Independence and Civil War
In the aftermath of the February Revolution in Russia, Finland received a new Senate, a coalition-Cabinet with the same power structure as the Finnish Parliament. Based on the general election in 1916, the Social Democrats had a small majority, and the Social Democrat Oskari Tokoi became prime minister. The new Senate was willing to cooperate with the provisional government of Russia, but no agreement was reached. Finland considered the personal union with Russia to be over after the dethroning of the Tsar—although the Finns had de facto recognized the provisional government as the Tsar's successor by accepting its authority to appoint a new Governor General and Senate. They expected the Tsar's authority to be transferred to Finland's Parliament, which the provisional government of Russia refused, suggesting instead that the question should be settled by the Russian Constituent Assembly.
For the Finnish Social Democrats it seemed as though the bourgeoisie was an obstacle on Finland's road to independence as well as on the proletariat's road to power. The non-Socialists in Tokoi's Senate were, however, more confident. They and most of the non-Socialists in the Parliament, rejected the Social Democrats' proposal on parliamentarism (the so-called "Power Act") as being too far-reaching and provocative. The act restricted Russia's influence on domestic Finnish matters, but didn't touch the Russian government's power on matters of defence and foreign affairs. For the Russian Provisional government this was, however, far too radical. As the Parliament had exceeded its authority, it was dissolved.
The minority of the Parliament, and of the Senate, were content. New elections promised a chance to gain majority, which they were convinced would improve the chances to reach an understanding with Russia. The non-Socialists were also inclined to cooperate with the Russian Provisional government because they feared the Socialists' power would grow, resulting in radical reforms, such as equal suffrage in municipal elections, or aland reform. The majority had the completely opposite opinion. They didn't accept the Provisional government's right to dissolve the Parliament.
The Social Democrats held on to the Power Act and opposed the promulgation of the decree of dissolution of the Parliament, whereas the non-Socialists voted for promulgating it. The disagreement over the Power Act led to the Social Democrats leaving the Senate. When the Parliament met again after the summer recess in August 1917, only the groups supporting the Power Act were present. Russian troops took possession of the chamber, the Parliament was dissolved, and new elections were carried out. The result was a (small) non-Socialist majority and a purely non-Socialist Senate. The suppression of the Power Act, and the cooperation between Finnish non-Socialist forces and oppressive Russia provoked great bitterness among the Socialists, and had resulted in dozens of politically motivated attacks and murders.
The October Revolution of 1917 turned Finnish politics upside down. Now, the new non-Socialist majority of the Parliament desired total independence, and the Socialists came gradually to view Soviet Russia as an example to follow. On November 15, 1917, the Bolsheviks declared a general right of self-determination, including the right of complete secession, "for the Peoples of Russia". On the same day the Finnish Parliament issued a declaration by which it temporarily took power in Finland.
Worried by the development in Russia, and Finland, the non-Socialist Senate proposed that Parliament declare Finland's independence, which was agreed on in the Parliament on December 6, 1917. On December 18 (December 31 N. S.) the Soviet government issued a Decree, recognizing Finland's independence, and on December 22 (January 4, 1918 N. S.) it was approved by the highest Soviet executive body—VTsIK. Germany and the Scandinavian countries followed without delay.
Finland after 1917 was bitterly divided along social lines. The Whites consisted of the Swedish-speaking middle and upper classes and the farmers and peasantry who dominated the northern two-thirds of the land. They had a conservative outlook and rejected socialism. The socialist-Communist Reds comprised the Finnish-speaking urban workers and the landless rural cottagers. They had a radical outlook and rejected capitalism.
From January to May 1918, Finland experienced the brief but bitter Finnish Civil War. On one side there were the "white" civil guards, who fought for the anti-Socialists. On the other side were the Red Guards, which consisted of workers and tenant farmers. The latter proclaimed a Finnish Socialist Workers' Republic. World War I was still underway and the defeat of the Red Guards was achieved with support from Imperial Germany, while Sweden remained neutral and Russia withdrew its forces. The Reds lost the war and the White peasantry rose to political leadership in the 1920s–1930s. About 37,000 men died, most of them in prisoner camps ravaged by influenza and other diseases.
Finland in the inter-war era
After the civil war the parliament, controlled by the Whites, voted to establish a constitutional monarchy to be called the Kingdom of Finland, with a German prince as king. However, Germany's defeat in November 1918 made the plan impossible and Finland instead became a republic, with Kaarlo Juho Ståhlberg elected as its first President in 1919. Despite the bitter civil war, and repeated threats from fascist movements, Finland became and remained a capitalist democracy under the rule of law. By contrast, nearby Estonia, in similar circumstances but without a civil war, started as a democracy and was turned into a dictatorship in 1934.
