Abstract
This article discusses observations on the differentiation process in the Finnish forest periphery and some of its links to Finnish society. Observations are based on the field studies of two villages in North Karelia. The two villages represent two different ways of combining agriculture with forestry: the peasant form of economy and the lumberman-smallholder economy. During a rapid reorganisation of Finland's position in the International division of labour, accompanied by a profound restructuring of the country's internal division of labour, both these forms of economy in the forest periphery began to crumble with somewhat different social consequences. The lumberman-smailholding economy has already met its demise, and the transformation of the peasant form of economy is still going on.