The Nordic Models

Hannes Gissurarson

2016, Report for New Direction

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The relative success of the Nordic countries is despite, not because of social democracy. Its main causes are the rule of law, free trade and social cohesion. There is a strong liberal tradition in the Nordic countries, starting with independent-minded farmers of the middle ages opposing royal abuses of power, and carried on by thinkers like Anders Chydenius in Sweden. While Sven Rydenfelt in Sweden, Christian Gandil in Denmark and Trygve Hoff in Norway were for a while voices in the wilderness, they are now revered by the young generation of Nordic liberals.

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Commonwealth and the present system of individual, transferable quotas in the fisheries; the individualist tradition in Icelandic history and literature, stretching back to the original settlement of the island in 874-930; and the writers, activists, and political leaders who have defined, defended, and practised freedom in Iceland, Jon Sigurdsson, the leader of the struggle for independence, Prime Minister Jon Thorlaksson, and others. A special emphasis is put on the comprehensive liberal reforms of 1991-2004, when David Oddsson was prime minister, and the many flaws in the anti-liberal Narrative widely presented abroad by his critics. Finally, the dramatic 2008 Icelandic bank collapse is discussed and explained. It has frequently been interpreted as the failure of liberalism, or as left-wing intellectuals prefer to call it, ‘neoliberalism’. For example, in a 2015 book two academics - one of them Icelandic - assert: ‘Iceland was the canary in the global coal mine, a warning of danger,’ adding:

with the poverty he saw among the peasants in his parish. In 1763 he participated in an essay contest on the question: ‘Why do so many people leave Sweden?’ He argued that there was nothing wrong with emigration. If the Swedes wanted to reduce it, then it was necessary to reform the Swedish economy and to make it more open and agreeable. Chydenius detailed the abuses, regulations, and taxes which made it difficult to escape poverty in Sweden. ‘Fatherland without freedom and merit is a big word with little meaning,’ he wrote. In 1765, Chydenius was elected to the Swedish Diet which was then divided into four estates. He successfully campaigned for the abolition of trade restrictions which in his home district of Ostrobothnia were particularly harmful as the towns there had to trade with Stockholm alone. Chydenius also managed to have a greater freedom of the press passed into law.

Anders Chydenius, The National Gain, $5 (London: Ernest Benn Ltd., 1939), http://www.chydenius.net/historia/teokset/e_kansallinen_johdanto.a Ibid., $31. The army officer Count Georg Adlersparre (1760-1835) was perhaps not as original a thinker as Chydenius, but he was even more influential. He translated parts of Adam Smith’s ‘Wealth of Nations’ for a magazine he published and was the first Swede to call himself ‘liberal’. After the hapless Swedish king Gustav IV Adolf had in 1809 lost Finland to the Russians, Adlersparrea led a successful revolt against him. The king’s old and childless uncle became king, and restrictions on the freedom of the press that the two previous monarchs had reintroduced were abolished again. A constitution was adopted which in a perhaps typical Swedish way was the result of a compromise between the liberals and the conservatives. Freedom of the press, of religion, and of assembly and the protection of property rights were guaranteed, while the nobility retained some of its privileges.

Besides Cassel and Heckscher, the best-known Swedish liberal intellectual in the 1930s and 1940s was Torgny Segerstedt (1876-1945), a newspaper editor, known for his uncompromising hostility towards the German national socialists, even at their heyday, when many of his fellow-countrymen thought it advisable to refrain from criticizing them. ‘Herr Hitler is a nuisance,’ Segerstedt defiantly wrote.'® Other liberals felt that they had to compromise, or perhaps rather to adjust their views, before the advancing tide of socialism. Blessed with a brilliant mind, good looks and an engaging personality, Bertil Ohlin (1899-1979), Economics Professor at the Stockholm School of Economics, argued for ‘social liberalism’ which would not envisage such a restricted role for the state as ‘old liberalism’. According to Ohlin, government had to try to level out economic fluctuations, work actively against monopolies, and ensure that income distribution did not become too unequal. In many ways, Ohlin and other members of the so-called Stockholm School in economics were Keynesians before Keynes. Ohlin also made important contributions to the theory of international trade. In 1944 he was elected leader of the People’s Party (Folkpartiet), most often the largest non-socialist party in Sweden. He served briefly as minister of trade in the Swedish wartime unity government, until 1945 when the Social Democrats formed

their own government. Although he kept his professorship, after the war Ohlin devoted himself to his political career, stepping down as party leader in 1967.

not find himself in agreement with Austrian economist Ludwig von Mises and some other founding members of the Mont Pelerin Society on redistribution. ‘If this is liberalism, then | am still a socialist,’ he said at the meeting.”