Large scale agrarian reform in the 1920s involved breaking up the large estates controlled by the old nobility and selling the land to ambitious peasants. The farmers became strong supporters of the government.
The new republic faced a dispute over the Åland Islands, which were overwhelmingly Swedish-speaking and sought retrocession to Sweden. However, as Finland was not willing to cede the islands, they were offered an autonomous status. Nevertheless, the residents did not approve the offer, and the dispute over the islands was submitted to the League of Nations. The League decided that Finland should retain sovereignty over the Åland Islands, but they should be made an autonomous province. Thus Finland was under an obligation to ensure the residents of the Åland Islands a right to maintain the Swedish language, as well as their own culture and local traditions. At the same time, an international treaty was concluded on the neutral status of Åland, under which it was prohibited to place military headquarters or forces on the islands.
Alcohol abuse had a long history, especially regarding binge drinking and public intoxication, which became a crime in 1733. In the 19th century the punishments became stiffer and stiffer, but the problem persisted. A strong abstinence movement emerged that cut consumption in half from the 1880s to the 1910s, and gave Finland the lowest drinking rate in Europe. Four attempts at instituting prohibition of alcohol during the Grand Duchy period were rejected by the czar; with the czar gone Finland enacted prohibition in 1919. Smuggling emerged and enforcement was slipshod. Criminal convictions for drunkenness went up by 500%, and violence and crime rates soared. Public opinion turned against the law, and a national plebiscite went 70% for repeal, so prohibition was ended in early 1932.
Nationalist sentiment remaining from the Civil War developed into the proto-Fascist Lapua Movement in 1929. Initially the movement gained widespread support among anti-Communist Finns, but following a failed coup attempt in 1932 it was banned and its leaders imprisoned.
Relations with Soviet Union
In the wake of the Civil War there were many incidents along the border between Finland and Soviet Russia, such as the Aunus expedition and the Pork mutiny. Relations with the Soviets were improved after the Treaty of Tartu in 1920, in which Finland gained Petsamo, but gave up its claims on East Karelia.
Tens of thousands of radical Finns—from Finland, the United States and Canada—took up Stalin's 1923 appeal to create a new Soviet society in the Karelian Autonomous Soviet Socialist Republic (KASSR), a part of Russia. Most were executed in the purges of the 1930s
The Soviet Union started to tighten its policy against Finland in the 1930s, limiting the navigation of Finnish merchant ships between Lake Ladoga and the Gulf of Finland and blocking it totally in 1937.
Finland in the Second World War
During the Second World War, Finland fought two wars against the Soviet Union: the Winter War of 1939–1940, resulting in the loss ofFinnish Karelia, and the Continuation War of 1941–1944 (with considerable support from Nazi Germany resulting in a swift invasion of neighboring areas of the Soviet Union), eventually leading to the loss of Finland's only ice-free winter harbourPetsamo. The Continuation War was, in accordance with thearmistice conditions, immediately followed by the Lapland War of 1944–1945, when Finland fought the Germans to force them to withdraw from northern Finland back into Norway (then under German occupation).
In August 1939 Nazi-Germany and the Soviet Union signed theMolotov-Ribbentrop Pact, where Finland and the Baltic states were given to the Soviet "sphere of influence". After the Invasion of Poland, the Soviet Union sent ultimatums to the Baltic countries, where it demanded military bases on their soil. The Baltic states accepted Soviet demands, and lost their independence in the summer of 1940. In October 1939, the Soviet Union sent the same kind of request to Finland, but the Finns refused to give any land areas or military bases for the usage of the Red Army. This caused the Soviet Union to start a military invasion against Finland on 30 November 1939. Soviet leaders predicted that Finland would be conquered in a couple of weeks. However, even though the Red Army had huge superiority in men, tanks, guns and airplanes, the Finns were able to defend their country about 3.5 months and still avoid invasion successfully. The Winter War ended on 13 March 1940 with the Moscow peace treaty. Finland lost the Karelian Isthmus to the Soviet Union after the war. The Winter War was a big loss of prestige for Soviet Union, and it was expelled from the League of Nations because of the illegal attack. Finland received lots of international goodwill and material help from many countries during the war.
After the Winter War the Finnish army was exhausted, and needed recovery and support as soon as possible. The British declined to help but in autumn 1940 Nazi Germany offered weapon deals to Finland, if the Finnish government would allow German troops to travel through Finland to occupied Norway. Finland accepted, weapon deals were made and military co-operation began in December 1940.
