Nationalism and Industrial Development in Finland

Kari-Erik Micheisen Markku Kuisma Universityof Helsinki

A quickscan of the historiographyof businessand economichistory reveals that both bodies of scholarshiphave focusedon large Western Europeancountries and the United States.This comesas no surprise.Modern businessinstitutions, entrepreneurs and ideologieswere born, raised and cultivatedin Western Europe and the United States. The emphasison developmentin Germany,France, Great Britainand the United States,has overshadowed the evolution of modern business life in small and less advancedcountries. As SidneyPollard points out, scholarshave often viewed peripheralEurope as a passiverecipient of new industrialproducts from the center,and a moreor lessunderdeveloped supplier of raw materials,surplus laborand foodto advancedregions [19]. Recent studies of smallerEuropean countriesillustrate, however, that this broadlyaccepted view is somewhat,if not completely,misleading. For instance,countries such as Sweden,Norway, Czechoslovakia,Poland and the Netherlandshad already developed large scale industriesand advancedbusiness institutions in the 19th centurywhich were comparable--notin size but in structureand function--tothose in more advancedcountries [10, 22, 5, 8, 12]. One obviousreason for the distortedpicture is that modernbusiness enterprisesand institutions in peripheralEurope are generallysmaller and less significantthan those in the United States, Germany, France and Great Britain. Smaller countrieswere not capableof providingthe capital,raw materials,energy resources, skilled labor, technologies and expertise required to build a diversifiedindustrial sector. Distinguishing the most promising industrialendeavors, and concentratingon them, has been an absolute necessityin smallcountries. In addition,private and publicsectors have had to find waysto collaborateand thussecure the necessarysupply of natural resources. Althoughthe evolutionof modernlarge scale industries and enterprises differsin manyways in peripheralEurope, the centerand peripheryshare similar origins.As Alfred D. Chandlerhas pointedout, salariedmanagers monitor and co-ordinatemodern businessenterprises. Also modern enterprisesare seenas evolvingfrom singleunit companiesto multifunctional,

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multiregionaland even multinational enterprises [4]. Publicpolicy has shaped the evolutionof modernmultinational enterprises in the centeras well as the periphery.Yet the principlesof publicpolicy in centercountries often differ from those in the periphery.It is well known that anti-trust legislation protected free markets and controlled the growth and influence of multinationalenterprises in the United States,Germany and Great Britain.At the sametime, in the Europeanperiphery, public policy was structured so as to enhancecollaboration between the public and private sectors,and to restrictcompetition in orderto protectbig business.' It is our intentionto examinehow and why the Finnishgovernment created an environmentfavorable to the growth of big business.Finland providesan extremelyinteresting case. Although small in population,Finland rapidlydeveloped into a modernEuropean industrial state during the interwar period.This accomplishment was exceptional among the newnations that had gainedsovereignty after World War I. Why did Finlandsucceed where others failed? Historians have pointed out that Finland had already created independentlegal and bureaucraticinstitutions by the 19th century.Finland wasalso able to build relativelystrong national identity under Russian rule. Therefore,Finland was politically,socially and culturallyindependent and readyto set herselffree from the Russianempire. It is the aim of thisarticle to explainhow the businesssector reacted to publicpolicy introduced following World War I. We will arguethat the Finnishgovernment integrated private and state owned enterprises, as well as multinational enterprises,into a process that unified the nation and transformedFinland from an agriculturalinto a modernindustrial state. The coreof thisprocess was public policy deeply influenced by nationalism.Hence, we will arguethat nationalismplayed a far greaterrole in the creationof modern Finland than previouslythought. Nationalism encouragedthe governmentto createlarge state ownedenterprises, to allow foreignhigh technologymultinational enterprises to selectivelyinvade Finnish markets, and finallyto find a new type of industrialentrepreneur, "a patrioticmanager."

Divided Nation

On December6, 1917the Finnish Senate declared Finland independent from the RussianEmpire. The declarationof independenceended a century- longrelationship between the two nations. The decisionto separatethe Grand Duchyof Finlandfrom Russia was made rapidly after Bolsheviks seized power in St. Petersburg.The quickdeclaration of independencealarmed Finnish Socialistsand Communists,who declared their solidarity with fighting comradesin Russia.Conservative parties, however, were determined to secure independence.As a result,political polarization escalated and a bloodyand bitter civilwar wasfought during the springof 1918[20].

