During this time period Finland went through major changes as the country urbanized and started to implement a broad and institutionalized welfare policy. The baby boomers became adults at a time when the living standards were rapidly improving.
During the 1960s, Finland's economic growth and structural transformation was very quick, driving workers out of agriculture and the countryside faster than had been the case in any other Western European country. Although the manufacturing output increased sharply, there were many in rural occupations – small-scale farmers, forestry workers, and so on – who could not find industrial jobs in Finland.
Many Finns were therefore looking for better economic opportunities in neighboring Sweden. During 1968 and 1969, approximately 80,000 people moved from Finland to Sweden. There had been some migration to Sweden since the war, but the late 1960s were the peak period. Altogether 300,000 Finns, mainly from the countryside in the north and east of the country, emigrated to Sweden after the Second World War.
During the late 1960s, student movements shook political systems across the Western world. In many countries, students protested against the same issues, like the Vietnam War, as well as the Soviet occupation of Czechoslovakia, and that was the case also in Finland. However, in Finland the student movement was less radical than in many other European countries. For example, the occupation of the Old Student House in Helsinki in November 1968 was mainly a symbolic gesture. Despite this, there was some concern among the older generations that the students were agitating for a real revolution.
In 1973, the members of the European Free Trade Association, and its Associate Member Finland, signed a free trade agreement with the European Economic Community (EEC). In Finland, the decision was a subject of a lively debate. The agreement did contribute to a better balance in Finland’s trade relations, maintaining the Finnish market access in the integrating West. Trade with the Soviet Union and other Eastern bloc countries continued to be important as well.
The Finnish social welfare system was created through a series of responses to specific needs. The Finnish system is characterized by its comprehensiveness, as it covers the entire population and not just people who are not able to take care of themselves. Measures like allowances for mothers and children, pensions and national health insurance, raised the standard of living significantly. By 1977, the social welfare expenditures accounted for over 20% of Finnish GDP.
In the 1970s, Finland reformed its education system. The reform abolished the two-track basic education model and stressed equal access to education at all levels. The Comprehensive School Curriculum of 1970 ensured that all students, regardless of their family background, received a similar level of education, and could attend the school closest to them.
President Urho Kekkonen made his second official visit to the U.S. in 1970. During the visit, President Richard Nixon stated that the U.S. respects Finland as a state which is independent and neutral, and which works on behalf of world peace, trying to relieve tensions between great and small states.
With the Vietnam War and developments across Asia, Africa and Latin America sharpening the tension between the Western and the Soviet camps, Finland’s neutrality policy came under pressure. In the West, some skeptics of détente and the new Ostpolitik pursued by Chancellor Willy Brandt accused him of trying to ‘Finlandize’ West Germany´s foreign and security policy. In this case, “Finlandization” suggested that West Germany was about to loosen its ties to NATO and the United States and allow the Soviet Union too much influence over its decision-making. Finnish diplomats fought vehemently against this rather skewed portrayal of Finland’s international position and policy. They saw the “Finlandization” label as potentially undermining the patient work to fortify Finland’s neutrality and increasing the room for maneuver in foreign policy.
Finland was in the spotlight of Cold War politics, when it hosted the Conference on Security and Cooperation in Europe (CSCE) in 1975. Finland had played an active role in the preparatory work for the conference since the late 1960s, and its non-aligned status was conducive to both the U.S. and the Soviet Union accepting the idea of Helsinki hosting the Final Conference. For Finland, the conference in the summer of 1975 was the greatest international effort since the 1952 Olympics. A total of 35 heads of state came together in Helsinki in the spirit of détente and committed themselves to essential principles safeguarding security in Europe, including peaceful means of resolving conflicts, territorial integrity of states, as well as, human rights.
The Helsinki Final Act addressed a range of prominent global issues and had far-reaching effects on the Cold War, U.S.-Soviet relations, and ultimately the dismantling of the Soviet control over Eastern Europe. The conference was a triumph for President Kekkonen and Finnish diplomacy. The Helsinki Final Act is still considered an important cornerstone of the European security order. Furthermore, the conference had a major impact on Finnish foreign policy: Finnish neutrality became more broadly recognized, and the discussion about “Finlandization began to fade away.
While addressing the audience of the opening session of the CSCE summit, President Gerald Ford said, “Particularly to you, President Kekkonen, I must convey to the people of the Republic of Finland, on behalf of the 214 million people of the United States of America, a reaffirmation of the long-standing affection and admiration which all my countrymen hold for your brave and beautiful country. We are bound together by the most powerful of all ties, our fervent love for freedom of independence, which knows no homeland but the human heart.”
President Kekkonen visited Washington, D.C., in 1976 to celebrate the bicentennial of the United States. During the visit, President Ford brought up Finland's great contribution to America’s history. “To cite a single example, Americans from coast to coast know of Finnish genius in Saarinen's design of Washington's Dulles Airport, one of the outstanding architectural achievements in our country in recent years. But whether in steel or concrete, or in mind or in spirit, the Finnish involvement with the United States continues to affirm the traditional ties of friendship between our two peoples,” the President said.