Matti Palo Coevolution of forestry and society in : from preindustrial to industrial forestry © Matti Palo

Finland is the second largest net exporter of forest 1. Forestry and society products in the world, but has the highest forest cover in Europe. How is this paradox possible? The purpose his article is a part of an ongoing global of this paper is to investigate the coevolution of the Tresearch project “Evolution and transi- Finnish forestry and society with the de jure and de tions of sustainable forestry in Costa Rica, facto transitions from preindustrial to industrial for- Finland, Japan and Korea: Case studies and estry since the 14th century until the 1950s. Finland comparative analyses” (Palo et al. 2004). Trop- had this change during the first half of the twentieth ical deforestation was estimated in 1980 as century based on the transitions to de facto and de 11 and in 2005 as 14 million ha/a. Deforesta- jure sustained yield of timber, and on the excess of tion has expanded in spite of multitude of the industrial use to the non-industrial use of timber. global, international and national political Unexpectedly, de facto transition took place a few efforts to decelerate it. The core issue here is decades prior to de jure transition. Therefore, it was the vague knowledge so far about the under- infered, that the Grand Land Reform and the increas- lying causes of deforestation. This project ing forestry incomes and real value of forests were aims to study ex post, how these four coun- the major factors causing this transition and not any tries have been able to stop deforestation specific forest policy. Wars, imports of technology and maintain their high forest covers and in and know-how and various other foreign impacts and this way to find out potential invariances by scientific paradigms have also played a role inthe comparative analysis to facilitate effective transition to industrial forestry in Finland. The wars policy proposals for the tropics. have promoted privatization of forests and increased On per capita basis Finland is rich in forest demands for forest products. Private property rights resources, which implies relative economic are theoretically most efficient for sustainable man- abundance in forest resources. Finland has agement. Colonization of forests by land reforms and the second largest forest area in Europe after privatization of forests have been the longest trend . Finland has only 0.5 per cent of the in the history of the Finnish forestry. Accessible low- total global forest area, but its share of the value forests are mostly deforested and degraded but global exports of all kinds of forest products high-value forests sustained. The increasing forestry is 10% and 25% of the printing and writing incomes and the value of forests have also decreased paper. Next to Canada, Finland is the larg- poverty and decreased the opportunity cost for sustain- est net exporter of forest products in the able forestry. Public policies have been a necessary but world. (Peltola 2003) Finland has the highest not a sufficient condition in this transition. forest cover per land area in Europe (Fig.

VUOSILUSTO 2004–2005 49 36. Iceland 35. Moldova 34. Netherlands 33. Denmark 32. Ireland 31. Belgium & Lux. 30. The Fyr of Maced. 29. Albania 28. Slovenia 27. Switzerland 26. Croatia 25. Hungary 24. Lithuania 23. Estonia 22. Slovakia 21. Bosnia & Herzeg. 20. Czech Rep. 19. 18. Serbia & Monten. 17. Latvia 16. Greece 15. Portugal 14. Bulgaria 13. Austria 12. Romania 11. Norway 10. Poland 9. Belarus 8. Ukraine 7. Italy 6. Germany 5. Spain 4. France 3. Finland 2. Sweden

1. Russia 5 10 15 20 25 Total forest area, mill. ha Fig. 1. Forest area map of Europe (data source: FAO 2005, design by Erkki Lehto).

1), which implies also relative environmen- policy and market instruments with support tal abundance in forest resources. How has from a number of other institutions. this kind of positive coevolution of forestry History of forestry in Finland has been and society been possible in Finland? In studied by a high number of scholars, e. most other countries along with population g. earlier by Meinander (1945), Helander and economic growth the forest cover has (1949) and Laitakari (1960) and a doc- declined. toral dissertation by Snellman (1996), and For a small country exports play a vital most recently the doctoral dissertations by role in economic development. Finland pro- Ruuttula-Vasari (2004) and Tasanen (2004). vides a unique case in the whole world, Michelsen (1995) published his “History where forest products exports have had a of Forest Research in Finland. Part 1. The key role in economic development for cen- Unknown Forest.” This is so far the widest turies (Åström 1978, Raumolin 1984a, Palo document in English about the history of 1988, Raumolin 1990, Kuisma 1993, Palo and forestry in Finland from the 1840s to the Uusivuori 1999). The forest resources of the early 1920s. While Part 1 described primarily country have been largely exploited in this the history of forestry, Part 2 was planned process. Until the middle of the 20th century to describe the history of forest sciences, this led to deforestation and forest degrada- but, unfortunately, it has not appeared so far. tion but later on to sustained yield of timber. These studies have been executed by follow- This development has required a mix of ing the traditional paradigm of descriptive

50 VUOSILUSTO 2004–2005 history studies with an emphasis on using The purpose of this paper is to study first original empirical information and data from the coevolution of the Finnish forestry and various archives. society in a long sweep until the 1950s with Kuisma (1993) adopted an international a particular reference to de jure and de demand-oriented approach in his compre- facto transitions from preindustrial forestry hensive study on Finnish forest industries and to industrial forestry. Second, an analysis forestry. Palo (1993) applied a forest policy of transition from preindustrial forestry to framework with political power application industrial forestry driven by wars, foreign into his study on the history of forestry in technology and know-how is given. Third, Finland since 13th century. Later on, Palo we analyse parallelly the transition from (2001) studied with similar but expanded preindustrial forestry to industrial forestry framework how forest resources had guided by describing the impacts of ecological con- the wars by G8 Economic Powers through ditions and markets as well as social, political centuries. Ollonqvist (1998) had an eco- and cultural institutions. Finally, a discussion nomic policy framework to analyse forest and some conclusions are arrived at. policy evolution in Finland since 1928. Björn We restrict our article here primarily on (2000) made a case study of two neighbour- the evolution and transitions into industrial ing municipalities in Eastern Finland with a forestry from 14th century to the1950s. By soft framework of preindustrial, industrial this time the paradigm of industrial forestry and postindustrial forestry. Rytteri (2002) became fully developed and the de facto applied a framework of environmental and transition was realized. In the 1960s a totally social responsibility in a case study of a new era of intensified national planning and leading forest industry corporation (Enso- mechanization of logging started in Finn- Gutzeit) in Finland. ish forestry as well as the first signs of the In Sweden Stridsberg and Mattsson (1980) appearance of the environmental non-gov- applied a framework of power relations and ernmental organizations to the forest policy causal changes in their Swedish forest his- arena took place. The theoretical framework tory project. In Denmark Fritzbøger (2004) of this paper is primarily based on Palo et studied the evolution of forest ownership al. (2004). The coevolution theory is a new- from 1150 to 1830 by applying a property comer in this paper. rights theory framework. So far, none of the numerous scholars We shall apply a theoretical framework in Finnish forestry history have specifically of political science, institutional economics focused on the transition process from and ecological economics, coevolutionary preindustrial to industrial forestry. However, approach and a case study method. Mostly Raumolin (1984b) has studied “The forma- secondary sources of empirical historical tion of the sustained yield forestry system in observations are used. Accordingly, in this Finland”. His study is more of a descriptive respect our approach is different from the one than an attempt to identify the causes first group of historians but has some simi- of the transition to sustained yield forestry. larity with the latter group. The framework Accordingly, there exists a gap of knowl- is a comprehensive and eclectic one. It is edge concerning the multiple factors, which not only limited to economic, sociological, have facilitated the transition in Finland political, ecological or silvicultural aspects. to industrial forestry. We aim to produce Rather an ambitious attempt is made here in novel findings in filling this gap. order to integrate these different disciplines (cf. Clawson 1973). We shall discuss the vari- ous reservations of this approach at the end of this paper.

VUOSILUSTO 2004–2005 51 Using forest resources Box 1. The typology of preindustrial for- estry, industrial forestry and postindustrial forestry. Public means Private means Three development stages of forestry (Mather, A. 2001, Political process Markets, contracts, traditions Pirot et al. 2000): 1. Preindustrial forestry: subsistence; open access Laws, plans, budgets Pricing process – traditional knowledge – common property – closed access

Public wants Private wants – colonization: state ownership–open access-defor- estation 1a. Traditional pre-industrial forestry: hunting, fishing, Human wants shifting cultivating, gathering of firewood, food, – wood – biodiversity medical plants, etc. – carbon stocks 1b. Agricultural forestry: clearing of forests for agricul- – water ture, agro-forestry, grazing of cattle, fodder, shelter – wildlife – range belts, other support to agriculture – wilderness 2. Industrial forestry: sustained or progressive yield – aesthetics and others of timber; private property Fig. 2. Policies and markets as regulators of produc- – scientific forestry knowledge, forester education: tion, distribution and consumption of forest prod- paradigm formation ucts and services (modified from Cubbage et al. 3. Postindustrial forestry: sustainable forest manage- 1993). ment/forest ecosystem management – scientific ecological, sociological, forestry knowl- edge, forest ecosystem education, paradigm transi- 2. Theory, method and data tion; private, community, public property rights

21. Industrial forestry paradigm

Deforestation and preindustrial forestry here is postindustrial forestry, which we were prevailing in Finland until the latter half exclude from our analysis in this paper. This of the 19th century resembling the contem- transition will be studied in the next phase porary situation in most developing coun- of our research project. The typology with tries. Even, if the de jure rhetoric towards the objectives of each category is explained sustainable forestry may have arrived to in Box 1. those countries, the de facto situation lies a In industrial forestry the objective is sus- long away from sustainable forestry situation tained yield of timber for industrial purposes. and practices. This paradigm was gradually developed Deforestation can be regarded as a socio- along with the expanding international trade economic-environmental process, which by wooden ships, industrialization and the mostly lies external to the traditional con- consequent appearance of scarcity of timber trols of markets and governments (Fig. 2). and firewood supplies, especially during Overcoming deforestation is here regarded the 18th and 19th centuries in Germany. as a first step towards sustainable forestry Industrial forestry paradigm in its utmost in transition from preindustrial forestry to sophistication requires privatization of forest industrial forestry. The next step to over- property rights as a pre-condition for its suc- come is forest degradation or a decrease of cess according to the property rights theory. the volume and quality of the growing stock From the economies of scale point of view of trees. The third category in our typology the foresters stressed that the state was the

52 VUOSILUSTO 2004–2005 most appropriate forest owner. Special forest With this model the land expectation value research and education activities to support could be calculated on an even-age monoc- industrial forestry were mobilized during the ulture forest stand in perpetuity. The original 18th century first in Central Europe, Russian idea was to find the financially optimum Empire and Japan. (Cf. Steen 1984) path from the present forest structure to Scientific breakthroughs, such as the the normal forest. The German forest econo- model of normal forest, forest and land rent mist Martin Faustman (1849) had financial theories, were created in support of the para- profitability of forestry as a background for digm of industrial forestry. These new scien- developing his famous model. More recently, tific findings were included in the curricula many variations of the Faustman model have of a growing number of Forestry Colleges been developed. (`Forest Academies`) and universities during The conceptual core of the sustained the 19th century in Europe, Japan and India timber yield was a model of a “normal and later on during the 20th century in other forest”. It was defined as a theoretical con- parts of the world for educating professional cept, where a forest was composed of sites foresters. Industrial forestry was gradually of uniform productivity, of single tree spe- created as a strong scientific paradigm that cies, of equal size of each age class of trees, was shifted to the successive generations of and with no risks for future growth and har- forestry students via educational facilities in vest. After the first tree stand or age class had different parts of the world. reached the optimal rotation age, it would Varying interpretations of sustained be clear felled and regenerated by planting yield forestry in the course of history have or sowing. Later on each year an equal clear appeared (Steen 1984). Here we restrict in felling by age class could be done until the sustained yield of timber, which also perpetuity. In the normal forest the annual has had a number of indicators. The weak- cut would equal the annual increment and est one was to maintain certain forest area the forest would operate like a factory. Also non-declining (under continuous forest timber would be produced and harvested cover/tree growth). A stronger physical for industrial uses. Therefore, the whole para- interpretation of sustained yield referred digm is called industrial forestry. (Steen 1984, to the `normal forest`, which was able to Raumolin 1990) produce a continuously (intergeneration- We regard industrial forestry and postin- ally) non-declining timber supply. The World dustrial forestry as scientific paradigms Forestry Congress III by FAO in in according to Thomas Kuhn’s (1962) con- 1949 recommended the idea of progressive cept (Box 2). It was a major scientific effort forestry (Saari 1949), continuously increas- first to create this paradigm of industrial ing timber yields, to be followed by FAO forestry primarily during the 19th century in member countries. This idea coincided with Germany. The stage of industrial forestry is the diffusion of the idea of economic growth indicated primarily by an officially expressed as the principal objective of economic policy. objective of sustained timber yield and sec- The progressive yield idea can be viewed as ondarily by a situation, when industrial use of the strongest physical interpretation of the roundwood is exceeding the non-industrial sustained yield or industrial forestry (Saari use. It was also a time consuming process to 1962). transfer the paradigm of industrial forestry to The Faustman model (König-Faustman politicians and foresters in Finland since the model in German literature) was based 1850s. This process along with the extension on the idea of computing the discounted of the message to forest owners, industrial- intergenerational net benefits from affor- ists and public at large took about a century estation investments and applying the idea in Finland (Helander 1949, Raumolin 1984b, of opportunity cost to the capital invested. Tasanen 2004, Ruuttula-Vasari 2004).

