course. I would shut down the credit ratings agencies – and make it illegal for banks to circulate negative private commercial information about you to all and sundry – but if that is not workable, then a scaled-down version could be implemented (but see point 3 where I admit Ian has a point). At the moment, renting a flat requires a credit check, which is just another fee for nothing, and I am left wondering why accommodation agencies can access credit ratings files at all in the first place. The deposit on a flat should cover any problems – and it should be easier and quicker to move people on who don’t pay the rent. Credit should be like it was in the 1960s: rarely given and only on a known-customer basis, as decided by the bank manager and not a computer system. Credit files are essentially a way of computerising the whole thing and taking the bank managers out of the equation – my local bank branch has cashiers only, but no one you could talk to about anything – as it is all online and over the phone now. There is nothing anarcho about credit files – the banks are effectively part of the state nowadays – which you should have realised during this current economic crisis.

    3. Whether debt should come before the courts – a good question. Maybe it depends on the level of the assets that you have that could pay the debts: most people who have CCJs against them have no assets worth taking and shouldn’t be in court in the first place. (In fact, many people with serious debts have already paid multiples of their original debts via constant interest and charges – on any common-law basis, the debts would be thrown out of court.) I could accept the maintenance of the credit-ratings system if the quid pro quo were that debts were only rarely actionable in courts – in that case it really would be a private and non-state system, with genuine risk on the part of the creditor.

    4. Apart from private debts, part of the problem is the fact that the courts spend a lot of time with the council tax – it is shocking that 4m are taken to court a year for the council tax – and the magistrates agree charging orders for hundreds of people at a time based on computer printouts and no examination of individual cases. Judicial systems shouldn’t be designed to make it easy for councils to sue so many millions – if this is how the system works, then surely there is a problem with the council tax in the first place (including the fact that most people don’t use many of the council services – I would rather pay no CT and be charged per service I use, assuming my income tax bills were also reduced as the block grant to local authorities was eliminated too).

    5. Seeing as you nearly touched on the subject: bailiffs. The only bailiffs you really need to worry about are the ones collecting “priority debts” including income tax and council tax (why are these priorities?), as they can force entry. Although if I served on a jury, I could not convict a householder for using extreme force against a home invasion by a bailiff collecting even priority debts. Maybe an article about debt would be a good idea – there is the germ of one in my mind now – I don’t see how ordinary possessions should be commandeered by bailiffs (eg having 4 chairs in a house with 3 people in is regarded as excessive, and so they take the 4th chair) – unless something expensive, e.g. jewels in a safe, is in the house, I see little in an average house that ought to be taken by bailiffs, especially when the tat they take is sold for pennies at auctions, any money made is set against bailiff van fees, and the original debt not reduced at all or even increased as a result of the bailiff’s visit! So I see the bailiff scam as essentially no different from the wheelclampers and other wide boys that are private companies benefiting from abuse of state power.

  36. I’ll say it explicitly if you want…

    Any person, or group of people owning anything that does not receive public funds has the right to associate, or not, with whomever they choose.

    As soon as they use public funds then you would, in effect, have people subsidising people to discriminate against them and that just ain’t on.

  37. DJ, I again apologise for derailing the thread. But since you’ve joined in the derailment :) I’ll make a couple of points.

    I have no problem with Credit Ratings on private debt. The issue of those Agencies’ involvement in State debt is another matter for libertarians. But to me, freedom of association would include the right for people to share the information that “Joe Bloggs is a bad payer” with others. In such a situation, it’s inevitable that “reputation clearing houses” would arise to consolidate that information- the CRAs.

    In general, such a system will be reasonably self balancing. There is some scope for malicious reporting, but in general people who make money by lending money will not have an incentive to blacklist good people, since they get no benefit from that. Nonetheless, some kind of appeals process might be in order, but that also might be suited to a court/legal process.

    This is all predicated on the assumption however of a “libertarian approved” free market banking system, rather than the current statist morass.

