"Caught in a Globalization Trap: Moral Standards Forcing Territorial Retraction, 1917-29"

The Norwegian Kiær-Solberg family situated themselves in the midst of the rise of Nordic (including Russia) paper and pulp industry during the first decades of the twentieth century, but had to retract heavily from their foreign ventures following the Russian Revolution and the Gold Standard policies of the 1920s. Moral matters were central to this retraction: The group had guaranteed the bank loans for their Russian factory that the new Soviet regime confiscated and that itself became a heavy burden for the family. Of perhaps even greater significance was the internal tensions within the family about who should take the burden and these conflicts broke down internal confidence of what was a kind of associative capitalism. Added to the Norwegian central bank’s high interest policies post 1920 promoting deflation to bring the value of the Norwegian krone back at its 1914 value, very much a moral issue, the family fortune dwindled as the value of its debt grew. The paper argues that the moral foundations of rapidly expanding Norwegian family capitalism – as playing out on both the corporate level and the national level – were a huge strain on Norwegian international business (the family members also being involved elsewhere).