VUOSILUSTO 2004–2005 53 Box 2. Thomas Kuhn’s science paradigm Under dictatorships the strongest vested (Kuhn 1962). interests, such as business, military and reli- gious regimes can have dominant impacts. 1. A science paradigm: Along with the advancement of – scientific definitions and their relationships countervailing powers, such as democratic – assumptions political parties, trade unions, farmers unions – exemplars/model problems and NGOs have their chances to balance the – beliefs power arena. The vested interests that have 2. Normal science most affected in the objectives and means – problem solving within a paradigm of forest politics and policies have varied – a scientist is working within a paradigm by time and country. We shall next turn to 3. Scientific revolution the key issue of forest ownership. It should – anomalies cannot be explained by the paradigm be carried in mind that property rights of – adoption of a new paradigm – slow shift/revolu- land and forests have also always indicated tion social and political power, and especially so in rurally dominated societies (cf. Fritzbøger 2004). 22. Politics, policies, power

Politics and policies are composed of the 23. Property rights interplay of formulating the objectives, instruments and institutions and implemen- Industrial forestry and postindustrial for- tations. Who decides the objectives, means estry paradigms presuppose both state and and institutions is a crucial power issue in market control. In order to facilitate both forestry and forests (Tansey 2000). of these controls an institution of property Politics is defined as “the science and art rights has to be created by the state. Property of government; the science dealing with the rights are socially accepted official rules, form, organization and administration of a which govern the access to forest resources state or a part of one, and with regulation and give guidance about the rights and liabil- of its relations with other states” (Shorter ities of the various actors, both forest owners Oxford English Dictionary). Politics is prac- and non-owners (Fig. 3). ticed typically by governments, political par- Only under clear and strong property ties and vested interests. Policy is defined as rights each forest holding has an owner, who “a definitive line of action”. Social power is a will prevent the non-owners from exercising fundamental phenomenon in politics. non-legal activities in his/her forest. The crea- Power in social sciences is defined to tion of competitive markets and effective mean a capacity of the first actor to affect government policies also require operational the behaviour of another actor against its property rights. Often four different theoreti- own will towards attaining the goal of the cal sources of the historical appearance of first actor. In this context the power of the property rights are introduced as follows: vested interests or a group of actors sharing the prior occupation, the invested labour, the same interests is most interesting. The the right to freedom, and the institutional source of power by vested interests may be economics (utilitarian) theory (Fritzbøger based on strong finances, on familiarity of 2004). We apply here the last one. politicians and political processes, on strong The state has the capacity to establish ability in lobbying, on superior information socially accepted rules or juristic infra- and know-how, on easy access to media, on structure by legislation and land reforms corruption, military power, cultural hegem- for governing the duties and rights of the ony, etc. various economic actors. Four basic regimes

54 VUOSILUSTO 2004–2005 Property State regulatory institutions institutions

Sustainable forest management system Market Community institutions institutions Knowledge institutions

Fig. 3. Roles of property rights, knowledge and communities along with state and markets in support of sustainable forestry. of property rights or tenure are generally istrative orders and the societal norms. The identified: open access, common property, non-forest owners have the right to only private property and state property (e. g. acceptable uses and the duty to permit the Bromley 1991). acceptable uses by the forest owners. The Open access is the most common real private property regime minimizes bureauc- forest property regime in the developing racy in management and has good chances countries. The absence of property rights to utilise local knowledge. either in the law or in the implementation The efficient property rights structure is results in an open access regime in the field. universal, exclusive, transferable and enforce- Typically no one`s property is everyone`s able. It also requires separability of rights property. Open access to any resource and a full specification of rights and duties results in deforestation, forest degradation, for the property owners and non-owners. wasting of timber and conflicts as described Universality means that all resources are pri- by Hardin (1968) in his eminent paper and vately owned. Exclusivity refers to a situation also e. g. by Fritzbøger (2004). where all benefits and costs accrue only to In a common property regime the own- the owner. Transferability means that prop- ership is defined to belong to a certain erty rights are transferable from one owner group of people, such as villagers or a tribe. to another on voluntary basis. Enforceability Open access in this case is closed by the refers, finally, to a situation where property members having the right to exclude the rights are secure from involuntary seizure non-members from the use of a common or encroachment by non-owners. Only the property forest. private property regime may fulfil all these Public property regime refers to an exclu- conditions of the efficient property rights. sive ownership by the state, one kind or (cf. Zhang 2000) another, on behalf of the society. A forest service or a department of forestry has been vested the right to manage the state forests 24. Roles of state and market in public interest. In a private property regime the forest The state and the market are the two princi- owners have the right to manage, log and pal institutions in market economies, how to otherwise use the forest resources. They control forestry and the allocation of inputs, have, on the other hand, the duty to behave production and distribution of forest goods according to the existing legislation, admin- and services for satisfying of human needs

VUOSILUSTO 2004–2005 55 (Figs. 2 & 3). The model of Fig. 3 assumes in causal impact on each other’s ability to per- support of state and market, however, not sist” (Murman 2003, p. 22). Murman (2003) only property rights, but also community studied coevolution of firms, technology and institutions, e. g. forest management asso- national institutions in die industry in Brit- ciations, environmental NGOs, forest certi- ain, Germany and the . fication, such as traditional spiritual beliefs The following five system requirements related to forests or common access for have been identified for a successful applica- recreation in all forests in some countries. tion of the coevolution theory: units of trans- Research, development and human capacity mission, sources of variation, mechanisms of building, along with traditional knowledge transmission, processes of transformation and various NGO-activities can be identified and sources of isolation. as knowledge institutions (Fig. 3). The evolutionary theory has inherently a Most communist regimes have collapsed multilevel approach. Therefore, it is essential in applying only government control or a in evolutionary analysis to identify the differ- socialistic central planning system. A similar ent levels of study as or units of transmission. approach has been surprisingly common in Here our primary level is forestry sector and forest policy. FAO’s journal Unasylva (1993) the secondary level is the society. However, published a special issue on forest policy and we have to consider also the various impacts, legislation. Unfortunately, the whole issue which enter Finland from the third level: the failed to introduce any complementary role external world. Similarly, we have to identify of the markets along with the government. how the forestry sector transfers its impacts On the other hand, by applying only a market at the firm level: at forest owners, forest system without effective government regula- industry firms, contractors, loggers and other tion has also produced many failures among local actors. (Figs. 4–5) developing nations (Stieglitz 2003). Forests compose the fifth level in our After the collapse of the study (Fig. 5). Forests are changed both by and a transition from a plan to a market in ecological conditions (Fig. 4) and by the numerous other previous socialistic coun- local actors (Fig. 5). We shall identify the tries, an increased interest on the roles of the various causal impacts, which are transit- government and the market has appeared ing the system from preindustrial forestry in economics. A search for an optimum mix to industrial forestry. The sequence is often of markets and public policies is consid- composed of impacts from the external ered as a global priority (Stieglitz 2003) but world to the society and from there to the only rarely in forestry (e. g. Palo 1997, Palo, forestry information system, forest policy, Uusivuori and Mery 2001). The state and local actors of forestry and finally to forests market institutions are in this paper viewed (Figs. 4–5). as complements to each other. The sources of variation originate from the different levels. For example, wars, technol- ogy, know-how, markets, political regimes 25.Coevolution as a research strategy and scientific paradigms have often arrived to Finland from the external world (Fig. 4). Coevolution theory (e. g. Murman 2003, Lam- Sometimes they have also appeared from berg and Ojala 2005) is applied here as an the Finnish society or even from the forestry approach to analyze evolution of sustainabil- sector. Our principal variation here is the ity both in forestry and in the society as an transition from the preindustrial forestry to interactive mutually causal activity. the industrial forestry. The relevant proc- Coevolution is defined in the following esses of transmission towards sustainable way. “Two evolving populations coevolve forestry are the five institutions of Fig. 3. if and only if they both have a significant

56 VUOSILUSTO 2004–2005 External world Wars, technology, output and input markets, regimes, paradigms, conventions, know-how, exemplars

SOCIETY Ecological Socio-econ- Political Cultural conditions omic factors factors factors

FORESTRY SECTOR Forests Forestry Forest Forest policy information

Finland Fig. 4. Model of coevolution of forestry sector and society towards sustain- ability with impacts from the external world (modified from Palo 1993). (Key: solid line = causal impact; dashed line = information flow)

Changes in socio-economic and technological environment, corruption

Vested interests Reference group External groups

Law

Implementation Group activity

Acceptance of the law

Motivation of local actors

Changed behavior of local actors

Changes in the forest Fig. 5. A model of transition from de jure to de facto situation under a new law (modified from Stjernquist 1973).

26. Method and data conditions change over time, and the desired time intervals to be selected would reflect In the single case studies Yin (2003) lists the presumed stages at which the changes five different rationales. We apply a rationale would reveal themselves”. This rationale may of longitudinal case study. Yin (2003, p. 42) be described as a cross of a contemporary defines this category as “studying the same case study and a historical study. single case at two or more different points in The choice of a case study unit is critical time”. Its purpose, supported by our theory for the success of our research. We define (Palo et al. 2004), is to identify “how certain the case study unit as the evolution and

VUOSILUSTO 2004–2005 57 Fig. 6. Shifting cultivation in Finland in 1860 (left) and 1913 (right) by Heikinheimo (1913). (Dark = high)

transition of forestry from preindustrial to viduals and markets that all have impacts industrial forestry. This choice matches with on the evolution of sustainability both in Yin’s idea that a “case” can be some event forestry and in society. or entity, e. g. organizational change. This Empirical statistical data are based prima- aspect reflects the longitudinal case study. rily on existing forestry, forest industries and The causal linkages between forestry and socio-economic statistics. A multiple source the society are vital for our study. evidence strategy is applied. The Yearbook of The emergence and evolution of the rel- Forestry Statistics in Finland (Peltola 2003) is evant socio-economic systems and institu- a primary statistical data source. The descrip- tions supporting sustainable forestry will tive historical observations are based on be described. The historical evolutions of secondary sources as indicated in the forth- their transitions from open access to indus- coming text. trial forestry are described by applying a common conceptual framework (Figs. 2–5). In this transition the key issue is how to overcome socially excess deforestation and 3. De jure and de facto transitions forest degradation. Our empirical observations are directed 31. De jure transition by this framework to exogenous and endog- enous factors relevant to transitions which Especially in the course of the 19th century consist of wars, technology, science para- forest clearing was expanded for shifting cul- digms, political regimes, institutions, indi- tivation (Fig. 6) and in order to establish per-

58 VUOSILUSTO 2004–2005 0 GNP/capita (Volume index, from 1860–) 100

1917 FORESTRY ACT: NO DEFORESTATION / STATE FORESTER ADMINISTRATION 1900 1886 FORESTRY ACT: NO DEFORESTATION/ POLICE ADMINISTRATION 1858 Forestry College

Autonomous Finland under Russia 1857 Liberalization of steam-powered sawmills 1800 1851 STATE FORESTRY ADMINISTRATION; REGULATION OF SAWMILLS 1805 Forestry act 1793 Forestry act 1789 Liberalization of farmer forest owners 1757 GRAND LAND REFORM (IMPLEMENTATION 1775-1935) 1700 1739 Liberalization of sawmills 1734 MOST COMPREHENSIVE FORESTRY ACT

Kingdom of Sweden 1683 Forestry acts supervised by Department of Mining 1647 FIRST COMPREHENSIVE FORESTRY ACT 1600 1634 First forestry (hunting) administration 1577 Protecting oak from shifting cultivation 1542 King Gustav Vasa declared wildernesses as state forests 1500

1442 King Kristoffer: beginning of state forests; control of hunting; protection of fruit trees/oaks, beeches and apple trees 1400

1347 King Magnus Eriksson: village common forest; illegal use of forest

1300

Oral traditions prevailed before laws in writing and forestry conflicts were solved at provincial tings 1200 0 1 2 3 4 Total population (millions)

Fig. 7a. Evolution of forestry legislation 1240–1917 in Finland with population since the 13th century and income per capita in 1860–1917.

0 GNP/capita (Volume index, 1926 = 100) 1000 2000 1998 LIBERALIZATION OF FOREST HOLDING MARKET 1997 GENERAL FORESTRY ACT; NATURE CONSERVATION ACT; forest improvement act amendment 1994 State forest administration renewal as a business enterprise 1990 1993 Forest taxation; amendment in private forestry supervision 1990 Amendment in Private Forestry act 1982 Forestry Faculty University of Joensuu 1980 1976 National parks

1970 1967 Amendments in Private Forestry and Forest Improvement acts 1964 Minimum wage regulation for loggers 1960 1961 Fresh water act

1950 1951 Forest Management Associations

1943 Reforestation of degraded forests 1940 1938 National parks 1935 Roundwood scaling act 1928 Private Forestry act: no deforestation/ semi-private forester administration 1930 1928 Forest Improvement act; protection of housing of loggers 1924 Regulation of forest holding market 1922 Colonization act; forest taxation act 1920 1918 Liberalization of tenants 1917 Forestry act: no deforestation/ state forester administration

1910 3 4 5 6 Total population (millions) Fig. 7b. Evolution of forestry legislation in independent Finland with population and income per capita.

VUOSILUSTO 2004–2005 59 manent arable fields. This took place along Box 3. The evolution of forestry administra- with the population and income growths tions in Finland since 1639. (Fig. 7a). Shifting cultivation was a land- extensive form of subsistence, while more – 1639/Queen Kristina: Jägerkorps/regulating of big dense population required more land-inten- game hunting sive forms of agriculture (Åström 1978). – 1851: Provincial foresters/surveyers Also the construction of wooden ships – 1858: Forester education & state foresters regulat- and the production of tar demanded for ing state forests increasing amounts of timber. The popu- – 1886: Police force regulating private forestry – 1917: Provincial state foresters regulating private lation increased in Finland from one to forestry two and a half million from 1800 to 1900. – 1928: Semi-public forestry boards for private More people demanded for more wood for forestry fuel and construction and for more cattle – 1996: Semi-public forestry centers regulating all and increasing grazing in forests. All these forests changes increased the scarcity of forests nearby more densely inhabited areas. The senate became worried about the forest situ- 1886 law declared simply that deforesta- ation and ordered the first national assess- tion is not allowed (Box 4). It was preceded ment of forests to be carried out (Fig. 15). by some important laws and acts, such as The wide-spread scarcity of forests mobi- the Grand Land Reform (Isojako) of 1757, lized new forestry reforms. State Forest Service in 1851 and 1859, the This population growth was facilitated not College of Forestry in 1858, and two NGOs: only by the reforms in food production but The Economic Society of Finland in 1797 also by new technology of steam engines, (Hushållnings-föreningen i Finland) and the pulp and paper making out of wood, other Finnish Society of Forestry (Finska Forstsälls­ industrialization as well as by the 109 years kapet) in 1877. However, the 1886 law first of peace in Finland as a politically autono- time explicitly expressed the basic condition mous part of the Russian Empire, expanding for sustainability: to stop deforestation with “home markets” in Russia and expanding some specification. The 1886 law did not, exports also outside Russia. Finland entered however, ban forest degradation. into an era of steady and comparatively fast Rather soon it was realized that the police economic growth (Fig. 7a, 14). Steam engine- corps under the leadership of the gover- driven sawmills, wood pulp, paper and paper- nors were not able to implement effectively board mills appeared gradually to produce the forestry law of 1886 (Helander 1949). leading export commodities (Fig. 8). Three successive committees were set up It is rather exciting to realize the appear- to redress this law. However, under the pre- ance of numerous government laws and acts vailing political circumstances it was not (Fig. 7a) in order to regulate forestry since before 1917 that a new act and its imple- the 14th century to follow closely the socio- mentation administration of state foresters economic development described below. to regulate private forestry were created However, for centuries to come the imple- (Box 5). This act expressed both prevention mentation of these laws was not effective, of deforestation and forest degradation in although various “forestry” administrations form of allowing the cut of young coniferous were created (Box 3). forests only by appropriate thinning and not A first step of de jure sustained yield of by clear felling. Interesting enough this act timber arrived in the form of the new for- and the establishment of the Forest Research estry law of 1886, although the 1647 and Institute took place just before 6 December 1734 laws already had some elements of 1917, when Finland declared her ultimate sustainability (Tasanen in this volume). The sovereignty. (Fig. 7a)

