It remains to be seen how Ilkka Paananen and Co. can maintain their operational principles in the long run when interests divide. It is sure that there will be partners, who think that paying taxes is stupid when on can avoid to pay them. However the viewpoint Paananen and Co. put forth strengthens my impression of that what I wrote in my article ‘New Political Culture’:
That the level of (spiritual) sophistication of citizens determines the competitive position of a society. How much are different operators in a society ready to co-operate with each other for common goals. Ilkka Paananen said that they have got so much from the society that now it is time for them to pay back. What does this “so much” practically mean?
The Finnish society offers its citizens free education. That way every citizen has basically the same starting point when it comes to personal growth. Companies get educated, competent workers without having to make bigger investments for it. When someone becomes sick the society ultimately takes care of the recovery of its members. When a family becomes a new member the society is from the very beginning supporting the family in integrating the new citizen into the society.
Most people take it for granted that health care covers every citizen.
Money never becomes an artificial barrier to competition in regard to basic activity. No one is abandoned because of unexpected life twists and turns. Many people don’t feel the need to amass fortune for bad days over own demand, because the trust for the functioning of social security is so strong. Most of the people don’t even want for instance a bigger apartment or house they themselves are able to clean and maintain.
The system is in balance, it breaths and lives its own life as long as there are people who want to keep it up. According to studies most of the citizens want to pay taxes to secure social services. Some companies are even willing to pay more taxes than the state collects from them.
This social and economic model, Social Market Economy, which was developed in West Germany after the WW II, is based on the thought that a strong state authority is needed above the political and social controversy of a society.
It recognizes that citizens get into financial problems without own fault, and that capitalism doesn’t have any self-acting mechanism, which would adjust these social problems. Therefore the state has to arrange social services to its citizens, so that they will divide the financial responsibilities caused by the problems in the society and will lighten the burden of individual citizens.
In course of the globalization progress this social system, which promotes common welfare is threatened when states compete with each other for investments by providing their companies tax benefits.
A company settles down in a country where it gets best benefits and makes short-sighted decisions according to its quarterly financial outlook. The most important task of a company is said to be shareholder wealth maximization, and money has no fatherland.
In this competition the countries, which arrange welfare services for their citizens get a raw deal. The profits provided by the social services are transferred as gains to countries, which don’t take the welfare of their citizens so seriously, and don’t collect taxes for social welfare.
The welfare created in high-tax societies moves to low-tax countries (tax heavens), where single groups of people enjoy well-being while most of the people struggle amid misery. People all over the world are criticising the inhuman practices of multinational concerns, which threatens the existence of us all.
For a Global Problem a Global Solution
The former director of US central bank (FED) Alan Greenspan says in an interview of a German newspaper Welt am Sonntag (10.11.2013) that only a political union – federation with its common social policy – can save euro.
The question is, what makes Greenspan think that a centrally planned system would work better in Europe than it worked in former Soviet Union. Should countries, which have taken good care of their social security system and which have kept their economy in balance, give their autonomy up to supranational corrupted politicians?
Most of the European countries already have acts concerning social welfare. But Europe is not an isolated island in the globalized world and its problems cannot be solved without taking into account the worldwide environment in which it operates.
Currency from Europe flows to tax havens, because companies want to maximise the profits of their owners. Politicians can make directives concerning the common social security, but it doesn’t stop money fleeing to tax havens. If a system doesn’t have supporters it does not work.
The harmonization of tax practises (tax rates) has also been suggested to balance the problems. It would mean that the countries with high tax rates should lower them, and this would mean that the basic services for citizens would have no financing.
It is said that if one wants to find a sustainable solution for a problem one should approach the problem from the weakest link’s viewpoint. In this case the lowest taxation however wouldn’t solve any problems. The solution would rather be that the basic services for citizens should reach every corner of the world, because people have same needs regardless of their culture or location.
Care for other people is not something people need to be forced to. It is people’s innate characteristic. Alan Greenspan says that the irrational behavior of people is a reason why it is so difficult to forecast economic development. He says that people live with their conceptions and beliefs in a bubble, which in the worst case can lead to economic crisis, like in 2008.
I think that irrational people, who live in some kind of bubble are those people, who let their ego lead their lives. People who have connection to their real self and thereby to the universal consciousness see themselves as part of the whole. They understand that the well-being of others is a key to their own well-being.
Read also:
The Atlantic: The Secret to Finland’s Success With Schools, Moms, Kids—and Everything
Welt am Sonntag: Nur eine politische Union kann den Euro retten