ABSTRACT

The purpose of this collection is to shed new light on the interwar period. The theme is timely since the interwar period had features which are like those of the crisis of 2008/09 – not least with regard to the financial markets, the immense risk of increasing costs from escalating trade protectionism and economic nationalism, resulting in trade barriers between trade blocs of which some are rising and some are in decline. Contemporary policy makers and business people often refer to the interwar period in terms of lessons to be learned from historical lapses. It is thus important that we have a comprehensive view of the period. In the literature, this period stands out as an example of deep and wide economic and political disintegration. Although the scholars still debate the causes of the crisis, there is a consensus that it developed into one of the worst depressions in history,1 which eventually ended in the outbreak of the Second World War.2 However, this view does not apply to the Scandinavian countries; although the crisis seriously affected the conditions for growth in Scandinavia, Sweden, Norway, Denmark, Iceland and Finland managed to develop both economically and politically during the period.3 But even though the diverging interwar experiences of the Scandinavian countries have been noticed in the literature, the characteristics ‘chaos, crisis, and catastrophe’, as characterized by Feinstein et al., are still applied generally and the attempts to explain the diverging experiences of these countries (and perhaps even to learn from them) thus remain only a partially solved quest.4 The basic idea of this book is thus to change the focus from the epicentres of the crises, such as New York, London and Berlin, to the Scandinavian countries. Even though the Scandinavian countries differed significantly with regard to economic structure and factor endowment, they had similar preconditions: they were small, homogeneous, open economies, and they reacted quite similarly to the economic and political course of events in the interwar era. The recurring theme in this book is why the Scandinavian countries, given these premises, diverged from the general pattern. Even though small, trade dependent and lateindustrialized countries like the Scandinavian ones were more vulnerable to the changes than large countries, the width and the depth of the crises in the former was less than in the latter. How should this be interpreted? In the textbooks it is suggested that the Scandinavian countries had advantages of escaping the costs

and tragedies of the First World War, and could continue their transition into mature industrialized economies.5 But even though the Scandinavian countries grew stronger and more competitive, US isolationism, the British preference for the Dominions and the Germans’ turning to the countries in the southeast and centre of Europe limited the opportunities for a trade expansion, which threatened to restrict further economic growth.6 Why, then, were the divergent patterns of economic growth in Scandinavia, relative to the European average, especially notable during the Great Depression, when protectionism increased?7 In this collection it is argued that the Scandinavian countries managed to remain relatively open and flexible, first by utilizing the increasing ‘Anglo-German duopoly’, which meant that the Scandinavian countries remained within the sphere of interest of both Germany and the UK, on which the Scandinavian countries depended for their growth. Although the Scandinavian countries took a secondary position compared to the Dominions, the British presence remained strong enough to outbalance any German political or economic expansion.8 This was crucial with regard to the openness, as well as terms and conditions, of trade, since the bargaining power of the small Scandinavian countries increased correspondingly with the Anglo-German competition. Eventually, German and British interest in the Scandinavian markets increased and grew into interdependence. In this respect, the adjacency and the developed market channels with Germany and British markets were of great importance, but it should be noted that the Scandinavian countries took a secondary position in the German and British economic spheres. This meant that the Scandinavian countries did not come into the same scope of the rival powers’ assertive trade policies as the Balkans and the countries in Central Europe, and the Dominions.9