Inside the multiethnic states of Imperial Russia and the Soviet Union, the Baltic peoples have been nationalist forces of importance. The Baltic area (see figure 18.1) is on the verge between ‘europeanness’ and ‘otherness’ as it has been termed in the discussion on Russian nationalism. In this context, Estonians in the late nineteenth century chose to commit themselves to European culture, partly obliged by Baltic German overlords, partly choosing between them and the Russian central power. German romantic nationalism and its organic view of the state have been recurring in Estonian thought, not only in the nineteenth century, but also in the interwar years. In this, Estonians adhered to the central European rather than to a Scandinavian pattern. This, however, also influenced their way of managing the economy.

Here, economic aspects of nationalism in Estonia will be discussed in the period between the so-called national awakening in the late nineteenth century up to the demise of the Soviet Union in 1991. In this period, Estonia has been subject to four different economic regimes; as part of tsarist Russia, as an independent capitalist nation state, as a socialist republic within the Soviet Union, and again as an independent state with a capitalist and liberal economic policy. Three different aspects of the problem will be addressed here. One is the ethnic division of labour and its consequences. The second aspect is the economic and ethnic policy of the successive governments.