Regional Wealth Inequality and Transformation of the Finnish Economy 1750-1900

Sammanfattning: Concentration of wealth has received considerable attention in recent years, and research shows that it is not only a modern day phenomenon. This thesis contributes to the ongoing debate by presenting wealth inequality estimates for rural Finland from 1750 to 1900 in three regions – East, Southwest and North. The current study uses a rich dataset of probate inventories containing over 18 000 observations for rural Finland, which enables a fine-grained analysis of farmers and workers, who constituted the two largest social groups in Finland at the time. It finds high levels of rural wealth inequality, particularly in Southwestern Finland. The results also display a trend of simultaneously decreasing mean wealth and increasing inequality for the period of 1750-1850. This development is retracted only between 1850 and 1900, when wealth grows explosively especially in the most advanced and industrialized Southwestern Finland. However, the growth of wealth inequality in this region seems to cease in 1850. These events are in stark contrast to Kuznets’ theory about inequality increasing together with modern economic growth. This is especially evident given Finland’s broad agrarian base well into the 20th century, and industrialization, which was fueled by the rise of forestry at the end of the 19th century. As inequality is mainly driven by changes in Finland’s primary sector, present study provides an indication of the importance of intra-sectoral change vis-à-vis the conventionally emphasized inter-sectoral change. Finally, in identifying Southwestern Finland as the region determining the course of wealth inequality, it also expands our understanding of the role of regional inequality in national inequality, and the importance of regional decomposition in the research of historical inequality as a whole.