FINLAND: Dreader, Arkkunen the crisis deepens by PEKKA HAAPAKOSKI The predictions made in this article, written before the parliamentary elections, were fully confirmed by the election results. There were no big changes in the relative strength of the main parties. The most that can be said is that the two large parties that were not part of the previous government coalition, the Communist party and the Conservative party, made some gains. This should be seen os a small sign of a growing class polarization and an expression of popular distaste for the parties of the previous government. The most important feature of the election results was the absence of any big changes. This means that the government crisis will continue, for the elections will be of no help in establishing a more broodly based government. Negotiations will go on while the caretaker govemment continues its difficult task. —INPRECOR
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Following is a list of the election results (the figure in parentheses indicates the percentage change from the 1972 elections; where no figure is given, the party in question did not con-
FINLAND test the 1972 elections): Party Social Democratic party Communist party Socialist Workers party Center party Conservative party Unity party Agrarian party Liberal People's party Swedish People's party Christian Union Constitutional People's party Employers party Ever since the second half of 1974 if has been clear that Finland, the political "special case" of the capitalist world, has not been able to remain on economic "special cose." Despite the 1973 Free Trade Accord with the Common Market and the "glorious" two-yeor collective contract reached with the labor unions in spring 1974, the prospects of Finnish capitalism soon began to deteriorate rapidly. The theory suggested by many circles (not least the Communist party), according to which "trade with the eost" could save the Finnish economy from the effects of the international recession, proved to be illusory. As long ago as the secand half of 1974 the markets for the main traditional Finnish export articles (first wood and then paper) began to collapse, During 1974 the volume of Finnish exports decreased slightly; the steep price increases during the first half of the year had increased the value of exports. During the first half of 1975 this development rapidly deepened to become a full recession in many exporting industries. Layoffs and short work weeks have become commonplace in the wood and paper industries. Only the metal industry is still functioning at relatively high capacity, mainly because of its long term work projects. Non-exporting industrial sectors have also been hard hit by the recession. In the building industry one can speak of near-catastrophe, for the total number of housing units built in 1975 will be about 40 percent lower than in 1974. The only potential "light of the end of the tunnel" for Finnish capitalism is the possibility of getting big contracts for certain work projects in the Soviet Union, but even these are still open questions, for the Finnish capital involved wants to add the full cost of Finnish inflation to the prices, while the Soviet side is willing to compensate the prices only according to average international in20
Percentage 25.0 (-0.9 19.0 (+1.9) 0.3 (-) 17.7 (+1.3) 18.4 (+0.8) 1.7 (-) 3.6 (-5.6) 4.4 (+0.8) 4.7 (-0.4) 3.3 (-0.8) 1.6 (-) 0.4 (-) flation. Unemployment, presently at about 50, 000, is expected to rise to an estimated 100, 000 during winter 1975-76. As a whole, it can be said that even though the international recession hit Finland relatively late, it finally come in a very drastic form. Ever among the usually optimistic "specialist" circles it is believed that the recession will continue throughout 1976; the most pessimistic circles are already osking whether any uptum of all will begin in Finland before the next international recession. Although the decline of exports and the stagnation of industry are difficult problems for Finnish capilalism, its two main nightmares today are inflation and the balance of payments. The balance of payments crisis is partially a direc/ consequence of the recession, for while exports began to shrink rapidly during 1974, imports continued to rise rather far into 1975: In 1974 the balance of payments deficit was 5,000 million Finnish markka (3.9 Emk = USS1) but in 1975 1l is expected to be much higher, perhaps some Emk 8, 00010,000 million. The positive balance of services con compensate for only a very small part of this deficit; the lion's share of the deficit must be covered by foreign credits. Already during 1974 Finland's foreign debt grew by 50 percent, and net foreign debt rose to Fmk 12, 600 million, while the convertible currency reserves of the Bank of Finland were only Fmk 1,700 million. The other big immediate problem of Finnish copitalism is inflation, which is expected to continue at the rate of 20 percent in 1975, despite the recession. This is rapidly weakening the relative position of Finnish exporting industries in their major morkets (including the "safety valve" of the Soviet Union) and thus makes an upturn more difficult. In the autumn, probably