60 VUOSILUSTO 2004–2005 Box 4. The forestry law of 1886 in Finland. was a compulsory planting or sowing of the deforested site. However, only minor imple- – ”Forest should not be cleared and devastated” mentations in this front took place due to (Reforestation by natural or artificial regeneration the scarcity of the staff. (Helander 1949) The required, if the site not cleared for agriculture or growing stock was increasing in he 1920s construction) (Fig. 9), not due to increasing increment – Implementation by provincial governers and po- but because the drain was lower than the lice increment (Fig. 10). – Sanctions: fines temporarily by governer and finally In 1928 four new forestry laws were, how- by court ever, launched by the Social Democratic – Effectiveness poor due to unclear definition of ‘for- government of Dr Väinö Tanner, who was a est devastation’ and weak implementation big forest owner himself. , a forester, as the Minister of Agriculture and a member of the Parliament, was another key Box 5. The private forestry act of 1917 person to facilitate such a radical reform of in Finland. forest legislation. Among them were the new private forestry law, another law defining – ”Forest shall not be logged in such a way that natural its administration, a law on state subsidies regeneration would be risked.” for drainage and reforestation, and a law on – ”Young coniferous forest should not be logged in housing of loggers and timber floaters. conflict with rational thinning.” The contents of the 1917 forestry act were – Implementation by provincial forester, provincial maintained nearly the same in the new pri- and municipal forestry boards, subordinated to vate forestry law, but the implementation state forest service. organization was changed from a pure state – Obligatory reporting to a municipal forestry board one to a semi-public one on a provincial about coming commercial logging. participatory principle, and also forestry – Sanctions by provincial forestry boards: logging ban; extension was included among the tasks the value of illegally logged timber lost, if the ban is of the administration along with the law violated. implementation. Sixteen Provincial Forestry Boards and one Central Forestry Associa- tion (Tapio) for the Finnish speaking parts and two Provincial Boards and one Central The 1917 Forestry Act was a landmark Forestry Association (Skogskultur) for the among the numerous forestry acts until that Swedish speaking parts of Finland were time, because the implementation of the established. Their activities were subordi- act became effective. If the act was violated nated under the State Forest Service and the according to the judgement of the provincial Minister of Agriculture. state forester supervising the implementa- The fresh Boards employed 50 foresters tion, the forester could negotiate a volun- and 180 local forest rangers by the end of tary banning of future logging for a certain the 1930s. This staff used most of its time in period with the forest owner. If this did not various forestry extension activities and only work, the case was taken to a court. one third in the supervision of the private The effectiveness of the implementation forestry law of 1928. Still the staff for the of the 1917 act is supported by the facts that implementation of the law was numerous already in the first year of its implementation in comparison with the staff implementing in 1919 logging was banned in 6,000 ha, in the 1917 act. Accordingly, also the areas of 1920–1924 from 15,000 to 27,000 ha, and banned forests increased considerably from in the last year 1929 in 73,000 ha of forests. the 1920s. About 0.4 million ha of forests Another requirement at the case of banning were annually banned during 1930–1959

VUOSILUSTO 2004–2005 61 (Hellström 1993). The growing stock was that way to support sustained yield of timber still increasing during 1930–1955 but lev- by preventing further forest degradation. elled off in the late 1950s (Fig. 9). During 1898–1928 forestry extension had Also in 1928 a new kind of policy instru- already been promoted in small scales by ment was activated: state subsidies for for- local Agricultural Associations with minor estry investments on a cost-sharing basis for state subsidies. (e. g. Holopainen 1968) private and state (until 1953) forest owners The Forestry Management Association Act for increasing wood production. State fund- of 1950 was the last important successive ing was allocated for forest drainage and legislation in supporting the de jure transi- planting of spruce only. A parallel organi- tion to sustained yield of timber. Until that zation of 14 districts was created under time the associations had been operated on the supervision of the two Central Forestry voluntary basis with some state subsidies Associations. A number of foresters and since 1898 and more so since 1931. The forest rangers were also recruited by this purpose of the new law was to tax the new organization, which can be regarded private forest owners in order to provide as an instrument to support progressive for- them extension services by forestry profes- estry. In 1948 the design and construction sionals employed in forest management and of logging roads was added under this law. in timber sales within these now law-based Forest drainage was expanded to 78,000 ha local forestry associations. The Associations in 1939 a total of 0.72 million ha became now received a new public financing chan- drained during the 1930s. After the wartime nel and a semi-public status under supervi- interruptions drainage works were gradually sion of the provincial Forestry Boards. expanded in the 1950s to 0.12 million ha in The paradigm of sustained timber yield 1959. (Helander 1949, Holopainen 1968) became later on more sophisticated in Fin- The 1928 laws were amended several times land. In 1948 a group of six leading sil- during the following decades but their basic viculturists defined a system of thinning contents remained the same until 1996 (Fig. from below as the only acceptable way of 7b). The Tanner government launched also in forest management (see more in Leikola 1928 a radical law to improve the low-stand- in the present volume). This paradigm was ard housing conditions for the loggers and adopted by the private forestry boards and it timber floaters in remote logging camps. This became an unofficial law in order to escape law was amended in 1947. A Committee on degradation of forests. An orthodox phase the Forestry Workers Occupational Training or normal science of industrial forestry in worked during 1952–1958 as a symptom of Thomas Kuhn’s (1962) terminology had major future changes in logging and floating. arrived to Finland latest in the 1950s. It proposed seven schools to be established In 1949 FAO organized the World Forestry for this kind of training. One of them would Congress III in Helsinki. This was a great deal with mechanization training. The imple- global support to Finland being in a rapid mentation of these proposals was started in recovering phase from the calamities of the 1962. (Holopainen 1968) World War II. Dr Eino Saari, Professor of The extension work by the provincial For- Forest Policy at the , estry Boards was carried out jointly with was the Chairperson of the organizing com- the local Forestry Management Associations. mittee. He also was able to insert to the final Their number increased from 86 to 310 declaration of the Congress an expansion to during 1929–1939 partly due to the simul- the paradigm of the Sustained Timber Yield taneous state subsidies. These local associa- as follows. Instead of maintaining the yield tions were important policy instruments non-decreasing intergenerationally, it should (Fig. 3) to extend rational methods in mark- be continuously increased (Saari 1949). This ing trees for sale and for silviculture and in was in accordance with the new theory of

62 VUOSILUSTO 2004–2005 economic growth in general economics. An existence of a reference group, to give an In summary of the de jure transition the example of law-based behaviour, would also 1917 Forest Act firstly banned deforestation. be beneficial. Some external groups may suc- This aimed to prevent a decrease of forest cessfully lobby for or against the law even area, which is regarded as the weakest cri- during its implementation. terion of sustained yield of timber. The act De facto sustained yield was observed as did not limit the scale of mature timber a transition from declining growing stock to logging and in this respect there was no increasing growing stock of timber around quarantee for sustainable logging. The act 1900–1910 (Fig. 9). The data are based on secondly regulated logging of young conif- scientifically designed and implemented erous forest and in this way was partly sup- national forest inventories by the Forest porting also the maintenance of the growing Research Institute since 1923. The last esti- stock and future cutting possibilities. (Saari mate for 2001 was 2,100 million m3 (Peltola 1962) The 1928 Forest Law did also cover 2003). Thus today the growing stock is at non-coniferous forests but did not change the level of the medium scenario in 1800. the basic contents. Another 1928 law on The further we depart back towards 1800, drainage and reforestation supported even the more unreliable the data are becoming. the idea of progressive forestry. The 1950 Therefore, three scenarios were constructed Law on Forestry Management Associations for the data prior to 1923. Another time was important in connecting the Associa- series (Fig. 10) indicates that the increment tions with the Provincial Forestry Boards and has been predominantly higher than the giving additional support for the Boards in drain of the growing stock of trees since local forestry extension work. 1900. The Figs. 9 and 10 mutually support each other. This finding of the de facto sustained 32. De facto transition yield of timber starting point of Figs. 9–10 is unexpected, because it is preceding de Sustained yield forestry has been observed jure sustained yield of timber in private applying several alternative indicators. Here forests in 1917. The timing of 1900–1910 we use the transition of the volume of grow- is even more surprising, if it is considered ing stock of timber from a decreasing phase with the model of Fig. 5. According to it the into an increasing phase as an indicator of maturation of the real effects of a new law transition from non-sustainable to sustained is a time-consuming process. Also a compre- yield of timber, which can be regarded as hensive enforcement of the Private Forestry the major objective for industrial forestry. As Law did not start before the end of the 1920s another indicator for industrial forestry we due to a restricted staff in the implementa- use the time when industrial wood utiliza- tion of the 1917 Act. tion will exceed non-industrial wood utiliza- The State Forest Service with 40% of total tion. (Palo et al. 2004) forests had of course had a half a century A transition from de jure sustainability to to operate towards sustained yield forestry de facto sustainability is approached with the but that time was primarily used for clos- model of Fig. 5. When a new law is launched, ing the access of local people to these for- it is by no means guaranteed that it will also ests (Ruuttula-Vasari 2004). Learning how become effective. First of all, the rationale to make timber sales profitable had been of the law has to be formulated according another major activity. It was not until the to commonly accepted concepts of justice late 1920s that proper silviculture and until and equality. Second, the implementation 1930s that large-scale drainage of peatlands organization has to be competent, moti- were mobilized. vated and reasonably free from corruption. We have to solve this paradox by crediting

VUOSILUSTO 2004–2005 63 primarily the markets (Fig. 3) for this early Box 6. The factors terminating the era of shift- breakthrough of de facto sustained yield of ing cultivation in Finland in 1870–1920. timber. Naturally, there had existed an inter- play of policies and markets, but finally the 1. Government policies structural changes, such as closing down of – Great Land Reform with clear and strong tenure shifting cultivation (Box 6), tar distillation for farmers and state forests 1776– and wooden shipbuilding, have been deci- – State Forest Service administration 1851– sive in this unexpected finding. Also the scale 2. Markets of forest fires started to decrease along with – Increasing real stumpage prices the decrease of shifting cultivation and tar – Increasing incomes to farmer forest owners distillation. Increasing stumpage prices and – Increase in agricultural productivity forestry incomes also played their positive – Increasing imports and decreasing prices of roles. (See more in Section 52 below) The grains effective implementation of the Great Land – Increasing of general level of income Reform was, of course, a necessary precondi- – Increasing industrialization and urbanization tion for the increasing stumpage prices. – Slowing down of population growth The depression of exports during the World War I did also contribute to this increase of the growing stock (Figs. 10–11). A similar depression and an increase in the growing stock was also visible during the wood in Finland rose from 26 to 54 mil- World War II. lion m³ in 1900–1959 (Fig. 11). This total is The establishment of the Forest Tree composed of different uses, such as domes- Breeding Foundation in 1948 was one fore- tic industrial use, domestic non-industrial runner of the later expansion of sowing and (primarily fuel, but also some timber for planting of trees. Two years later the Central construction, fencing, poles, pilings etc.) Forestry Association Tapio organized a Silvi- and exported industrial uses. The indus- cultural Campaign (Metsämarssi) in order to trial use surpassed the non-industrial use in promote sowing and planting of trees, tend- 1925–1950. Therefore, we have terminated ing of juvenile stands, and thinnings. Juho this paper in the 1950s. The non-industrial Kusti Paasikivi, the President of the Republic use grew larger than the industrial use only attended personally the opening ceremonies during the exceptional times of the Great of the campaign. A total of nearly a half a Depression of the early 1930s and during million citizens (ten percent of the total the World War II and just after it. The period population) participated in these manual 1925–1950 coincides well with the high silvicultural works during the campaign. share of 70–90% of forest products in all When the act of 1917 and the law of 1928 the commodity exports during those years favoured natural regeneration as the first (Fig. 8). alternative to be considered in regeneration, We may conclude that Finland has tran- the texts of the laws were interpreted in sited from preindustrial to industrial for- such a flexible way, that the foresters could estry during the first half of the twentieth interpret the opposite in the later post 1950 century based on the transitions to de facto implementation of the 1928 law. The clear and de jure sustained yield of timber and felling sites with sowing and planting as a finally on the excess of the industrial use method of regeneration remained at low of timber in comparison with the non- levels during 1929–1949, but reached 30,000 industrial use. ha in 1950. The area was doubled during the Next, we shall turn to the exiting issue, 1950s (Holopainen 1968) which additional factors have been sup- The total utilization of domestic round- porting the transition from preindustrial to

64 VUOSILUSTO 2004–2005 Total 100 % Sawmilling Tar Forestry 80 Paper industry

60

40

20

1860 1880 1900 1920 1940 1960 1980 Fig. 8. Exports of forest products in 1860–1990 as percentages of the total value of commodity exports (Seppälä et al. 1980).

mill. m3 2500 C

2000 B A

1500

1000

500

1800 1820 1860 1900 1940 1980

Fig. 9. Growing stock of timber in 1800–2000 in Finland. Note: Finland lost 12% of its forest area to the Soviet Union as a result of the 1939-1944 war. (Myllyntaus et al. 1998).

industrial forestry? It may be rather evident 4. Impacts of wars, technology that this transition cannot be a result of any and know-how single factor but a combination of multiple factors as assumed in Figs. 2–5. 41. Impacts of wars

King Gustavus II Adolphus launched “the Trade and Sailing Order” in 1614. This occa- sion has been regarded as the beginning of a mercantilist political regime, which was

VUOSILUSTO 2004–2005 65 80 mill. m3 Increment

60

Drain 40

20

0 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

Fig. 10. Increment and drain of growing stock of trees in Finland 1900–2000 (data: Sevola 1999).

mill. m3 60 Total

40

Industrial wood 20

Non-industrial wood 0 1860 1880 1900 1920 1940 1960 1980 2000

Fig. 11. Utilization of roundwood in Finland 1860–2000 (data: Sevola 1999).

adapted to Sweden from abroad. The aim for producing copper, iron and silver with was to restrict imports and support exports a state regulation of preindustrial forestry as well as to increase the endogenous stocks (Fig. 7a). Those metals composed 80–90% of of gold and silver and to be better prepared the value of exports in Sweden until 1809 for the next war. Only four Finnish towns (Stridsberg and Mattsson 1980). of the southern coast received the right to Finland was a province of the Kingdom of export directly abroad. The other towns on Sweden since the 12th century until 1809. the western coast had to sail their goods The Swedish kings were frequently partici- either to Turku or to Stockholm in transit for pating in wars, which caused continuous their exports. This policy meant state support losses of men, horses and resources but