IStateintervention ineconomic and industhai development isoften misunderstood torepresent socialism.As we showin this article,state intervention also could be usedto preventsocialism and strengthennational institutions. See [19, pp. 159-63]. 345

As usuallyhappens after a civilwar, a nationis socially,politically and culturallydivided. Finland proved to be no exception.Victorious Whites controlledsociety. Communists and socialistswere imprisonedor forcedinto exile in Soviet Russia. This situation could not last long. The White governmentwas very much awareof the fact that a dividednation was unable to resistthe politicaland ideologicalpressures coming from the East. In addition,England, France and the United Statesdelayed their recognition of Finnishindependence aslong as the political situation in thecountry remained unsettled.The White governmenttook the firststeps to unifythe nationin the fall of 1918.Red prisonerswere pardoned, concentration camps dissolved and moderate left-wing parties were granted political rights. In addition, land reformwas introduced which provided farming land to a politicallyunstable rural proletariat.Also, municipal governments were encouraged to startsocial housingprojects and employersto improveworking conditions in factories. Theseinitiatives were successful.The ideologicalgap between socialists and conservativesslowly narrowed and political tensions lessened. As the standard of livingrose, life returnedto normal.Two decadeslater, in November1939, whenthe SovietUnion attackedFinland, the nationstood solidly against the aggression[1].

The Collapse of Market Structure

Finlandindustrialized during the lastthree decades of the 19thcentury. Lureberingin previouslyuntouched forests and incipient development of hydro powermade large scaleproduction of timber,pulp and paper possible.The dominationof Finland'sexport market by forestindustries is illustratedby the fact that wood,paper and pulp comprisedmore than 90% of Finnishexports in 1920 and over 80% as late as 1938.

Table1. Mainexport goods in 1920and 1938 (%)

1920 1938

Timberand wood procucts 56.4 40.3 Pulpand paper 37.3 41.5 Forestproducts, total: 93.7 81.8 Otherexport goods, total: 6.3 18.2 Source:Suomen taloushistoria, osa 2. Helsinki 1982,p. 269.

The wealth createdby forest industrieswas broadly dispersedin Finnishsociety. It is oftenargued that Finnishsociety and its culturalheritage have been built on forests. The dominance of forests in Finnish culture is derivedfrom age-oldtraditions. Historically, forest land had not beenowned by private companies,but rather by farmers,peasants and the state. Therefore,forest industries became dependent on farmersand land-owners whocontrolled the valuableraw materialsupply. This relationshipprompted 346

the movementof capitalfrom the industrialto the agriculturalsector. The agriculturalsector, in turn, suppliedforest industries with raw materialand skilledas well as unskilledlabor [21]. Finnishsawmills and tar producersestablished business relations with Europeanship-building and constructionindustries by the 17th and 18th centuries.These associations proved valuable in the 19thcentury, when rapid urbandevelopment in Englandand Germanyopened new marketsfor wood products.Finnish saw mills and lumber companies eagerly supplied these new markets.Just prior to World War I, Finlandwas estimatedto be the third largesttimber exportingcountry in Europe [2]. A sizableproportion of Finnishpulp and paper productswere sold on the Russianmarkets. An estimated80% of the total productionof paper in Finland was "exported"to Russiabefore World War I. The word "export"is slightlymisleading because the Russianmarkets were in fact domesticmarkets for Finnishpaper makers. Finnishpaper was very popular in the largeprinting houses of St. Petersburg, Moscow,Kiev, Odessaand Minsk. Justbefore the war the Finns controlled about30% of the Russianpaper market [17, 18]. World War I, the October revolutionand the Civil War in Russia changedthe structureof the paper market entirely.In short, the Russian paper market dosedwhen the Bolsheviksseized power. At the same time, World War I closedthe exportroute of timber from Finland to European markets.The dramaticchange in market structureis illustratedby the followingfigures: in 1910 about27% of Finnishexports went to Russiaand approximatelythe sameshare went to Great Britain;two decadeslater the tide had turned,Germany and Great Britainwere the mostimportant trading partnerswhile only0.5% of Finnishexports went to the SovietUnion [16]. The collapseof the Russianmarket was, of course,a terribleshock to the Finnishpaper industry. Paper makers had to find businesspartners in westernEuropean markets. The loss of Russianmarkets also causeda decreasein the food supplyin Finland. Russia had started to "export" inexpensivegrain to Finlandin the 19thcentury. Because of this,dairy-farming graduallyreplaced grain production, especially in the easternpart of Finland. By the dawnof this century,Finland was not self-sufficientin grain.When Lenin'sgovernment cut off the grainsupply in 1917,starvation and hunger plaguedFinland for the firsttime sincethe yearsof the greatfamine of 1867- 68.

