TARTU UNIVERSITY Faculty of Social Sciences and Education Institute of Government and Politics Centre for Baltic Sea Region Studies Kevin Axe FINNISH ADS, ESTONIAN TVS: EXTERNAL CULTURAL ROOTS OF ELITE NEOLIBERAL CONSENSUS IN TRANSITIONAL ESTONIA Master’s thesis Supervisors: Dr. Andres Kasekamp and Dr. Vello Pettai Tartu, 2015 This thesis conforms to the requirements for a Master’s thesis. ……………………………………………….……….. (Signature of a supervisor and date) ……………………………………………….………... (Signature of a supervisor and date) Submitted for defense …………………………………. (Date) This thesis is 24,989 words in length. I have written this Master’s thesis independently. All ideas and data taken from other authors or other sources have been fully referenced. I agree to publish my thesis on the University of Tartu’s DSpace and on the webpage of its Centre for Baltic Studies. …………………………………………………………. (Signature of the author and date) 2 ACKNOWLEDGMENTS I would like to start by thanking my supervisors, Dr. Andres Kasekamp and Dr. Vello Pettai, for their patience, guidance, and recommendations. I am also very grateful to my interviewees, who not only took time from their busy lives to meet with me for long conversations in a foreign language, but gave me the detailed, thoughtful answers, and occasionally sources and recommendations, that allowed this project to exist. Moreover, I would like to thank Dr. Heiko Pääbo for his seminars, and both him and Siiri Maimets for their help in helping me navigate academia and attain my degree over the past two years, as well as Dr. Viktor Trasberg, my initial supervisor, for help and advice when this was a very different project. I must also thank Milan Brezovsky and Saara Mildeberg, to whom I remain indebted for hosting me during the five trips I made to Tallinn to conduct research, as well as on countless other occasions. Finally, I would be remiss if I failed to thank my parents, Kenneth and Ann Axe, for their love, guidance, and occasional proofreading over the decades. 3 "From the 1960s, Finland represented Estonia’s window to the West: we watched Finnish television, saw things such as democratic elections (!), realised that Lech Walesa had a moustache (his picture was forbidden), and from bad American television shows like Dallas we came to believe that people in the West lived like JR." -Estonian president Toomas Hendrik Ilves, 2004. 4 ABSTRACT When the Baltic states returned to independence in 1991, they had similar problems, means, and goals, and yet, within a few years, Estonia had passed and sustained the most radical neoliberal reforms. While much has been written about the after-effects of reforms, the reasoning behind the reforms themselves has rarely been approached from a cultural angle, although various academics have noted that the cultural and ideological background of economic and political choices in Estonia is underestimated and under-analyzed. Similarly, while Estonia's unusually high level of contact with the West is frequently remarked upon, it is rarely discussed in detail, and the motives of Estonia's transition elites have also received little attention, a niche this thesis fills. Through the use of semi- structured interviews with elites in power during Estonia’s transition, compared and contrasted with academic narratives, and with each other, this thesis establishes that this development was partially the result of years of contact with media and persons from beyond the Iron Curtain, especially Finland, to a degree unknown in the rest of the former Soviet Union. These contacts helped inform, radicalize, and build a consensus in favor of rapid neoliberal economic reform among activists who took power during the transitional period of “extraordinary politics” that followed Estonia’s independence, providing ideal circumstances for radical changes to Estonia’s economic structure. Although planned economies have become almost non-existent, the transitions that Estonia underwent in order to become an independent, pluralist democracy with a market economy based on private ownership are situations that are frequently encountered globally, showing that Estonia’s experiences remain important and worthy of study today, even beyond the Baltic Rim. By exploring an oft-overlooked factor in one of Estonia’s transitions, this thesis also lays the groundwork for future historians and political scientists who may seek to explain similar situations and experiences elsewhere. 5 TABLE OF CONTENTS Introduction ........................................................................................................................... 8 Chapter 1: Background ...................................................................................................... 12 1.1 The Soviet Era ................................................................................................................. 12 1.2 Socio-linguistic Connections .......................................................................................... 13 1.3 Finnish Media Contacts .................................................................................................. 15 1.3.1 Television ............................................................................................................. 15 1.3.2 Radio ..................................................................................................................... 20 1.7 Interpersonal Contacts ..................................................................................................... 21 1.8 1987-1995: From a “Miracle” to “Normal Politics” ....................................................... 23 1.9 Measures of Estonian Reforms ....................................................................................... 26 Chapter 2: Conceptual Framework .................................................................................. 29 2.1 Literature Review: The Four Main Schools of Thought ................................................. 29 2.1.1 Geographic Factors ............................................................................................... 29 2.1.2 Initial Economic Structure .................................................................................... 30 2.1.3 Post-independence Reforms .................................................................................. 31 2.1.4 Cultural Factors ..................................................................................................... 32 2.2 The Importance of Elites ................................................................................................. 33 2.3 “Extraordinary Politics” and Transitional Mental Models ............................................. 36 2.4 Neoliberal Reforms: “Shock Therapy” Versus “Gradualism” ........................................ 41 Chapter 3: Methodology ..................................................................................................... 44 Chapter 4: Findings ............................................................................................................ 48 4.1 Finnish Connections ........................................................................................................ 48 4.1.1 Media ..................................................................................................................... 48 6 4.1.2 Personal .................................................................................................................. 54 4.2 How Economic Policy Was Made .................................................................................. 55 4.2.1 Consensus ............................................................................................................... 55 4.2.2 Planning ................................................................................................................. 58 4.2.2.1 “Miraculous” IME ...................................................................................... 58 4.2.2.2 Post-IME .................................................................................................... 60 4.2.3 Execution................................................................................................................ 63 4.2.4 Why “Shock Therapy?” ......................................................................................... 67 4.2.5 Debate .................................................................................................................... 69 4.2.6 The End of “Extraordinary Politics” ...................................................................... 72 Conclusion ............................................................................................................................ 74 Works Cited ......................................................................................................................... 79 Appendix I: Interviewees .................................................................................................... 88 Appendix II: Interview Questions ..................................................................................... 91 Appendix III: EBRD Data .................................................................................................. 93 7 INTRODUCTION Although the Baltic states were remarkably similar politically, culturally, and socioeconomically upon gaining independence from the Soviet Union, they soon began to diverge significantly, particularly in regards to their economies, due to a range of factors, two of which will be analyzed in this thesis: elite-based