66 VUOSILUSTO 2004–2005 hardly any benefits to Finland (Åström 1978). partly financed by printing more money. It is interesting to observe that Sweden A serious economic crisis followed. Eco- stopped going wars after losing Finland to nomic reforms were required. One such Russia. The Swedish kings were also fond reform came in 1766 when the cities of the of hunting. Hunting was adopted as the western coast (Pohjanlahti-bay) of Finland main objective in the management of crown were liberated for free access to sail abroad. forests. It was supported by a special admin- (Mäntylä 1987) istration Jägarkorps since 1639. Imperialis- Russia conquered Finland again in 1808 tic foreign policy supported by wars made as a consequence of a pact by Napoleon Sweden a great power in Europe during the and Alexander I. The pact was agreed at 17th century. Tilsit in East Prussia in 1807. When Napoleon Sweden participated successfully in the could not win Britain by war, he chose an 30 Years’ War primarily in Germany until the economic blockade. He banned all shipping treaty of Westfalen in 1648. The strategic role from continental Europe to Britain. Napo- of forests was realized not only for the navy leon wanted Alexander to pressure Sweden and commercial fleet, but also for mining and to join this blockade (Zetterberg 1987). The weapons production. This was one reason Finnish ports were supplying about a half of along with the mercantilist regime for the the tar needed by the British navy. Napoleon launching of the first proper forestry decree wished Alexander I to stop the deliveries of in Sweden in 1647 (Fig. 7a). The decree was tar from Finland to Britain. published both in Swedish and Finnish. It Finland was a province of Sweden for more clarified the forest ownership, the use of than 600 years. When Sweden lost Finland in common forests, the rights of tenants and 1809 Finland surprisingly inherited its Swed- banned a wide range of illegal activities, as ish legislation, e. g. the laws of 1734, 1789 and well as defined punishments for each viola- the forestry act of 1805. Accordingly, Finland tion. (See more Tasanen in this volume.) had a four chamber Diet/Parliament and its Russia conquered Finland from Sweden own autonomous government (Senate) with two times in the first half of the 18th century: a growing number of national administrative first in 1713–1720 and second in 1740– offices. A “Grand Duchy of Finland” became 1743 (Isoviha, Pikkuviha). As a consequence established. The Russian Emperor became, Sweden lost its territories east of Kymijoki- however, the supreme power to accept the River in Finland to Russia. Sweden also lost laws and major nominations proposed by its Baltic territories and its Great Power the senate and the parliament. era was terminated. The state economy was “Old Finland” or the prior Finnish ter- ruined after these long lasting wars. New ritories lost to Russia in 1720 and in 1743 ways had to be found out how to increase were soon reunited to Finland proper. This the national wealth. A special Finnish Depu- promoted sawmilling and tar production in tation was established to promote welfare eastern Finland due to strong commercial in Finland. The Great Land Reform was intro- houses and know-how in the cities of Viipuri duced in 1747 to Sweden from Holland and and Hamina. Those ports also became again Great Britain by Jacob Faggot. A subsequent accessible for exports of forest products law was launched ten years later by the from eastern Finland. However, Finland was Parliament. The primary idea of this reform in a poor condition after the heavy war. was to increase productivity in agriculture Some economic reforms were expected. but it became of key importance also for Alexander I asked in 1816 the Senate to future forestry. prepare a plan for the promotion of silvi- Sweden joined France and its allies in the culture and forestry. The Senate responded War of Pommer against Prussia in 1757– in 1823 that the best way for Finland to 1762. The war became expensive. It was promote forestry was to intensify the imple-

VUOSILUSTO 2004–2005 67 mentation of the Great Land Reform. The After the death of a conservative tsar Great Land Reform had covered most part Nikolaus I Russia got a new emperor Alex- of Finland by 1875 or in a century. This was a ander II in 1856 just after the Crimean War. prerequisite for the competitive functioning He immediately asked the Finnish Senate to of both the market institutions and the state promote exports, industrialization, establish- regulatory institutions in forestry (Fig. 4). ment of schools, and improve the infrastruc- The number of independent farms with ture for traffic. A new vice chairman of the forest lots grew from 30,000 to more than Senate (prime minister) Fabian Langenskiöld 100,000 during this reform. In addition was nominated in order to guarantee the 50,000 new tenant farms were established. implementation according to the liberalistic (Tasanen 2004) This strategy was most rel- regime. Immediately the Senate started to evant towards sustainable forestry. Estab- prepare reforms in legislation. The use of lishing clear and strong property rights steam in sawmilling was allowed in 1957 and facilitated competitive markets, increasing the log quotas were removed in 1861. The value of standing timber and effective policy Parliament was invited in session in 1863, implementation whenever the other suffi- first time after 1809. A number of other more cient conditions appeared. general liberalistic reforms were executed Russia lost the Crimean war in 1854–1855 (e. g. Palo 1993). to the Ottoman Empire, which was strongly The war of 1870–1871 between Prussia supported by Great Britain and France. The with its allies and France had its impact on joined British and French navies arrived also the high boom in demand for sawnwood to the coasts of Finland in order to eliminate in the 1870s (Helander 1949). Another con- strategic stocks of tar and other naval sup- sequence of the war was the unification plies and ships. They destroyed the fortress of Germany, which accelerated economic of Bomarsund in the Åland Island, the ports growth there and consequently also import of Hamina, Loviisa, Kotka, Uusikaupunki, demands for Finnish exports. For example, Rauma, Oulu and Raahe, but failed in June the sawmilling cities of Kotka, Pori, Oulu and 1854 to destroy the port of Kokkola. The Kemi were then created nearly overnight. Royal Navy lost there a landing boat and The economic accessibility of logging was 29 lives of its marines. Kokkola received expanded all over Kymijoki, Kokemäenjoki, a high reputation in the Russian press as Oulujoki and Kemijoki watercourses deeply an example of a patriotic defence of the to the interiors of Finland. vast Russian Empire. This publicity may have Russia won the war of 1875–1876 against partly affected the new Tsar Alexander II to the Ottoman Empire in Bulgaria. Due to the adopt a favourable attitude towards Finland’s high costs of the war the volatility of the development (Kauppala 2004). Russian ruble became high and a recession The war interrupted the exports of sawn- arrived to the Russian economy. The Finn- wood and tar from Finland to Western ish exports of pulp were decreased and the Europe for two years. This caused serious investments in new mechanical pulp mills losses to the commercial houses producing stopped for 1874–1880. (Helander 1949) and exporting these products. The Finnish Russia lost a war against Japan in 1906. Senate helped the companies to survive by This was a great surprise not only to Russia giving guarantees and low-interest loans. but also to the rest of the world. This was After the Crimean war a boom in demand the first step by Japan in its series of impe- for forest products appeared in Europe. This rialistic wars in hunting for timber and oil. saved the handicapped companies to wait In the treaty Japan got the southern part for the forthcoming business opportunities of Sakhalin Island and free access to take due to the liberalization of the economy over Korea. Both of these territories became some years later. (Michelsen 1995) important timber suppliers for Japan until

68 VUOSILUSTO 2004–2005 the end of the Japanese occupation in 1945. ber 1917. Another cause was naturally the (Palo 2001) emergence of the socialistic political regime The Tsar Nikolaus II initiated reforms in from Germany and Britain to Russia. Finland Russia proper and also in Finland in order took this opportunity and declared the coun- to improve the welfare and the social atmos- try sovereign in about a month. After 109 phere. Russia got its own parliament ‘duma’, years of political autonomy the democratic where Finland was not represented. Finland institutions were already so diversified and was able to create a most modern one-cham- advanced in Finland that only a national ber parliament in 1906, still under the Rus- army, diplomatic missions and a substitute sian empire. The suffrage was extended to for the tsar as the supreme political power all adult men and women. This reform was had to be created. (Jussila 1987) the first of its kind in Europe and the second The communistic revolution closed all one in the whole world after New Zealand. the imports by Russia from Finland. Russia The new parliament facilitated the agrarian had been a favourable duty-free zone for party (Maalaisliitto) and the labour party Finnish exports of multiple kinds. The Finn- (Suomen Sosialidemokraattinen Puolue) to ish forest industries had to establish a new become the largest parties. strategy, how to penetrate to the western This reform played its role in the forth- markets in the sales of pulp, paper and coming forest policy reforms. For some paperboard. An operational solution in the years already there had been a social ten- form of exports marketing cartels, Finncell, sion in Finland among farmers due to the Finnpap, and Finnboard, was found accord- increased purchases of forest holdings by ing to a German model of import cartels. forest industry firms (Kajander 1901). The In 1918 Germany was the principal buyer reformed parliament gave a law in 1915 to of pulp and paper products from Finland. reject purchases of forest holdings by forest (Skippari et al 2005) industry firms. Its implementation was not, After 1918 the forest products dominated however, effective. After an additional law the Finnish exports until the 1950s with a of 1924 (Lex Pulkkinen) the non-industrial 70–90% share of the total (Fig. 8), because private forest ownership became stable and the textile, machine and agricultural indus- expanding also partly due to some other tries, which had been major exporters to laws to promote colonization. Russia, could not penetrate to the western These years after the war against Japan markets. One more key institution was cre- were in many ways the hay days of national ated by the forest industry firm: The Central awakening in Finland. New political par- Association of the Finnish Forest Industry ties, cooperative movements, financial and CAFFI. It became immediately the most influ- cultural associations were created, includ- ential lobbying body in the domestic politics. ing one to promote private forestry within (Kuisma 1993, Skippari et al. 2005) the Finnish speaking territory (Tapio) and A civil war took place in Finland in another in the Swedish speaking coastal 1918. This was caused by various social ine- territories (Skogskultur). The education of qualities in Finland, the regime of socialism foresters was transferred from Evo to the and the neighbouring revolution in Russia. University in Helsinki in 1908. The Society of The war lasted only less than a half a year Forest Sciences (Suomen Metsätieteellinen but times of political instability continued Seura) was established in 1909. somewhat longer. The new democracy was Russia lost the World War I in 1917 to at stake also in the early 1930s coinciding Germany. This ended the rule of Nikolaus II political upheavals in Italy, Germany and in the March Revolution of 1917. The loss in some other European countries. However, the war was also one cause underlying the the democracy survived in Finland. Typical communist revolution in Russia in Novem- to the politics of the 20th century political

VUOSILUSTO 2004–2005 69 power rested primarily the longest times to promote forestry and forest sciences. with the agrarian party and/or social demo- The “white” government socialized, still cratic party, both of which were strongly in 1918, two forest industry companies, supporting democratic system of govern- Ab H. Gutzeit & Co and Ab Tornator, which ment but also the poorest strata of the popu- had been in Norwegian ownerships. The lation. socialization was based on a pressure by Ger- Still in 1918 as a consequence of the civil many, which was afraid that these strategic war the fresh “white” government of Finland resources would easily be transferred into made a radical land reform to liberate the British ownership (Kuisma 1993). Germany tenant farmers. As a rule they got their farm- was still in war against Britain on the west- ing land but also a woodlot. This advanced ern front. Germany had made a pact in April also privatization of forests because a part 1918 with the “white” government of Fin- of the tenants had been farming in the land in order to supply a military interven- state forests. Another major land reform, tion to southern Finland in support of the Lex Kallio, was launched in 1922. Jointly as “white” army. The pact included the control a consequence of the two reforms about of the Finnish foreign trade and an access to 150 000 new independent farms with their Finnish forest and other natural resources. forests were created until 1935. (Holopainen This socialization was not mentioned in the 1968) pact but was in the line with its contents. According to the paradigm of the industrial (Rautkallio 1977) forestry (Box 1, Section 21 above) rational The World War II in 1939–1945 caused a forestry management required such a long severe loss of forest resources and industries time perspective that the state and forest to Finland. Twelve percent of the forest area industry corporations as large-scale forest (Fig. 9) and a capacity of 0.5 million tons of owners were the best owners. Farmers did pulp and paper mills, 50,000 m3 of plywood not have the capability for rational forestry as well as a capacity of 0.6 million m3 of management. The farmers were not in a posi- sawmills had to be given to the Soviet Union tion to hire professional foresters and their according to the treaties of 1944 and 1947 time perspective was too short. In Finland (Lindroos 1993). While exports were strongly this view was shared by most influential decreased by the wars (Hjerppe 1989) the professors A. K. Cajander (1918), Eino Saari industrial use of roundwood decreased from (1929) and Viljo Holopainen (1968). Most 30 to 10 million m3 from 1937 to 1940–1944 foresters adopted this view. They did not pay (Fig. 11). Accordingly, the increment clearly attention to the favorable income distribu- exceeded the drain (Fig. 10) and the grow- tion impacts, to the ample labour supply for ing stock of trees increased in the remaining logging and floating and to the increase of Finnish territory. democratization by this small-scale farmer Also more major land reforms due to the forest ownership pattern typical to all the wars were implemented in Finland. More Scandinavian countries. arable land and forests were allocated from The government also sacked the director the state, municipalities, firms and manor of the Forest Service, Mr P. J. Hannikainen, estates to evacuated farmers from the ter- and nominated Dr A. K. Cajander, Professor ritories lost to the Soviet Union. Also the of Silviculture, as his follower. Hannikainen soldiers had been promised new land. The had not stopped his daily work in his office land reforms not only gave employment and as the rest of the staff during the “red gov- incomes for a high number of people but ernment” in Helsinki. Cajander later became they also consolidated the Finnish democ- nominated three times as the Prime Minister racy against a communist revolution. The of Finland. Consequently, he became a most share of forest ownership by the non-indus- influential forest politician and a key person trial private forest owners increased accord-

