Government action, cartels, and national corporations - the development strategy of a small peripheral nation during the period of crisis and economic disintegration in Europe. (Finland 1918–1938)

Abstract

This article examines a specific case, the national development strategy of a small peripheral economy, that of Finland, in the inter-war period of crisis and disintegration in Europe. Unlike the East-European agrarian latecomers, Finland, still a producer of raw-materials, was lifting herself closer to the relatively prosperous West-European level. It is shown that among the factors contributing to the rapid economic growth and forest-based industrial progress of Finland, the most important one was the successful set of means consisting of government action coloured by agrarian interests, the establishment of state-owned industrial corporations inspired by economic nationalism and entrepreneurial enthusiasm, and intensive cartellization, led by the private family firms of the export sector.