articles for Swedish and Norwegian newspapers and journals, including the business magazine Farmand in Norway, whose editor, Dr. Trygve Hoff, was one of the founders of the Mont Pelerin Society. Hoff brought Rydenfelt into the Society where he found other intellectuals with similar views.23 Rydenfelt became a good friend of Milton and Rose Friedman, and in 1984, Friedman contributed a foreword to an English edition of one of Rydenfelt’s books, on the failure of centrally planned food production.24 Polemical and uncompromising, Rydenfelt certainly was not a prophet in his own country, often being dismissed as a mere reactionary. But this and much else was to change in the fourth quarter of the 20th century. @ journalist, was a critique of the Swedish Security Police for its close surveillance of individuals allegedly holding controversial views, mostly radical leftists. Indeed, the Security Police investigated whether Rydenfelt was an extreme leftist! Its informant in Lund assured the agency that this was far from being the case.?2

n 1976, the Social Democrats had been in power for 44 years (with only a brief break in the summer of 1936). Sweden seemed to be a prosperous, successful country. Left-wing intellectuals around the world looked on her as a role model. Books were written about ‘the middle way’ or ‘the third way’ where Sweden seemed to be located. A charismatic and radical leader, Olof Palme, who had in 1970 become leader of the Social Democrats, was determined to carry further the social reforms started by his predecessors, even if it would mark a departure from the post-war consensus. The emphasis was changing from lifting up the poor to bringing down the rich. Pragmatists were replaced by ideologues. Ambitious plans were made to transfer private enterprises gradually into the hands of the trade unions by means of special wage earner funds. Swedish society was to become as socialised and equalised as would be possible. But as sometimes happens, the time of a movement’s greatest triumph is also the time when it may have over-extended itself, gone too far, and has to start a retreat. The ‘Swedish model’ which left-wing intellectuals animatedly discussed in the 1960s and 1970s was not to last. Indeed, a distinction can be made between three Swedish models. The liberal model was developed in the mid-19th century, when liberal principles of free trade and unfettered competition were generally accepted and implemented in Sweden. The years between 1970 and 1990 were the heyday of the social democratic welfare model, although it had of course started its development much earlier and was to last for a few more years. The third model emerged in the 1990s after the experience of the social democratic model: this was the liberal welfare model.?5 THE THREE SWEDISH MODELS

The Social Democrats seemed to aim for capitalism without capitalists. The tax system was becoming ever more distortionary. Examples abound. In 1980 a private person owning a business could pay an effective marginal tax of 137% on the return of capital raised by new share issues. Thus, he could lose money by making a profit. If his business was financed by debt, on the other hand, the marginal tax was high, but not expropriatory. If the business was tax-exempt, as some institutions and insurance companies were, then it might face a negative effective taxation, a net benefit, mainly because of inflation.?”? The predictable consequence of the social democratic policies was that entrepreneurship diminished. In 2004, 38 of the largest companies in Sweden were entrepreneurial which means that they had been started as privately owned enterprises within the country. Of these 38 firms, 21 were founded before 1913 and 15 between 1914 and 1970. Only two had been formed after 1970.78 While the public sector grew, the private sector stagnated. Between 1950 and 2000, the Swedish population grew from seven to almost nine million. Incredibly, the net job creation in the private sector during this period was close to zero. All the new jobs were in the public sector.?9 transfer of private enterprises to wage earner funds. They ran, however, into great opposition, and the feeling became widespread that they were going too far. The leadership of the Social Democrats was greatly weakened by the assassination of Olof Palme in 1986 - which shocked the Swedish nation - and by the resignation in 1990 of Finance Minister Kjell-Olof Feldt, who later reflected on his time in office:

The argument for the social democratic model was that it could combine security and prosperity, provide generous welfare benefits without any significant harmful effects for economic growth. But it became obvious in the 1970s and 1980s that Sweden was materially declining relative to some other rich countries, in particular the US, as shown in Figure 2.4° Figure? BOTH INSTITUTIONS AND CULTURE MATTER: SWEDES IN DIFFERENT ECONOMIES

sources: CIA World Factbook; Canada Statistics, US Bureau of Economic Analys'

be continued. The central bank was made independent; the budget process was reformed; welfare benefits were cut; a new pension system was established, partly with self-funded pensions; collective bargaining was reformed; the inheritance tax was abolished. The centre-right government which was in power 2006-2014 continued liberalising the Swedish economy: the wealth tax was abolished, tax credits were given on earned income, tax deductions were allowed for ‘household services’, choice in health care and in assistance to the elderly was increased, property rights were strengthened, and the corporate tax was cut to 22%. The Social Democrats who came back into power in 2014 have not tried to reverse these changes. model was emerging. Individual responsibility and choice have been extended, taxes and welfare benefits have been reduced; markets have been deregulated, companies have been privatised, and private provision of publicly financed welfare services has been introduced. The ideal has however not been abandoned of a safety net where every citizen is guaranteed access to welfare services, even if he or she was unable to pay for them. This new and liberal Swedish model was largely brought about unintentionally by pragmatic responses to the crisis of the unrestrained high-tax welfare state, but it enjoys wide support. It shows the self-corrective ability of Swedish society. Many problems remain however: even if taxes have been reduced, they are still high; the labour market is heavily regulated; housing is also strictly regulated so that there is little construction and low mobility; and freedom of enterprise, especially in services, is restricted. e

out between Denmark and the German Federation, led by Prussia, resulting in the resounding defeat in 1864 of Denmark and the loss of both Schleswig and Holstein. The defeat was traumatic for the Danish nation, coming after the loss of Norway to Sweden in 1814 and of several territories earlier to Sweden. The National-Liberals were totally discredited and conservatives took power. Nevertheless, liberal ideas remained strong in Denmark. Government ministers and high officials, while distrustful of democracy, firmly supported free trade, sound money, and the rule of law. The poet Holst expressed a widespread feeling in the country in a poem with the words, ‘Wha is lost outside has to be regained inside.’48 This was a sentiment similar to that of Tegnér after Sweden lost Finland in 1809: the lost territory had to be absolute power and a liberal constitution was adopte on 5 June, with separation of powers and freedom of the press, religion, association, and contract. The dominant party, the National-Liberals, were liberal as the name suggests, but Danish politics were complicated because of the thorny question of the two duchies of Schleswig and Holstein, where the Danish king was duke. The population of Holstein was German-speaking and the duchy was a member state of the German Federation, whereas Schleswig was divided between a Danish-speaking population in the northern part and a German-speaking one in the southern part. The National-Liberals wanted to maintain the union of Schleswig and Denmark, but were content to sever the ties with Holstein. When they tried to implement their policy, a war broke