70 VUOSILUSTO 2004–2005 ingly from 51% to 63% and the respective national forestry programs. (Palo 1993) share by the state decreased accordingly In the aftermath of the World War II from 40% to 28% (Holopainen 1968). Europe experienced a remarkable boom in The war also raised Dr N.A. Osara as a reconstruction of housing and rehabilitating Minister of Forestry and Energy Supplies in the industries destroyed by the war. This the wartime government in 1943–1944. He caused a boom in the demand for forest was able to launch a law on reforestation products in 1947–1949 (Ollonqvist 1998). of low-productive forests in 1943. Dr Osara This boom was highly welcomed by the continued to be a most influential forest Finnish national economy in order to create politician in the post-war era. As a Director additional employment and income for the of Tapio he expanded forest management people and country ruined by six years of planning and initiated logging road construc- wars. tion in private forests. As a Director of the The Korean War in 1950–1953 caused even State Forest Service (metsähallitus) since a higher boom than the previous one in the 1952 he mobilized the expansion of large- demand for forest products in Europe. This scale clear fellings in northern Finland. These benefited greatly the Finnish forest industry novel activities created additional employ- firms and forest owners. Never in the history ment and incomes. before or after have the stumpage prices In the 1940s Finland experienced an risen so fast. This created more employment energy crisis among all other calamities and incomes for a high number of people. In and problems created by the wars. A com- fact, the labour input in forestry was highest prehensive state regulation of forestry was during this period (Fig. 12). created. During the war some oil and coal In 1952 Finland exported to the Soviet were imported from Germany but for some Union the last goods in compensation of years after the war those foreign energy the war damages required by the Treaty of supplies were closed for Finland. Dr Osara Paris in 1947. This post-war epoch under led a national body to organize supplies of compulsory war reparations to the Soviet fuelwood and charcoal (Fig. 11), which were Union had been important in developing most essential for the survival of the country. Finland’s metal and machine industries, Even railways and road traffic were depend- especially pulp and paper machine produc- ent on wood-based fuels. All this activity tion and ship construction (Jokinen 1988). created extra employment and incomes at Also in 1952 the government rationing of the period. This was highly valuable for the consumption was ended. Finland started to society especially during the post-war years open more towards free trade with Western (Lindroos 1993) Europe. Finland never received any financial Minister Osara established a committee in Marshall aid from the United States as the 1943 for complementing the ban of defor- most other European war-going nations did. estation with obligatory minimum require- Therefore, the post-war recovery has special ments for silviculture to prevent forest comparative merits for Finland. degradation and to replace the private for- As a summary the wars have had impacts estry act of 1928. The forestry law of 1948 in both on the transition to sustainable for- Sweden was used as an exemplar, when the estry and on the impacts of forestry on committee completed its mission in 1953. society. First, the post-war reconstructions This proposal was strongly supported by have increased the demands for forest prod- professional foresters but opposed by the ucts and the value of forests. Second, the agrarian party and the Farmers’ Union MTK. privatization of forests has created numer- The law proposal was never accepted. After- ous small holdings all over Finland. This has wards, the foresters started to innovate new expanded the supply of labour for logging ways to intensify forestry management via and floating and maintained the wages at

VUOSILUSTO 2004–2005 71 250 Labor input by non-industrial private forest owners Total labor input 200

150

100 1000 man years

50

0 1860 1880 1900 1920 1940 1960 1980

Fig. 12. Labor input in Finnish forestry 1860–1990 (Elovirta 1987).

low levels until the 1950s. This again has tar distillation. (Meinander 1945) supported increasing stumpage prices and The Finns had been constructing boats the value of forests. Third, the privatization and small ships capable for inland waters of forests with increased number of hold- and Baltic Sea coasts from the times imme- ings has increased an equal distribution morial. The know-how of designing and con- of forestry incomes both functionally and structing wooden ships capable for sailing spatially, which again has strengthened the in open seas arrived during the 17th cen- economic development. A real coevolution tury from Holland via Sweden. The Swedish of forestry and society has taken place due navy established a shipyard at Kronoby in to the consequences of the wars. the neighbourhood of Kokkola the central western coast of Finland. From there the know-how spread around and this province 42. Impacts of foreign technology became the pioneer in wooden shipbuilding and know-how transfers and foreign trade of tar and sawnwood for about two centuries. These economic activi- Boards and planks were manually made for ties became important sources of employ- centuries with axes and later with saws. ment and income both for the urban and The first water-powered sawmill of Finland rural people. was established in 1540 in Halikko, south- L.G. Hartman, the “Prime Minister” of western Finland. This technology arrived to autonomous Finland invited a Swedish for- Finland via Sweden from Holland. Gradually, ester G.E. Segerdahl to consult him during these sawmills were spread all over southern the second forestry commission prepar- and western parts of the country and in the ing the forestry law of 1851. Sweden had 19th century also to the central, eastern and had a forestry college already since 1830 northern parts. Shipbuilding and exports and also since 1838 a concept of a modern were the primary customers of those hydro- state forestry administration. Hartman was powered sawmills. Their utilization of logs convinced that Finland’s future lied in the was strictly controlled by the government rational exploitation of her forest resources. and the scale of logging remained restricted Exports of forest products could support in comparison with shifting cultivation and imports of goods that could not be produced

72 VUOSILUSTO 2004–2005 domestically. However, a better knowledge high simultaneous demand boom turned should be found about the volume and the history of forestry in Finland towards growth of forests. A state forest administra- a continuous expansion of sawmilling and tion and forestry college had to be created. an increase in the real value of forests. A (Helander 1949) number of other innovations to improve Fabian Langenskiöld, the follower of Hart- floating of timber arrived from Russia. (See man, invited baron Edmund von Berg, the more about floating of timber: Pakkanen in Principal of Tharand Forestry Academy in this volume) Germany to consult him in 1858. Von Berg The demand for paper increased continu- made an excursion of one month with C.W. ously in the first half of the 19th century Gyldén, the Director of State Survey and along the spread of reading of newspapers Forest Service, around some parts of Finland and books. Finland had had paper mills since and recommended an establishment of a 1667. Until the 1860s only residual textiles regular administration for the state forests, were used as raw material for paper-making. a college for forester education, freedom for Friedrich Keller in Germany invented the sawmilling, timber and export markets, and method of making mechanical pulp from state regulation for private forests. He also wood in 1844. Another German Heinrich gave instructions for silviculture and forest Voelter developed the system further and got management and stressed the importance it patented in 1856. Simultaneously, Carl Vil- of clear border lines between the state and helm Holmström in Viipuri, Finland invented private forests. (See more Tasanen in this his own method of making mechanical pulp volume) from wood. He established the first mechani- Steam engine had been invented by James cal pulp mill in Finland in 1856. This mill was Scott in Scotland in 1769. The first steam a pioneer of its kind in . Until engine-driven sawmill had been established 1875 there were already 12 mechanical pulp in Sweden in 1847 by a British business mills in operation in Finland. man. In Finland it was forbidden to drive Charles Watt of England and Hugh Burg- sawmills by steam engines until 1857. More ers of the United States patented in 1853 and more steam engine-driven sawmills a sulphate method of chemical cooking of were established during the rest of the cen- pulp from wood. In 1866 Benjamin C. Tilgh- tury. Parallelly, the sawnwood production by man patented a sulphite method of cook- the water-powered sawmills was gradually ing pulp from wood. This invention became decreasing. The total sawnwood produc- operational only after C.D. Ekman of Sweden tion tripled from the late 1860s to the early improved the method in 1872. In 1880 the 1890s. (Helander 1949) first sulphate pulp mill started its production In a sawmilling boom of the 1870s a at Valkeakoski in Finland. The first sulphite number of Norwegian and Swedish busi- pulp mill appeared in production one year nessmen and sawmillers arrived to Finland later at Kuusankoski. In 1885 there were with their know-how and capital. Until those 27 chemical pulp mills in operation in Fin- days the major rivers in Finland had been land. considered unsuitable for driving logs down A paper machine was invented in France due to the forceful rapids, which had broken and Britain already around 1800. The first the logs. The Norwegians, such as Aslak Holm­ paper machine using textile residues as raw sen and Hans Gutzeit by the Kymi River and material was assembled in Tampere in 1841. Terje Olsen by the Kemi River with their Since the 1870s paper machines were inte- teams taught the Finns an innovation how grated with mechanical and chemical pulp to pass the logs aside the forceful rapids mills. In 1879 there were seven mechanical by constructing light v-shaped wooden pas- pulp mills with integrated paper machines sageways. This innovation along with the out of a total of eleven mills, and only one

VUOSILUSTO 2004–2005 73 Photo: Finnish Forest Research Institute

Photo 1. Extraction of logs by a horse and sledge. Snow and frost lowered the costs of extraction.

mill, where paper was still produced manu- the truck transportation started to expand ally. (Kuisma 1993) not before than in the 1950s. This was also The innovation of constructing channels the beginning of trials with tractors and arrived to Finland from other European their gradual expansion in replacing horses countries. In the 1830s smaller channels in extraction of logs (Photo 1) from the were constructed in central and eastern logging site to the road or riverside. Also parts of the country. Finally a major chan- the first power saws arrived simultaneously. nel was completed in 1856 to connect the But a large-scale breakthrough of tractors lake system of Saimaa to the Bay of Fin- and power saws took place after the 1950s. land. This made possible the transport of (Rauhalahti in this volume) sawnwood and timber from inland by ships It is surprising how slowly technological directly abroad. Steam engine-driven ships innovations were created in forestry since of iron and steel were another innovation the last decades of the 19th century until the in water traffic. They gradually started to 1950s. Trees had been felled by axes until the replace wooden sailing ships. Also railways end of the 19th century, but since then a two- construction started in the 1860s. Parallelly, man manual saw with a broad blade (Photo communication also became revolutionized 2, justeeri in Finnish) from North America by foreign inventions, such as the cable and and Sweden gradually penetrated to the telephone systems. logging of large-diameter timber (Lehonko- It took a long while before truck trans- ski 2004). This was used also for bucking portation of roundwood started to grow in the trunks into relevant assortments. Later importance on roads and highways. In fact, on, a one-man manual saw with a narrow after various experiments in earlier decades blade with wooden frames was developed

74 VUOSILUSTO 2004–2005 Photo: Finnish Forest Research Institute

Photo 2. Felling a tree by a two-man manual saw (for big trees) in the early 20th century. Most logging took place during winter.

in Finland for small dimension trees (Photo to demand for more timber and of more 3, pokasaha in Finnish). In the 1950s the varying dimensions and tree species. In this wooden frame was replaced by a steel frame way the stumpage prices, forestry incomes (Photo 4) originating from Sweden. Both saw and the value of forests have increased in logs and pulpwood were manually peeled in support of sustained yield and industrial the forests with simple tools (Photo 5). (See forestry. Foreign know-how was needed in more: Rauhalahti in this volume) the application of the new technologies but In summary, foreign technology and know- also in comprehending the contents of the how have been key factors in promoting new paradigm of sustained yield forestry. Finland’s transition to sustained yield of timber and industrial forestry. Imports of foreign technology have expanded and diversified the capacity of forest industries

VUOSILUSTO 2004–2005 75 Photo: Finnish Forest Research Institute/Paavo Aro

Photo 3. Bucking a tree by one-man manual saw of wooden frames, which was used for small trees. Work efficiency study is going on in the 1930s. Photo: Finnish Forest Research Institute

Photo 4. Bucking a tree with steel-framed manual saw in the 1950s.

76 VUOSILUSTO 2004–2005 Photo: Finnish Forest Research Institute/Albert Sandman

Photo 5. Debarking a log with a manual tool (petkele)

5. Impacts of ecological, market, more south from Finland. In those periph- social, political and cultural factors eral latitudes not many options traditionally existed for raising welfare: the Icelanders have been fishing and processing fish and 51. Ecological factors the Finns have been growing trees and processing timber. In those simple means Finland is located between Sweden and of production and with strong comparative Russia and between the 60th and 70th lati- advantages in their foreign trades the two tudes (Fig. 1). This location is such a northern nations have created some of the highest one that only Iceland, as a whole country, levels of living among all the nations. is comparable in this respect worldwide. Due to the warm Gulf Stream in the Atlan- For example, in the western neighboring tic Ocean along the Norwegian coast not country Sweden most of the population lives only Norway but also Sweden and Finland

VUOSILUSTO 2004–2005 77 The National Art Gallery Ateneum in Helsinki, copyright/Kuvasto 2006

Photo 6. Shifting cultivation in 1893 by a family in Lapinlahti, Central Finland, painted on the spot by Eero Järnefelt, one of the foremost painters of the time.

enjoy much milder climate in comparison by public subsidies and legislation, which, with the same latitudes in Siberia, Alaska and on the other hand, has artificially increased the northern territories of Canada. Especially, the opportunity costs of sustainable forestry. the two coniferous endogenous tree spe- Finland became nearly totally covered by cies of high commercial value, pine (Pinus natural forests after the Glacial Age. Poor sylvestris) and spruce (Picea abies) have sites of peatlands and mountain tops, along been thriving well in the Finnish conditions. with some bare rocks and beaches remained The forest soils have been resistant towards without forest cover. erosion after large-scale shifting cultivation The climate has also favored forestry in the (Fig. 6, Photo 6) and clear felling. Also other way that cold winters with frozen soils and ecological factors have been favourable for snow have facilitated timber extraction tra- transition into sustainable forestry in Fin- ditionally by horses (Photo 1) to the water- land. courses. Finland has nearly 200,000 lakes The northern location has, however, given and hundreds of rivers and long shorelines relatively poor climatic and soil conditions of the Bays of Finland and Pohjanlahti, which for agriculture. This has decreased the oppor- facilitated long-distance transportation of tunity costs of sustainable forestry. Agricul- timber by floating with minimal investments ture has been favored more than forestry to improve the infrastructure.

78 VUOSILUSTO 2004–2005 2,00 Fi markka/cubic foot in 1964 prices

1,50

+ 2.0 %/a 1,00

0,50

0,00 1920 1930 1940 1950 1960

Fig. 13. Real stumpage prices of saw logs in Finland, 1920–1960 (data source: Sivonen 1970).

The two bays provided also good sites for them have been drained for improving tree harbours and access to the Baltic Sea and growth, one third for agricultural purposes international oceans (Fig. 1). Finland has and one third have been legally protected also enjoyed the proximity to Russia and for nature conservation. especially to St. Petersburg, which played an important role in providing markets for pulp and paper among other goods during 1809– 52. Markets 1917. Neither was Finland too far away from the most rapidly industrializing countries of The utilization of forest resources in order Central Europe and from their expanding to sustainably satisfy human wants by for- demands for forest products. estry goods and services relies primarily on Water power was also readily available in successful government policies and on the Finland along the rapids of the numerous proper functioning of the market system rivers, where all the water-powered sawmills (Figs. 2–3). The sawlogs in Finland have expe- as well as pulp and paper mills were estab- rienced a real stumpage price trend growth lished. Also fresh water availability for the of 1% per annum from 1860 to 1920 (Kunnas pulping and paper-making processes was 1973). Thereafter, for nearly a half a century easy to organize. the respective growth was 2% (Fig. 13). Soil productivity with management This stumpage price increase facilitated impacts for tree growth has been second even faster increase in the forestry incomes highest after Sweden in comparison with to forest-owner farmers and other rural the other countries in the boreal zone (Kuu- people due to increasing industrial logging sela 1990). The average current annual incre- (Figs. 8 & 11–12). In fact, the net incomes ment of the growing stock is 3.4 m³/ha as from forestry and agriculture were about a national average. Temperature is the mini- equal during the 1920s–1930s (Laine 2004) mum growth factor in tree growing in Fin- Forests could also be used as a collateral land. Finland is 1100 km long from the south since the laws of 1901 and 1929 in support to the north, which allows a high variety in of borrowing money. Also forests could be climate conditions and increment. One third insured against fire in two insurance com- of soils have been peatlands or bogs. The panies since 1916. (Helander 1949) This large scale of peatlands has been typical to increased the financial importance of forests Finland’s geography. Until today one third of to the farmers.