after the elections (September 21), a new wave of price increases is expected. Thus, even a devaluation of the markka is not completely ruled out, although it would be a lost resort. The strategic centers of Finnish copitalism have been preparing many alterative projects described as "painless operations" to "thoroughly stabilize the economy." Political instability and economic policy One big problem for all "stabilization plans" is the mounting instability of the political superstructure in Finland, Ever since the downfall of the "popular front" (1971), Finland has been governed by a coalition of two big parties (the Social Democracy and the Center) and some smaller bourgeois parties. In practice, since 1973 this "center-left coalition, * Ted by Prime Minister Kalevi Sorsa, has been paralyzed by internal conflicts occurring at ever briefer intervals; this has been aggrovated by the recession. The lost year of the coolition, spring 1974 to spring 1975, was little more than continuous internal quarreling. The only force that kept the govemment together even that long wos President Kekkonen, the "supreme judge" of Finnish politics. In the course of several years he had moved step by step from being a godfather of the center to a godfather of the Social Democracy, büt all the big parties (including the CP) support him as the guarantee of continuity against "choos." By the spring of 1975, however, not even the authority of Kekkonen was enough to hold the government fogether; parliament was dissolved and new elections called for September 21. The center-left government was provisionally replaced by a "'nonpolitical" government composed of Social Democratic and bourgeois technocratic figures from the state bureaucracy. The new prime minister, Keijo Liinamoo, was the main architect of the Finnish incomes policy. At the same time, the growing weakness of the govemmental power has forced big capital to drosticolly increase its direct influence on political decisions. In 1974 a kind of Finnish "zaikai" (employers' ossociation) was formed with the name of "Delegation of Business Life" (Elinkeinoelaman voltuuskunta - EVA). It wos led by former UN secretary general candidate Mox Jakobson and has continually strengthened its grip on economic policyIn practice it is rather difficult to find any systematic and coherent long-term trend in the policies of the Sorso and Liinamoo governments. Very often the measures taken have been improvised and hasty reactions to the cross pressures of the recession, inflation, and the balance of payments deficit. However, since the second half of 1974 a somewhat clearer trend has been developing, not least because of the influence of the EVA, where the exporting sectors are strongly represented.
The first clear feature of the government policies has been a very heavy concentration of "antirecessionary" measures favoring and subsidizing exports. Already ar the end of 1974 so-called export deposits were eliminated and these very substantial funds were pumped back to the exporting industries. Since then, new incentives (tax releases, subsidies, etc.) have been used, and according to presently available information, the budget for 1976 will include a gigantic transfer of income to the exporting industries. Finally, the idea of devaluation is certainly goining ground, even though no one is talking about it publicly yet. Another trend is the almost complete absence of "antirecessionary measures" in the internal market. In fact, the policy of the government has been the direct opposite of the "orthodox" Keynesian policy, for in the midst of the recession the government is sharply cutting consumer demand, drastically lowering all expenditures for welfare and public services, and liquidating all "nonproductive" investments. Pensions and other income sources of the weakly organized groups have been among the main targets of this "austerity" policy. The development of medical care and public fransport has been hit hard and the thoroughgoing educational reform started in the 1960s has been practically stopped. This trend has been especially clear since the return of the former popular-front prime minister and present director of the Bank of Finland, Mauno Koivisto, from his credit-seeking trip to the World Bank, which no doubt inspired a good part of the "austerity. " As for imports, the most drostic restrictive measure taken by the government has been the import deposit law of March 1975. According to this law, importers must deposit up to 30 percent of the value of their imports in the Bank of Finland for a certain period, unless they are directly used in the export industries. However, all these measures have been unable to solve or substantially ease the problems of decreasing the balance of payments deficit, eliminating inflation, and helping the export industries get back on their feet. "To put the house really in order" the labor factor in production must also be "stobilized." That is why Finnish capital today has more than ever sef "improving labor morale, "ending irresponsible strikes, " and "creating a really watertight incomes policy" as top priorities. The winter 1975 negotiations over continuing the wage agreements in the middle of the two year period went better for the employers than most of them had dared expect. After some small additional wage increases and a modest rise in the minimum wage, the union bureaucrats, acting through the votes of the Social Democratic majority, gave a green light to the confinuation of the agreements. The CP union leaders protested, but did not even dare to lead "their" unions to struggle, let alone try to mobilize the rank and file of the whole SAK (the national Trade-union federation). Even the "rebellious" union, the mainly white-collar technical functionaries' organization (TVK), was pressured back into line. This was a big — and surprisingly easy - victory for the employers, who immediately began prepar-
FINLAND ing for the next agreements, to be signed in the beginning of 1976. The main aim of the employers for the next period is to arrive at 2-3 year agreements and to strictly tie wage increases to increases in "productivity." At the same time, a law providing for compulsory arbitration of strikes is now in preparation (such a plan failed during the 1960s). The efforts to "improve labor morale" have also been stepped up recently, mainly by pressuring the unions to act as factory cops, by threatening to import foreign labor, and by threatening selective layoffs. The coming winter struggles The parliamentary elections will be held September 21 in this atmosphere heated up by the recession, the governmental crisis, and the aggressive Impoverishment policy of the government. This atmosphere has been reflected in the electoral campaign, the language of which has been more aggressive ond the political field more polarized than at any time since the 1940s. The two former main