over the whole of the country.® The Commonwealth was remarkable in that it constituted order without government. The founders agreed upon a body of law that would apply to all, but where enforcement was essentially private. The law was interpreted and developed by the Law Council (logretta) consisting of 39 chieftains (godar) meeting every summer at Thingvellir, an uninhabited place in the Southwest of Iceland and probably the easiest place to get to from al corners of the country. The aim of the Law Council was not to create new law, but rather to discover the good, old law, inherited by generations down the centuries, unwritten, but preserved in memory. If a piece of genuinely new law was to be passed, it required unanimous agreement in the Law Council.® The only elected official of the Commonwealth was the Law- speaker, a chieftain chosen for his thorough knowledge of the law. He was required to recite a part of the law publicly each year at Thingvellir. The chieftains were farmers, usually affluent and from respected families, and probably in pagan times performing religious functions as well. The chieftains also nominated their fellow farmers to the four farthing courts, one in each of the four farthings, or quarters, into which the whole country was divided. Those cases which were not resolved in a farthing court were brought to Thingvellir where the ‘Fifth Court’ (fimmtardomur) sat at the same choose between chieftains in his farthing. Thus, the chieftainships were not strictly geographically defined, but were formed by choice rather like modern security firms. A chieftain acted like a protector and ally of his ‘subjects’ or farmers who had declared their allegiance to him. The main problem of stateless societies, that the weak enjoy little or no protection from the strong or the wicked, was solved, or at least reduced, in Iceland by three means. First, of course, an individual farmer was protected by his family. Marriages were seen not primarily as love affairs, but rather as family alliances to strengthen this kind of protection. Some of the dramas in the Icelandic sagas indeed arose when those two considerations came into conflict. In the second place, the farmer would expect protection from his chieftain. Thirdly, individual cases could be transferred from a weaker to a stronger person, for example from a poor smallholder to a rich and powerful farmer. Then the stronger person undertook to enforce claims or court decisions on behalf of the weaker one, probably for a fee. Punishments were mainly based on restitution: if a man was killed, for example, the perpetrator had to pay damages to his kinsmen.

all Norse settlements in the North Atlantic, from Greenland through Iceland to the Faroe Islands, the Orkneys, Shetland, the Hebrides and the Isle of Man. Mixing favours with threats, he gained many allies in Iceland who, as Thorarinn Nefjolfsson two centuries earlier, argued that Iceland needed a king. When Snorri Sturluson proved reluctant to obey him, King Haakon ordered one of his Icelandic allies, the cunning chieftain Gissur Thorvaldsson from the Haukdaelir family, to kill Sturluson, which he did in 1241. In the next two decades, after violent conflicts, Thorvaldsson emerged as victor. By then, some Icelandic farmers had however had more than enough of rulers, as can be surmised from ‘Sturlunga’, a compilation of historical accounts from the 12th and 13th century. For example, when Thorgils Bodvarsson from the Sturlungar family in 1255 asked a meeting of farmers at Vallalaug in Skagafjordur for acceptance as their ruler, one farmer, Broddi Thorleifsson from Hof, wearily said: ‘If | have to serve a master, then | would choose Thorgils Bodvarsson, but it would be best to This speech probably owes more to Snorri Sturluson in 1225 or thereabout than to the farmer Einar Eyjolfsson from Thvera two centuries earlier, in 1024. Nevertheless, it illustrates a clear awareness by the Icelanders of their separate collective identity and their suspicion of kings, especially the royal propensity to lay heavy taxes on the people.

f the Icelanders thought that they had obtained a shelter by yielding their country to the Norwegian crown, then they would be greatly disappointed because they found themselves in a trap. As a result of innovations in shipbuilding technology, in the early 15th century English fishermen started to harvest fish in the Icelandic waters and to trade with the Icelanders. This should have opened several possibilities for Iceland of developing her fisheries and trading with foreigners. But now the Norwegian and Danish crowns had been united, and the Danish king was quick to prohibit all trade with foreigners, although it proved difficult to uphold his authority in the remote island: in 1467, English fishermen and traders even killed the crown’s governor of Iceland. Thrice in the 16th century, the Danish king offered to sell Iceland to his English counterpart, the notorious Henry VIII, who was however not interested.”° The present writer has calculated that the price the king wanted for the country was approximately six million dollars (in 2017 dollars).” But slowly the Danish king reestablished his authority in Iceland and imposed a total Danish monopoly of foreign trade. In alliance with the domestic landowning class, the Danish crown outlawed fishing and trade as full-time occupations: every able-bodied person had to be either a farmer or a dependent of a farmer or a farmhand, registered in one of the roughly 5,000 farms of the country. As a consequence, the paradox arose that the Icelanders often went hungry even if they were surrounded by some of the most fertile fishing grounds of the world.” In mid-16th century, the Danish king imposed the Reformation on Iceland and seized many church properties, and in 1662 he forced the Icelanders to accept the absolute power that he had already established in Denmark. The country was ravaged by cold spells, volcanic eruptions, earthquakes, epidemics, famines, and economic isolation, with the population going down to around 35,000 in 1785 and the Danish government seriously considering evacuating it to another Danish territory.”3

74 Gisli Gunnarsson, Monopoly Trade and Economic Stagnation: Studies in the Foreign Trade of Iceland 1602-1787 (Lund: Ekonomisk-Historiska Féreninget 1980).