VUOSILUSTO 2004–2005 79 Photo: Finnish Forest Research Institute/Olli Heikinheimo

Photo 7a. A typical view of open shifting cultivated forest sites around a farm house at Heinävesi in Central Finland. (Heikinheimo 1915).

The continuous increase of real stumpage driven process, although the Great Land prices has been reflected to increasing values Reform and the establishment of the State of forest stands and forest holdings. This has Forest Service also played key roles (Box given an incentive and self motivation for 6). forest owners to avoid deforestation and Construction of wooden ships and distil- forest degradation as well as to intensify lation of tar and their exports started to forest management. In Finland this “invis- decline rapidly after a couple of techno- ible hand”-mechanism has been operational logical innovations. Iron replaced wood and since the latter half of the 19th century. This steam engines replaced the sails and also was possible due to clear and strong forest tar from coal replaced to a great degree tar property rights (Fig. 3). This value creation from wood during the latter half of the 19th was a driving force in terminating shifting century. For centuries the governments had cultivation until 1920 (Fig. 6, Box 6). tried unsuccessfully to control tar distillation Shifting cultivation was terminated during by various laws (Fig. 7a), but this termination the first decades of the 20th century – per- was finally a market driven process. haps latest in any European country. Numer- In 1864 the sales of forest holdings were ous government laws, decrees and orders liberated. The demand for those holdings was had been launched through three centuries strongly increasing along with expanding in order to control shifting cultivation (Fig. demand for forest products and the establish- 7a) but with weak effectiveness. This time ment of more companies to produce them. the termination arrived finally as a market This led to increase in the value of forest

80 VUOSILUSTO 2004–2005 Photo: Finnish Forest Research Institute/Erkki Oksanen

Photo 7b. The same site as in Photo 7a but in 1993. (Erkki Oksanen).

holdings along with increasing stumpage is a tendency that high value resources are prices. However, under political pressure by sustainably managed and conserved. “Gold- the agrarian party, the government started to smiths never waste their raw materials.” (Palo regulate forest holding markets in 1915 and 1997) 1924. This regulation continued in one form In Finland exporting and importing of or another until 1998. Thereafter, the market forest products have mostly been free or for forest holdings became liberated again, with periodical duties or quotas. This was even the foreigners were given a free access the case during the exceptional times during to purchase forest holdings in Finland. and after the Second World War. The two forestry markets have played key Most innovations in forest industries in roles in raising the value of standing forests. early days were imported to Finland (Section Low value forest resources and timbers are 42 above). However, profit motivation also wasted still today in socialistic forestry coun- gradually created new domestic technology. tries and especially in the tropics, but there Already towards the late 1800s the metal

VUOSILUSTO 2004–2005 81 6 1000

5 800

4 600

3 Total population

400 Total Population (millions) Total 2 GNP / capita

200 1 Index, 1926=100) GNP/capita (Volume

0 0 1750 1800 1850 1900 1950 2000 Fig. 14. Population since 1750 and GNP per capita since 1860 in Finland (data source: Hjerppe 1989).

manufacturers (e. g. Tampereen konepaja, nomic development for more than a century. Karhulan konepaja, Varkauden konepaja) or In that respect the forest sector has played a some forest industry corporations, however, key role, especially during 1920–1960, when started to manufacture machines for saw- the share of forest products exports from the milling, mechanical pulp and paperboard value of the total commodity exports varied manufacturing (Kuisma 1993). between 70–90% (Fig. 8). This activity has grown and expanded The Finnish economy has grown second to cover all forest sectors. By the end of fastest after Japan during 1860–1990 (Fig. 14, the 1950s Finland had also started to pro- Hjerppe 1989). Economic growth in Finland duce plywood machinery, chemical pulp is unique among all the nations due to its and paper machines. State-owned Valmet Oy heavy reliance on forest industries (Hjer- and four other firms were then constructing ppe 1989, Palo and Uusivuori 1999). The paper machines primarily for exports (Joki­ worst depressions took place around our nen 1988). In this way Finland has arrived civil war in 1918 and in the early 1990s. The to a forest cluster: forestry and forest indus- last one was more severe in absolute terms tries have induced machine and some other but the former one in relative terms. The industries to be established and expanded Great Depression in the early 1930s and the based on the various linkage effects. Second World War in the early 1940s were The Finnish corporations have been suc- overcome more easily in terms of the set cessful in exports of forest products (Fig. 8). backs in economic growth in Finland. The Finnish made forest products have been This kind of strategic importance of forest mostly exported to other European coun- sector and the whole forest cluster to the tries, but Finland has also benefited from the national economy has brought some special liberation of the international trade world- favours to this sector by the government. The wide. Finland has followed an export-led eco- Finnish forest sector for a lengthy period

82 VUOSILUSTO 2004–2005 Olli Heikinheimo 1925 Photo: Finnish Forest Research Institute/

Photo 8. A horse-driven “plow” to prepare ground for sowing rye after burning the ground.

benefited from the devaluations of the Finn- sequently, for example in the 1950s all the ish currency markka. The Union of Farmers pulp and paper machines became restored (MTK) and the Federation of Woodworking (Ollonqvist 1998) and several expansions Industries (Suomen Puunjalostusteollisu- took place. uden Keskusliitto) were jointly so strong, Finland had until the end of the 1920s that they could lobby the government and exported mainly sawnwood. Pulp exports the Bank of Finland to make devaluations for were increasing in the following decades. In their mutual benefits. (Ollonqvist 1998) In the 1950s both writing and printing papers, his way frequent benefits from the currency kraft papers and paperboards exports markets were available. started to increase rapidly (Fig. 8). Later on The Finnish financing systems were inten- Finland gradually passed Sweden, Canada sified during the latter part of the 19th cen- and the United States in the share of these tury. A few commercial banks, a savings bank more value added products in their exports. system, and a system of cooperative banks (Petersen 2004) were established. In a similar way a number Labour supply situation for forestry, float- of insurance companies appeared. ing and forest industries was favourable in Capital markets were protected in Finland Finland until the 1950s. Due to low degree of until the middle of the 1980s. The Bank of industrialization and centuries old coloniza- Finland gave allowances for imports of for- tion activities by the government the rural eign capital. The domestic banks and insur- areas had a high number of small farmers, ance companies favoured investments in who needed additional work. Also numerous forest industries due to relatively few invest- landless people were ready to migrate for ment opportunities available and the high part-time or full-time employment to the dis- know-how of this industry in Finland. Con- tant logging, floating and mill sites. The trade

VUOSILUSTO 2004–2005 83 union movement was weak until the World growing. Landlessness and poverty were War II. While the forest industries had their strongly linked during the agrarian society strong cartels the level of wages remained of those days. The skewed tenure situation low. Accordingly, there did not appear any accompanied by poverty was a driving force strong motivation to increase labour pro- in shifting cultivation and tar distillation ductivity until the 1950s. expanding forest degradation and deforesta- A private body Work Efficiency Associa- tion. The Grand Land Reform and the estab- tion (Työtehoseura ry) established in 1942 lishment of the Forest Service made the toll a department for developing productivity of the poor even worse towards the end in logging. The Federation of Finnish Wood- of the 19th century. (Ruuttula-Vasari 2004, working Industries also established a logging Tasanen 2004) research and development unit (Metsäteho) Poverty to a great extent became gradually in 1945. Its aim was first to study work effi- released by various mechanisms. Industriali- ciency in logging and to find out objective zation was expanded but at the same time criteria for tariffs for manual piece work also a mass emigration to North America took in logging. Gradually mechanization studies place especially from the western coastal were initiated especially during the 1950s. area. In that part the previous exploitation of Then trucks, farm tractors and power saws forests by wooden shipbuilding and tar dis- appeared in logging, extraction and transpor- tillation had exhausted the forest resources. tation indicating a revolution of mechaniza- While the central and eastern parts had tion to arrive more strongly later. In fact, the ample remaining forests, forest-based indus- labour input in forestry was at its peak in the trialization could be mobilized there and in early 1950s (Fig. 12). the south-eastern coast, where timber could be floated from those forest-rich provinces. This brought increasing stumpage incomes 53. Social institutions to forest owners (Laine 2004) and labour incomes to landless people as forestry work- The systematic population data in Finland ers (Helander 1949). dates back to 1750. Population growth was The labour and the tenant farmers were fast especially during the late 18th and the politically organized as a Social Democratic 19th centuries (Fig. 14). It was accompanied Party since 1903. Soon also labour and farm- with fast economic growth on the latter half ers unions were established and an Agrarian of the 19th century or from the time we Party. Both parties grew up as strong eco- have national income data (Hjerppe 1989). nomic, social and political countervailing We have good reasons to assume that eco- powers to the previous political powers of nomic growth was much slower during the the nobles, the clergymen, the bourgeois and earlier periods. During the 19th century the the big farmers. Finland had a project of one population grew 2.5 times and in the 20th century to remove the poverty by social and century 2.0 times. A transition in population economic legislation, by mutual agreements growth started to be visible already during of the labour unions with the federations of the second half of the 19th century, but employers, by the Farmers’ Union MTK via actualized more later. It was not before the agreements with the government and so second half of the 20th century that popula- on. This project was also supported by the tion pressure supporting forest degradation strong cooperative movements, which were and deforestation started clearly to release. active both in agricultural production (SOK) Finland was a poor peripheral country and consumer (OTK, SOK) fronts. during the 19th century comparable in many A forestry cooperative Metsäliitto was respects with poor developing countries established first as a joint stock company today. The number of landless people was in 1934, and after its bankruptcy again in

84 VUOSILUSTO 2004–2005 1947 as a cooperative. Its mission was to mining purposes remained only local around raise timber prices by exporting roundwood the few mines in the south, while in Sweden, and by establishing its own wood process- with much more mining activities, it must ing mills. By roundwood exports during the have had a wider impact. Some liberation Korean boom Metsäliitto cumulated enough of sawmill regulation took, however, place cash to be able to bye Wärtsilä’s pulp and in Sweden and Finland in the 1730s as a paper mills at Äänekoski in central Finland. consequence of the arrival of new foreign Metsäliitto was quite successful in its opera- ideologies of Enlightenment, utilitarism tions and in its mission until the end of the and liberalism. 1950s. Liberalism played a most important role Transparency International has lately during a couple of decades after 1856. assessed Finland four times in successive Socialism was most important in 1917–1918 years as the least corrupted country in the but played its role also later on in protect- world. Corruption situation today is worse ing the social conditions of the loggers (e. g. among the developing countries than in Tanner Government reforms later). Neo-clas- Europe. Our historians have not identified sical economics regime with practically no any past era, where corruption would have government economic planning played its been widely spread in Finland. Even forestry role during the inter-war period 1920–1939. history of the early times, when state owned However, some new laws to regulate forestry nearly half of all the forests cannot illustrate were launched (Fig. 7b). Keynesian econom- corruption in any wider scale. This situation ics regime started to have its impact from has supported closing down deforestation the 1950s in increased government planning, and transition to sustained yield forestry which matched also well together with the (Palo and Lehto 2006). increasing impacts of social democratic influ- All the five Scandinavian countries have ences in all Scandinavia and in Holland. been found as a cluster at the lowest end of Since 1918 to 1998 the government regu- corruption. This helps in identifying factors lated forest holding ownership in favour of which have contributed to this end. The farmers and to prevent the expansion of countries share advanced , not corporate forest ownership. In 1955 the non- only today but already since one century industrial private persons owned 61%, and and a half ago. A strong tradition has sur- the corporations 9% of the forest area. The vived in supporting freedom for NGOs and rest is owned mostly by the state but also by the media. The prosecutors and courts have communes, parishes, and foundations. This been independent and have shared strong pattern of the tenure has been important democratic cultures. The civil servants have for socially and economically sustainable had a culture honouring legal procedures. development, because of fair distribution The Scandinavian peoples have also shared of forestry incomes both functionally and the same religion – a Lutheran protestant spatially in comparison with primarily state one. It has always stressed honesty and fair or corporation ownership. play towards other people. (Palo and Lehto Private ownership of forests has also ben- 2006) efited both the state and the municipalities via forest taxation, which was based since 1921 on the basis of a potential average 54. Political institutions yield of timber and market prices and on average costs, but earlier on the basis of real Mercantilism with mining interests domi- net income. nated forestry in Finland until the 1850s. Markets do not operate in a vacuum. However, despite of its politically dominat- Various political institutions must precede ing position, the exploitation of forest for market institutions. The situation of “law and

VUOSILUSTO 2004–2005 85 order” is a fundamental requirement for the State Forest Service has been periodically viability of the markets. Also open access reformed by new legislation after 1858, to forests has to be closed by establishing when the first independent state forest property institutions. Already before the administration was created. (Fig. 7b) independence in 1917 many political insti- The Finnish democratic system also sur- tutions were created (Fig. 3). The Grand Land vived happily through the difficult times Reform, Forest Service administration, lib- of The World War II. Finland never became eration of steam-powered sawmills, forestry occupied by the enemies but especially the laws of 1886 and 1917 were the most critical years after the war were risky for a com- ones in support of markets and sustainability munist coup. Since 1949 more stable politi- (Fig. 7a, Section 31). cal times arrived. Gradually Finland became A general compulsory primary educa- integrated in international organizations tion and the first few high schools were and in special trade agreements in order mobilized. A Forestry College was founded to strengthen her political and economic in 1858 and forestry ranger schools some bases. Finland joined the United Nations and years later. The College was later in 1907 the Union of the (Den- integrated to the University, which had been mark, Iceland, Norway and Sweden) in 1950, established already in 1640. A number of gov- which was one stabilizing political factor. ernment research institutes, including the The Keynesian regime to mobilize govern- Forest Research Institute were established ment interventions by expanding demand in in the early 20th century. order to increase employment and economic The 109 years of the Finnish political growth appeared clearly in Finland in the autonomy is the longest time of continu- 1950s. Prime Minister, Dr , ous peace in the so far. President of Finland in 1956–1981, designed It is called the era of Pax Russica. Income and published a program for development and other taxes were non-existing or low, of northern Finland with support of govern- but some duties were collected from for- ment investments in hydropower, mining eign trade. The period was favourable for and forest industries. A Commission for mobilizing new investments and entrepre- promotion of industrialization in its report neurship. Immigration favoured entering of to the Government in 1951 recommended entrepreneurs with know-how and capital, expanding investments in forest industries especially from Germany, Britain, Norway and those metal and machine industries with and Sweden. close linkages to the forest industries. In The situation of Finland resembled the addition the recommendations included sup- present membership in the European Union port by economic and financial policies for in the way of expanded duty-free markets maintaining the technological competitive- covering finally all Russian Empire. Finland ness of the paper and paperboard industries. was more industrialized than Russia and it (Ollonqvist 1998) could export processed goods and import An Economic Policy Council was estab- raw materials. If Finland had remained a part lished in 1951 for strategic planning of public of Sweden this had never been possible, economic policy. The Council had members because Sweden was more industrialized not only from the Government but also from than Finland. the unions of the employers and employees. Nature conservation (1922, 1938), scal- It continued in one form or another to guide ing of roundwood (1938), colonization acts the economic policy through the 1950s and (1918, 1922, 1935, 1940, 1945, 1958) and even until today. The Council has been sup- many other aspects of forestry and land ported by a team of professional economists use have been safeguarded by legislation as its secretariat. In line with the paradigm since the independence of Finland in 1917. change in economic policy a Commission for

86 VUOSILUSTO 2004–2005 Erik Lönnroth Photo: Finnish Forest Research Institute/

Photo 9. Metsätalo/Forest Building in 1939 just after its completion in the downtown Helsinki.

