The Rise of the Interventionist State

In his influential work Norge og Verdenskrigen (Norway and the First World War) from 1927, the economist Wilhelm Keilhau (1888-1954) argued that one of the most crucial changes to Norwegian society during the war was the emergence of the state as a key driving force in shaping the country’s economy and society.[1] For Keilhau, the challenges of war had caused a fundamental shift in Norwegian politics and introduced an acceptance for the interventionist state, through what he labelled as “inflated state activities”. While Keilhau, in his book, charted the rapid expansion of the state from 1914 to 1918, the origins of this interventionist state must also be sought in the years before the war.

Prior to 1914, governmental initiatives under the leadership of the Liberal Party (Venstre) and a broad social-liberalist coalition had emerged to take control of what were considered unfortunate side effects of market-capitalism. This pre-war interventionist turn originated with Norwegian independence in 1905 and gathered the support of large parts of society. It led for example to the concession laws of 1906, which regulated access to acquisition of Norway’s valuable watercourses, but also the establishment of limited forms of health insurance, and other experiments in early state organised welfare.[2] The First World War, however, offered up a set of unprecedented challenges that lent a certain urgency and energy to state intervention, ultimately channelling these pre-war state initiatives into a fundamental change in the relationship between state and society, and foreshadowing the emergence of a modern welfare state.[3]

From the outset, the war appeared to represent an almost existential threat to Norwegian society, as modern naval warfare and blockade tactics jeopardized the country’s trade and industry.[4] It exposed Norway's fundamental reliance on the outside world and forced the state to intervene in the economy and shoulder the responsibility of securing safe passage for supplies to arrive at the country’s ports and ensuring that Norwegian companies could continue to export their goods to a global market.

Initially, however, a solution to this crisis seemed almost ephemeral, as it was uncertain whether the belligerent powers of Europe would respect Norway’s pre-war trade arrangements within the new limits of neutrality. Under increased pressure from belligerent countries, especially Great Britain, the issue was solved through a series of private agreements between business and trade organisations and Norway’s trading partners in Europe during the early years of the war. While private enterprises took the lead in these negotiations, they were, from the start, conducted with the full cooperation and support of Norwegian authorities, and underwritten by the government. The successful conclusion of these trade agreements not only secured Norwegian trade, but also signalled the start of a more symbiotic relationship between private enterprise and the state, a cooperation that would have been unthinkable prior to 1914.[5]

This new relationship was highlighted through the implementation of the new trading regime that was put in place during 1915. The belligerent nations, especially Britain, demanded that newly negotiated trade agreements be rigorously implemented, requiring the Norwegian government to pass laws and regulations concerned with granting import and export licences, permits and exemptions, in an ever-expanding control regime that caused a large growth in the number of government institutions and manpower.[6]

Politics of War and Crisis - A Nation Ill Prepared for War

The impact of war, however, compelled the Norwegian government to intervene on a much broader scale than just foreign trade. From 1914 to 1918, the government established a “politics of crisis” (krisepolitikk), which witnessed the state expand its control and regulation over almost every part of the economic and financial sector: imports, exports, domestic trade, production, and the consumption of goods. The free market was, at times, severely restricted, radically altering the relationship between private enterprise and the state. One of the earliest examples was the introduction of price controls on several goods, put in place to prevent hoarding and price gouging in late August 1914. This form of direct governmental intervention in the market was unprecedented and would have been impossible under normal circumstances. Indeed, new legislation had to be hastily passed by the Norwegian parliament to allow the government to act, as there was no legal precedent for such a radical intervention. Price caps, however, were only the start of governmental control and were followed by legislation that allowed the government to confiscate goods and introduce rationing of both consumer goods and industrial raw materials, all of which was a first for the modern Norwegian state.

A flood of laws and regulations washed over the country from 1914 to 1918, detailing all aspects of economic life, from the manufacturing and sale of lubricants and grease to the legislation that mandated the establishment of state-controlled stockpiles of grains. Accompanying the new laws and regulations was a massive expansion in governmental offices and institutions, as new ministries, offices, commissions, and councils were created to oversee the growing interests of the state. These new bureaucratic organisations were not passive administrative units but came equipped with far-ranging authority to intervene in both society and the free market. An early example was the creation of a national provisions commission, whose main task was to oversee the import and storage of foodstuffs, in 1914. Corn, flour, sugar, salt, and other commodities were purchased and stored in government-controlled stores before being re-distributed or sold under strict rules to consumers or industry. The government either bought or took control of infrastructure, such as factories, stores, and ships to secure provisions. The establishment of these national institutions was mirrored by local municipalities, who were encouraged to establish their own provision commissions, and, in 1916, made mandatory for every municipality.[7]

