The Impoverished Insophisticate: Human and Economic Development in Finland, 19th-20th Centuries

Sakari Saaritsa, University of Helsinki

A central tenet of the Scandinavian development narrative has been the notion of synergy between human capital and economic growth – a model Lars Sandberg (1979) famously elaborated by referring to mid-19th century Sweden as an “impoverished sophisticate” characterized by high life expectancy, high levels of literacy and low GDP. The human development characteristics were seen to facilitate later take-off in terms of growth. It is a well-worn practice in Finnish economic history literature to use Scandinavia as the primary reference group when assessing Finnish economic and social development, although by many standards Finland was midway between this group and what is now termed Central and Eastern Europe. This paper assesses the Finnish case from this perspective by reconstructing and deconstructing a historical human development index (HHDI) for Finland and comparing it both to the usual suspects from Scandinavia and Western Europe and to a select set of countries more similar by initial state and geopolitical economy (E.g., Ireland, Czechoslovakia, Hungary, Poland). Comparison are made not only in terms of timings of convergence and timings of take-offs and accelerations, but also timings of divergence. Methodologically, the paper also discusses characteristics of the HDI as a representation of development by moving from a composite “mashup” index of development to a “dashboard” of dimensions. A comparison of HDI and contributions to HDI of its subcomponents in the Nordic countries over different historical periods à la Prados de la Escosura will be included. Despite a rather complete convergence with the Nordic pattern by the late 20th century, Finland emerges as an “impoverished insophisticate” where economic growth was the first dimension to diverge from the periphery, education lagged behind not only other Nordics but also parts of the European periphery surprisingly long by many metrics, and the evolution of health was far from linear.

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 Presented in Session 117. Cases of Colonialism and Development