78 Jon Sigurdsson, Um verslun a Islandi [On Trade in Iceland], Ny felagsrit, Vol. 3 (1843), pp. 52-3. 79 Jon Sigurdsson, Um felagsskap og samtok [On Associations and Corporations], Ny felagsrit, Vol. 4 (1844), p. 10 80 Jon Sigurdsson, Hugvekja til Islendinga [An Exhortation to the Icelanders], Ny felagsrit, Vol. 11 (1848), pp. 11-16. Jon Sigurdsson argued that the 1262 Covenant had been made between the Icelanders and the Norwegian king, not the Norwegian nation. Later, the Danish king had replaced the Norwegian king, so the Covenant was between the Icelanders and him. In 1662, the Covenant had been annulled when the Icelanders had recognised the absolute power of the Danish king. This was also a treaty just between them and the monarch. When the Danish king was now renouncing his absolute power in Denmark, appointing a representative government in that country, this meant for the Icelanders that the 1262 Covenant between them and the monarch became valid again. The government of Denmark therefore had no right to govern Iceland. The logical next step, Jon Sigurdsson argued, was to establish a legislative parliament in Reykjavik and to appoint a government with a representative in Copenhagen. It should be emphasised, however, that Jon Sigurdsson did not solely base the claim to national self-determination on an old document, the 1262 Covenant. His two other arguments, perhaps more convincing to foreigners, were from identity and prudence. He pointed out that the Icelanders were a separate nation with their own history, literature, and language. Moreover, it was prudent to assume that they knew better than Danish officials far away what was necessary for the country; self-rule was, Jon Sigurdsson submitted, a prerequisite for the progress which Iceland desperately needed.®° Jon Sigurdsson’s most influential paper, ‘An Exhortation to the Icelanders’, was published in 1848, when the Danish king, under pressure to renounce his absolute power, was preparing a constitution for the Danish Realm which included not only Denmark, Iceland, Greenland, and the Faroe Islands, but also the two duchies of Schleswig and Holstein. The king was keen on retaining his duchies, but Holstein was to all purposes a German territory, whereas Schleswig was mixed. As noted earlier, therefore many Danes wanted to abandon Holstein and annex Schleswig to Denmark, while both the leaders of Holstein and of the German states were adamantly opposed to that idea. In his ‘Exhortation’

In fact, Jon Sigurdsson may have agreed, up to a point. He was a practical man, realizing that Iceland needed economic progress to be sustainable as an independent country and economic progress required foreign capital, which could probably only come from Denmark. But Sigurdsson thought that the Icelanders also needed self- respect and dignity, especially because they were so few and poor. Therefore, he brought forward the argument from the 1262 Covenant which many would think absurd: it enabled the Icelanders to approach the matter as not asking for a favour, but as insisting on a right. Like Onund the Tree-foot a thousand years earlier, he did not want to beg for what he regarded as being rightfully his. 81 Gudmundur Halfdanarson, Icelandic Modernity and the Role of Nationalism, Nordic Paths to Modernity, eds. Johann Pall Arnason and Bjorn Wittrock (New York: Berghahn Books, 2012), pp. 251-273.

Jon Sigurdsson was however no radical. In Reykjavik in 1875, young students organised a celebration for him, one of them, Gestur Palsson, composing a poem about him. When Jon Sigurdsson thanked them, he took issue with a statement in the poem, ‘You the leader who never knew any restraints.’ He rejected the notion that he had never known any restraints. Discipline and restraints were needed for human development, he said. Restraints were necessary both within and outside, both for individuals and for nations. Unrestrained freedom, without any limits, was no freedom, but simply turmoil and disarray.®® Thus, Jon Sigurdsson could best be characterised as a conservative liberal. After he passed away, Thorlakur O. Johnson, a Reykjavik shopkeeper, led a movement to make his birthday, 17 June, a day of celebration. The first such celebration was held in 1886, becoming a tradition in early 20th Century. The Icelandic republic was established 17 June 1944, and Sigurdsson’s birthday has since then been the national holiday.

even after the abolition of the monopoly. In 1886, the first Icelandic bank, Landsbanki, was established by the government. It put into circulation Icelandic kronur, equivalent to Danish kroner. While it was nowhere written into a legal statute, everybody assumed that it was on the gold standard like the Danish currency. In 1904, a private bank, Islandsbanki, was established by Danish and Norwegian investors, being given the right to issue kronur and now legally backed by gold. The two banks provided the capital necessary to replace the old open row boats with modern fishing vessels, first decked sailships, then trawlers. The fisheries replaced agriculture as the most important sector of the economy, owners and captains of fishing vessels prospered, and to the chagrin of farmers, poor people from the countryside flocked to the fishing towns on the coastline, mainly to Reykjavik. The Danish government granted Iceland home rule in 1904, the governor being replaced by an Icelandic minister who, while a member of the Danish Council of State, was only answerable to the Icelandic parliament. But Icelandic capitalism had its opponents both intellectuals who identified a potential political constituency in the rapidly expanding class of urban labourers and even conservative farmers who resentec seeing their former farmhands leave for the towns anc the banks mainly providing capital to fishing firms. As Iceland had gained home rule and was rapidly approaching full sovereignty, the old parties of the struggle for independence gradually became obsolete. Political ideas or social identities guided the formation of new parties. In 1916, the Icelandic Social Democrats founded a party (A/thyduflokkurinn), which tried to gain the support of urban labourers and cooperated closely with the Icelandic Confederation of Labour and with its Danish sister party. The same year some farmers in parliament also established the Progressive Party (Framsoknarflokkurinn) which was backed by the Cooperative Movement and had much support in rural districts.

