WHEN THERE'S NOT ENOUGH MONEY

 

 

Warning: the revelations in this text may

affect the value of your holiday cottage

 

Idleness has many forms ,” said Setti of Komula,

a smith known nationwide for his Tommi knives,

as in his old age he eyed the huge building site that

had cropped up near his homestead. There, sweat

on their brows, gravel billowing and diesel engines

roaring, people worked in earnest in order to build an

amusement centre. Komula and SyvaÅNjaÅNrvi are nowadays

better known as Ukkohalla, and the nearby Lietejoki

(‘sludge river’) was rebranded as Ukkohalla River.

Millions and millions of euros have been poured into

the support of Ukkohalla. For every euro the spa has

received in admission tickets, the government has given

another. Thus, the society has supported the water-skier

in Ukkohalla much more generously than it has the

nearby farmer drudging in his fields. The increase in the

consumption of sofas, televisions and hamburgers has

become more important to society than for instance

the prevention of the acute ecological crisis or the safeguarding

of food production, not to mention cultural

development.

It’s said that without the increase of consumption our

country can’t survive. Thus, lying in a hot tub amid the

winter snows is not idleness anymore: it has become

important work for the common good.

This text creates an overview of the industrial poli-

cy practiced in Finland during the last decades through

two examples. The conclusion can be given here, at

the beginning. The market liberalistic folly which 

dominates the Finnish society leads to completely absurd

developments.

Am usement for the People

The region of Kainuu saw a severe structural change in

the 1970s. Forestry and farming didn’t require labour

force as much as they used to, and people flocked to the

big southern cities. There were attempts to prevent the

structural change: a new industrial city and a railroad

were built in Kostomuksha in the Republic of Karelia

by workers from Kainuu. In Kainuu itself, a staggering

amount of tarmac roads were built to connect deserted

villages, and also investments to the forest industry were

made. When the building projects in Kostomuksha

were finished, and there were enough roads and facilities,

a dead end was reached. The people were unemployed

again.

A serious modernistic welfare state had to make way

to yuppie culture and to postmodern frolicking. The

idea to build Ukkohalla is closely related to many similar

projects all over Finland. The state gave huge sums

to support the building of a leisure centre in the middle

of nowhere. Through compensation, there should have

been good grounds for tourism business and the improvement

of the employment rate. It was assumed that

wage earners would have more and more spare time,

which they could spend at the new centres. Downhill 

skiing centres cropped up in four neighbouring municipalities:

Kivesvaara in Paltamo, Saukkovaara in RistijaÅNrvi,

Paljakka in Puolanka, and Ukkohalla in Hyrynsalmi.

The centres operated for a few years on government

support, until the depression of the early 1990s. During

the depression, the downhill skiing centres of Saukkovaara

and Kivesvaara grew quiet. The only thing that was

left was the horrible scarring in the most beautiful landscapes

of the area. Ukkohalla and Paljakka also went

bankrupt, but they managed to remain in operation.

The centres, which were located in adjacent municipalities

within a 15 kilometre radius of each other, and

were built according to similar concepts, were in bloody

competition over the depression-diminished clientele.

There was a decision to raise the slope of Paljakka by

twenty metres in order to make it higher than the nearby

Ukkohalla. This procedure cost millions of marks

and was mainly financed with public support funds.

At the same time as the nearby slope was being raised,

a large web of malpractices was uncovered at Ukkohalla.

Hundreds of thousands of marks of state funds had

drifted into wrong targets, or disappeared altogether.

In addition, the funds had been distributed unjustly so

that a few entrepreneurs got virtually free money, while

many others lost their livelihoods. Closely connected to

the clearing up of this mess was the rural police chief

of Hyrynsalmi, who was sent behind bars because of

his financial crimes, as well as an incident of drunken

shooting with his service firearm in the town centre.

The politicians who got involved in the investigation,

among them MP Sulo Aittoniemi, took the question of

the lax use of support funds all the way to parliament.

Recently, while having coffee in the only cafe of Hyrynsalmi,

I rested my cup on a tray made in the early

1990s. On it was printed the local service directory.

There were four grocery stores, two mobile shops, over

ten specialist stores, and dozens of different service providers

in the town. There were also many more bars and

cafes. Nowadays scarcely a fifth of these shops survive.

The previously breath-taking view from road 5 is now

dominated by a large chain grocery store; everyone uses

a car to get there.

