The Cold War: Finland (1944-92)

Figure 1.--After World War II, Stalin ordered the Finns not to accept American Marshall Plan aid. The Soviets also demanded that the Finns orient their economy toward the Soviet Union and Soviet Empire East Block. Finlandization did not just mean Soviet control of Finnish foreign policy it meant that Finland was not able to share in the post-War economic boom of capitalist Western Europe. Here we see a rural Finnish family in 1961. What Finland preserved was its democracy. There would be no Communist police state in Finland.

Finlandlization became a Cold War term for a country neutralized by the Soviet Union, but able to retain a democratic government with civil liberties. Less discussed at the time was how forced Soviet economic policies meant economic stigmatization and poverty, the same failures that would eventually lead to the collapse of the Soviet Empire and the Soviet Union itself. Stalin after signing the Non-Aggression Pact with Hitler first invaded Poland (September 1939). His next target was Finland (November 1939). The Finns contrary to Stalin's expectations fought and proved a tough adversary and fought back in the Winter War (1939-40). In the end the Soviets with the enormous Red Army prevailed over the tiny Finnish Army. annexed Finnish borderlands, but the Finns remained independent, which probably would not have occurred had they not fought. The Finns subsequently joined the NAZIs in the invasion of the Soviet Union (June 1941), but restricted their participation to recovering Finnish territory. They eventually withdrew from the alliance with the NAZIs and had to turn more territory over to the Soviets. The Finns managed to maintain their independence even as NAZI Germany was destroyed. The Finns managed to maintain their independence. Stalin demanded a high price, including more territory. Probably because of his World War II alliance with the West and post-War image, he decided to tolerate Finnish independence, albeit under tight control. The process became known as Finlandization. Finland was allowed a free hand in its domestic policies as long as it did not ally with the West or criticize Soviet conduct in international fora. As a result, Finland pursued neutral policies during the Cold War. The Finns were allowed to control their domestic policies as long as they essentially accepted Soviet influence if not control of their foreign policy. The Finns thus did not participate in the Marshal Plan or join NATO (1948-49). They benefited, however, because of NATO blockading further Soviet control in Europe. This left space for both Austrian, Finnish and Swedish neutrality on the Iron Curtain borderlands. Of the three, the Soviets exercised more control over Finland. This meant that for nearly two decades, the Finns did not participate in the American-led post-War European economic recovery beginning with the German Economic Miracle. The Finns manged, however, to retain their precious democracy. The Soviet Union offered an alternative to the Marshall plan--the Molotov Plan. The Soviets claimed to offer subsidies and trade preferences. It eventually evolved into the COMECON. In actuality the Soviet economic relationship developed into Finnish and other Eastern European subsidies to the Soviets. The Finns had to export to the Soviets what might have earned them valuable hard currency in the West. In return they got low-quality, high cost Soviet manufactured goods. The result was that the Swedish and Finnish economies that had become closely linked developed very differently. Sweden like the rest of Western Europe boomed. Finns endured low wages and high unemployment (1950s-60s). The kinds of control the Soviets maintained in Finland are similar to what Russia today is seeking to achieve in Ukraine, although they tolerated Finnish democracy. Gradually Finland gained more control over economic policy. It was, however, only after the collapse of the Soviet Union that Finland was able to join the European Union (1995).

World War II

Stalin after signing the Non-Aggression Pact with Hitler (August 1939) first invaded Poland as a NAZI ally (September 1939). His next target was neutral Finland (November 1939). The Finns contrary to Stalin's expectations fought and proved a tough adversary and fought back in the Winter War (1939-40). In the end the Soviets with the enormous Red Army prevailed over the tiny Finnish Army. The Soviets annexed Finnish borderlands, especially Karelia, but the Finns remained independent, which probably would not have occurred had they not fought. The Finns subsequently joined the NAZIs in the Barbarossa invasion of the Soviet Union (June 1941), but restricted their participation to recovering Finnish territory. Aftervthe Ostkrieg wen terriabky wrong for the Germans, the Finns withdrew from the alliance (September 1944) with the NAZIs. And as part of the deal with the Soviets had to turn more territory over to the Soviets as well as frive the Germans out of norternFinland--the Lappland War. As a result, the Finns managed to maintain their independence, albeit at condiderabke cist, even as NAZI Germany was destroyed.