104 Hannes H. Gissurarson, Kiljan, Vol. 2 of Laxness’ biography (Reykjavik: Bokafelagid, 2004). 105 Benjamin Eiriksson, Orsakir erfidleikanna i atvinnu- og gjaldeyrismalum (Reykjavik: the author, 1938). Repr. in Benjamin Eiriksson, Rit 1938-1965, ed Hannes H. Gissurarson (Reykjavik: Stofnun Jons Thorlakssonar, 1987). ee Manlenfnlemiel TAAL

n the spring of 1938, Benjamin Eiriksson was not the only Icelander to graduate in economics. In Copenhagen, Olafur Bjornsson (1912-1999) finished his studies after six years at the University. A pastor’s son from the North of Iceland, as a young man Bjornsson had briefly flirted with socialism in the midst of the Great Depression, but his views changed when during his last winter in Copenhagen he came across two books, ‘Socialism’ by the Austriar economist Ludwig von Mises and ‘Collectivist Economic planning’, a collection of papers edited by another Austrian economist, Friedrich A. Hayek. In his book, which had originally been published in German in 1922, Mises argued that collectivist economic planning such as socialists traditionally envisaged was bound to fail because the planners could not price resources and other goods according to their relative scarcity. They could not make rational decisions about whether to build a road or a railway between two places, or whether to use a plot of land to grow corn or wine, or about thousands of other matters. In a free market economy, such decisions

On Hayek’s 80th birthday, 8 May 1979, the Icelandic Libertarian Alliance was founded by the present writer and a few other people interested in classical liberal, libertarian, and conservative ideas. When Hayek was informed of the foundation of the LA, he expressed his delight and said that he was willing to visit Iceland 114 Olafur Bjornsson, Frjalshyggja og alraedishyggja [Libartarianism and Totalitarianism] (Reykjavik: Almenna bokafelagid, 1978)

an economic process in which the agents slowly, and erratically, coordinated their pursuits of different aims. It was also fascinated by the public choice approach to politics, where it was deromanticised and analysed as the interplay of individuals promoting their own interest. A member of the group, Fridrik Fridriksson, in 1981 started doing postgraduate work in economics at Virginia Polytechnic Institute and University where James Buchanan and Gordon Tullock taught. In the autumn of 1982 Buchanan visited Iceland and spoke about the economic analysis of politics at a meeting which was well-attended and widely discussed.'2° During his stay, David Oddsson, who had in the spring become Mayor of Reykjavik, gave a dinner in Buchanan’s honour at Hofdi House (which was four years later to become famous as the meeting-place for Reagan and Gorbachev at their Reykjavik summit). Even if Oddsson was first and foremost a practical politician, he listened carefully to new ideas, not least if they fitted in with his robust, old-fashioned individualism mixed with deep scepticism about arrogant elites. of justice, whispered to them to play ‘Vienna, City of My Dreams’. When Hayek heard the music start, his eyes lit up, he smiled broadly and started softly to hum the text of the song. Hayek also told the group how Mrs. Margaret Thatcher had once completely disarmed him. Soon after she became prime minister, she heard that he was in London and invited him to 10 Downing Street. She greeted him at the entrance, saying: ‘Professor Hayek! | know precisely what you are going to say. You are going to say that | have not done enough. And you are absolutely right!’ During their conversation, Hayek observed that liberation always seemed to be in conflict with liberty, although he did not explain this in any detail. At the end of the dinner Hayek spoke a few words. He expressed his pleasure that young people were taking interest in his ideas, but he added that he had one favour to ask the students for their own sake as much as his: that they would not become Hayekians, as he had observed that the Marxists were much worse than Marx and the Keynesians much worse than Keynes!

danger to capitalism. ‘Look into a mirror, Friedman answered. ‘The greatest danger to capitalism is the capitalists themselves. They are always ready to ask for small and big favours from government. They do not like competition.’ Freedom’."! Two years later, in the autumn of 1984, Friedman visited Iceland with his wife Rose. It is fair to say that he, like Caesar long ago, came, saw, and conquered. Small of stature, but thoughtful and witty and totally in command of his subject, he made a strong impact. When he met the press during his first day in Iceland, a reporter asked whether he could sum up his recipe for Iceland in just one word, he replied: ‘Yes, | can!’ Slightly surprised, the reporter asked what that word would be. ‘Freedom,’ Friedman said with a broad smile. At a luncheon given by the Minister of Trade, the present writer introduced a governor of the Central Bank of Iceland to him with the words: ‘Here is a man, Professor Friedman, who would lose his job if your ideas were implemented in celand: a governor of the Central Bank.’ Friedman was quick to reply: ‘No, no. He would not lose a job; he would just have to move on to a more productive job.’ The Chamber of Commerce gave a dinner for Friedman, and one of the businessmen present asked him over coffee what he thought was the greatest

HE ICELANDIC ITQ SYSTEM IN THE FISHERIES hile the formation of the first Oddsson government certainly can be regarded as a turning point in the economic history of Iceland, in some fields reforms whic h had started earlie! were mostly consolidated and continued. This applies in particular to the fisheries, by far t sector of the Icelandic economy. Ice he most important and had extended her fishing limit four times, until it finally reached 200 miles in 1975, which meant that the celanders became sole users of the fertile fishing grounds in the territorial waters: earlier, around half the total catch or more had been harvested by foreigners. But at the same time, it seemed that the most valuable fish stock, the cod, was in danger of depletion, as had happened to herring some years before. Moreover, it was clear that too much capital had been invested in the fisheries, as economists would have predicted about any non- exclusive resource.'6 The fishing fleet had grown much faster than the total catch. The government decided to try and limit effort, defined as fishing days out at sea, but this did not seem to be successful, at least not in reducing over-investment.