governmental parties, the Center and the Social Democracy, have launched extremely bitter attacks against each other. The general polarization is also seen in the closer relations among the bourgeois parties and in their hostility to the Social Democracy, even though relations between the Social Democrats and the Communists have not improved. As for the results of the elections, they will probably not bring any sensational changes. In the bourgeois camp the bigger parties (Center and Conservatives) will probably gain at the expense of the smaller parties; on the left, the CP will probably gain somewhat at the expense of the Social Democracy. If that is the result of the election, it will be very difficult to form a new government. The present bitter struggle makes the renewal of the "center-left" coalition very difficult at this stage, not to mention a popular front. In this situation there is a growing possibility of a bourgeois coalition. Such a government would have the advantage of having much freer hands to enact tough measures than a Social Democratic government, but of course it would also be much less able to keep the unions "within limits." The other big problem would be the very slight majority of such a government and the strong contradictions among the interests of the bourgeois sectors represented by the parties. So, while the prospects for "strong" and effective government seem slight, it is possible that the "nonpolitical" caretaker government will have to say in office for some time after the elections and make a series of very unpleasant decisions on such questions as the budget. But besides the elections there will also be a much more Important fest of the present mood and fighting ability of the workers during the autumn and winter. In October the metalworkers union (the largest union in Finland) will elect a new leadership; shortly thereafter, the battle for the new collective agreements begins. When 22 spring 1975 passed without the expected big strikes, this was rather widely understood as evidence of a demoralization of the workers because of the growing unemployment. This was undoubtedly one important factor, and it will come into play even more strongly next winter. At the same time, it is clear that since summer 1975 many new factors have appeared that can badly shake the plans of the "stabilizers" for next winter. First, it is clear that because of the recession and the continuation of inflation, the real wages of broad groups have begun to go down for the first time, and the expected wave of price increases this autumn will not ease the situation. To this must be odded the sharp cuts in social expenditures and public services. In addition to the "consumers" of these services, the "austerity" measures have also hit the workers in these sectors. Already now the teachers are moving aggressively, and the autumn may well lead to a general turmoil in the "social sector." It is also clear that despite the existing fear of unemployment the working class may be pushed close to the limits of "tolerance" by the extremely provocative "stabilization policy" of the government, the next budget, the coming proposal for compulsory arbitration of strikes, and the possible establishment of a bourgeois government; in that event, fear of unemployment may lose its effect. Already during the summer some very militant strikes were fought, for instance the machinists! strike in July and a number of local battles in the metal industries. This is very important, because the metalworkers will play a key role in the events of the coming winter. In October the conference of metalworkers will elect a new leadership, and this time it seems that for the first time in decades the CP has a real possibility of taking over the union, which is a good sign of the developing mood of the working class. In any cose, the metalworkers union is by far the strongest union in the SAK, and in the winter it could very well act as the advance guard of the whole class. But the militancy of the rank and file and the possible CP takeover of the leadership do not in themselves solve anything. A successful struggle needs a concrete, coherent, and unifying platform, and the Communist party has shown no interest in developing anything like that. For the CP, the "union struggle" is a wage struggle, the "political struggle" is a parliamentary struggle, etc. The CP leaders never see the need for using the tremendous strength of the unions to respond to the overall offensive of the bourgeoisie on all fronts. To launch an effective counteroffensive, the working class has to fight next winter not only for wage increases, but also against unemployment, against cuts in social expenditures and for the workers control of industry; the workers must fight against the bourgeois government and for a workers government. To make the struggle effective, all unions should gather in a common front behind really unifying demands: For one-year agreements with Fmk 4 per hour increases for all; for a sliding scale of wages and index calculated and controlled by the unions; for a minimum wage of
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Fmk 2,500 per month for all; for a real wage equality between men and women. No to layoffs, redundancies, and short workweeks/ If the workweek is shortened, there should be no pay cut. Every idle factory must be taken over by the workers and put to production again. Such industries must be nationalized without compensation and under workers control. No to any kind of "forced arbitration" and state intervention in trade-union affairs! No to any kind of "fiSubscribe Red Weekly NAME ADDRESS.
nancial responsibility." The freedom to strike must be unfettered!
Not a penny off social expenditures, not a penny increose in the prices of services and necessary goods!
For price-control committees set up by workers, housewives, etc.
Down with the bourgeois government! For a workers government responsible only to the workers organizafions!
September 15, 1975
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