Ask A Philosopher: What Led To The 2008 Crash?

As we look back on the 10th anniversary of the post-crash protests that brought down the Icelandic government, the root causes of the collapse were philosophical as much as they were financial. So we contacted doctorate student of philosophy Sævar Finnbogason to ask: What are the philosophical aspects of Icelandic culture that contributed to the 2008 financial collapse?

“If asked to name a single aspect of Icelandic culture that contributed to the financial collapse, I think it would be naivety. At the time, Iceland was a nation of less than 300,000 people and such small societies tends to be more cohesive and trusting. We should also remember that, in the space of a few decades, Iceland had transitioned from being one of the poorest nations in Europe, with a simple resource-based economy, to an open free-market economy, and, in 1994, a part of the European common market. After this, Iceland’s small and unsophisticated domestic financial sector grew to ten-times the size of the national GDP in just a decade, comparatively bigger than Switzerland or the UK.

“It is a well-known witticism in Iceland that we took to banking with the same ferocity as the fishermen who risk their lives to catch as much fish as they could before the next storm hit— fish as much as you can while the going is good. You never know what the weather will be like tomorrow. There might be more to this witticism then we like to admit. Icelanders learned to manage their fish stocks, let’s hope we have also learned from the financial collapse of 2008.”