The Meaning of Success
‘How to succeed in Modern Business: Lessons from the Icelandic Voyage’ is the title of an address given by Iceland’s president Ólafur R. Grímsson to British business leaders in London’s Walbrook Club in 2005. In his lecture, the President enumerated 13 national characteristics to explain ‘our’, that is Icelanders’, ‘success’ in finance: “Eighth on my list is the heritage of discovery and exploration, fostered by the medieval Viking sagas that have been told and retold to every Icelandic child,” he said. “This is a tradition that gives honour to those who venture into unknown lands, who dare to journey to foreign fields, interpreting modern business ventures as an extension of the Viking spirit, applauding the successful entrepreneurs as heirs of this proud tradition.”
President Grímsson was not the first to mythologize Iceland’s rapid implementation of global capitalism with Viking references. In the late 1970’s and early 80’s, a handful of young men, members of the so-called Locomotive group [Eimreiðin], made themselves busy importing Milton Friedman’s free market ideology. Davíð Oddsson was a prominent member of this group. He would later implement Friedman’s ideology as the Independence Party leader, Prime Minister (1991-2004) and, since 2005, chairperson of the Central Bank. Milton Friedman’s dogma is now well known: privatize, deregulate, then look away. In The Shock Doctrine, Naomi Klein has exposed to us how Friedman’s disciples went about doing this, by using the disorientation caused by traumatic events, such as natural catastrophes or economic depression, to push through programmes that otherwise would never have been democratically approved. A lesser known proponent of ‘more radical capitalism’ is Milton Friedman’s son, the self-professed ‘anarcho-capitalist’ David Friedman. In 1979, Friedman jr. published an article entitled ‘Private Creation and Enforcement of Law: A Historical Case’. The historical case in question is medieval Iceland, when law was not upheld by a state, but by individuals: “Medieval Icelandic institutions […] might almost have been invented by a mad economist to test the lengths to which market systems could supplant government in its most fundamental functions,” wrote the young Friedman. In such a society, he goes on, seats in parliament are a commodity and justice is upheld by the threat of thralldom as punishment for any offence. The Old Norse term ‘thralldom’ is a bit of an obscurity in modern English. Its modern Icelandic variant – Þrældómur – is transparent enough; it just means slavery.
In 1979, the Locomotive group invited David Friedman to Iceland for a seminar about his thesis on the benefits of slavery. The lecture was then translated by the future Viking executive Hreinn Loftsson and published in the Locomotive’s magazine, Freedom [Frelsid].
Life in Debt
Iceland’s three publicly owned banks were privatized in the early 2000’s and the republic thrown into the deal, as mortgage. This mortgage was considered solid, the rising (now 18%) local interest rates luring, and the banks accumulated enormous assets. The banks grew ten times bigger than Iceland’s economy. When international bankers started having doubts, the Icelanders reached for European private savings with ‘ingenious’ schemes, as Sigurjón Árnason, the manager of Landsbanki bank, called their Icesave offer: “The only thing I have to do is look each day and see how much money came in,” he says, laughing, in a 2006 interview, “picks up the phone and a moment later says: ‘50 million pounds came in, just last Friday!’”. Our beloved Vikings took the money and ran, and left the Icelandic state with a foreign debt of € 20 billion. Divided between the country’s 300 thousand inhabitants, that is € 70 thousand per person.
Icelanders, however, are already familiar with debt. Home ownership is public policy, sinking most people in debt in their early 20’s. Before turning 30, most have taken student loans, a real-estate loan, a ‘car-loan’, travelled on VISA, and raised a baby on overdraft. Since the country has its own currency, the Króna (ISK), there isn’t much difference between this system of debt and so-called ‘truck systems’, where a labourer buys goods from the company he works for. His work and his consumption are noted in a single book of debit and credit, while the worker sees little or no ‘real’ money. Young people took their parents’ advice and borrowed up to 100% of the heavily inflated, London-priced real estate. Now many of them are stuck. The real estate market has now collapsed, making the highly leveraged apartments impossible to sell. Since the loans are linked to the local retail price index, in times of inflation the homeowners’ debt grows: a young woman who borrowed 24 million ISK to buy an apartment five years ago, and has duly paid her rising monthly payments since, now owes the bank 30 million ISK for that same loan. The technical term for this is ‘price-insurance’ but colloquially it is known as ‘the Hell-machine’. When you travel to Iceland, the Martian landscapes between the airport and Reykjavík may look a lot like lava, but don’t be fooled: it’s hardened debt.