I mentioned the development at a local hairdresser’s

(of which, contrary to the local trend, there are more

now than twenty years ago). The hairdresser told me

that things were better before: the bars held kid’s discos

and dance classes during the day, and adult’s dances after

eight o’clock almost every night. You could meet locals

at the bars, and catch up with them over coffee or other

refreshments.

However, after the founding of Ukkohalla everything

changed. At first, the tourist centre and its services 13

kilometres from the town centre drew the locals in.

This killed the bars in the town centre and took a few

specialist stores with it. Over the years, the mentality at

Ukkohalla became hostile towards the locals. The centre,

which was targeted at the well-to-do from the South 

or the Oulu region didn’t want local yokels to ruin the

trendy ambience. Ukkohalla wanted to distinguish itself

from the town of Hyrynsalmi, and to form its own

brand, which is not connected to a remote town in the

middle of the Kainuu forests.

Nowadays the people of Hyrynsalmi rarely go to

Ukkohalla, but there are very few meeting places in the

town centre, either. There is as much alcohol consumed

as before, but now it’s drunk at home. Statistics on social

exclusion and sickness continue to grow darker, and the

leisure centre hasn’t certainly had a positive impact on

this development.

Ukkohalla’s impact on employment and tax revenue

has always been rather small. During the best periods,

there have been a fair number of jobs, but in its usual

state all the businesses of the centre employ fewer than

10 persons in all. Many locals entered the holiday cottage

business, but lost their money and their cottages in

the centre’s repeated bankruptcies, as a result of which

the value of the cottages collapsed. Through the bankruptcies

the business activities and the real property of

the area transferred into the hands of outsiders for a

song, and therefore the municipality’s tax revenue remains

small even in good economic conditions. Furthermore,

the building projects and other investments

in the town centre are mainly carried out by out-of-town

workforce and materials.

A short bright era dawned in the late nineties, when

the centres of Ukkohalla and Paljakka were under common

ownership. Bickering was replaced by co-operation,

and the centres were profiled to reinforce each

other. As a seal of co-operation, it was decided that a

new road be built through the forests to shorten the

distance between the two centres by about twenty kilometres.

The costs were apparently closer to ten million

euros. Soon the centres went bankrupt again, and the

new owners weren’t willing to co-operate. The new

tourist road was now redundant.

The leisure centres of Ukkohalla and Paljakka, their

brands and marketing, have since the early 2000s been

developed completely independently. The services and

development plans of the centres, however, are almost

identical. Tough competition forces them to invest aggressively

in new devices, services and buildings. As a

rule, the state and the EU pay nearly half of the investments,

and many projects are carried out completely on

public funding. In the last few years, Ukkohalla has seen

the building of a new spa, pedestrian bridge, wakeboard

cable, hotel, and a bunch of holiday cottages; there is

also a master plan and numerous marketing projects

with project support rising overall above five million

euros.

The central problem of governmental project support

is that it doesn’t develop the area or its economic

life. The support in Ukkohalla concentrates on one

business and its few owners, while all others are left

empty-handed. Healthy competition cannot exist if one 

person’s investment is given 50% of its funding by the

government, and another’s 20%, or nothing. Even the

competition of the leisure centres is at its heart competition

over support percentages and which municipality

has more project knowhow, and eventually, the management

of which leisure centre and the services of the

industrial development of which municipality are closer

to the inner circle of the regional council. In this race,

it’s very rarely that the truly developable business ideas

win.

During its existence, about 20 million euros of EU,

governmental, and municipal funding has been poured

into the holiday centre of Ukkohalla. The centre has

lurched from one bankruptcy to another, and over the

past years the story seems to be repeating itself. At the

same time that project funding has been pumped into

massive investments and marketing, the revenue of the

skiing centre limited company dropped by over 50%

and the amount of visitors by 30%. A majority of the

area’s entrepreneurs has disappeared. It seems that at the

end of the unnecessary road there’ll soon be an empty

spa and an empty hotel. A few dozen small businesses of

the area again lose their savings as none will buy or rent

their cottages, which will lose their insurance value after

the centre goes bankrupt again.

An illustrative example of the recent developments

at Ukkohalla is the founding of a tourism association a

few years back. It was given hundreds of thousands of

euros in development funds by Kainuun liitto, the central

purpose of which was to activate the tourism association

and the getting together of local entrepreneurs

to support common development and marketing. The

tourism association didn’t meet once during the project

term, and thus couldn’t take care of its regular assignments

nor promote collaboration as the project presumed.