    A criticism of making general debt not recoverable might be that this would make lenders more reluctant and reduce the availability of credit. I see this as a bug, not a feature. It is not so long ago (well within my 46 year old living memory) that consumer credit was seen as something rather disreputable (“they got it on the HP” type gossip) and most people had none, and indeed many ordinary people did not have even bank accounts. There does not seem to be good evidence that the explosion of consumer credit has been an economic benefit; indeed I don’t think I’m alone in believing that it is massively economically destabilising. In most cases, taking out credit to fund consumption rather than investment is not economically rational. Some people pay their credit card off every month, but they are not the people who provide the profits to the credit card companies; it is those who run up a massive debt and then pay it many times over in interest payments, unable to ever pay off the debt itself. So, less credit would seem to me to be a feature, rather than a bug.

    Also, I agree with DJ’s last paragraph regarding bailiffs in its entirety.

    Back on the question of obligating businesses to trade with those they do not wish to trade with, it seems to me that people only want to restrict them in certain ways. For instance, an apparel company printing tee-shirts would be obligated to trade with homosexuals. If they refused to print gay rights tee-shirts, they would currently be open to legal action. But if an anti-gay group asked them to print “gays are evil” tee-shirts, should they be obligated to do so also, or is that okay? I am an artist, and once turned down a fairly lucrative offer to draw some comic strips for a website, because I found the content morally objectionable (violent treatment of women that I would be ashamed to be associated with). I doubt anyone would say I should have been forced to draw those comics; but I suspect that if I were to refuse to draw, say, a feminist comic strip, I would be accused of “discrimination”. So, these provisions do not seem to me to be about preventing discrimination, but only discrimination against certain state-defined groups.

  38. We actually missed a good opportunity in 2008 to let the banks collapse – we could have done what Iceland did and forced writedowns on the banks – even if they were forced into liquidation. That way: quick deleveraging. It was stupid in the extreme for the taxpayer to buy the banks…

  39. Agreed Mr Webb – Anglo Irish (and the others) should have been allowed to go bankrupt. Sadly Iceland seems to have used taxpayers money to set up new banks – which is silly (to put it mildly).

    If banks are economcially viable then people will risk their own money to create them – and if they are not economically viable then there is no point in having them. It really is as simple as that – no need for taxpayer subsidies. Perhaps a country of a couple of hundred thousand people (Iceland) actually does not need big banks? But it appears to be blasphemy to suggest this.

    I do not agree with your claim that Finland benefited from the Euro or the European Central Bank and therefore owes people XYZ – in fact I think you were engaged in what my Grandfather James Power would have called “blaney” if I have got the spelling correct (he actually kissed the stone – although someone had to hold his feet for him to twist round to do so).

    Finland owes the ECB (which has broken its own laws) nothing. It is all waffle and spin.

    Still I am glad we agree on freedom of association.


    How on Earth does a bus company profit by getting blacks to sit at the back? You must know that the Jim Crow Laws were just that – statutes. Statutes past by State governments to stop “evil” money grubbing companies trading with blacks on the same basis as whites. Racism costs money – no “greedy capitalist” would engage in it if there were not regulations making them do so – see Gary Becker “The Economics of Discrimiation” and W.H. Hutt “The Economics of the Colour Bar”.

    Limited liabilty.

    Hell’s teeth – how many times do I have to go through the matter on this site?

    Corporations and limited liability are NOT the creation of state laws (although YES there are state limited liability statutes in the 19th century) – they have been known to Canon Law and Law Merchant for a very long time, back in the days when “states” were just hairy Warlords.

    If you want Ian B. to risk his shirt then PAY HIM TO DO SO.

    No one makes you trade with a limited liability enterprise – if you are willing to pay HIGHER PRICES people will risk their shirts (and their underpants) to trade with you.

    Go get your insurance from Lloyds “names” (and pay through the nose for the unlimited liability they risk) and so on.

    The only thing unlibertarian about a limited liablity club, church, or trading company is if there is some sort of deception involved – i.e. you did not know what you were choosing to trade with.

    If you not willing to pay higher prices (and accept less choice of products) then be content with what money there is in the “trading pot” and do not go after some little old lady in Wells who owns one share in the enterprise.