‘There is No Such Thing as Non-fiction’
Most of the country’s citizens live in debt but precise statistics are hard to find. Thatcher’s dictum ‘There is no such thing as society’ was taken very seriously by policy makers under Oddsson’s rule, and institutes that had the role of providing social data were disciplined and silenced, or simply shut down. When the National Economic Institute repeatedly published unsuitable information, Oddsson passed law through the Parliament to abolish the institute. That was in the late 1990’s. He then redirected the institute’s role to the Central Bank and years later appointed himself as Central Bank manager. This is why key figures, such as the international Gini index, meant to measure equality of wealth distribution, do not exist for Iceland.
For a few years, from mass privatization in the early 2000’s until October 2008, Reykjavík cafés would present you with laid-back high school students chatting mainly about currency rates and the benefits of short-selling. But this small linguistic community seems to uphold only one line of thought at a time. Non-financial vocabularies were left to wither. ‘The ever-present danger of perishing would not permit of a language restricted to gesture,’ said Rousseau on the origin of language in the North: ‘And, the first words among them were not love me, but help me.’ Admittedly, there is no Icelandic word for ‘gesture’, which helps explain awkward moments in foreign relations. The local term for ‘hegemony’ [forræði} also covers ‘administration’ and ‘child custody’. The recently coined translation for ‘structure’ [formgerð] still feels forced. This conceptual lack is supported by official linguistic policies, which have aimed at ‘purification’ since the 19th century. When discussing politics, people take refuge in metaphors of fishing and farming. On BBC’s Hard Talk ex-PM Geir Haarde repeated the prevalent meteorological analysis of last autumn’s events: “We were in the middle of a hurricane. A global financial hurricane. Our banking system and the resources of our government were not big enough to withstand the wind. That came from that hurricane.” Ask not which way the wind blows – it blows at thee.
All media in the country, state-run or private, is edited by members of the Independence party. Media policy has been in line with party policy, the most crucial element of which is optimism. Davíð Oddsson, who started his career as a radio entertainer, is also a published author of short stories and poetry. In 1983, Freedom magazine printed Oddsson’s admiring article about poet Tómas Guðmundsson where he compares the poet with Winston Churchill, in terms of their unwavering optimism. In the recession of 1933, Guðmundsson published a popular collection of romantic poetry about Reykjavik, entitled Beautiful World. ‘It can be assumed,’ writes Oddsson, ‘that to many this question must have sounded peculiar, whether they did not find the world beautiful. But Guðmundsson did not ask. He announced this to his nation.’
The poetic announcement sheds light on Oddsson’s political theory and policymaking, as well as a peculiar sort of journalism. As national dogma, this optimism verges on the totalitarian. In October 2008, when ‘the perfect storm’ set in, as the International Monetary Fund (IMF) called it, that is when all of Iceland’s banks were bailed out from bankruptcy by the state, the newspapers were busy doing other things. Morgunblaðið, which originated as the Independence Party’s own organ, ran the front-page headline ‘The intrinsic power of our Nation’ underneath a photograph of a waterfall (Sep 27). ‘What will ‘our girls’ do?’ the front page then asked its readers (Sep 28) referring to female soccer. When the events could no longer be evaded, editors bypassed the news and went straight to problem-solving: ‘Want to strengthen the banks’ (Sep 29) – and whitewashing: ‘It was unavoidable’ (Sep 30). A day later ‘Want to honour equality’ is accompanied by ‘We know as little as the public’. October 3, Morgunblaðið scoops: ‘Economic uncertainty’ – oh, no! – but helps the country heal for the next few days: ‘Only to a safe haven’, ‘Good conversation is good fortune’ and ‘The public’s savings are safe’ (Oct 6). These are the actual main front-page headlines running while two of the country’s three banks were nationalized –to the world’s attention. The third nationalization did make it to the front page, as: ‘Kaupþing bank admits defeat’ (Oct 9). Smaller catastrophes, which abounded, received no mention. In a radically capitalist state, negativity is too risky, true words too dear. This is media as a police force, doing crowd-control, with a poetic touch. ‘There is nothing to see here, move away,’ these front pages say, while dispersing the crowds.
