By Rene Kuuksmann
I have been most likely affected by living half my life in welfare states (Scandinavia) and I can only speak for the region (including Baltic states) but after following the news of UK and international newspapers almost daily for about 10 years, the tendency seems to be partly the same globally also in the so called developed world.
Loss of purchase power
My parents moved to Finland in 1990, and with one parent net monthly salary it would have taken between eight to eleven years to buy a three room + sauna apartment in Helsinki/Espoo during the years 1991-1995. Today it would take them 16-21 years. In fact, besides home appliances and electronics there is hardly anything that they can buy more of than they did 15 years ago.
But do people actually buy less, live in smaller apartments, drive older cars, eat less, save more? No they don’t: they all live better. With just one small but: the loss of income has been directly replaced with credit. And it is amazing how this simple and horrible fact is not noticed. Even the editor of the main newspaper in Finland (Helsingin Sanomat) wrote some years ago on the editors page of how he was envious towards young families today who live in 3 room apartments when it took 5 years of living with his parents before he could afford his first home. He just failed to realize that he bought in cash from savings of net salary in 5 years, whereas the “lucky” modern family will have the home paid in 25-30 years, assuming no disturbances in the economy for a quarter of a century.
If I remember correctly the working American’s real income per hour has hardly increased at all since the 1980s, whereas the increase in dividends and earnings of the top ten percent of society during the same time is up a hundredfold. And now the surprise: I am not left wing, I am actually a prudent neo liberal and right wing capitalist, against any redistribution of wealth (excluding the elderly and in medical need). Therefore, I am attacking the misguided attitude of the middle class. I have a right – society is doomed to fail.
The middle class of today hates equally and makes no distinction between the venture capitalist who provides equity input, fires employees, improves the last 1-10 quarters by asset stripping or result “optimizing” and exits at the peak, after which the company far too often fails to continue its operations on the one hand and the industrialist who has owned the factory for perhaps 25-50 years, knows the parents of the employees and has helped the janitor 20 years ago with family or health issues on the other. Once they park their Mercedes in front of the office, they are equally hated.
I personally know a Scandinavian industrialist who has owned a factory for 50 years with hundreds of employees with high salaries (compared to the average) – in his family they are not allowed to buy better cars than Volvo, in order not to disturb the peace with labour union and employees. The amount of taxes the company has paid is in hundreds of millions of euros.
If only Larry Flynt would have known what he started by saying “I have the right”, he would not have said that. The middle class and lower salary groups in the developed world believe that they have a right to everything: to receive high salaries regardless of their input compared to the next guy, the right to smash some windows in London to express themselves, the right for their outstanding credit to be forgiven regardless whether the credit is due to trips to Ibiza and shopping for new Gucci etc…
Too often the middle class hates the more “clever” ones among themselves; they hate the guy who gets promoted, the one who goes and tries to make a private company, the office manager who is just trying to say that he would rather pay more to the good employee! He is immediately attacked as being selective, right wing and unfair. There is a saying among many companies: it is just as difficult to promote the good employee as it is to fire the lazy one. Egalitarianism mostly makes sure that there are no new industrialists born, yet fails to see how the zero added value produced by derivative traders and speculators earn ten times as much as industrialists with great responsibility and stress of true Henry Ford.
Politicians partly to blame
Try to remember when you last heard some politician criticising the electorate for spending too much on goods that don’t last, saving too little, drinking too much, smoking too much? I haven’t heard this since the 1970s. I wasn’t even born then, but I have watched some 1000-2000 hours of old programs from the Finnish national broadcasting archive, and the speeches were incredible and clearly productive. Lets face it, from 1917 to 1990, for example, Finnish government debt was practically zero, regardless of some wars, and all the roads, hospitals, factories and other infrastructure which was built during that time. Now within 10-20 years, the debt has gone through the ceiling mainly for painting the hospitals and fixing the roads.
Economic footprints should be introduced
I find it wrong that the person who buys a new car every 7-10 years, uses one mobile phone for 3-5 years, collects money for their child’s education and for the “rainy” day and prefers to spend leisure time in nearby nature is openly considered an enemy of the global economy, a cave man some might say. Whereas the 21 year old MTV generation member who is changing car every year, as well as their mobile phone, spends all their money on alcohol, trips, and the latest fashion is considered as the engine of the economy! Quite often the economic footprint and the carbon footprint go hand in hand.
To conclude these are just matters to be studied carefully by others in order to understand society and where it is heading. The tendencies which I mentioned are happening in Finland and one can already find them taking root in the Baltic states.
Rene Kuuskmann moved from Soviet era Estonia to Finland 1990, lived most of his life in Scandinavia , Switzerland and Ukraine. Founded Consumer finance companies in Finland and Moldavia, presently is active as private investor.