New EconomicPolicy

Upheavalin the springand summerof 1918forced the government to take radicalsteps to improvethe economicsituation, but there was not much the governmentcould do. Russianpaper markets were permanently dosed.The marketsfor timberexports remained closed as long as war in Europe continued.The domesticsituation was evenworse. Factories were partiallydemolished and a large numberof workerssuffered from diseases and malnutritionin concentrationcamps. Deserted farms and uncultivated fieldspredicted more starvation and famine for the comingwinter. There was, however,some light in the darkness.The demandfor timberwas expected to 347

increasewith the reconstructionof Europeancities following the w• The collapseof the Russianempire eliminatedone of the largestproducers of timberfrom the European market and Finnish sawmills were more than eager to take over the former Russianshare. Also, the demandfor paper was expectedto increaseafter the war. Although Finnish paper was low in quality, there was a growingdemand for brown wrappingpaper and low quality newsprintin Europe. As the war in Europeapproached its conclusion,Finnish companies and the governmenthurried to make preparationsfor the comingeconomic boom.A committeeset up by privatebusiness associations in 1913provided comprehensiveguidelines for future policies [9]. The committee recommended,first, that Finnish companies that exportedgoods should form cartelsto minimizedomestic competition, and second,that the government shouldtake strict measuresto protectdomestic industries (iron and steel, textiles,food stuffs) from foreigncompetition. In the midstof the political chaos,the Finnishgovernment quickly introduced a new economicpolicy basedon thesetwo recommendations. The governmenthad signed commercial treaties with Germany and Austria-Hungaryin 1918. In the early 1920s, similar agreements were made with France, Estonia, the British Commonwealthand the United States[10, pp. 52-63]. In addition,Parliament passed laws prohibiting foreign enterprises from purchasingor owningland, forests,hydro power resources or mineral ore deposits.New tariff regulationsand tax reductions were introduced which gavedomestic industries almost total protectionagainst foreign competition. Forestindustries followed the recommendationsby formingexport cartels in 1918. FINNPAP, FINNBOARD and FINNCELL agreedupon pricesand regulatedproduction of paper,pulp, board and timber. Cartels also promoted the increaseof exportsby establishingbroad networks of salesbranches in majorEuropean, North and SouthAmerican, and Asian cities. In addition, Finnishexport cartels collaborated with otherScandinavian paper and timber cartels,for instancewith Scannewsand Scankraft [3]. The new economicpolicies were highlysuccessful. The volumeof Finnishindustrial production increased at almost8% annuallyduring the interwarperiod. This wasfaster than the averagegrowth of world trade.The Great Depressionslowed growth, but onlytemporarily. The Finnisheconomy wasback on trackby 1932.The wealthcreated by the volumeof exportsand thevery favorable trade balance was widely dispersed throughout society. The nation'sstandard of livingimproved, and the 1930sbecame known as "the goldendecade." For the firsttime, people had money to spendon fashionable clothes,new technologicalappliances, automobiles and entertainment.The rapid and steadyeconomic development in Finlandwas exceptionalrelative to small Eastern European states.If comparedto countrieslike Poland, Rumania, the Baltic States or Yugoslavia,Finland successfullyovercame underdevelopmentand becamea modernindustrial state [6, pp. 45-46]. 348

