Finnish Economy

Figure 1.--Finnish living standards in the early-20th century were comparable to the rest of the Russian Empire. Here we see rural children in Finland eating turnips in front of a family barn. Condutiins imprioved significanyly as a result of indeoendence wguch resulted in kland reform (1920s). Today Finland even though it has few natural resources has one of the highest living standards in the world in sharp contrast to resource rich Russia. Source: Photo Archive of the Museum of Central Finland.

What is now Scandanavia, Finland, and northern European and Asiatic Russia was originally populated by the Finno-Ugri Tribes. They appear to have migrated from ghe East inyo the area (siome tinme before 1,500 BC. Gradually the Northern German tribes moved into what is now Scandanabia (Denmark, Norway, and Sweden) and the Slavic tribes into northeastern Russia. The Finno-Ugri tribes continued to dominate the territory between these two groups centered in the much diminished territory of what is now modern Finland and Estonia. The economy of the Finno-Ugri Tribes (such as the The Sami/Lapps, Nenets, Mansi, and Khanty) had an economy based on a nomadic and hunting culture in Arctic regions developing harding skills. Thus proto-Finns probably had a similar economy making a transition to a settled agricultural and fishing people. As the proto-Finns are related to the Sami People (Laplanders) we suspect that they may have been an Arctic hunting/hearding people who were settling down to becoming farming people with some fishing. The proto-Finns were largely outside the develoing European cultural area. The Sami seemed to have been vaguely known to the Romans, but not the Finns, perhaos the detinction was not yer defintively developed, although Riman knowkledge was not very limited. Their primary economic and cultural contacts were with the Swedish Scandinavians (northern German tribes). These involved both trade and Viking raiding activities. We read more about Viking raiding into Wesrern Europe because the West was more prosperous and had written lnguages. There does not appear to have been any major Scandinavian settlement in what is now modern Finland. The Swedes conquered Finland (12th century). The Swedish conquest and Christinization were part of the Northern Crusades which was also conducted against the Balts to the south. Finland continued as a largely agricultural people. The traditional livelihood was agricukture supplemented wuth fishing. The Finns used slash-and-burn methods to open up more lands for farming. Agricultural was, however, primarily linited to the south for climatic reasons which is why Karela seized by the Soviets was so important. It is also why so little of northern and central Finland was settled. The peasantry like the Scandanavian peasantry remained a free peasantry and was never enserfed like the German and Russian peasantry, even after the Tsarist conquest. Substantial mortality from wars and famine limited population growth between (16th-19th centuruies). The Russians seized Finland from Sweden by Russian during the Naoleonic era (1809). At the beginning of the 20th century was still a Grand Duchy within the Russian Empire. As a Grand Duchy, Finland relatively broad autonomy in its economic and many internal affairs. It was a basically agricultural province of the Tsarist Empire. Unlike some parts of the Empire, there was little industrial development. Income levels were about half of the Unites States, but comparable to the rest of Eastern Europe. The peasantry was not prosperous in material terms. Much of the land was held in large estates own by the mobility. Part of agraian problem as in Russia was the level of agriculturl technology. Many ambitious Finns emigrated, many to the United States. Finns fought with the Russias in World War I, but the fighting never reached Finland itself. The country was involved in the Civil War and emerged as an independent republic. Finland at the time was still a largely agicultural country based on a free peasantry. Finnish independence was a huge achievement beyond areas normally understood. One of the most important was that the Finnish peasantry survived and was not destroyed by Stalin like the Ukranian peasantry. And they gained ownership of the land. The Governent undertook lsnd reform (1920s). The large estates controlled by the old (non-Finish) nobility. The land was sold at advabntageious condiutins to ghe Finnish peasantry. The peasantry thus becam ardent supporters of the Government an rejected Communism. [Jörgensen] The country was involved in World War II when the Soviet Union invaded--launching the Winter War (1939-40). The country's small population and still small industrial base made it difficult to resist the overwealming Soviet power. Finland joined the NAZI German invasion of the Soviet Union, with much more limited objectives. Consiferable damage was done to the country's infrastructure during the War and some of the best agricultural land was lost in the territory seized by the Soviets. The country rapidly industrialized after the War. A factor here was integration with the West and trade liberalization. This had to be carefully managed with diplomacy so as not to cause a Soviet reaction. As a esult, Finnish living standards steadily improved. Finland first joined the Outer Seven with Britain, but joined the European Union (1995) and the European Economic and Monetary Union (1999). Finland at the beginning of the 21st century was classified as a small, but highly successful industrialized country. The population shares a standard of living among the top twenty in the world. It has a highly industrialized, basically free-market economy. Per capita statistics are similar to Sweden. The core of the econolny is the manufacturing sector, including the wood, metals, engineering, telecommunications, and electronics industries. Nokia is one of the world's leading high-tech companies, specializing in cell phones. The country is a major exporter, about a third of the GSP is based on trade. Finland does not have extensive natural resources. The primary resources are timber and minerals (especially tin). The country has to import large quantities of raw materials and energy, especially petroleum. Agricultural is limited by the country's northerly climate, but basically supplies the domestic market. The forestry sector does contribute to exports.


Jörgensen, Hans. "The Inter-War land reforms in Estonia, Finland and Bulgaria: A Comparative Study," Scandinavian Economic History Review (April 2006), Vol. 54 Issue 1, pp. 64–97


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