In practice, the project funding was used to hire

a marketing director for a company, the managing director

and main owner of which also happened to be

the chair of the tourism association.

With the same funding, a new master plan was drawn

up for Ukkohalla. In a brainstorming event arranged for

local actors the emphasis was on natural and cultural

activities and the linking of local life with tourism. This

would correspond to the current trends of tourism and

would be a logical move for a leisure centre that is surrounded

by old forests unique even on the national

scale. It was also considered important that Ukkohalla

should genuinely benefit the local people and the other

businesses of Hyrynsalmi. It was concluded in the brainstorming

event that foreign tourists are hardly interested

in skiing in Kainuu, as there are naturally higher

slopes nearly everywhere else in the world. For a reason

not made clear, the final master plan states that the most

important development vision of Ukkohalla is the raising

of the skiing slopes higher than those of Paljakka.

The costs were said to be approximately 8 million euros,

and the investment will be mainly carried out with 

public funding. The neighbouring municipality, however,

isn’t ready to give up their title of highest slopes. There

is enough gravel and lorries in Puolanka, and EU has

enough business subsidies to keep the Paljakka hills

higher than those of Ukkohalla.

Around the endless series of misinvestments and the

ruthless squandering of common resources, the ancient

spruce forests of Kainuu continue to live their own

lives, unless they are chopped down to make way for

new skiing slopes or raised hills. Still, in countless calculations

nature and culture tourism are seen to be

more beneficial for the local economy and more ecologically

and socially sustainable than the current activities

of the holiday centres.

The only business in the Ukkohalla-Paljakka area

which has run profitably for over ten years, and employs

over four people, has concentrated on demanding nature

tourism. The activities of the business are frequently

reported in the most distinguished and widely circulated

magazines of the field. Almost no one in Kainuu

knows about the existence of the business. One of the

reasons may be that the business has stated its reluctance

to grow. Instead, it concentrates on producing as

good service as possible for the current-sized clientele.

This solution effectively avoids the spiral of bankruptcies

the large centres suffer from, and its running doesn’t

need governmental support after the initial stages.

Which of course annoys the area developer and the

project investor.

Peace on Earth

From the small fry we’ll move on to slightly larger circles:

to the history of the recently-founded spa resort in

Joutseno’s Rauha, the biggest of its kind in Scandinavia.

The ridge system of SalpausselkaÅN touches the southern

sides of the Suur-Saimaa lake in Joutseno. The Russian

doctor Dmitri Gavrilovitsh visited the place in the

1860s and saw it to be a fitting place for a health spa because

of its natural beauty and the healing water springing

out of the ridges. In the area of Tiuruniemi, which

reaches into the Saimaa lake, and Rauha (“Peace”) there

were built a number of spa buildings, boarding houses

and private villas. Rauha became a well-known holiday

resort for Russians, alongside the nearby Imatrankoski

rapids.

The clientele of the Rauha sanatorium was made up

of the wealthy upper class of czarist Russia. The buildings

and their people in the middle of meticulously

kept gardens were like another, unattainable planet for

the populace of the nearby villages who lived in hunger

and deprivation.

Towards the end of the 19th century, there was an

awakening in Russia and its subordinate Finland to oppose

the extreme enrichment of the wealthy and the

eternal impoverishment of the poor. Social and economic

equality became a widely accepted goal among 

the wealthy who strove for reform. Gradually, a desire to

better their own position awoke among the ordinary

working people as well.

The upper-class sanatorium life of Rauha ended with

the Russian revolution and the independence of Finland.

A new use was sought for the area. At that time, the

policymakers of the Southern Karelian municipalities

and region had a growing worry about the fate of the

virtually abandoned mentally ill of the villages and cities.

After different reports and preparations, it was decided

that a mental institution be founded in the luxurious

milieu of Rauha.

There were very few known cures for madness at that

time, and the excellent groundwater of Rauha, its pine

forests rich in oxygen and ozone, its gardens and its

overall natural beauty were thought to be beneficial to

mental health. The minutes of the constitutive meeting

of the hospital state that its goal was to provide the disadvantaged

with the best possible environment for

recuperation.

The seed of the Finnish welfare state had germinated

for a long time before independence, and when there

was a chance to make our own decisions, in all of Finland

a strong development arose with a goal of general

equality, democracy and social parity. The same goals,

albeit with different emphases, became central for all

major parties.

The hospital of Rauha was soon enlarged, because

there was a great number of those needing treatment.