Planning Forestry was established. It was in Democratic Parties, which both were keen session all through the 1950s. Its report was to advance forestry. A major financing of the a landmark towards progressive forestry via second national forest resources inventory increasing investments in intensification of and the second survey of wood consump- forestry management, which started a new tion were implemented. epoch in industrial forestry in the 1960s. Mauno Pekkala, a forester and department Perhaps internationally rather unique phe- chief of the Forest Service, was the Minister nomenon in politics took place in Finland of Agriculture in 1927–1928 and responsi- since the 1920s. Forest scientists and forest- ble for the most radical forestry legislation ers became nominated in leading positions reform of all times (see above). He also in politics and culture. Dr A. K. Cajander, allocated funding in 1928 for doubling the Professor of Silviculture and Director of the vacancies of Professors at METLA. Pekkala Forest Service was the Prime Minister of was also a Prime Minister in 1946–1949. Dr the Republic twice in the 1920s and once Eric Lönnroth, Professor of Forest Mensura- in 1936–1939. In his capacity he was able to tion and Inventory, was a chairperson in the mobilize new law for forestry taxation and committee for the construction of the new conservation of the northern timberline in Forest Building (Metsätalo) in downtown 1922 and simultaneously financing for the Helsinki, next door to the headquarters of first national forest resources inventory. At the University and the Government. With the the same time Cajander established a com- support of Prime Minister Cajander, Lönnroth mittee to renew forest legislation under the created this modern and spacious cradle for chair of Mauno Pekkala. In the late 1930s forest sciences of the University of Helsinki Cajander led a coalition government com- and the Forest Research Institute (Photo 9). posed mainly of the Agrarian and Social Later Lönnroth became also nominated as

VUOSILUSTO 2004–2005 87 the President of IUFRO and the Rector of supervision and about the same number the University of Helsinki. under Professor Gadd. The latter prepared a Dr N. A. Osara worked in 1943–1944 as a comprehensive forestry program for Finland Minister of Forestry and Fuels Supplies in the in 1767. The language of the theses was wartime government of Dr Edwin Linkomies, changed from Latin to Swedish in order to Professor of Latin (see Section 41 above). Dr allow the priests to extend the findings to Eino Saari, Professor of Forest Policy, became the farmers and sawmillers. Gadd was even a member of the Parliament and the Minister nominated as a Planter for Finland with a of Social Affairs in the early 1950s. He was duty to travel around and inform the locals later on also nominated as a Chancellor of how to sow and plant useful plants includ- the University of Tampere. Some number ing trees. A couple of study tours by promi- of other foresters became members of the nent scientists were made in the middle of Parliament. the 18th century. In the tour reports many observations were given about the condi- tions of forests in Finland and some propos- 55. Cultural impacts als to improve the situation were launched. (Tasanen 2004) The chair of folklore was transformed into Anders Chydenius was one of Pehr Kalm’s a professorship of economics in 1746 at the disciplines. He worked as a minister at the Academy of Åbo (Turku). A similar profes- parish of Kokkola on the western coast sorship had been established earlier also at of Finland. Kokkola was a small town but another Swedish university of the time in already on the latter half of the 18th century Uppsala. Pehr Kalm was nominated as the a remarkable port for exports of tar, wooden first professor of economics at Turku. He was ships and sawnwood. Chydenius was elected a discipline of Carl von Linné. In fact Kalm as a member to the Swedish Parliament. He was a natural scientist, but a professor of was a productive writer and a recognised economics at the time, when economics as predecessor of Adam Smith in promoting a science was not yet created. liberalism to replace mercantilism as guid- Anders Celcius along with von Linné ance to economic policies. Chydenius was achieved international reputation with their able due to his writings and speeches in findings, which gave support to new scien- the Parliament to liberate access to foreign tific discoveries. The Royal Swedish Academy trade for the cities in the western coast of of Science was established in 1739. Linné Finland. This was a real starting point for himself as a botanist was also interested the vast expansion of wooden shipbuild- enough in forestry that he published some ing and tar production there with a subse- papers with guidance for sowing and plant- quent expansion of subsistence among the ing trees. In the Academy also some other commoners.(Virrankoski 1986) forestry papers, e.g. by C.W. Cederhjelm The Academy of Åbo was relocated to appeared in the 1740s. Also U. Rudenskiöld Helsinki in 1828 and renamed as the Impe- gave a lecture at the Academy in 1748 on the rial Alexander’s University. In the 1830s the conditions and opportunities of forestry in professorship of economics was closed Finland. (Tasanen 2004) down. During the whole 19th century no The Enlightenment and utilitarism relied forestry studies were carried out at this uni- on science in promoting welfare for nations. versity. The professors were more engaged In similar way Kalm and his colleague, Pro- in the studies of Finnish language, culture fessor of Chemistry, Pehr Adrian Gadd sup- and poetry leading an expanding school of ported their students to study mineralogy, Finnish identity. agriculture and forestry. Eight forestry theses A few learned people outside the university were prepared under Professor Kalm’s in Finland were following the evolution of

88 VUOSILUSTO 2004–2005 forest sciences in Germany and some other A.G. Blomqvist was one of the teachers European countries. C. C. Böcker (1829) and directors of the forestry college. When wrote a first major treatise on forestry and education there was closed for seven years forest policy in Finland. C. W. Gyldén (1853) he devoted his time for research. He became published another major forestry handbook. the first real forest scientist in Finland with His other major forestry contribution was a contributions within growth and yield of national assessment of forest resources (Fig. the major tree species and in forest policy. 15). This was implemented by the surveyors Blomqvist later became decorated as an Hon- of the National Board of Survey and Forestry, orary Doctor by the University in Helsinki, where he was the Director. which was otherwise passive through the The assessment by Gyldén was more whole 19th century in promoting forest sci- subjective than based on any systematic ences. sampling, although the idea of systematic P.J. Hannikainen was pioneering in writing sampling in forestry had been already and publishing forestry papers and books in launched by a Swedish scholar af Ström Finnish, while earlier all forestry issues were in 1830. Anyway, the map indicated defor- published in Swedish. Hannikainen wrote estation and degradation in most accessi- also a book on forest policy parallelly with ble locations and ample forest resources in Blomqvist. Hannikainen became nominated more remote and economically non-accessi- as the Director of the State Forest Service in ble locations under then prevailing technol- 1903 due his learned activities and his prior- ogy. As such the survey and the optimistic ity in Finnish language. Soon he established views of the book may have promoted eco- more forestry ranger schools and started nomic policies towards liberalism. The book experimenting own logging by the Forest already introduced the concept of a normal Service to improve the profitability of timber forest – the nucleus of sustained yield of sales and to increase revenues to the state. timber – and how to arrive there. The 1858 A Finnish Forestry Association (Finska For- report by Edmund von Berg may have had a stföreningen), a NGO, was established in similar impact (See Section 42 above). 1877 to advance forest research and exten- However, J.V. Snellman, an influential jour- sion as well as to improve practical forestry. nalist, later Professor, Senator and Prime Min- It soon started to publish a forestry peri- ister, did not have any great vision of future odical. At the State Forest Service and at the forestry. He resisted publicly the establish- University in Helsinki and partly elsewhere ment of a college for educating foresters and some forest research was already carried establishment of permanent State Forest out but the main occasion in this front was Service. Gyldén and Rabbe Wrede, a forester, the establishment of the Forest Research criticised Snellman’s views. Snellman’s criti- Institute in Helsinki (Metsäntutkimuslaitos cism could not prevent the coming major METLA in Finnish) in 1917. Jointly these reforms: a college for forester education, reforms produced the know-how and infor- new Forest Service etc. (e. g. Michelsen mation bases for effective forest policies 1995) based on the forthcoming new forest leg- A forestry college was established in the islation during the ultimate sovereignty of wilderness of Evo, 145 km northeast of Hel- Finland (Figs. 3–4). sinki, in 1868. The teachers had been edu- A new interest on forestry issues among cated mostly in Germany. Since the 1850s the scholars of different non-forestry disci- some Finnish students completed their for- plines of the University appeared in the early ester education also in Russia and Sweden. 20th century. For example, Väinö Voionmaa This way the paradigm of the sustained yield studied the role of shifting cultivation and and industrial forestry started to reach Fin- economic geography, Heikki Renvall ana- land. lysed the exports of forest products and

VUOSILUSTO 2004–2005 89 Fig. 15. Scarcity of forests (=red) in Finland in 1850 as assessed by Gyldén.

90 VUOSILUSTO 2004–2005 supported the forest ownership by industry 1924 (Fig. 10). The first national wood con- corporations, and J. T. Hanho studied the sumption survey was completed in 1928 development of sawmilling industry. Just (Fig. 11). For the first time in history reliable about all of the scholars emphasized the assessment was made about the level and importance of forestry in the national econ- structure and spatial distribution of forest omy. A threat of expansion of deforestation resources, comparison of increment and and forest degradation also survived because drain and about future allowable cut. This no reliable knowledge existed about the was replicated at the end of 1930s and by sustainability of forestry under continuous the middle of the 1950s. Then a good idea expansion of forest industries. (e. g. Raumo- of the dynamics of forest resources was lin 1990) received (Figs. 9–11) for the basis of future The first symptom of nature conservation forest policies. These findings with other rel- in Finland appeared in 1803 at Punkaharju evant research supported Finland to plan for in south-eastern Finland. Then Tsar Alexan- a massive expansion of forestry and forest der I visited there and declared later on the industries in the late 1950s and 1960s. beautiful ridge of a few kilometres length The prevailing socio-economic-environ- protected. A geographer and a later famous mental importance of forestry and forests explorer Adolf Nordenskiöld innovated in in Finland since the late 19th century has had 1880 an idea of nature reserves in order to many cultural impacts via arts. The foremost preserve the image of the traditional nature Finnish artists travelled around 1900 in the to the future generations. The Society of vast forests and made a number of famous Forestry organized a seminar on this topic paintings like the one of Photo 6 by Eero one year later. A.G. Blomqvist favoured the Järnefelt. Also Akseli Gallen-Kallela, Juho Ris- proposal and referred also to the similar sanen and others made several paintings proposal by G.P. Marsch in the United States. inspired by forestry works or forest nature. A working group by four scientific societies A statue of a logger was designed and carved and three other NGOs was established in by Kalervo Kallio in 1958 in Rovaniemi on 1903. It proposed the establishment of ten the shoreline of Kemi river, which has been nature reserves. A state committee was set the major floating route until recently. Other up in 1907 to make the formal proposals. similar statues are located in Joensuu and (Helander 1949) some other localities. August Renvall studied in his doctoral dis- Aleksis Kivi was the first author to publish sertation the issue of the decline of the novels and plays in Finnish by the middle northern timber line in the 1910s. A law to of the 19th century. His novel “The seven protect from such a decline was launched brothers” describes mostly the life in forest in 1921. First official nature reserves were wilderness. The book is among the best-sell- established in 1916 and the law of nature ers in Finland. It has been translated into conservation in 1923. Finally, not before several languages. Also Johannes Linnanko- 1938 a Union of Nature Conservation, a ski, Ilmari Kianto, Juhani Aho, Pentti Haanpää NGO (Suomen Luonnonsuojeluliitto) was and others were inspired by forests and for- established by various scientific societies in estry in their novels and short stories. Teuvo Finland. For some time this NGO was chaired Pakkala wrote in the early 20th century a by foresters. (Helander 1949) novel “Tukkijoella”, which described the life The Forest Research Institute played a of the loggers floating logs along a river. It decisive role for forest policy during 1920s became not only an evergreen book, but also to 1950s according to the model of Fig. 4. an evergreen play and film in Finland. About Finland became a pioneer in developing and a hundred films must have been produced implementing first in the world a systematic in Finland until 1960 with major inspiration sampling-based national forest inventory in from forestry and floating of timber.