“IGURE 4 OVERFISHING (EXCESSIVE FISHING EFFORT) IN OPEN-ACCESS FISHERY the very success of the system has given occasion to harsh criticisms. Some people resent that the fishing firms have become profitable unlike their counterparts in most other countries. These critics point out that the owners of the firms initially received the quotas on the basis of catch history, and not in a government auction. Friedman’s old opponent, Sociology Professor Stefan Olafsson, writes, for example, ‘This form of original allocation was by many seen as unfair, closing the formerly open access to the commons that the fishing grounds had been and producing privileges in a more closed industry.3° But this objection to the ITQ system shows that Olafsson has not fully comprehended the nature of the problem arising from non-exclusive or open-access scarce resources. According to fisheries economists, from Jens Warming to H. Scott Gordon, under open access to a fishery fishing effort will inevitably increase to the point when there is no more profit to be gained in the industry - when access becomes worthless. Consider a simple model of a fishery, based on Warming’s and Gordon’s analysis, illustrated in Figure 4. Assume there is one fish stock in one fishing ground. Cost is assumed to be the same for each boat, so the cost line goes straight up. Catch, and with it catch income, however increases rapidly first, as marine biologists submit, but then it reaches a maximum, the maximum sustainable yield, MSY, and after that it goes down, and would fall all the way to zero if the fish stock would collapse (as has sometimes happened, not only in the Icelandic herring fisherv in the 1960s. but also in the cod fishery off Newfoundland in the 1990s). Fisheries economists point out that in this example effort will, under open access, increase to 16 boats. That is the point when income equals cost. But the optimal point of fishing effort is 8 boats because there he difference between income and cost, in other words net profit, is the greatest. There one would have the same or even more catch and income as with 16 boats, but with only half the cost. The task is herefore to reduce fishing effort from 16 to 8 boats. When individual transferable quotas are allocated o the 16 boats according to catch history, the more efficient boat owners will buy quotas from the others who consequently leave the fishery and the number of boats will gradually go down to 8 boats because that is the point of maximum profit.

becomes profitable, as Adam Smith pointed out long ago."” The fishing firms pay taxes and employ people, and since they export most of their products they keep the exchange rate for the krona higher than it otherwise would be. Their owners use their profits for consumption or investment. Thirdly, it is not correct that a resource tax, imposed directly or indirectly on the fisheries, would not reduce the total fisheries profit. It would reduce the international and domestic competitiveness of the Icelandic fisheries, discourage research and development in the fisheries, and remove the incentives the fishermen have to try and maximise the long-term profitability of the resource, for example, by a cautious setting of the TAC, total allowable catch, over the season."® Moreover, by creating a new source of income for the politicians, political rent-seeking would be encouraged, as Professor Runolfsson has emphasised. Instead of fishing firm owners over-investing in a chase for dwindling fish stocks, advocates of special interests would waste resources on capturing as much as they could of the new and dwindling government revenues. Onshore waste would replace offshore waste."9 @ publicly defended economic liberty, including the ITG system. Professor Birgir Thor Runolfsson (b. 1962) wrote his doctoral thesis under James Buchanan and Gordon Tullock on the Icelandic Commonwealth and has published papers on that subject as well as on the fisheries. Professor Thrainn Eggertsson (b. 1942) is internationally known for his contributions to institutional economics, which he has applied to several Icelandic subjects."5

140 Marianna Jonasdottir, The Icelandic Pension System (Reykjavik: Ministry of Finance, March 2007). https://eng.fjarmaalaraduneyti.is/media/Lifeyrismal/ The_Icelandic_Pension_System_032007.pdf This was done to make the system sustainable in the long run. The reforms also included facilitating additional private pension schemes, where payments of up to 6% of wages into special accounts with recognised and registered pension funds were exempted from tax. These accounts were inheritable, unlike the pension rights of the public fund and the occupational funds. The occupational pension funds have become financially very strong. In 2005, pension payments from them for the first time exceeded payments from the state-financed public fund."*° The total assets of the pension funds (both mandatory and voluntary) amounted to more than the GDP and when David Oddsson stepped down as prime minister in 2004, they had become the second- largest in the OECD. Even after the 2008 bank collapse, they remain strong, as illustrated in Figure 5. The strong position of the pension funds means that Iceland may avoid the bankruptcy of the pension system, foreseeable in many European countries where the labour force (and with it the tax pool) is shrinking at the same time as the number of pensioners is greatly increased with a higher average age. uring David Oddsson’s tenure as prime minister, 1991-2004, the ITQ system was not only maintained against fierce opposition, but also reformed by removing various exemptions from it and facilitating quota transfers. The pension funds were also strengthened, becoming some of the strongest in the world. A public pension fund for all had been established in 1936, and occupational pension funds in 1969, becoming mandatory in 1974. The public pension, financed by taxes, was basic and low, while a supplementary pension was paid to low-income pensioners, and payments were reduced to those receiving adequate pensions from occupational pension funds or other sources of income. A pensioner with no other source of income would receive roughly what amounted to the minimum wage. The occupational pension funds were self-financed by a contribution for each employee of at least 12% of his or her wage, 4% paid by the employee, and 8% by the employer. In 1998, the pension system was reformed, replacing wherever possible defined-benefit pension plans (pay-as-you-go schemes) with defined-contribution benefit plans.