Finland's support from, and coordination with, Nazi Germany starting during the winter of 1940–41 and made other countries considerably less sympathetic to the Finnish cause; particularly since the Continuation War led to a Finnish invasion of the Soviet Union designed not only to recover lost territory, but additionally to answer the irredentist sentiment of a Greater Finland by incorporating East Karelia, whose inhabitants were culturally related to the Finnish people, although religiously Russian Orthodox. This invasion had caused the United Kingdom to declare war on Finland on 6 December 1941.
Finland managed to defend its democracy, contrary to most other countries within the Soviet sphere of influence, and suffered comparably limited losses in terms of civilian lives and property. It was, however, punished harsher than other German co-belligerents and allies, having to pay large reparations and resettle an eighth of its population after having lost an eighth of the territory including one of its industrial heartlands and the second-largest city of Viipuri. After the war, the Soviet government settled these gained territories with people from many different regions of the USSR, for instance from Ukraine.
The Finnish government did not participate in the systematic killing of Jews, although the country remained a "co-belligrent", a de facto ally of Germany until 1944. In total, eight German Jewish refugees were handed over to the German authorities. In the Tehran Conference of 1942, the leaders of the Allies agreed that Finland was fighting a separate war against the Soviet Union, and that in no way was it hostile to the Western allies. The Soviet Union was the only Allied country which Finland had conducted military operations against. Unlike any of the Axis nations, Finland was a parliamentary democracy throughout the 1939–1945 period. The commander of Finnish armed forces during the Winter War and the Continuation War, Carl Gustaf Emil Mannerheim, became the President of Finland after the war. Finland made a separate peace contract with the Soviet Union on 19 September 1944, and was the only bordering country of USSR in Europe that kept its independence after the war.
During and in between the wars, approximately 80,000 Finnish war-children were evacuated abroad: 5% went to Norway, 10% to Denmark, and the rest to Sweden. Most of the children were sent back by 1948, but 15–20% remained abroad.
The Moscow Armistice was signed between Finland on one side and the Soviet Union and United Kingdom on the other side on September 19, 1944, ending the Continuation War. The armistice compelled Finland to drive German troops from its territory, leading to the Lapland War 1944–1945.
In 1947, Finland reluctantly declined Marshall aid in order to preserve good relations with the Soviets, ensuring Finnish autonomy. Nevertheless, the United States shipped secret development aid and financial aid to the non-communist SDP. Establishing trade with the Western powers, such as the United Kingdom, and the reparations to the Soviet Union caused Finland to transform itself from a primarily agrarian economy to anindustrialised one. After the reparations had been paid off, Finland continued to trade with the Soviet Union in the framework of bilateral trade.
Finland's role in the Second World War was in many ways strange. Firstly the Soviet Union tried to invade Finland in 1939–1940. However, even with massive superiority in military strength, the Soviet Union was unable to conquer Finland. In late 1940, German-Finnish co-operation began; it took a form that was unique when compared to relations with the Axis. Finland signed the Anti-Comintern Pact, which made Finland an ally with Germany in the war against the Soviet Union. But, unlike all other Axis states, Finland never signed the Tripartite Pact and so Finland never was de jure an Axis nation.
Neutrality in Cold War
Finland retained a democratic constitution and free economy during the Cold War era. Treaties signed in 1947 and 1948 with the Soviet Union included obligations and restraints on Finland, as well as territorial concessions. Both treaties have been abrogated by Finland since the 1991 dissolution of the Soviet Union, while leaving the borders untouched. Even though being a neighbor to the Soviet Union sometimes resulted in overly cautious concern in foreign policy ("Finlandization"), Finland developed closer co-operation with the other Nordic countries and declared itself neutral in superpower politics.
In 1952, Finland and the countries of the Nordic Council entered into a passport union, allowing their citizens to cross borders without passports and soon also to apply for jobs and claim social security benefits in the other countries. Many from Finland used this opportunity to secure better paying jobs in Sweden in the 1950s and 1960s, dominating Sweden's first wave of post-war labour immigrants. Although Finnish wages and standard of living could not compete with wealthy Sweden until the 1970s, the Finnish economy rose remarkably from the ashes of World War II, resulting in the buildup of another Nordic-style welfare state.
