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Comment by tarvaina | Hacker News Reader

The two words missing from the HN post title (“says minister”) give the crucial context. As everywhere in Europe, there’s a heated ongoing debate in Finland about the rising price of electricity, what should be done about it, and who is to blame. This is a political statement aimed at defending the government’s past and current policies, not more or less than that.

(At the moment of writing this the yle.fi title is “Finland will be self-sufficient in electricity within a year or two, says minister” whereas HN title is “Finland will be self-sufficient in electricity within a year or two”.)

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"self sufficient" doesn't mean "pricing will not depend on external influences".

If you have cables to the rest of europe, they will be buying any cheap energy off you.

Clearly, thats good for the economy as a whole (better to sell that energy and earn a decent profit for the country), but voters might still be unhappy at high prices.

this

Not neccesarily. They could choose to implement a two-tier system for pricing. One system for internal use (within Finland), and only making the rest available for export (and thus Europe) after the finnish needs have been covered.

The full market integration isn't a natural law, as some free-market enthusiasts would have you believe.

No, but it is more efficient.

This recent crisis has unleashed a weird strain of anti-capitalist crony-capitalism.

People angry that "their" energy is being sold to "other people" so we should do X, where X obviously makes them poorer, but "sell X to other people at a profit and redistribute the profits to the whole nation making everyone richer" is simply considered iconcievable because it would affect the concentrated profits of crony capitalists and generally make people aware that they have democratic power to do things like that.

Same deal as with carbon taxes.

Yes, but why should we pay the price when it is our natural resources being sent abroad? Why is it not allowed (due to EU/EEC-regulation) to have a competitive advantage on energy prices when it is allowed to have an advantage on for example lower wages.

Plus, transport of electricity is not efficient. You lose a lot in the cables. It would be better to transport the factories that need it to where the electricity is generated.

And, the backlash is because of what is perceieved as poor energy politics from the central european powers. Making oneself dependent on fossil energy Russia while decommisioning nuclear is madness when trying to reduce carbon emissions.

Northern europe is also much more based on the use of electricity for heating than the rest of europe, so it hits them a lot harder when prices skyrocket. The result is much more use of wood for heating, which in turn increases air pollution.

> but why should we pay the price when it is our natural resources being sent abroad

Because price signals are important and useful tools.

But note, I'm not suggesting you "pay" the price. I'm suggesting the "others" pay the price and then you use that money to make your life better, with greater impact than you'd get by just capping prices and using all your resources wastefully locally.

The same reason you have a job and then pay people to do various tasks that you could in theory do yourself. It makes your life richer.

You fail to see my point. Cheap electricity is our only competitive advantage (well, in addition to a well educated population). We cannot compete on labor wages, which are much higher here than pretty much anywhere in the world.

If we give away that advantage for shortsighted profit instead of using it to build our own industry, we will only strengthen central europe's industries, while we go back to being a resource economy.

You don't need to have a competitive advantage to gain from trade. You don't even need a comparative advantage.

You think that trading electricity to the rest of Europe will let them take your manufacturing industry. So your plan is to pointlessly increase Europe's electricity prices by breaking the market mechanisms that allow trade?

That is not a good plan. It's not a good plan if you want to support local industry and it's not a good plan if you don't. It's just not a good plan.

At best, you could claim that there's nothing else you can do that would work, and so this bad plan is better than all the other worse options but frankly it's not a very convincing case.

I know trade _can_ be beneficial even without an advantage. But not if it means giving away our only advantage. I'm sorry, but if you don't tell me why it is a bad plan, I'm supporting it. Trade is not always better than building industry. Especially not if it means that we go back to being a resource economy. Trade is always more lucrative with refined goods than raw materials.

Why would any industry start here if it means higher labor costs if all else is equal? How do we compete then? We've already seen much industry being moved to for example Latvia, or Russia, or China, or Vietnam. And that was with the cheap electricity.

We're not the one "pointlessly" increasing Europe's electricity prices. They did that to themselves by combining the gas and electricity markets in the first place. And relying on Russia for their energy needs, instead of building more energy for themselves.

It's really not that bleak, Finland certainly has other advantages than cheap electricity. But yes, a big change is coming and we'll see whether leaders have the chutzpah to capitalize on that opportunity; if not, yes going back to a provider of cheap raw materials for others to add value to is a real risk.

A recent writeup on this topic, in Finnish unfortunately, at https://jmkorhonen.fi/2022/08/25/uskallammeko-voittaa-teolli...

I guess that's part of the give and take of living in a large union. There are advantages and disadvantages. As someone from the US, that dynamic is familiar.

But you're not giving the electricity away for free or even a low price. As far as I know there's no EU regulations that prevents Finland from redistributing these profits to the population in such a way that it makes the effective price of electricity close to what it would be if it wasn't exported. Or to use some of the money to build more cheap production capacity and increase your advantage in the long term.

But you cannot give it to companies, as that would be illegal subsidies. Thus, our economy will tank even if the households are compensated.

It isn't a natural law, but it is an EU law.

A two-tiered system would also need EU on board, since currently such a system is considered anti-competitive for some reason (unclear to me why).

Because the EU thinks it's ok to have an advantage with lower wages, but not on cheap electricity. If they didn't, they would have made regulation that either normalised wages throughout the EU (VERY unpopular with the inhabitants of northern Europe) or allowed nations to demand that all wages must be paid locally in accordance to local laws or tariffs. This is not allowed today, as it would make work migration a lot less beneficial for capitalists importing workers from eastern Europe.

This goes against everything the EU stands for so that's not happening.

Just curious, but why does the EU necessarily have such a fundamentalist view on free markets?

I simply don't know enough about all the reasons and philosophies behind the policy decisions to give you an adequate answer.

Ok, we've restored the minister. Thanks!

Ministers say a lot of things.

Blame me if it sounded like clickbait. I submitted with the verbatim headline ("..., says minister") but HN rejected it as too long. It was late, I was lazy, so I just removed the ", says minister" and carried on. I should have edited it down more intelligently. Apologies.

No worries!

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