Hacker News Reader

Comment by idle76 | Hacker News Reader

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.

View on HN

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.

> 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.

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...

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.

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.

Reply on news.ycombinator.com