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. <<