? Ministry of Finance, Debt Statistics, https://www.ministryoffinance.is/government-finance/debt-statistics/ 41 General government main aggregates, Financial balance, http://www.statice.is/statistics/economy/public-finance/general-governmer

143 Einkavaeding fra 1992 - Tafla, https://www.forsaetisraduneyti.is/raduneyti/verkefni/Einkavaeding/nr/247 The exchange rate at the end of 2005 is usec $1=63.13 kronur, http://www.sedlabanki.is/hagtolur/opinber-gengisskraning/

the Scandinavian welfare states’, Olafsson wrote in a 2005 paper. ‘Inequality and poverty levels seem to be slightly higher in Iceland than in the Scandinavian welfare states.®* This Olafsson found somewhat surprising because ‘one could have expected the forces of the colonial union of Iceland and Denmark until 1945’, he writes, ‘to have pushed Iceland more into the direction of the Scandinavian model.7® But what is really surprising here is Olafsson’s contention that there was a ‘colonial union of Iceland and Denmark until 1945’. First, Iceland became a republic in 1944, severing her last ties with Denmark, not in 1945. In the second place, Iceland had already in 1918

Source: Islenska skattkerfid: Samkeppnishaefi og skilvirkni (report, 2009)

86 Social tryghed i de nordiske lande 2004 (Kobenhavn: Nososco, 2006), Table 7.8, http://nom-nos.dk/nososco.htm 87 Stefan Olafsson, Einar Arnason and Olafur Olafsson, Rangfaerslur raduneyta um hag aldradra, Morgunbladid 20 March 200 88 Social tryghed i de nordiske lande 2004 (2006), Table 7.25, http://nom-nos.dk/nososco.htm IGURE 8 AVERAGE PENSION INCOME OF NORDIC PENSIONERS 200

TABLES CHILD BENEFITS IN ICELAND AND SWEDEN It was true that if one divided total pension payments by the total number of Icelanders of pension age then the average was lower than in most other Nordic countries."®® But this was a meaningless outcome because 5,000 of this total did not take pension. The fact remained that the average income of the 26,000 people of pension age who took their pension was higher than in the other Nordic countries. Here again, one of the characteristics of the Icelandic welfare system is illustrated: recipients of benefits were fewer relatively, but their benefits were on average greater. This is illustrated in Figure 8. Moreover, there was less poverty in the ranks of the elderly than in any other Nordic country. This was for two reasons. First, the growing and self-financing occupational pensions were starting to have an impact. Secondly, the Icelanders tended to work for more years and start to take their pension later than many other nations. This was also desirable in another sense, because then there was less danger of social exclusion of the elderly. without any explanation, that total outlays were lower on average in Iceland than in Sweden without adding that the outlays were targeted to the poor, not to all. The worst-off were better off in Iceland than in Sweden.

FIGURE 9 OLAFSSON’S GINI COEFFICIENTS FOR 2004 tefan Olafsson, Aukinn ojofnudur a Islandi [Increased Inequality in Iceland], Stjornmal og stjornsysla, Vol. 2 (2: 2006), p. 134. 190 Thorvaldur Gylfason, Thogn um aukinn ojofnud [Silence on Increased Inequality], Frettabladid 25 May 2006; Hernadur gegn jofnudi [The War Against Equality], Frettabladid 17 August 2006. Gylfason claimed that his data on Gini coefficients came from the Internal Revenue Service. But when Professor Ragnar Arnason approached the Icelandic IRS and asked for the data, he was told by the staff that no such data had been provided to anyone. It is a myster) wherefrom Gylfason received his data. The reason why the data fit in well with those of Olafsson was presumable that Gylfason had also included capital gains from shares.

92 They included mathematician Benedikt Johannesson and economist Ragnar Arnason.

Landsbanki and Kaupthing responded by reinforcing their collection of retail deposits abroad, especially in the United Kingdom. Landsbanki ran its operations ina branch so that the deposits in its Icesave accounts were covered by the Icelandic Investors’ and Depositors’ Guarantee Fund, whereas Kaupthing used subsidiaries to collect deposits abroad so that deposits were covered by the domestic schemes of each country."®” In early 2008, the CBI, Central Bank of Iceland, tried to obtain credit facilities in the European Central Bank, the Bank of England, and the US Fed, so it could provide credit in foreign currencies to the banks, and, perhaps more importantly, so it could demonstrate its ability to so. But the CBI was everywhere turned down except in the three Scandinavian central banks that grudgingly provided some credit. It became clear that the relatively small Icelandic Depositors’ and Investors’ Guarantee Fund could not compensate Icesave depositors in the case of Landsbanki’s failure. As the year went on, the credit crunch worsened, and so did the situation of the Icelandic banks. When the US Fed announced 24 September 2008 that it had made dollar swap (The SIC identified three major business groups in the Icelandic economy and in its report criticized the banks, and in passing the IFSA, Icelandic Financial Supervisory Authority, for regarding individual companies in each group as separate debtors, thus underestimating the total risk involved in the debts of each group.) In 2006, the banks suffered a setback, as foreign analysts pointed out their vulnerability both because they were engaging in high-risk loans to connected companies with little real equity and because they were operating in a small economy with limited lender-of-last-resort facilities.%® While the ownership of Landsbanki and Kaupthing remained relatively stable after some initial changes, in the spring of 2007 Jon Asgeir Johannesson and his group managed to get control of Islandsbanki, and used it to increase credit still further to themselves (as can be seen from Figure 11).