    By the way – if any actual person in a limited liability enterprise cheats you (or is negligent) you can still sue them PERSONALLY (limited liability enterprise – or not).

  40. A bus company will profit if white people prefer to use buses with segregated seating. It’s as simple as that. Similarly, a housing estate which is initially 55% segregated will end up 95% segregated if there’s free transfer of properties. I think the analysis was done by Crow and Kimura.


  41. In which case Jim Crow regulations would not have been passed Tony.

    By the way – does the cult of “anti discrimination” apply to black clubs and to black associations?

    No of course it does not.

    But if you want to run whites only busses – it is no business of mine.

    And using violence to prevent them is no business of yours.


  42. Any state can depreciate its currency at will – the euro is not required for that. Finland could peg its currency to the Greek drachma if its politicians were crazy enough. More realistically, they could just drop the interest rates to zero or print a big load of money.

    It is immoral for Finnish or any other country’s politicians to make taxpayers liable for Greece’s or any state’s debts. I fail to see the morality in making it so. The speculators in state bonds take a risk and they should bear the risk – especially some other country’s taxpayers should not.

  43. “It is immoral for Finnish or any other country’s politicians to make taxpayers liable for Greece’s or any state’s debts. I fail to see the morality in making it so.”

    In which case – veto the bailouts – or if you can’t, leave the euro.

    But if Finnish money is lent to Greece, it is “moral hazard” to claim that Finland as a creditor cannot take on any risk.

    As it is, Finland is one of the creditors through its share of the ECB and yet they claim they alone cannot suffer any risk.

    As you say, Matti, Finland could have depreciated the markka, but it is interesting how the Northern states STILL refuse to understand what has happened to Greece. Simply depreciating the markka would not have worked in the same way – the euro has another aspect to it, which is to have allowed Greece and others the same interest rates (set by the ECB) and the same bond interest rates (until recently) as the northern countries – and by stoking a boom in Greece and in Southern Europe, Finland has been able to benefit along with all the other Northern states.

    Finland has not just benefited from a low euro, but also from the low interest rates and bond rates in countries like Greece, Spain and Portugal, which helped to boost demand for Finland’s exports.

    You are being obtuse – you have gained from the euro at Greek expense. If I were you, I would walk away from the euro now, but as you know, Finland is only in the EU in the first place in order to drag the EU into your standoff with Russia….

  44. Matti, on your website ( you claim to be: liberaali, panarkisti, utilitaristi, transhumanisti, vapaa-ajattelija, edistyksellinen, egalitaristi, piraatti.

    Liberal, ???, utilitarian, transhumanist, freethinker, advanced, egalitarian, pirate. I’m assuming panarkisti means “anarchist”, as there is no word panarchist or pan-anarchist in English.

    Yet this is confused – as egalitarianism is the opposite of genuine liberalism, because it requires state enforcement. Also, none of this is freethinking, as it is just state ideology. And if you were transhumanist, whatever that means – you would have some sympathy with the Greeks.

    As far as I can see, the Greeks don’t owe the ECB, the EU or the IMF (the troika) a cent!

  45. Panarchism.

    Also, transhumanism is a general suite of ideas relating to humans breaking free of/beyond the human condition via technology. I am myself something of a transhumanist, since I believe that in the near future we will be able to abolish ageing and death from natural causes, leading to a fundamental and possibly nigh-utopian alteration to the human condition; one of the saddest parts of reality is that humans spend most of our lives, at this stage of human history, older than we’d like to be, on the road to senescence. Changing that should be our first priority as a species. Anyway, transhumanism is that kind of thing. Also, stuff about having an iPhone implanted in your brain or something, but I don’t go for that side myself.

  46. There is no legal obligation stemming from euro use to participate in bailouts – quite on the contrary there is a legal prohibition in the treaty. Thus there is no need to leave the euro if you can’t block the bailouts.

