VATT in 2010s: More economist thinking in public debate
Juhana Vartiainen was working in Sweden as a civil servant, before he became the director general of VATT. He returned to Finland, because he felt it was his duty to alert Finns of the dangers of the widening sustainability gap. “The same way doctors defend vaccinations, economists must be ready to bring economist reasoning into society”, Vartiainen calls upon his profession.
Concern over the sustainability gap
In 2008-2009, when Finland was experiencing an economic downturn, the public debate focussed around Nokia and the electronics industry.
– The export industry is of course important, but the debate completely ignored the fact that in 2009 a major structural shift was taking place in Finland, as the working age population started to decrease, Vartiainen describes the economic debate at the time.
Sweden was taking its ageing problem far more seriously, even though the problem was less serious and acute than in Finland. While still in Sweden, Vartiainen tried to wake up the Finns to the problem, but felt he could do a better job from Finland.
– It was one of the reasons why I applied for a post in Finland. In addition to advancing my career, I also wanted to bring economist thinking to Finland, says Vartiainen.
Vartianen acted as VATT’s director general in 2012-2015. In Sweden, he had been an economist civil servant preparing fiscal policy, particularly, wage formation information control and macroanalysis. Then, suddenly, he was the centre of economic debate in Finland.
– In Sweden, I was just a regular mainstream civil servant as can be, but, when said things in Finland that would have been regarded as normal economist insights in Sweden, then they were suddenly extremely odd, radical and challenging, Vartiainen describes his confusion.
In his opinion, the mistrust towards economist thinking reflects deep-rooted attitudes in the Finnish culture.
– Finland is a nation that is interested in its political history and war history. Economics has been a lesser discipline, and in my opinion, this has lead to problems in fiscal policy, he states.
In Sweden, there are more economists in comparison, and in general, the economist profession is stronger.
– In Sweden, economists have more power in the public debate. Economists’ arguments are more likely to appear in media. Also, politicians listen to economists more closely. In general, all parties are more favourably disposed towards the market economy, Vartiainen compares attitudes towards economist thinking in the two countries.
What kind of research does Finland need?
Vartiainen’s goal as VATT’s director general was to influence ways of thinking and acting by instilling a notion that, in addition to high-quality academic research, a research institute’s other main function was to support decision-making and public debate.
– Your journal articles may be read now, but probably not anymore in 10 to 20 years’ time. Instead, if you have contributed to a good tax, financial assistance or labour market reform, then you have done a great, lasting service to Finland, Vartainen motivated the researchers.
Vartiainen describes VATT employees as key experts.
– Economists play a key role in planning and justifying structural reforms. You, the researchers, and you, the organizers of research, you are key experts in Finland, Vartiainen appealed to the employees’ sense of duty and pride.
In addition to research, he also actively invested in developing administration and communication at VATT.
For Vartiainen, international collaboration is a guarantee of research quality.
– Participation in the international research community is a prerequisite for conducting high-quality research and earning the authority that research must have, he states.
International collaboration is particularly important in field like economics, where research methods and questions have been harmonizing around the world over the last decades.
– Economists across national borders understand each other, they study similar issues and feel they are a part of the same global economist community. I think this is a brilliant thing!, Vartainen says with enthusiasm.
More economist thinking in public debate
According to Vartiainen, high-quality research alone is not enough. It is also a researcher’s duty to bring research-based economist reasoning to the public debate.
– It used to be the case that experts would only produce the analysis and it was the political decision-makers’ job to then justify the necessary actions. Nowadays, research must also provide decision-makers with rhetorical devices to enable them to succeed in the public debate, Vartiainen describes the change in public debate.
The researchers’ support is needed, because research results are often at odds with the public opinion. Vartiainen names labour migration as an example.
– It is something that most Finns instinctively disagree with. Researchers would do Finland a great service, if they would help politicians explain, why Finland needs to increase labour migration, even though there are unemployed people in Finland, Vartiainen says.
According to Vartiainen, being overly cautious not wanting to get involved in politics is naïve at a time, when the world is full of influencing and misleading information. Researchers staying silent will only reinforce the misconceptions.
– We work in field full of misconception and systematic deception. Such an important profession as economists simply cannot stay in the side lines. The same way doctors defend vaccinations, economists must be ready to bring economist reasoning into society, Vartiainen demands.
Everything the researchers say must be based on research or economic reasoning.
Answers to fundamental questions
In Vartiainen’s youth in the 70’s, there was a fierce debate on the supremacy of communism and capitalism, plan economy and market economy.
– The debate was not just academic, there was hard and, in global politics, even a violent battle line between these two alternatives, Vartiainen describes the time.
Vartiainen studied law, philosophy and mathematics, until economics carried the day.
– I thought that Keynesian economics, the competition between socialism and the market economy, and the development of the welfare state in between these two, were too important questions to be ignored. I thought I must learn and resolve these issues, he says.
There are economists, who approach economics as a natural science. They attempt to model and explain people’s behaviour and how markets work. Vartiainen does not disagree with their approach.
– For me, economics has always been the basic science of societies, which seeks to answer the fundamental question of what is a good society, he describes his interest in economics.
– I am extremely glad that I had the opportunity to work at VATT, Vartianen concludes the interview.
Master of Social Sciences (Economics) 1983, University of Helsinki and London School of Economics
Doctor of Social Sciences (Economics) 1992, University of Helsinki
Academy of Finland, research field of social sciences, head research assistant 1984-1986
Labour Institute for Economic Research, senior researcher 1993-1996
Labour Institute for Economic Research, senior researcher 1996-1998
Labour Institute for Economic Research, research coordinator 1999-2005
Palkansaajien tutkimuslaitos, tutkimuskoordinaattori 1999-2005
Fackföreningsrörelsens institut för ekonomisk forskning (FIEF), researcher 2002-2003
Fackföreningsrörelsens institut för ekonomisk forskning (FIEF), managing director 2003-2005
National Institute of Economic Research (Sweden), research director 2005-2012
VATT Institute for Economic Research, director general 2012-2015
Kansallisen kokoomuksen eduskuntaryhmä, kansanedustaja 2015-
Director General interviews
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VATT 30 years