The state also intervened in the housing market, as a combination of rising inflation and a sharp decline in the construction of new houses lent a certain urgency to the coordination of governmental housing policy. The situation was further compounded by a pre-war crash in the housing market, combined with restrictions on imports during the war, which led to a housing shortage especially in major cities like Kristiania, Bergen, and Trondheim. The government responded by allowing local councils to limit the rise in rents, which was to set a precedent for rent-control, both during and after the war.[8]

Most of these legislative changes were implemented with very little political opposition, as the direness of the situation discouraged political debate. Norway’s prime minister, Gunnar Knudsen (1948-1928), was ideologically opposed to the form of full-scale governmental control that emerged during the war and viewed it more as a necessity than a political course change. In large parts, it was the result of political improvisation that responded to acute problems, often inspired by policy decisions made in the neighbouring countries of Denmark and Sweden. Indeed, the extraordinary expansion of state control that emanated from a national crisis created in large part by the outbreak of war was abolished shortly after the war’s end.

The First World War, however, had established a greater acceptance of governmental intervention in both the economy and in other parts of society and would have a long-lasting effect on Norwegian politics and society. In the late 1950s, the historian Thomas Christian Wyller (1922-2012) argued that the war had established the principle of an expanded state sphere and that business leaders themselves had moved away from a more dogmatic liberal view. Wyller further argued that the First World War marked a definitive break with what he termed old liberalism, which was underlined by state intervention during the crisis of the 1920s and 30s.[9] However, it should be noted that state intervention did not originate with the First World War, as the conflict only accelerated an existing trend that was present prior to 1914. The Norwegian state did not take its first steps towards greater state involvement during the war, but perhaps its longest step. In the short term, it created a more intimate relationship between individual citizens and the state, and in the long term it laid the foundation for a move towards a welfare state.

The Surveillance State

The British historian A. J. P. Taylor (1906-1990) famously noted that the First World War fundamentally changed the relationship between British citizens and their state.[10] Prior to 1914, the people of Britain faced few limits to their freedom, they could travel, trade, and interact with the world with only limited intrusion from the state. After four years and three months of total war, this reality had been severely altered, as the state’s apparatus of surveillance and level of social control had expanded to unprecedented levels. A similar fundamental shift is possible to trace in other belligerent and neutral states, including Norway.

Driven by the effects of total war, the Norwegian state expanded both its involvement in society and surveillance of its citizens, as scarcity of resources, increased immigration and economic instability intensified the need for the state to define and defend those it considered to be part of the nation.[11] This development was exemplified through the enactment of the stricter Aliens Act in 1915 and 1917 but was also found in legislation to counteract foreign intelligence services, as noted by Ola Teige and Nik. Brandal.[12] Legislative expansion was accompanied by state-run surveillance infrastructure, in the form of departments, offices, and an increase in police and military personnel.

The result was the emergence of a modern surveillance state armed with new powerful tools that increasingly, and systematically, gathered information about its citizens. In the post-war era, this new information state, in combination with a rationale for the design of social order, was to have wide-ranging consequences for those who were defined as “others”, be they political opponents, national minorities, or other outsiders. The new laws and surveillance apparatus introduced during the war were, in the 1920s, used to monitor and control ethnic minorities, such as Kvens/Norwegian Finns, Jews, Forest Finns, and Roma and Romani people, as policing took on an added social control dimension in line with ideas linked to Zygmunt Bauman’s (1925-2017) concept of the “Gardening State”.[13] The apex of this new approach would be the passing of the Aliens Act of 1927, which contained a “Gypsy clause” (Sigøynerparagraf) that was intended to exclude Romani people from Norway.

The war would both strengthen and centralise the state’s executive power. At the same time there emerged an increased acceptance in the population for state intervention in the private sphere. This allowed the state to introduce legislation that attempted to eradicate social ills, and that would have been impossible prior to 1914. One such example was the ban on the sale of liquor and spirits. Sales and exports of grain for the production of alcohol were halted at the outbreak of war, and a temporary ban on the sale and production of liquor was introduced in December 1916. The initial cause for these bans was rooted in a severe shortage of supplies of foodstuffs, but the government also came to recognise them as an important tool to maintain control in the face of growing societal unrest during the latter part of the war. Politically, prohibition also found favour in parliament. The temperance movement had been a growing force in Norwegian society and politics for several decades. During the 1880s-1890s, the movement had won several local victories and introduced prohibition in several cities and counties. The strength of the movement lay in its broad appeal and found supporters in both Gunnar Knudsen’s Liberal Party and in the emerging labour movement. The ban was made permanent in 1919, after a national referendum, and not overturned until a second referendum in 1926.[14]