    What kind of moral hazard would it be to claim that Finland as a creditor cannot take on any risk? At any rate, Finland has taken a lot of risk already and the government seems to be full of yes-men that take on any risk that Brussels tells them to. They absolutely do not claim they alone cannot suffer any risk. The interest rate of Finnish government bonds is higher than that of e.g. Sweden, Denmark and the United Kingdom because of the Finnish commitment to the bailouts.

    How do the Northern states STILL refuse to understand what has happened to Greece? The benefit from the unsustainable boom has been more than countered by the harm done by the recession and the bailouts. Finland has suffered from the too low euro by way of inflation. It is unfortunate that the Greeks have been made to pay for the mistakes of the European Union, but it does not follow that innocent Finnish taxpayers should pay for the mistakes.

    Russia is not the only reason for Finland to be in the European Union. I have not seen that reason being mentioned for a long time. I remember that a former war veteran, president Mauno Koivisto mentioned it, but it is not that important for most people.

    “Panarchist” is an English word, though a rare one. It is not exactly the same as anarchist but means the individual right of secession.

    “Edistyksellinen” means progressive in English.

    I am an egalitarian in the Enlightenment sense, famously expressed in the French revolution, of equality before the law. That equality does not require state enforcement but actually it is the state that is the prime enemy of equality before the law by having a ruling class and a ruled multitude.

    Transhumanism is an extension of humanism to other sentient beings like hypothetical sentient robots.

    I have a great deal of sympathy with the Greeks. In fact I have relatives living in Greece.

    I agree that the Greeks do not morally owe anything to supranational world governments.

  47. Transhumanism sounds rather jolly. But will it be ready in time for me?

  48. Mr Webb – Finland “has gained from the Euro at Greek expense”.

    That is untrue.

    As for a Greek default……

    There is a little thing that Russian Television (and so on) miss out when they are spinning that line.

    Even if they defaulted the Greek government still could not finance its Welfare State.

    “They could print the money”.

    Oh dear.

  49. “Transhumanism is an extension of humanism to other sentient beings like hypothetical sentient robots.” – in which case I oppose it, as I have had enough of animal rights to even contemplate extending them to robots.

    As for Greece couldn’t pay welfare if it defaulted on debt: Paul, you are talking about the “primary balance”, ie the balance on the government budget once debt-servicing is eliminated. The Greek government has a deficit of around 7-8% of GDP in 2012, but a primary deficit of around 1%, but next year their deficit is expected to fall to around 5% of GDP and their primary balance is expected (but forecasts are always guesstimates) to be a surplus of around 1% of GDP.

    In other words, next year they will be in a deficit **only because they are servicing debt**. Now of course, default produces a rapidly shifting economic situation. We cannot assume they will default, and then the EU economy will remain exactly the same, and demand for Greek goods exactly the same, and there will be no reprisals against Greece. So on paper, they will be in a primary surplus, but if they default and there is market mayhem, and possibly Greek assets abroad are all seized etc, it may be that the economic repercussions will magnify and they will once again be unable to pay their bills even without debt servicing payments.

    But what needs to happen is that they just spend what they collect, and no more. If they default and they are forced out of the euro and their banking system collapses, and the economy plunges even further, then they will just have to spend only what they can raise, however painful that is. After all, Argentina and others have been through this process too.

  50. Don’t forget Paul, that Greece ***can*** physically print euros.

    I know the treaties don’t allow rogue quantitative easing by the member states – but the Bank of Greece has a printing press that prints euro notes. It is only meant to print in quantities authorised by the ECB – but they do have a printing press and in extremis can overuse it. In fact – forget printing – what if a member state of the euro zone embarked on secret illicit quantitative easing via electronically created money?

    It’s not allowed – but forget that for now, as the situation is an extreme one – let’s say they “go rogue”. Most money does not exist in paper form; it is just digits on the screen. If the Bank of Greece enters an “illegal” entry into its accounts, adding, say 500 billion euros which came from nowhere (just the same as the Bank of England is creating money out of thin air in its QE) – it is just an entry on the screen. But once in the Bank of Greece’s accounts, it can be spent.