Finlandization

Finlandization became a Cold War term for a country neutralized by the Soviet Union, but able to retain a democratic government with civil liberties. It was a term that came out of the West German press and focused primarily on foreign policy. Less discussed at the time was how forced Soviet economic policies meant economic stagnation and poverty, the same failures that would eventually lead to the collapse of the Soviet Empire and the Soviet Union itself. The Finns managed to maintain their independence. Stalin demanded a high price, including more territory. Probably because of his World War II alliance with the West and early post-War image, he decided to tolerate Finnish independence. Stalin was hopeful of controlling Western Europe, expecting an American withdrawal and election victories in France and Italy. Finnish independence, however, had limits. Finland was allowed a free hand in its domestic policies as long as it did not ally with the West or criticize Soviet conduct in international fora. As a result, Finland pursued strictly neutral policies during the Cold War. The Finns were allowed to control their domestic policies as long as they essentially accepted Soviet influence if not control of their foreign policy. The Finns did not join either NATO or the Warsaw Pact. They benefited from NATO, however, because of NATO blockading further Soviet control in Europe. This left space for both Austrian, Finnish and Swedish neutrality on the Iron Curtain borderlands. Of the three, the Soviets exercised more control over Finland. After World War II, the Finno-Soviet Pact of Friendship, Cooperation and Mutual Assistance (YYA Treaty) gave the Soviet Union ways of intervening in Finnish domestic politics. The post-War era was dominated by long-serving president Urho Kekkonen. The real danger of Soviet intervention gave him a weapon to use against his critics. He was able to maintain essentially a monopoly on Soviet relations (1956-82). President Kekkonen's failing health forced him to retire after holding office for 25 years. His policies remained in force after he left office until the implosion of the Soviet Union (1991). The policy was to avoiding any policy or statement that would offend the Soviets.

Finnish Democracy

The kinds of control the Soviets maintained in Finland are similar to what Russia today is seeking to achieve in Ukraine, although in the end, Stalin decided to tolerated Finnish democracy which Russia seems unwilling to do in Ukraine. Finns were divided between a monarchy and a republic after declaring independence from Russia at the end of World War I (1918). Baron Carl Mannerheim led the White forces in the Finnish Civil War that made this possible. A parliamentary democracy was established. There was no Bolshevik coup attempt and democracy survived the anti-Communist Lapua Movement. The Bolsheviks after early defeats in Finland focused on the Baltics and Poland to the south. Finnish society successfully moved toward greater social integration and economic progress (1920s-30s), building support for the democratic parties and weakening the appeal of the Communists. This and knowledge of Stalin's treatment of Finns in the Soviet Union along with Finnish portrait explain the popular support to resist Soviet aggression in the seemingly Quitotic Winter War (1939-40). In return for Finlandization, the Soviets tolerated Finnish democracy, a concession not allowed elsewhere in the Soviet Empire except Austria. Elections are only part of democracy. The Finns were spared the atrocities of the Soviet NKVD and collaborating Communist police forces which spread terror throughout the Soviet Eastern European Empire. The Finnish police and independent judiciary respected democratic norms and basic civil liberties. Finland had one of the freest presses in the world, although during the YYA era practiced self censorship concerning the Soviet Union. We are not sure how the Finnish press today deals with Putin and Russia.

Social Welfare

The Finns followed the same basic trends as Scandnavia to the west. Progressive social legislation included child labor laws, work place safety, social insurance (social security), assistance for mothers and young children, aid for the poor, handicapped, alcoholics, and the mentally handicapped, and housing aid. Finland led European trends in the emancipation of women. They gained voting rights (1906) and full legal rights with the new Constitution (1919). Many women entered the work force, including the professions and politics. All of these achievements meant the generation of considerable support not only for independence, but a democratic Government.