Yet another term non-existent in Icelandic is ‘strategy’. During ‘the blessed war’, as older people fondly remember World War II, Iceland began to leave pre-industrial poverty behind: this spot in the Atlantic was strategically important and so was its fish. In 1944, Iceland the colony declared independence from Denmark’s modest empire and became Iceland the Republic. This proudly independent country was however already occupied by US forces, and would be until 2006, when the Bush administration found some better things to do with the two remaining fighter-jets. While the US dollar is supported by 300 million citizens, industry and military intervention, the Icelandic Króna is used by 300 thousand people, whose main export remains cod. Disillusion hit mere days before the banks collapsed: On September 24th 2008, the US Federal Reserve announced it would make currency exchange deals with the Central banks in Sweden, Norway and Denmark, to support them through the global recession – but not Iceland. As the Nordic countries like to see themselves as one community, this signal was unambiguous: sink, Iceland, sink.
And sink it did. The country’s first response was to take offence, and in an episode that reveals a sublime combination of the cartoonish and the Shakespearean, Davíð Oddsson announced that Russia would lend Iceland all the money it needed. Russia did not agree – and instant-mix articles about the deep ties and common history of the two countries stopped appearing as suddenly as they had commenced. Iceland was falling, but in the manner of a cartoon character who runs off a cliff and then stops in midair: it’s easy enough to stand on nothing, as long as you don’t look down and realise. Sheer optimism may hold you for a breathless moment – then you fall.
The original version of this article, published in Italy’s Il Manifesto October 2008, concluded that these events were ‘already revolutionary in measure’. The editors of The London Review of Books edited the revolution thing out before publishing it in November. I found that very reasonable: revolutions are rare. The term should be used sparingly. Then, every Saturday, ever growing thousands of people came together for protest in the main square of Reykjavík, united on very clear demands. For the last twenty years, Icelanders have been very reluctant protestors – and to begin with most felt hesitant to support such actions as hurling eggs at parliament. As daring activists waged further and further – with symbolic action, such as raising a discount supermarket’s flag on parliament but also direct action such as carrying a bank manager out of her bank – and as these actions started showing success, while politicians refused to utter a word of apology, let alone resign, support for the protest became as close to unanimous as can be expected. On the 21st of January, police used teargas for the first time in Reykjavík since people demonstrated against Iceland joining NATO in 1949. When polled the day after, 70% of the country’s population declared their support of the protest actions. A people, so long fenced-in with optimistic silence, learned to show anger, resentment and shout.
Let’s back a day: On the 20th of January 2009, Parliament intended to resume its activities after a vacation seen by some as ludicrously long. A call for action was voiced: let’s make noises! A few hundred showed up in front of parliament before noon. Before long, these few hundred hesitatingly and shyly crossed a police ribbon that had been strung around the building at a few metres distance. Once the ribbon was broken, the protestors surrounded the building, banging pots, pans and the windows of parliament. When police applied pepper spray, the demonstrators showed resolute solidarity, ready with diluted washing-up liquid and milk to take care of each other. A garden behind the house of parliament became a site of struggle, where the police arrested dozens, mostly underage teenagers. In a few hours police gained control of the garden, but protestors kept banging.
As dusk set in, the one or two hundred people who were still relentlessly banging whatever bangable items they had brought that morning, witnessed something bewildering: the action was not fading. On the contrary new streams and flocks of people appeared. In a few hours, after the evening news, the hundreds turned to thousands and the incessant tribal beat was accompanied by a bonfire in the square in front of parliament. The fire lasted for hours, but grew to most splendid heights when the City’s own Christmas tree was brought down and carried on to the fire. And as it turned out, this is one way to off a government: the noise continued and they were gone in a week.
