Government Intervention Works. The Libertarians Proved It. - The Reykjavik Grapevine

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Government Intervention Works. The Libertarians Proved It.

Government Intervention Works. The Libertarians Proved It.

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Published August 5, 2005

According to some, Iceland is the dream model for a conservative government. The former prime minister and key member of the Coalition Government, Davíð Oddsson, has toured the world touting his conservative policies, speaking at the neo-con think tank the American Enterprise Institute about the miracles he performed in Iceland by privatizing state-run corporations. Oddsson, who has cited Margaret Thatcher as a hero, has even lambasted former British Prime Minister Sir John Major in England for being so foolish as to pay minimum wage—Iceland doesn’t have one.

Not that Mr. Oddsson’s pro-big business, anti-taxation and government services stance is anything new. During June 17th, some local teens put the settlement of Iceland into perspective. Pointing to the statue of Iceland founder Ingolfur Arnarsson, they asked us, assuming we were run-of-the-mill foreigners, “Do you know who this is?”

Our journalist, always looking to make friends, said “A tax evader and murderer from Norway?”
“That’s absolutely right,” the teenagers said, and decided we were good friends of Iceland.

According to economist David Friedman and Pulitzer Prize-winning historian and anthropologist Jared Diamond, the original government in Iceland was the libertarian ideal of the Free State. For the first three hundred years, there were no taxes, no police, no army, the few functions typically handled by the state in other countries were initially handled privately here, including criminal prosecution. In his essay “Living on the Moon,” Jared Diamond claims the Icelandic Free State which lasted from 930 to 1262 was a disaster and showed the failure of such a system. The problem is, many people here, and many scholars looking at the system with a healthy perspective, believe that the Icelandic Free State succeeded quite well—332 years is doing better than the system set up in America, for example.

While the success of the Icelandic Free State is open to debate, we can at least acknowledge that when Davíð Oddsson started pushing Libertarian values in Iceland, he was reverting to one of the most celebrated times in Icelandic history. And as his Coalition Government has managed to privatize the last of the extremely profitable major state-run corporations in the country this week, Síminn, the Iceland telecommunications company, Oddsson has transformed his home into something resembling that glorious Free State of history. And to his credit, there is a good deal more wealth in Iceland than there was fifteen years ago. True, there is a wider gap between the rich and the poor, and true, the average personal debt in the country is enormous, but the quality of life still seems to have gone up.

As the current government chugs along, spouting alarming anti-government rhetoric, we at the Grapevine are sometimes cast as extreme for asking that the government regulate employers’ treatment of immigrants, or that government officials who privatize banks and end up profiting from the privatization at least be monitored—we haven’t printed our request that Iceland begin a recycling program in earnest because the look of shock on the faces of Icelanders in the room convinced that we were truly going over the top.

The view of so many people here is “If it ain’t broke, don’t fix it.” And, most of the year, it’s hard to argue. Kids with high school degrees are running multi-million dollar businesses, there’s work enough for everyone, and the social services, while on the decline, are still available to most. But then you get days like August 7th, the day of the Gay Pride Festival, which should remind locals of the move by the current government to pass Gay Union Legislation in 1996, three years before the first Gay Pride Festival.

The fact that few in the country remember extended public debate over gay partnership laws, and that nobody has been able to point out to us any significant public action that may have spurred on this law, leads us to follow the conclusion many locals have about this case: a few powerful politicians decided to be forward-thinking, and the nation followed. By passing a law about lifestyle, Parliament was able to shape a tolerant community.

Laws like the Gay Union Legislation should be celebrated, but they also remind those of us interested in politics how much is at stake, how much good can be done. Legislation in Iceland led the way to a more gay-friendly society, and legislation could lead the way to a more environmentally-friendly society, to a better-educated society, and to a more integrated society (the diversity is already here(. This country may have been founded by a group of landowners who disliked legislation and enforcement of laws, and for their time the Icelandic Free State did some great things, but in modern times, as demonstrated by the actions of Mr. Oddsson in 1996, a more aggressive and conscientious government is necessary to build the kind of society that creative and productive citizens want to be a part of.

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