Nationalism as a Key to Success

Althoughthe new economicpolicy effectively protected Finnish industries,Finland could not dictatethe rules in world markets.Rapid increasesin exportsand the standardof livingcreated pressures to open domesticmarkets to foreigngoods. As Finlandmodernized, the country becamean attractivenew market area for foreigninvestors. Large foreign enterpriseswere eager to procurerights to Finland'slargely untouched natural resources.Sizable German companiesin particularviewed Finland as a potentialbuyer of hightechnology goods and supplier of woodproducts and minerals[6, pp. 286-98]. It is difficultto estimatehow seriously foreign enterprises planned to investin Finland.A numberof variablesmitigated against permitting foreign investment,among them the closeand unsecuredborder with the Soviet Union, as well as Finland'ssmall population and longtransportation routes. Yet, it is certainthat harnessingthe Imatra Falls interestedthe Britishand Frenchelectric power companies. We alsoknow that Metallgeschellshaft tried to obtain rightsto exploitthe rich copper-oredeposits in Outokumpu. However,the protectivebarrier was strong. The onlyforeign companies that successfullypenetrated the protectivebarriers were ZellstoffabrikWaldhof, whichbuilt a chemicalpulp factoryin Kexholm,near Lake Ladoga,and the InternationalNickel Corporation, which obtained rights to extractnickel ore in Petsarno[11]. For the Finnishgovernment it did not matter how real or unreal foreigninvestment plans were. The governmentwas determined to preventthe nation'sresources from slippinginto the handsof multinationalenterprises. In 1918the stateaccordingly purchased two foreignowned companies, W. Gutzeit & Co. and Tornator Ltd.. These transactions amounted to more than 150 million marksor little over 10% of publicrevenue in 1918.These two companieswere chosen by the Finnishgovernment on the basisof practical considerations.British and Norwegian families owned companies had acquired more than 500,000hectares of forestbefore the FinnishSenate passed laws prohibitinglumber companies from buyingforested land. The statefused W. Gutzeit& Co. and Tornatorinto a new company,Enso-Gutzeit Ltd., which inheritednot onlythe forests,but alsoa numberof sawmills,as well as pulp andpaper factories. The giantstate owned company became one of the largest paper,pulp and timber manufacturers in Finlandand had buyers all overthe world [7]. The statetook its next stepin 1921.Parliament turned down offers from foreigncompanies and askedFinnish electric, power and construction companiesto harness the Imatra Falls. This effort was intended to demonstratethe strengthand technological skill of the newnation. It wasnot an accidentthat the governmentchose Imatra Falls to displaydetermination and nationalisticenthusiasm. Imatra Fallshad alwayshad culturaland social valuein Finlandsimilar to NiagaraFalls in the United States.The gigantic task of buildingthe Imatra powerstation took more than ten yearsto completewith the total costexceeding 250 millionmarks. When the power stationwas finishedthe state foundedImatran Voima Corporationwhich 349

monopolizedelectric power distribution in Finland[15]. Finally,in the early 1920s,the state purchasedthe rights to developthe Outokumpucopper depositfrom a Norwegian-Finnishcompany. This transactiondestroyed Metallgesellschaft'splans to transportcopper ore from the Outokumpumine to the company'snew smeltery in Hamburg. The governmentfounded Outokumpu Mining Corporation in 1924. Soon after, the state built a productionchain which linked the Outokumpucopper mines to electrolytic ref'meries,and iron and steelworks in Imatra and Pori [11]. These initiativestaken by the Finnish governmenthad several importantconsequences. First, state ownedenterprises eliminated foreign competitionand concentratedthe productionof paper, pulp, timber and mineralsin the handsof Finnishcompanies. Second, state owned enterprises supportedprivate companiesby investingheavily in technologicaland industrialinfrastructure. In addition,state ownedenterprises produced raw materialsand semifinishedgoods and sold them to other industrialsectors. This decreasedthe needto importexpensive goods from abroad.Third, state ownedenterprises escalated industrialization through the use of largeamounts of natural resources.New enterpriseswere often built in distantlocations, where privatecompanies hesitated to invest.This was especiallytrue in the caseof Veitsiluotosawmill. The newsawmill was located in the northernpart of Finland closeto the Arctic Circle where it usedlarge stateowned forest resources.Fourth, state owned enterprises strongly affected the unificationof the nation.New factoriesincreased the consumptionof wood and other raw materialsin the peripheralareas of the country.This providedextra income to farmersand land-owners.State owned enterprises increased employment opportunities,which in turn decreasedthe rate of unemploymentand thus lessened social tension. In spiteof therapid industrialization, the Finnish industrial sector was still extremelyspecialized. Paper, pulp, timber, and iron and steelindustries producedonly primaryproducts such as timber,pulp, paper,plywood, iron andcopper ore. Without high technology capability Finnish industry depended on foreignhigh technologycompanies for suchgoods as telephones,electric appliances,chemicals and machine-tools.Dependence on foreign high technologygoods and knowledgewas a concernto the Finnishgovernment. Althoughnecessary, multinational enterprises represented alien interests which threatenedto underminethe developmentof a strongnational state. Once foreigninvestment had begun,it becamedifficult to preventthe incursionof foreigncapital into primaryproduction sectors. From thisdelicate position the governmentattempted to f'mdways to satisfyboth foreignhigh technology enterprisesand domesticcompanies. To constructa safety net that would tie Finnish companiesand foreignhigh technology enterprises neatly together, the governmentissued a statute in 1919 which required a foreigner to obtain a permit before establishinga businessin Finland.Additionally, foreign investors could not ownshares in Finnishliability companies. New lawsand regulations supported thesemeasures by stipulatingthat the generalmanager of a firm as well as a majorityof membersof the board of directorshad to be Finnishcitizens. In order to operatein Finland,foreign high technologyenterprises were thus 350