Cures were developed, and although the prognosis was

often bad, some of the patients might get better and return

to their old lives. For the most part of the patients,

Rauha was a home for years or even decades. The development

of medication changed the treatment from

physical work to service and monitoring work. Despite

the horrific side effects, the mental state of the patients

became somewhat more tolerable when the medication

was got right.

The rooms, wards, corridors and underground tunnels

of the hospital were rather bleak. Outside, however,

there was, summer and winter, the glorious and varying

nature to look at. Work in the gardens, at the hospital

farm and the sawmill, in the engine room, the boiler

house and the laundrette were a central therapy form.

The bad spells were spent in the closed ward, and the

better ones in light, supervised tasks. The hospital had

its own band practice room, a space for arts and crafts

therapy, good spaces and equipment for sports, a cinema,

and of course a canteen. Hair was cut in the hospital’s

own hairdresser’s, and you could buy an ice cream

at the kiosk run by patients. Rauha was a world of its

own, where patients and staff formed a more or less

idyllic community. Neither the patients nor the staff

knew of anything better. Rauha was built communally,

it was the centre of local life.

In the 1980s new treatment ideologies landed in Finland

as well. Professionals didn’t want to base treatment 

on medication (or physical work) alone, but different

kinds of dialogic forms of therapy started taking over

the field. Ultramodern video conference equipment was

bought for the Rauha hospital, so that staff could train

under the international top specialists of the field while

working. Therapeutic practices received quick results

and the prognosis of the patients got radically better.

Former intensive care wards were transformed into

home-like outpatient spaces, in which the patients could

live a nearly normal life with the hospital staff still nearby

at need. Rauha was in the lead of international psychiatric

development, and the doctors were requested

to give lectures all around the world about the results

they had gained.

At the same time as the idea of Ukkohalla was hatched

in Kainuu, the band around Rauha began to draw tighter.

It wasn’t easy to get funding for psychiatric treatment

anymore, and particularly its development in a more

therapeutic direction. Although the results spoke for

themselves, and everything worked as smoothly as possible,

there were demands to make the operations more

effective. These demands were made by people and organisations

with no educational or work background in

psychiatric care. The call for efficiency didn’t cover

more effective treatments or better results; it had to do

with cutting treatment costs. The resources of psychiatric

treatment could only be understood by comparing

them with the other items of expenditure in society: the

goal of efficiency was to cut the costs of treatments in

relation to other sectors.

In the late 1980s there landed in Finland a social philosophy

based on the neoclassical economic theory,

which is sometimes called market liberalism. Market

liberalism is based on a thought that market demand

should freely steer society. The society should produce

goods that the markets want. Thus, the society doesn’t

follow targets born in a political or for instance cultural

system, but only answers to the demands made by the

market.

The demand of the market was to cut the costs of for

instance health care, culture and social services, and

to transfer funds into the support of businesses. This

would make the society healthier and at the same time

build a ground for lasting welfare. The demand of the

market was, plainly put, the demand of the private sector

to get a larger share of common resources for their

own use. The demand included the fact that in all sectors

of society, the position of those persons with an

education in the commercial field rose above the professionalism

of all other fields. In effect, economic leaders

got to decide what hospitals, social welfare offices,

art museums or universities should do. They defined

the highest function of these institutions, and of the

whole society.

In the 1990s, Rauha was continuously expanded and

turned into a better treatment unit. The number of beds

didn’t increase, but the services available for patients 

were improved. The patients got better in increasing

numbers. The air was full of dark rumours, however.

There was talk of the closing down of wards, the ending

of research projects, cutting down of everything ‘extra’.

Soon the bomb dropped: the hospital was to be run

down in less than ten years.

It took a while to internalise this information, and

many people still haven’t. The life’s work of many generations,

a huge shared, social project was named an unnecessary

expense. The closing down was justified by

the aim to get psychiatric patients out of ‘forest mental

institutions’, to become a part of society. There was an

aim to replace institutions with dynamic outpatient

units.

The operations of Rauha were transferred to the central

hospital of Lappeenranta, in which were founded

two psychiatric wards to replace the 16 closed-down

ones. Surprisingly, there weren’t enough funds for outpatient

treatment either, and it’s still, fifteen years after

the decision to close down Rauha, in a chaotic state. The

closing-down process was gone through solely in economic

control with no chance for mental health professionals

to make the transformation a little bit more humane

for the patients.