The Consequences of the Wartime Boom-and-Bust Economy

Despite initial economic uncertainty caused by the outbreak of war, the first two years of the First World War were economically beneficial to large sections of Norway’s private industry. Shipping experienced an extraordinarily lucrative expansion, as belligerent states’ demand for the movement of valuable raw materials dramatically increased. The export of valuable minerals such as pyrite to Germany, for example, rose from 40,000 tons in 1913 to 210,000 in 1915.[15] Rising commodity and freight rates made shipping a booming business, and contributed to energise the domestic economy, as profits from shipping was reinvested in different parts of society. There was a large amount of risk capital available and much of this was re-invested in several ventures, resulting in an expanding home industry. An added benefit was less competition from foreign companies.

The government’s income rose sharply, in large part because of the war and the economic boom, especially through revenues from both income and capital tax. The total income of the state rose from 18.5 million kroner in 1914-1915 to 150.6 million kroner in 1917-1918. A further 250 million kroner was added to this increase due to other taxes aimed at specific incomes from profits on the growing trade and freight during the war.[16] However, governmental expenses also increased sharply: military expenditure, foodstuffs, and cost-of-living compensations were among the many extra expenses incurred by the war. Due to the way the central government accounted for its finances, however, the budgetary deficits during the war were not noted until the early 1920s. Hence, the long-term economic consequences of the First World War for the Norwegian economy did not become apparent until some time after the war’s end. In 1922, it was revealed that the national debt was much higher than anticipated and that it had grown rapidly since 1914. This was in contradiction to the government’s budgets, which had shown a steady surplus both during and after the war.[17] The revelation heralded a decade of state poverty that was mirrored on local level and compounded by the international economic crisis in the inter-war period.

A More Divided Society

The impact of the First World War and its consequences for Norway emphasized and strengthened pre-war differences and divisions within society. The societal divides crystallized themselves along several fault lines: between labour and capital, cities and rural parts of the country, and farmers against both labour and capital. Furthermore, there were internal splits within these groups and conflicts that sometimes crossed and re-crossed pre-existing divides, creating new alliances and opponents. The consequences of war gave energy and urgency to these conflicts and helped to propel them into the inter-war years.

The twin powers of the effects of the boom-and-bust economy, especially after 1916, with its rising cost-of-living and the Russian October revolution in 1917 caused an increased tension between the labour movement and business leaders. As the economic situation worsened during the last part of the war, growing unrest in the labour movement culminated in “Cost-of-living” (Dyrtids) protests and threats of a general strike in 1918. The political fallout from this conflict was to have consequences for the Norwegian labour movement beyond the war. In 1919, radical forces within the movement gained a majority and the Norwegian Labour Party joined the Communist International. While more moderate forces soon prevailed and the Labour Party left the Comintern in 1923, the internal rifts caused by the twin forces of the war and the Russian revolution continued to influence the Norwegian labour movement during the inter-war years.[18]

The war and the Norwegian government’s “politics of crisis” (krisepolitikk) also affected other sectors of Norwegian society. Strict governmental regulations that included price caps on agricultural products, forced cultivation and other forms of encroachments on agricultural life hit farmers hard. Norwegian farmers also clashed with the labour movement, as the latter pushed for the introduction of stricter price caps on agricultural products to limit the impact of rising cost-of-living. The approach found little favour among farmers and the Norwegian Agrarian Association increasingly viewed the labour movement as an enemy. The economic and social divide in Norwegian society continued to grow after 1918 and it energized the emergence of an agrarian movement that sought an alternative modernity to the path offered by both the radicalized labour movement and the bourgeois. This divergence culminated in the founding of a Farmers’ Party in 1920, which became a vocal political force for the agrarian movement in the inter-war years, especially during the post-war economic crash and uncertainty.[19]