Soviet Economic Constraints

The Soviets left Finland's market economy and private ownership of farms untouched. This should be seen within the context that Stalin and other Soviet officials believed that after the War that Communism would prove its superiority. And since the Communist Party was allowed to participate in the political process, the Finns would turn to Communism. Here we are not entirely sure about what transpired in Finland. The Finns did not dare participate in the American Marshall Plan (1948) This meant that for nearly two decades, the Finns did not participate in the American-led post-War European economic recovery beginning with the German Economic Miracle. The Soviet Union offered an alternative to the Marshall plan--the Molotov Plan. The Soviets claimed to offer subsidies and trade preferences. It eventually evolved into the COMECON. In actuality the Soviet economic relationship developed into Finnish and other Eastern European subsidies to the Soviets. The Finns had to export to the Soviets what might have earned them valuable hard currency in the West. It did provide needed raw materials, often at below market prices. In return they got low-quality, high-cost Soviet manufactured goods. The result was that the Swedish and Finnish economies that had become closely linked developed very differently. Sweden like the rest of Western Europe boomed. Finns endured low wages and high unemployment (1950s-60s). Various industries benefited from trade privileges with the Soviets. One source maintains that there was widespread support for pro-Soviet policies among business interests in Finland. Sources claim that there was rapid in the postwar era and by 1975 Finland's GDP per capita was the 15th highest in the world. Here we are looking into just what occurred. It is true that economic success enabled Finland to finance one of the most extensive welfare states in the world.

Finland Joins the West

Gradually Finland gained more control over economic policy and began expanding trade with the West. Finland initially declined to formally participate in Western European integration out of concern with Soviet reaction. Sources claim that there was rapid in the postwar era and by 1975 Finland's GDP per capita was the 15th highest in the world. Here we are looking into just what occurred. It is true that economic success enabled Finland to finance one of the most extensive welfare states in the world. Integration with the West brought trade liberalization. This had, however, to be managed with small steps diplomatically so as not to bring about a Soviet reaction. The steps had to be carefully calculated while Stalin lived. His death (1953) meant that great engagement with the West was possible. Finland's Cold War neutrality dance meant retaining more economic and trade relations with the Soviets than it might have liked. The Finns, for example, were not allowed to accept American Marshall Plan aid (1948). Bilateral trade agreements with the Soviet Union started in 1947 and continued until the Soviet Union was dissolved (1992). On the other hand, the Finns were allowed to join important Western economic bodies: the World Bank, the International Monetary Fund (IMF) and the Brenton Woods agreement (1948), Finland became a member of the General Agreement on Tariffs and Trade (GATT) (1950). Finland participated in European trade liberalization. The first step was an agreement between the European Free Trade Area/Outer Seven (EFTA) and Finland (Finneft) (1961). After the EFTA vegan to follow apart, the Finns deftly managed this, negotiated with the European Economic Community (EEC). Th EEC was the predecessor of the European Union (EU). The resulting treaty mostly eliminates customs duties with the EEC (beginning in 1977). Finland eased tariffs in trade with Western countries. Of course, NATO was out of the question, but neither was Finland forced to join the Warsaw Pact. While Finlandization enabled the country to avoid the painful fate of Central and Eastern European satellite states which became part of the Soviet empire, Finland’s independence came with a large dose of self-censorship and accepting a substantial degree of Soviet controls. Finland after the War was still not fully industrialized. Many Finns despite losing Karelia were still involved in agriculture as well as mining and forestry. And the process of industrialization was slowed by limits the Soviets placed on engagement with the West. The country did industrialize and unlike the Soviets created efficient profit making companies that could compete in Western markets. And as a result, Finnish living standards steadily improved, much more rapidly than in the Soviet Union. Finland did not fully join the EU until after the collapse of the Soviet Union (1992). Finland joined the EU (1995).

Created: 9:35 PM 5/9/2016
Last updated: 8:56 PM 3/5/2024