The former patients of the hospital were desperately

seeking new homes, and many remained in the former

staff dormitories of the hospital. Without appropriate

care many of them were driven into mixing alcohol and

medicines. The closing down of the hospital led to

many unnecessary suicides. Rauha deteriorated in a few

years from a psychiatric centre of excellence into a dreadful

slum, in which the patients are left to fend for themselves

the best they can.

After being left to fall into decay for years, Rauha was

finally given a new lease of life. With the generous help

of the government, it was cultivated into a huge spa resort

with a hotel, a boat harbour, a holiday village and a

golf course. Now there are plans to found a private hospital

at Rauha to cater for the needs of occupational

health patients, businesses and wealthy private individuals.

A central customer segment is formed by wealthy

Russians. Thus we have full circle, and Rauha returns to

the czarist era.

Conclusions

Finland is full of stories like those of Ukkohalla and

Rauha. The inhabitants of countless towns have looked

on flabbergasted at the structural change, which they

have been told is inevitable. It has been all about the

rehabilitation of the economy.

Suddenly, health and social services were regarded as

items of expenditure which are funded with the tax revenue

generated by the private sector. At the same time,

we assumed the idea that investing in the growth of the

private sector and entrepreneurship would ensure sufficient

tax revenue to maintain the welfare state. Now, 

a majority of the Finnish economic elite opines that we

simply can’t afford to preserve the welfare state. And

those who still believe in the welfare state say that the

maintenance of welfare is only possible through an increasing

support to the private sector.

In Keynesian terms, the ability of a state to maintain

welfare has nothing to do with the amount of tax revenue.

A sovereign state, or in the present moment the

EU, can fund the operations it deems fundamental

through a central bank; taxes have a steering effect only.

Through taxation it’s possible to support development

which is deemed positive, and to control unwanted

developments.

The thought that the increase of consumption, production

or economic operations overall would secure

welfare services is flawed. There’s more money than ever

in our society, and still we can’t afford even a tenth of

the psychiatric treatment which was possible in the

1980s. The increase of production on the slopes of a holiday

centre isn’t the kind of work that keeps the wheels

turning. In this sense, any work which only has the goal

of increasing the income of a private individual or a

business at the expense of others can’t be seen to be

serving the common good.

In market liberalism we all want to be achievers (in

relation to non-achievers). We want to rise to challenges

and not worry about our problems. This is a denial of

the reality at its worst. We’re wearing ourselves out, and

what’s worse, we’re wearing out our environment. The

forgetting of our own limitedness and the basics of humanity

leads to the disappearance of the relationships

of cause and effect and common sense.

Fewer and fewer of us are achievers. When resources

are running out and the amount of goods and consumption

needed to indicate success simultaneously increases,

the only possible conclusion is that the number of

achievers compared to non-achievers will drop. The

foresight report of the current government starts from

the point of view that Finns are achievers even when

other peoples and parts of the world are not.

The government has driven holiday centres, hospitals,

museums, municipalities and citizens into a competition

against each other. A majority of public project

funding has been directed at the expenses of this competition

which benefits no one. Competition can boost

productivity, but it can also defeat the competitors. In

an unfair competition whole states are being defeated

at the moment.

Competition needs boundaries and rules. Behind

them, there needs to be a general goal: a worthwhile,

culturally rich society which is as good as possible for

all citizens. The setting of this goal was the most important

offering of the economist John Maynard Keynes to

the development of the 20th century. Finland provided a

fruitful ground for Keynes’s thinking, and therefore we

could enjoy in an unique way a material, educational

and cultural development for a few decades. 

Keynes himself stated that through sound economic

planning we may reach a situation on a large scale where

we don’t have to use a majority of our energy for the satisfaction

of our material needs. This stage was reached in

Finland in the 1980s at the latest. After that we could have

steered societal development in a more qualitative and cultural

direction.

But we didn’t. The welfare state was sneakily replaced by

a market society in which we work like mad to be able to

consume like mad. Democracy, culture, and the life-supporting

natural systems are only in the way as we hoard

global resources for our own use.

Nothing is new in this situation. Keynes saw exactly the

same basic problem in the Europe of the 20th century. Even

then, the neoclassical economic theory which is similar to

ours led into short-sighted and brutal self-seeking. This in

turn led to desperate competition and finally to the two

world wars. Keynes won’t rise out of his grave, but perhaps

because of him we can draw the correct conclusions and

take appropriate action before it’s too late. <<