obligedto establishaffiliate companies and recruit a largenumber of Finnish managers,directors and engineers to operateand manage factories in Finland. This gave Finnishmanagers and engineersunique opportunitiesto obtain trainingand educationin highlydeveloped foreign enterprises. The historyof FinnishChemicals provides an excellentexample of how the statesuccessfully encouraged foreign high technology companies to supportindustrial development in Finland.Finnish Chemicals was founded in 1937by three giantmultinational enterprises: IG Farben,ICI and Solvay& Cie. The affiliatecompany, Finnish Chemicals, produced bleaching chemicals (chlorineand caustic soda) for the pulpand paper industries. These chemical substanceswere neededto producethe whitenews-print which had become the trademark of the Finnishpaper industry on the worldmarket during the interwar period [13]. Instead of supportingdomestic electrochemical industries,the governmentasked IG Farben,ICI and Solvay& Cie to build an electrochemicalplant in Finland.To make the offer evenmore attractive, the governmentpromised to partiallyfinance the constructionof the Aetsa plant. Becauseof the size and qualityof the productionin Aetsa, Finnish Chemicalssoon gained control of rapidlygrowing bleaching chemical markets in Finland.As the governmenthad expected,foreign ownersequipped the Aetsaplant with the latest production technology and trained the management in England. As thisexample illustrates, the government selectively allowed foreign hightechnology enterprises to operatein Finland.Simultaneously, legislation carefully protected the primary production sector. Formation and implementationof industrialand public policy therefore resembles the post- war Japanesepolicy making process.Thus, Finland followed a kind of intelligentfollower's strategy by selectivelyallowing western influences while integratingbusiness targets of foreignmultinational enterprises with national developmentgoals and projects.

Patriotic Managers

In orderto functioneffectively the neweconomic policy required the supportof the privatebusiness sector. In the late 19th centurya relatively strongmanagerial culture already existed. The first generationof business managers,however, represented old Swedishfamilies who had stayedin the countryafter Russia captured the province of Finlandfrom Sweden during the Napoleonicwars. Legendary entrepreneurs such as G,•. Serlachius,Wilhelm Rosenlew,and William Ruth penetratedinhabited forest areas in order to establishmodern paper, pulp and timber industriesin the RussianGrand Duchyof Finland. Becauseof the wealthand culturalbackground of these men, they compriseda small Swedishelite that held politicalas well as economicpower in Finlandduring the Russianregime [23]. The situationchanged, however, after Finlandbecame independent. The newlyfounded independent state, ruled by the Finnish-speakingmiddle class,regarded the Swedish-speakingbusiness elite as disloyaland alien. Nationalisticslogans urged the government to takeaction against the Swedish- speakingminority and return Finland to theFinns. There was, however, very 351

little the governmentcould do to limit the economicpower of the Swedish elite. The youngnation of Finlandcould not risk loosingcapital, knowledge and managerialskills during the periodof transition.In order to createa balance between the Finns and Swedish-speakingbusiness elite, the governmenthired top levelmanagers for largestate owned enterprises from middle-classFinnish families. This decisionproved to be highlysuccessful. Both blue and white collarworkers relied on new managerswho spokethe samelanguage and shared the sameethnic heritage. These managers, in turn, spreadthe gospelof nationalismand national unity in isolatedindustrial towns andvillages. This articledoes not permita full studyof the characteristicsof the new managerialgroup, the "patrioticmanagers." Yet, the exampleof V•x_. Kotilainen,the managingdirector of Enso-Gutzeit,will illustratehow the patrioticmanagers operated and why they became such important figures in Finnishsociety during the interwarperiod. V•x_ Kotilainenwas born in February1887 in Hein/ivesi,a smallvillage located in the heartof Finland. His fatherworked as a forestengineer for Halla sawmills.Kotilainen studied law at the Universityof Helsinki,as did manysons of middle-classfamilies at the beginningof the century.His legalcareer was short but brilliant.In 1911 he was electedas judicialtrainee in the Viborg JusticeCourt of Appeals. When World War I interruptedthe dailywork of the Court, Kotilainenleft Viborg to work as a privatelawyer in the easternpart of Finland. Duringthe civilwar, Kotilainenserved in White headquarters.This periodproved to be of greatvalue to him. Kotilainenmade personalfriends with top levelpoliticians and militaryleaders of the White army.Soon after the war, Kajana Wood Corporationhired Kotilainento be its executive manager.At the time,Kajana Corporation was one of the largestpulp, paper and timber corporationsin the country.What wasmore important,however, was that the devotednationalistic Paloheimo family ownedthe corporation. As a recent study has shown, nationalismwas a factor in shapingthe foundationof the corporationby the late 19th century.V•x_. Kotilainen continuedthe tradition and in many ways created an even stronger nationalisticimage for the company[24]. GeneralRudolf Walden, a distinguishedleader of the United Paper Mills and close friend of General Mannerheim,strongly encouraged the governmentto hire Kotilainento be the new executivedirector for state ownedEnso-Gutzeit company in 1924.Walden's trust in Kotilainencame from the time the two men spent togetherin the White headquarters.V•x_. Kotilainenmanaged Enso-Gutzeit from 1924to 1944.During his term, the imageof the companybecame increasingly Finnish. In 1924Kotilainen moved the companyheadquarters to a newlocation, Enso, which lies in the eastern part of the country. In addition,he introducedFinnish as the company's officiallanguage and stronglyrejected Swedish which had been spokenin boardmeetings and businessoffices for more than two centuries.Finally Kotilainenchanged the company'sname by replacingan originallyNorwegian name,W. Gutzeit & Co., with the FinnishEnso-Gutzeit, emphasizing the nationalcharacter of the company.These changes illustrate how Kotilainen 352