    Think about it: why doesn’t NatWest do its own QE? If the Bank of England can create electronic money, why can’t NatWest? First of all, we don’t know if all banks in the UK adhere to the regulations perfectly, but the presumption is they wouldn’t dare – as they are regulated institutions and it is against the law for them to do this. But Greece is a sovereign state, and there is nothing the ECB can do to stop Greece doing whatever it has to do – other than asking Germany to bomb Athens or seizing Greek assets abroad.

    If the Bank of Greece decides to create electronic money, they can do this – it is just a new entry in the accounts on screen.

    If Greece were known to be debasing the euro by rogue creation of money – they could try to kick them out – but there is nothing to stop them using the euro – just like Panama uses the dollar – and so it is problematic forcing them out if they don’t want to leave – especially as they have an official printing press that prints the euro notes correctly. In the end, the ECB would have to withdraw its notes and issue a new design that Greece didn’t have in order to create a currency distinct from that still being used by Greece.

    And the fact that Greek notes have a code on them showing they’re issued by Greece – this is true of the physical notes only – electronic euros (the majority of the money supply in any country) is indistinguishable.

  51. Mr Webb – I agree with you (100%) that Greece can print Euros.

    Where I disagree (not so much with you – as with Putin’s boys and girls on “RT”) is over whether this would be a good thing.

    As for the “small Primary deficit” thing.

    I have heard all this before – in the case of Argentina.

    “Our problem is servicing the debt – if we defaulted …..”

    It did not work out that way – look at Argentina now.

    And remember – both in the case of Argentina and Greece.

    The official figures (in the deficit and just about everything else) are lies.

    Not just distortions (as with the U.K. and Ireland) – but wild lies.

    In Argentina they put people who tell truth about inflation and so on in prison.

    It does Argentina no good – and it will not work in Greece either.

  52. Paul I get the feeling you are invested in Greek government bonds and for that reason don’t want to see a default. Argentina has done fantastically well following its default – it has been a tiger economy. The IMF has its own agenda in Argentina – badmouthing the government and economy because it opposes default. It is only now, after a decade of extremely rapid growth, and against the background of global crisis, that the Argentine economy is once again facing difficulties. There is a lot of evidence the government is falsifying inflation data – and I would argue that the default should have been followed by as many free market reforms as possible especially once the economy was flying – but it often works the opposite way, that if interventionism seems to work once, the government gets a taste for it and never stops fiddling – and so Kirchner will never stop intervening. Argentina is not in the same amount of trouble as the UK though – its debt levels are much, much, much lower. Of course, Argentina does not get much FDI owing to its default – as overseas investors do not trust the government. See for more.

  53. Mr Webb – no I do not own any Greek government bonds (by the way the private bond holders were cheated some time ago) nor do I own (or have every owned) government bonds of any country.

    As for your claim that Argentina is doing well economically……

    It is often difficult to tell whether Libertarian Alliance people (with the exception of David Davis – who is straight) mean what they say or not. For example Sean often says things he does not mean – simply out of a desire to be naughty. Of course I (and others) share some of the blame for that – because our practice of taking him seriously and getting angry with him over the stuff he says (on Nazi Germany and many other topics), I suspect he greatly enjoyed the anger of stuffed shirts such as myself (indeed that inspiring anger among the “vulgar masses” is the motivation for a lot of what he does).

    However, on the chance you actually mean what you say……

    You are wrong. Argentina is not a “tiger economy” it is actually falling apart ecnomically – and in every other way. Please learn not to trust official statistics – especially from Peronist dumps.

    By the way – economic policy in Argentina has actually got worse in recent years. The default is no longer the central matter.

  54. I still can not get over this claim that Argentina is a “tiger economy”.

    Mr Webb do you really mean this utter absurdity?

    Or are you just “yanking my chain”?

    I doubt I will get an honest reply.

    More likely it will be “Dublin friendlyness” – where a person makes friends with a visiter (buys him drinks and so on), with a group of associates waiting to mug the poor sap when he steps outside.

    Even my grandfather (and his people were Waterford, not Dublin) told me all about “smile and hit”.

