Conceptualizing Economic Growth and Development during the Interwar Period – the Case of Finland

Heikki Mikkonen, Tampere University

After the Second World War, economic growth emerged as a key economic concept and a dominant political paradigm. Heinz Arndt’s The Rise and Fall of Economic Growth. A Study in Contemporary Thought (1978) is most likely the first study that placed this emergence of the idea of economic growth into a historical context. Arndt pointed out two shortcomings of his study. First, he focused almost exclusively on writings of economists. Second, he only analysed what had been written in English language. Arndt’s important study has been followed by several original contributions. However, most studies still share Arndt’s framework: their primary focus is on texts written in English by economists in Anglo-American universities and international organisations. In this paper, I analyse how economic growth was perceived in economic associations in Finland during the interwar period. In textbook accounts of history of growth theories, it is often claimed that interest to growth theories diminished in the late 19th century, when classical political economy was replaced by marginalist theories that focused on individual utility and preferences instead of long-term economic development. Finland, however, provides interesting case for studying the interwar intellectual history of growth and development. Alongside the new marginalist ideas, a strong current of the German Historical School, with a curiosity concerning long-term economic development, continued to influence economic thought. In addition, in terms of the GDP, interwar Finland was still catching up with the more developed countries in Western Europe. Consequently, economic thinkers were not receptive to the pessimistic ideas of mature economy and secular stagnation that were present in immediate Anglo-American analysis of the Great Depression.

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 Presented in Session 135. Conceptualizing Economic Development