Despite the passport union with Sweden, Norway, Denmark, and Iceland, Finland could not join the Nordic Council until 1955 because of Soviet fears that Finland might become too close to the West. At that time the Soviet Union saw the Nordic Council as part of NATO of which Denmark, Norway and Iceland were members. That same year Finland joined the United Nations, though it had already been associated with a number of UN specialized organisations. The first Finnish ambassador to the UN was G.A. Gripenberg (1956–1959), followed by Ralph Enckell (1959–1965), Max Jakobson (1965–1972), Aarno Karhilo (1972–1977), Ilkka Pastinen (1977–1983), Keijo Korhonen (1983–1988), Klaus Törnudd (1988–1991), Wilhelm Breitenstein (1991–1998) and Marjatta Rasi (1998–2005). In 1972 Max Jakobson was a candidate for Secretary-General of the UN. In another remarkable event of 1955, the Soviet Union decided to return the Porkkala peninsula to Finland, which had been rented to the Soviet Union in 1948 for 50 years as a military base, a situation which somewhat endangered Finnish sovereignty and neutrality.
Finland became an associate member of the European Free Trade Association in 1961 and a full member in 1986. A trade agreement with the EEC was complemented by another with the Soviet Bloc. The first Conference for Security and Co-operation in Europe (CSCE), which lead to the creation of the OSCE, was held in Finland in 1972–1973. The CSCE was widely considered in Finland as a possible means of reducing tensions of the Cold War, and a personal triumph for President Urho Kekkonen.
Officially claiming to be neutral, Finland lay in the grey zone between the Western countries and the Soviet Union. The "YYA Treaty" (Finno-Soviet Pact of Friendship, Cooperation, and Mutual Assistance) gave the Soviet Union some leverage in Finnish domestic politics. However, Finland maintained capitalism unlike most other countries bordering the Soviet Union. Property rights were strong. While nationalization committees were set up in France and UK, Finland avoided nationalizations. After failed experiments with protectionism in the 1950s, Finland eased restrictions and made a free trade agreement with the European Community in 1973, making its markets more competitive. Local education markets expanded and an increasing number of Finns also went abroad to study in the United States or Western Europe, bringing back advanced skills. There was a quite common, but pragmatic-minded, credit and investment cooperation by state and corporations, though it was considered with suspicion. Support for capitalism was widespread. Savings rate hovered among the world's highest, at around 8% until the 1980s. In the beginning of the 1970s, Finland's GDP per capita reached the level of Japan and the UK. Finland's economic development shared many aspects with export-led Asian countries.
Society and the welfare state
Before 1940 Finland was a poor rural nation of urban and rural workers and independent farmers. There was a small middle class, employed chiefly as civil servants and in small local businesses. As late as 1950 half of the workers were in agriculture and only a third lived in urban towns. The new jobs in manufacturing, services and trade quickly attracted people to the towns and cities. The average number of births per woman declined frombaby boom a peak of 3.5 in 1947 to 1.5 in 1973. When baby boomers entered the workforce, the economy did not generate jobs fast enough and hundreds of thousands emigrated to the more industrialized Sweden, migration peaking in 1969 and 1970 (today 4.7 percent of Swedes speak Finnish). The 1952 Summer Olympics brought international visitors and marked the nation's most visible presence on the international stage.
By the 1990s, farm laborers had nearly all moved on, leaving owners of small farms. By 2000 the social structure included a politically active working class, a primarily clerical middle class, and an upper bracket consisting of managers, entrepreneurs, and professionals. The social boundaries between these groups were not distinct. Causes of change included the growth of a mass culture, international standards, social mobility, and acceptance of democracy and equality as typified by the welfare state.
The generous system of welfare benefits emerged from a long process of debate, negotiations and maneuvers between efficiency-oriented modernizers on the one hand and Social Democrats and labor unions. A compulsory system provides old-age and disability insurance, financed mostly by taxes on employers. The national government provides unemployment insurance, maternity benefits, family allowances, and day-care centers. Health insurance covers most of the cost of outpatient care. The national health act of 1972 provided for the establishment of free health centers in every municipality. There were major cutbacks in the early 1990s, but they were distributed to minimize the harm to the vast majority of voters.
The post-war period was a time of rapid economic growth and increasing social and political stability for Finland. The five decades after the Second World War saw Finland turn from a war-ravaged agrarian society into one of the most technologically advanced countries in the world, with a sophisticated market economy and high standard of living.
In 1991 Finland fell into a depression caused by a combination of economic overheating, fixed currency, depressed Western, Soviet, and local markets. Stock market and housing prices declined by 50%. The growth in the 1980s was based on debt and defaults started rolling in. GDP declined by 15% and unemploymentincreased from a virtual full employment to one fifth of the workforce. The crisis was amplified by trade unions' initial opposition to any reforms. Politicians struggled to cut spending and the public debt doubled to around 60% of GDP. Some 7–8% of GDP was needed to bail out failing banks and force banking sector consolidation. After devaluations the depression bottomed out in 1993.