  55. Paul, it’s my experience the David Webb is a very “straight” writer and doesn’t go in for Sean’s occasional charming puckishness.

    Is puckishness a word? It is now!

    I’m very fond of the suffix “ness”, because it’s kind of mathematical; it implies a derivative. If something has a certain value of being puckish, that is its puckishness; so puckishnessness woudl be the second derivative of puckish, ad infinitum. How much puckishnessnesnessnessness? Etc.

    On a more serious note, on the matter of why banks don’t do their own QE, it’s because they cannot within the system. QE works on reserves, not broad money, and the Bank of England holds the reserve accounts, so the client banks would have no power to “QE” themselves without the BoE doing it. If on the other hand they create arbitrary amounts of broad money, they simply open themselves up to bankruptcy, since the reserve accounts have to balance on the BoE’s books; which is not entirely dissimilar to what actually happened.

    The problem is that, if Paul and David are with different banks, and Paul transfers soem money to David, that has to be reflected in the reserve accounts (e.g. bank A’s reserve account is reduced by £100 while Bank B’s is increased by £100 at the end of the trading day). Normally, most of the transfers are reciprocated so the adjustments are small. But if Bank A just invents a trillion dollars, most of that is loaned via customers to other banks (this is how the broad money figure rises) and Bank A’s reserve account would rapidly dwindle, leading Mervyn King to get rather angry.

    It’s best remembered that in a fiat money system, the reserves (MO) play the part that gold would play in a gold money backed system. The amount of broad money in the latter is constrained to something less than the reserve ratio multiplied by the quantity of actual physical gold in the vaults (at the BoE). In fiat, it is constrained by the quantity of reserves in the BoE’s ledgers.

  56. Ian I will take your word for it on David Webb.

    I am an intolerant man, quick to anger – and that can lead me to injustice.

  57. Ian B – couldn’t Greece generate money electronically? It wouldn’t square their accounts with the ECB, but by the time they were engaged in such creative policymaking, they would have to be desperate enough to just do it regardless of the consequences. Anyhow, if there is a flaw in what I proposed for electronically created ones and zeros (after all, if it were that easy, North Korea would just create ones and zeros in its $ bank account – as you said the problem is international settlements have o match up) – they can definitely print paper notes. I don’t know if the ECB controls the supply of special paper etc to do that – but they could easily overprint a few billion €500 banknotes…

  58. I meant to say a few billion in €500 banknotes – they might run out of the special paper to do more than that if the ECB refuses to supply the basic materials

  59. DJ, I think the answer is, “yes they could do that”, but if they did they would no longer be part of the Euro. Effectively, the Greek “euros” would be counterfeit. Which is an interesting problem you get when your currency is not within your own sovereignty. By contrast, the British government, having a sovereign currency, could indeed simply create as much money as it likes, and indeed remove the reserve money monopoly from the Bank of England. Indeed, I’ve been arguing for some time (at the risk of inducing apoplexy in Paul Marks) that it should do precisely that, and stop borrowing money into existence with bond issues, which are a holdover from the days of gold when the only way a government could get more gold was to borrow it. With fiat, you don’t need to borrow a single penny if you’re a sovereign state. And, so long as you don’t print too much, the currency will hold its value.

    But anyway, for Greece to arbitrarily create money would be for it to step outside the Euro. As I said, they would be counterfeiting, because the Euro is not within Greek sovereignty. It would be effectively the same as the French government buying a printing press and printing “pound notes” or our government printing “dollars”.

  60. There was an Israeli Finance Minister (I think his name was something like “Levi-the-print”) who just printed money and spent – rather than going through the song and dance of lending (newly created) money to the banks, and then borrowing the money (at a higher rate of interest) back again.

    But it makes no fundemental difference.

    The promises that Greek governments (both the Socialists – and the New Democracy people) have made to the Greek people are impossible (not possible).

    And the Greek government figures (like the Argentine ones) are just a tissue of lies.

    “print money” , “create money electronically”.

    Talk about “missing the point”.

    By the way – the promises the British and American governments have made to people are also impossible.