VUOSILUSTO 2004–2005 91 Jean Sibelius composed a series of piano cies fisheries suffered from the expanding peaces with such names as “Mountain timber floating and finally salmon was termi- ash”, “Pine”, “Spruce”, “Birch”, and “Aspen”. nated in the rivers after the World War II by Many other compositions by him were also hydropower constructions. (Åström 1978) inspired by forests. Once around 1900 he Electricity consumption grew especially due travelled with his piano for inspiration to to expanding forest industries. Accordingly, Koli, remote forested mountain accessible a transition to industrial forestry had also only by boat in eastern Finland. The other some other drawbacks in nature conserva- composers followed the famous suite. Also tion, which started to become more actual in light music we may have hundreds of later on along with the intensification of forestry, timber floating and forests inspired forest management since the 1960s. pieces. (Reunala and Virtanen 1987) Tasanen (2004) studied the advance of silviculture in Finland until the 1870s. According to him the Crown aimed towards sustainable forestry already since the forestry 6. Discussion and conclusions law of 1647. He continues that the state con- sidered as its duty already then to guarantee 61. Discussion the sustainability of forest resources for the multiple needs of the exporting industries, It is evident that the theoretical framework army, navy and commercial fleet as well as has had a strong influence on our findings. for the urban and rural populations. Tasanen It has been like a microscope for genetists did, however, mention that de facto imple- or a telescope for astronomers in selecting mentation of this and later laws remained relevant observations guided by relevant weak. It was not before in the 1886 law that theories. The reliability of our findings is the terminating of deforestation was made dependant not only on the reliability of quite explicit as described in Section 31 of the historical facts and data but also on the this paper. quality and relevance of our theory and Ruuttula-Vasari (2004) has convincingly approach. If we compare the findings of this demonstrated the long path and great prob- paper with those of Massa (1993), his find- lems in implementing a law of state forest ings about sustainability of Finnish forestry administration in Finland in the latter half of are quite opposite from ours. He chose a the 19th century. When the law was restrict- soft framework of “Raubwirtschaft” as his ing the immemorial user rights of the rural approach and applied only a few quantita- people and when they got support in the tive data. His approach covered also all eco- press and even in the parliament, it was nomic sectors, why his analysis of forestry understandable that numerous illegalities remained insufficient. took place then in the Finnish state for- If Finland was able to transit to sustained ests (cf. Fig. 5). Fritzbøger (2005) found that timber yield in the early 20th century, there similar illegalities were prevailing in most was an early deterioration of other goods and European countries during the 19th cen- services by forests. Valuable game became tury. A comparison of the findings by Ruut- intensively hunted since 16th century. Beaver tula-Vasari with the contemporary tropical and wild deer became totally extinct early in countries is also interesting: parallel illegal the19th century. Wolf, bear, two eagle species, activities are still prevailing in their forests a few hawks and moose became also nearly (Palo and Lehto 2006). distinct later on. The population of squirrel Finland experienced a parallel stage of was also largely exploited, because it was take over of the private forests by profes- the most common commercial commodity sional foresters in 1918–1959. First, the state for many centuries. Salmon and other spe- foresters were only implementing the 1917

92 VUOSILUSTO 2004–2005 law. Since 1928 the foresters were promot- al. 1998). Also capacity building of human ing also investments in forest management resources has a key role. In this way more intensification and practicing extension of value added in timber processing can be rational forestry management guided by achieved. R&D has played key roles in identi- the semi-official provincial forestry boards. fying major forest policy issues. For example, Finally, since 1950 also the numerous local the threat in the 1920s and 1930s for deplet- forestry management associations were inte- ing timber resources in Finland would not grated in this promotion of the industrial have been observed fast enough without forestry paradigm to the farm forest owners. reliable forest inventory and timber drain The diffusion of rational industrial forestry information systems. (cf. Figs. 4 & 10) paradigm among the farmers faced numer- Björn’s (2000) environmental history study ous problems but gradually the level of sil- was interesting from the point of view that viculture was somewhat raised (see Leikola he was the only one to apply this three- in this volume). stage typology of preindustrial, industrial Fritzbøger (2005) is the only forestry his- and postindustrial forestry. His findings at torian in our references, who has recognized the local level were to some degree paral- the key role of property rights in the way lel with our findings at the national level. towards sustainable forestry. He concluded However, he did not specify well enough the that the absence of private property induced paradigm of industrial forestry and did not overexploitation of forests and it was the aim to study specifically the factors under- main reason for deforestation in Denmark lying the transition from preindustrial to since the 12th century until the beginning industrial forestry. of the 19th century. Traditionally in Denmark the rural people had common rights of five different kinds concerning cutting of big 62. Conclusions or small trees, and ranging of grasses and bushes etc. In sustainable forestry predict- The first purpose of this paper was to study ability of wood production was needed and the transition from preindustrial to industrial this required monoculture instead of earlier forestry. We may conclude that Finland has multiple-use forestry. We share his views also transited from preindustrial to industrial for- concerning contemporary tropical deforest- estry during the first half of the twentieth ation (Palo and Lehto 2006). century based on the transitions to de facto Michelsen (1995) emphasized the role of and de jure sustained yield of timber and research and know-how in organizing for- finally on excess of the industrial use of estry management and administration in the timber in comparison with the non-indus- 19th and early 20th centuries. Also according trial use. Unexpectedly, de facto transition to our findings domestic R&D have been preceded de jure transition. From a causal important in following up the international point of view the latter cannot be the cause advances in forest sciences and policies. The of the former. Therefore, it is infered, that the transition to sustained yield of timber has Great Land Reform jointly with increasing also required a lot of new research in Finland forestry incomes and increasing real value to support the paradigm change. R&D has of forests were the primary causes of this to be accompanied by effective education, historical transition. training and extension activities. It appeared The second purpose of this paper was to to be time-consuming to overcome the resist- analyse the roles of wars, foreign technology ance for this kind of paradigm change. and know-how in the transition to indus- Furthermore, more research and develop- trial forestry. The numerous wars, imports ment (R&D) on both public and private of technology and know-how and various funding have been needed (Hellström et foreign impacts of political and economic

VUOSILUSTO 2004–2005 93 regimes and scientific paradigms have also increased the growing stock of timber. The played a major role in the past transition post-war expansion of demand by wars of Finland to industrial forestry. The wars means usually also increasing real stumpage have promoted privatization of forests and prices and making forests more valuable. increased demands for forest products. Pri- Low-value forest resources are mostly defor- vate property rights are theoretically most ested and high-value forests sustained. The efficient (Section 23 above) for sustainable key role of wars through centuries in sup- management. Colonization by land reforms port of transition to sustainable industrial and privatization have been the longest forestry is regarded as our novel finding. trend of this study starting already from the However, wars alone cannot make this 16th century. Forests have also supported transition but a complex process of many the Finns in defending their country against simultaneous factors is required. enemies. Naturally, during the wars regular Foreign technology and know-how have production of forestry and forest industries also been key factors in promoting Fin- has often been periodically disturbed. land’s transition to sustained yield of timber The motivations of the state to expand and industrial forestry. Imports of foreign colonization have been to increase tax rev- technology especially before 1910 have enues, defence aspects and to avoid deprava- expanded and diversified the capacity of tion due to the lost wars and high number forest industries to demand more timber of evacuated rural people. and more varying dimensions and of varying During the most recent decades, Brazil tree species. In this way the stumpage prices, and Indonesia are illustrative cases, which forestry incomes and the value of forests have strongly favoured the colonization of have increased in support of sustained yield previously uninhabited forest wildernesses and industrial forestry. Foreign know-how partly for the same motivations by the states. was needed in the application of the new Under those tropical ecological, corruptive, technologies but also in comprehending the open access, and low-level democracy condi- contents of the new paradigm of sustained tions this colonization has led to expanded yield forestry. deforestation (Palo and Lehto 2006). In Fin- The third purpose of this paper was to land 2.5 million ha of forests were transfered analyse the roles of ecological conditions, from the state to the farmers until 1959 and market, social, political and cultural insti- (Holopainen 1968) tutions. The ecological factors have been The forest industry corporations have ben- favourable by decreasing the opportunity efited from the long-lasting colonization of cost of sustainable forestry. The primary forests in Finland. Due to the large-scale idea in applying this development model colonization the inhabitation became widely of Fig. 4 as a framework was to find out distributed among the vast forests. Therefore, how Finland overcame deforestation and the supply of loggers and horses for extrac- forest degradation at a development stage tion of logs was accessible in most parts of similar to many of the contemporary devel- Finland. Only in the most remote forests in oping countries. Stable governments with northern and eastern parts specific logging advanced democracy create one foundation camps had to be created with additional for the success. Workable social, institutional costs for the corporations. The labour input and legal infrastructures are also needed. to forestry was about 200,000 man-years in Corruption and other illegal activities have 1950 at the highest peak ever in the Finnish to be overcome. forestry. Simultaneously, about 70,000 horses Clear and strong forest property rights were recruited at the top season in extract- establish one foundation for a future success. ing roundwood. (Fig. 12, Holopainen 1968) Open access can then be closed by overcom- The wartime depressions of exports have ing transaction costs and consequently, com-

94 VUOSILUSTO 2004–2005 petitive markets can be established. Imports roles in the 18th century, Lars Gabriel Hart- of technology and knowhow among other man and Fabian Langenskiöld in the 19th factors have a tendency to increase demand century, A. K. Cajander, Mauno Pekkala, N. for forest products. This will increase the A. Osara and Matti Lepistö (Piha 1975) until value of forest and decrease the opportunity the 1950s in the 20th century. Naturally, cost of sustainable forestry. Also other market vested interests and political parties have failures and government failures have to be always played their own key roles both in corrected. An optimum mix of markets and the agenda formation and in the final imple- policies (Fig. 2) has to be applied in control mentation of these reforms. of production, distribution and consumption Finland has had a peripheral geographic of forest goods and services. location and specific ecological conditions. The missing of this kind of “invisible They have jointly determined traditionally hand” in support of public policies is still rather restricted investment opportunities in today a major problem for more than 80% this country. Accordingly, Finland relied until of the world’s forests owned by the states. the 1950s primarily on her forest resources Artificially made low stumpage prices with in economic development. Therefore, Fin- consequent low value of forests makes the land has implemented more intensive forest opportunity cost of sustainable forestry policy and management efforts to maintain high. Therefore, and due to a high degree of her forest resources than most other coun- corruption, typical to socialistic forestry, a tries. large-scale deforestation is continuing in the In fact, Finland has already created a forest tropics (Palo and Lehto 2006). cluster until the 1950s to support forest- Forestry problems do not induce reforms based development. In this cluster forest in isolation by their sole existence. The role industries were connected with backward, of public discussion by scholars in promot- forward, agricultural, investment and con- ing the agenda formation necessary for sumption linkages of materials, energy and new forest legislation is one more novel key information to a high number of other indus- finding of this paper. This took place in the tries. This forest cluster gradually became 1730s and 1740s before the launching of the a core of economic growth for the whole Great Land Reform and the liberalization of national economy. Even Nokia started as a the access for sailing abroad, again in 1829 pulp company in 1869. After the 1950s the by Böcker before the two committees for the diversification of the economy has led to a 1851 law, and again in the 1850s by Gyldén, less pronounced role of the forest cluster in von Berg, Snellman and Wrede before the the society (Fig. 8). major reforms of the end of 1850s and the The coevolution theory integrated our 1886 law, and again in the early 20th century analysis conserning the interaction between in advance of integrating the Forester Col- forestry and society. The coevolution of for- lege to the University, establishing the Forest estry sector with the society via forest-based Research Institute and the 1917 forestry act. development and forestry regulation in Fin- A similar discussion was going on since 1914 land has been unique in the whole world (e. g. Pekkala 1922) to criticise the integra- (Hjerppe 1989, Palo and Uusivuori 1999). It tion of forestry extension with agriculture may not be easy to replicate it in the devel- (Helander 1949). A Committee for private oping countries or in the countries with forestry was set up in 1924 and in 1928 economies in transition. The world context major reforms arrived. today is so different from the world Finland The role of individual actors in key vacan- encountered in its earlier phases of develop- cies in the government is another precon- ment. However, some lessons can be learned dition to forestry reforms. We may identify from the Finnish experience. Jacob Faggot and Anders Chydenius in such The interplay and interaction of public

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98 VUOSILUSTO 2004–2005 Snellman, H. 1996. Tukkilaisten tulo ja lähtö. Kansa- Acknowledgement: I wish to acknowledge Erkki tieteellinen tutkimus Kemijoen metsä- ja uitto- Lehto for drawing the figures, for correcting my työstä. Scripta Historica 25. Oulun historiaseuran English and for proof-reading of this paper and julkaisuja. Pohjonen. Yrjö Sevola for providing some of the long time Steen, H.K. (Ed.) 1984. History of sustained-yield series data. I am grateful to Professor Yeo-Chang forestry: A symposium. Forest History Group Youn of Seoul National University (South Korea) (S6.07)/IUFRO & Forest History Society. USA. for his cooperation in creating the ongoing 469 p. research project plan, Dr Jari Ojala of the Univer- Stieglitz, J.E. 2003. Poverty, globalization and growth: sity of Jyväskylä (Finland) and Dr Jussi Saramäki perspectives on some of the statistical links. of Metla’s Research Station in Kannus (Finland) In: UNDP: Human development report 2003. for their useful comments on my manuscript. I p. 80. am also indebted to Seoul National University and Stjernquist, P. 1973. Laws in the forests. A study Suomen Metsäsäätiö (Finnish Forest Foundation) of public direction of Swedish private forestry. for financial support of this study. Lund CWK Gleerup. 212 p. Stridsberg, E. and Mattsson, L. 1980. Skogen genom tiderna. LTs förelag. Stockholm. 265 p. Tansey, S.D. 2000. Politics. The basics. Second edition. Routledge. London/New York. 277 p. Contents Tasanen, T. 2004. Läksi puut ylenemähän. Metsien hoidon historia Suomessa keskiajalta metsäteol- 1. Forestry and society 49 lisuuden läpimurtoon 1870-luvulla. Summary: 2. Theory, method and data 52 The history of silviculture in Finland from the 21. Industrial forestry paradigm 52 Medieval to the breakthrough of the forest indus- 22. Politics, policies, power 54 try in the 1870s. The Finnish Forest Research 23. Property rights 54 Institute. Metsäntutkimuslaitoksen tiedonantoja 24. Roles of state and market 55 920. 443 p. 25. Coevolution as a research strategy 56 Unasylva 1993. Policy and legislation (A special 26. Method and data 57 issue). Vol. 44(175). 68 p. 3. De jure and de facto transitions 58 Virrankoski, P. 1986. Anders Chydenius. Demokraat- 31. De jure transition 58 tinen poliitikko valistuksen vuosisadalta. WSOY. 32. De facto transition 63 498 p. 4. Impacts of wars, technology and Yin, R. 2003. Case study research. Design and meth- know-how 65 ods. Sage Publications. 41. Impacts of wars 65 Zetterberg, S. 1987. Suomen sota 1808–1809. In: 42. Impacts of foreign technology and Zetterberg, S. (Ed.): Suomen historian Pikkujät- know-how transfers 72 tiläinen. p. 351–371. WSOY. 5. Impacts of ecological, market, social, Zhang, Y. 2000. Deforestation and forest transition: political and cultural factors 77 Theory and evidence in China. In: Palo, M. and 51. Ecological factors 77 Vanhanen, H. (Eds.): World forests from deforesta- 52. Markets 79 tion to transition? World Forests, Vol. II. Kluwer 53. Social institutions 84 Academic Publishers. Dordrecht/Boston/London. 54. Political institutions 85 p. 41–66 55. Cultural impacts 88 Åström, S-E. 1978. Natur och byte. Ekologiska syn- 6. Discussion and conclusions 92 punkter på Finland’s ekonomiska historia. Söder- References 96 ström & C:o Förlag AB. 160 p.

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