This is revolution. It is a revolution of mindset, born of deep anger, resentment and a categorical demand for justice. But this is also a good-old ‘The King is Dead! Long Live the King!’ factual sort of revolution, where the public throws off the burden of unbearably bad rulers and demands new ones. A constitutional convention is underway, to meet basic demands, such as a separation of government, parliament and the courts. In a supposed republic where citizens still tend to refer to themselves as subjects, this is, in some ways, 1789. In order to undermine the protestors’ own achievement, and to postpone the obvious hard question: what now, then? – both the protest movement and its opponents have cute-ified the happening by naming it ‘the cutlery revolution’ [búsáhaldabyltingin]. And the newspapers, of course, acknowledge no such thing as revolution. The event, as event, is a priori excluded from their agenda. The day after the government was toppled, their headlines ran: ‘Left-wing government seems likely’.
Lessons from the Icelandic Voyage
Neoliberal Iceland was run as a secret conspiracy worthy of a James Bond screenplay: it was exchanged for gambling money in a plot involving Russian oligarchs, offshore accounts in the Caribbean, and luxury yachts no less kitschy than your average dictators’ – not to mention Elton John, Tina Turner and Duran Duran entertaining in private parties, and a lot of cocaine. Or so they say. Rumours abound, but no details, no facts: no single money transaction has been publicly verified. In Iceland, no businessperson, politician or civil servant has been charged with any crime.
The first revolutionary stroke in Iceland’s history re-established the possibility of meaning. Just that. Then everything is left unsaid and undone. How far back do the lies reach? Was Iceland rigged up to feed the US army? It may not be much harder to forge a national identity than decorating a Pizza Hut: one Nobel Prize here, Viking myths there, put a ‘The world’s oldest democracy’-plaque on the wall ….
Camouflaged in elegant white, we thought that we had passed through as Europeans. As long as we’d keep proper distance from the Inuit and always correct those who think we live in snow houses, we hoped that no one would notice. Will they now despise us? During the self-professed ‘good years’, a lot of people left Iceland. In 2007, some 60 thousand Icelandic citizens permanently resided elsewhere, 20% of its inhabitants. Now Icelanders have suddenly become Europe’s cheapest workforce. We all know how this works – Norwegian worker rentals have already set up shop in the city hall, recruiting from those already unemployed. Those who were not in on any scam and gained nothing from Iceland’s rise and fall, ask: Will we be treated like we treated our immigrants? Or worse? No, we are not numerous enough, someone answers. They won’t notice.
‘Ninth,’ President Grímsson went on in his London address on Icelandic success, ‘is the importance of personal reputation. This is partly rooted in the medieval Edda poems, which emphasise that our wealth might wither away but our reputation will stay with us forever. Every Icelandic entrepreneur knows that success or failure will reflect not only on his or her own reputation but also on the reputation of the nation. They therefore see themselves as representatives of a proud people and know that their performance will determine their reputation for decades or centuries to come.’ Grímsson forgot to mention the most prominent advice in the Edda-poems: ‘The ignorant booby had best be silent / When he moves among other men / No one will know what a nit-wit he is / Until he begins to talk.’ (Verse 27 in W.H. Auden’s translation.) Grímsson evaded the subject of thralldom altogether.
It’s got geothermal heating, so at least no one will freeze to death’, wrote Time Magazine about Iceland’s prospects in October 2008. According to rumours from more experienced third-world countries, the IMF might beg to differ. We have every reason to fear that they and other representatives of global market interests will want to use this opportunity for a full-scale Friedmanite Shock Doctrine. Already in early October, right-wing forces tried to create consensus on the dogmatic “Now nothing can be holy”, i.e. now is the time for environmentalists, feminists and socialists to shut up and let business do its business. Venture capitalists have made bids at the state’s total real estate. It’s Don Corleone’s world, full of ‘offers they can’t refuse’. We know little about the IMF’s agreement with Icelandic authorities, only that they promised each other to suspend the full force of the collapse until 2010. It’s a gluey sort of Apocalypse. 8000 of the country’s 300 thousand inhabitants are currently studying business and finance, acting as if nothing happened. Everyone still acts as if money has a function and basically every trick in the hysteric’s toolbox is currently applied to hide the fact that there is no way back. Tomorrow may be capitalist, but tomorrow’s capitalism would be a dystopian remix of Fukuyama’s universe, without any pretences towards freedom. In a silent act of minimal decency, local right-wing ideologues have stopped uttering the word. For the next year or two, our brutally real choice will continue to be revealed: between capitalismo puro, capitalism as mere, brutal fact and – through a thick layer of ridicule, this word still demands its way out as the only fitting one – revolution.
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