The Norwegian political conservative movement was also influenced by the broader calamitous effects of the First World War on Europe. The radicalization of the labour movement in the aftermath of the Russian revolution, the inter-war economic depression, and the rise of fascist and Nazi regimes, all contributed to the emergence of radical movements on the political right in Norway. These groups found fertile ground among supporters of the traditional Conservative Party, but also recruited from the Liberal Party and the agrarian movement. The Fatherland League (Fedrelandslaget) was founded in 1925 and became the largest and most prominent of these right-wing political groups, amassing an estimated 100,000 members at the peak of its popularity in 1930. The success of the movement was, partly, due to its opposition to the rising influence of the Russian revolution, but also the recruitment of polar explorer and national hero Fridtjof Nansen (1861-1930) and Norway's first prime minister, Christian Michelsen (1857-1925). The league declined during the latter part of the 1930s, partly due to its increasingly positive attitudes towards the Nazi regime and the Labour Party abandoning its revolutionary ideology.[20] Some members left the league for the far-right party National Unity (Nasjonal Samling), which was founded by, among others, the former defence minister, Vidkun Quisling (1887-1945) in 1933.[21]

Gender and the Impact of War

In 1914, the book “Norwegian Women: An Overview of Their Position and Living Conditions in the Centenary 1814-1914” celebrated the political, social, and cultural achievements of Norwegian women, which culminated in the women’s right to vote in 1913. Gina Krog, a notable Norwegian suffragist, and co-founder of the Norwegian Association for Women’s Rights (NKF), noted, however, that while the early part of the women’s suffragette movement had been a joyful party, Norwegian women now faced a harder working day.[22] Her prediction was to be proven correct, although the impact of war on Norwegian society would bring both challenges and benefits to women’s struggle for equality.

Initially, the shortage of labour during the war and in the first few post-war years provided women, and especially younger women, with many opportunities to enter the job market. A scarcity of qualified positions allowed certain groups, especially educated women, to demand and receive sizable wage increases and in 1920, government-employed women won the right to have the same salary scale as their male co-workers.[23]

The economic crisis that followed the war, however, also impacted women’s working opportunities, salaries, and social position. While the 1920 decision introduced theoretical parity, the gap in pay between men and women remained. Indeed, from being on the offensive prior to 1914, women’s fight for equality was forced on the defensive during the war, often struggling to defend what had already been achieved. According to one local chapter of the NKF, the war had forced all those working on “special interests” to put these aside to work for the common good of society.[24] Not everyone within the broader women’s coalition supported such an approach, as women within the labour movement demanded lower food prices and played an active role during the cost-of-living demonstrations in 1917 and 1918. While the end of the war brought this issue to a close, a larger challenge was soon to arise.

The economic crisis of the 1920s and 30s, with rising unemployment among both men and women, led to demands for a re-evaluation of women’s role in the labour market. Both the Norwegian Labour Party and the Norwegian Confederation of Trade Unions (LO) supported the introduction of a curtailment policy that would see married women make way for men in the labour market. Only in the mid-1930s did this campaign against married women subside somewhat and towards the end of the decade it was abandoned.[25]

Neutrality and the League of Nations

The pursuit of neutrality during the war led Norway down an arduous foreign policy road in which authorities had to perform a continual balancing act between the belligerent powers. At the end of 1918, Norway’s foreign policy of neutrality throughout the war was considered a success, in large part due to the country’s ability to stay out of the war by balancing its dependence on Britain with an acceptance of German foreign policy interests. It paved the way for an understanding that neutrality had saved the country from the horrors of war, but also brought home the reality that Norwegian sovereignty still rested on the guaranties of a great power like Britain. Furthermore, the calamitous effects on the country of the United States’ entry into the war in 1917 had also raised concerns about the dangers of being a small isolated state.[26]

During the war, Norwegian and other Scandinavian internationalists had moved to the forefront of the international discussions on how to secure a lasting peace. Scandinavian internationalist co-operation was intensified and institutionalised to a degree which was remarkable even by international standards. As noted by Karen Gram-Skjoldager and Øivind Tønnesson, the emergence of this particular peace oriented Scandinavian Sonderweg around the time of the First World War corresponds well with the international image of the Scandinavian countries as a particularly peace-loving bloc in international politics, characterised by peaceful regional coexistence and peace promoting foreign policies.[27]

The success of neutrality and the efforts of an emerging liberal internationalist milieu, energized and strengthened by the First World War, paved the way for Norway eagerly joining the League of Nations in 1920 with an aim to strengthen an emerging international order. Consequently, the League of Nations became an important arena for Norwegian foreign policy during large parts of the inter-war years with notable politicians, peace activists, and bureaucrats such Christian Lous Lange (1869-1938), Carl Joachim Hambro (1885-1964), and Fridtjof Nansen playing key roles.

Eirik Brazier, University of Southeast Norway

Reviewed by external referees on behalf of the General Editors