favoredFinnish culture and ethnicheritage over the previouslydominant Swedishculture [7, p. 345]. Nationalismalso shaped the socialpolicy of Enso-Gutzeit.It was a dream of VA. Kotilainento organizethe work and life of the company's paper,pulp and timberfactories so that blue and whitecollar workers and managerscould live in proximityand harmony.The socialpolicy of Enso- Gutzeitprovided employees with modern medical care, primary education and vocationaltraining free, or at minimal cost. Additionally,the company commissionedtop Finnisharchitects (for instanceAlvar Aalto) to design housesand buildings for workersand managers.VA. Kotilainenhired Martti Jukola, a leadingFinnish journalist and powerfulnational agitator,as the editor-in-chieffor the company'sweekly journal, Enso-Gutzeit [14]. PersonallyVA. Kotilainenmaintained a close relationshipwith governmentfigures. Because Enso-Gutzeit was a stateowned enterprise, the governmentappointed members to the board of directors.It was therefore hypotheticallypossible that politicianscould exercise strong influence in the company,although this was not the caseduring Kotilainen's term. Step by step Kotilainenconsolidated more powerin his ownhands. As a result,it wassoon impossibleto distinguishEnso-Gutzeit from privatelyowned paper, pulp and timber companies.Although VA. Kotilainen successfullytransformed a foreignowned enterprise into a strongnational company, he never gained substantialpersonal wealth from Enso-Gutzeit.On the contrary,he servedas a salariedmanager and throughoutof his life belongedto the middle-class. VA. Kotilainenwas one of the managerswho helpedto shapethe institutioncalled "patriotic managers." It is appropriateto call thismanagerial group an institutionin Finland becauseof its unique nature and history. Patriotic managersplayed a crucialrole in Finnishbusiness life after the World War II, when the countrypaid heavywar debtsto the SovietUnion. Duringthe last50 years,it hasbeen Uolevi Raade, the managingdirector of the stateowned oil-company Neste, who developed the institutionof patriotic managersto the greatestextent.

Conclusion

The interwarperiod was in manyways exceptional in Finnishhistory. In spite of proximity,Finland had almostno relationshipwith the Soviet Union. It was the civil war which demolishedFinland and left the country sociallyand politically isolated in the northernmostcorner of Europe.In order to survive,Finland had to unify and establishnew businessconnections in WesternEurope and the United States.This requireda socially,politically, culturallyand economicallystrong nation. To understandthe transitionof Finlandfrom a Russianprovince to a modernindustrial nation it is imperativeto observethe changesthat took placein Finnishbusiness life. We havetried to demonstratethat publicpolicy, heavilyinfluenced by nationalism, played a crucialrole in the unificationof the nation. Nationalismshaped the structureand managementof large state ownedenterprises. Nationalism also affected legislation that selectively allowed multinationalenterprises to enterthe country.Finally, nationalism shaped the 353

institutionof "patrioticmanagers" that introduced values and goals of Finland's publicpolicy to everystrata of managementand workers.

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