IFSA was given power to take over banks."? At the same time, government ministers publicly announced that the Icelandic state would guarantee all domestic bank deposits. As the run on Landsbanki was becoming unstoppable, the IFSA took it over Tuesday 7 October. Meanwhile, the British government closed Landsbanki’s branch in London and also the bank’s subsidiary, Heritable Bank. The IFSA took over Glitnir 8 October. In the hope of saving one of the three banks, Kaupthing, the government had decided to give to it an emergency loan of €500 million. But on Wednesday 8 October, at the same time as Alistair Darling, the British Chancellor of the Exchequer, announced a £500 billion rescue package for British banks, he closed Kaupthing’s subsidiary in London, Kaupthing Singer & Friedlander, even though it was a British bank. This meant that the parent company in Iceland, Kaupthing, went under, as credit to it was automatically cancelled because the British subsidiary had been closed. deals with the three Scandinavian central banks, Iceland’s absence was painfully obvious.'88 One day later, Jon Asgeir Johannesson’s bank, Glitnir (the former Islandsbanki), was the first bank to seek an emergency loan of €600 million from the CBI, because it could not raise the money to pay its foreign creditors. Instead of giving Glitnir the emergency loan, the government decided, on the advice of the CBI, and with the approval of the opposition parties, to buy a 75% stake in Glitnir for €600 million. This implied a significant write-down of existing shares in Glitnir, and was strongly resisted by Jon Asgeir Johannesson.

Again, Olafsson writes, ‘A controversial publication of private e-mails of a prominent IP [Independence Party] member, Mr Styrmir Gunnarsson, an influential editor of Morgunbladid at the time, has him on record talking about the need to get the Landsbanki into the hands of individuals “on good speaking terms with 202 Stefan Olafsson, The Political Economy of Iceland’s Boom and Bust, Iceland’s Financial Crisis: The Politics of Blame, Protest, and Reconstruction, eds. Valur Ingimundarson, Philippe Urfalino, Irma Erlingsdottir (New York: Routledge, 2016), p. 61.

Then there is another question: were the two left-wing parties in Iceland really underfunded? At least this cannot be said about the Socialist Party, formed in 1938 by a merger of the Communist Party and the left wing of the Social Democrats. The leadership of the Socialist Party was in close contact with the Communist Party of the Soviet Union and enjoyed generous financial support from it. This was well-known and confirmed already in 1999.24 It has been calculated that in 1940-1972 the financial contributions from Moscow to the Socialist Party and its front organisations amounted to at least $3.5 million in today’s dollars, a hefty sum indeed for a population then around 150,000.25 The party itself and its newspaper as well as some front organisations employed many people; the party handed out grants to university students going to the communist countries and countless invitations to much-coveted tours to the Soviet Union and other communist countries.?76 It is true that, not least because of its close ties to Moscow, well-known at the time, the Socialist Party did not have continuous access to the power structure in Iceland, but it certainly had access to the power structure in the Soviet Union; thus, it was able to extend significant patronage to its members. However, when the People’s Alliance, which had been an electoral alliance since 1956, with the Socialist Party as its most powerful member, became a political party in 1968, it severed all formal ties with the Soviet Union, while some individual members kept secretly in contact with the comrades in Moscow. The Social Democrats also received some financial aid from their more powerful counterparts in the Scandinavian countries, although much less relatively than the Socialists.?27 Then there is another question: were the two left-wing parties in Iceland really underfunded? At least this cannot be said about the Socialist Party, formed in 1938 by a merger of the Communist Party and the left wing of the Social Democrats. The leadership of the Socialist Party was in close contact with the Communist Party of the Soviet Union and enjoyed generous financial support from it. This was well-known and confirmed already in 1999.24 It has been calculated that in 1940-1972 the financial contributions from Moscow to the Socialist Party and its front organisations amounted to at least $3.5 million in today’s dollars, a hefty sum indeed for a population then around 150,000.25 The party itself and its newspaper as well as some front organisations employed many people; the party handed out grants to university students going to the communist countries and countless invitations to much-coveted tours to the Soviet Union and other communist countries.?76 It is true that, not least because of its close ties to Moscow, well-known at the time, the Socialist Party did not have continuous access to the power structure in Iceland, but it certainly had access to the power structure in the Soviet Union; thus, it was able to extend significant patronage to its members. However, when the People’s Alliance, which had been an electoral alliance since 1956, with the Socialist Party as its most powerful member, became a political party in 1968, it severed all formal ties with the Soviet Union, while some individual members kept secretly in contact with the comrades in Moscow. The Social Democrats also received some financial aid from their more powerful counterparts in the Scandinavian countries, although much less relatively than the Socialists.?27

Fourthly, it would have been instructive to see a list of the 111 appointments surveyed by the experts chosen by Kristinsson and especially a list of those 18 appointments which Professor Kristinsson and the people he interviewed considered to be purely political. That list has not been made available despite requests.743 From Kristinsson’s discussion of his findings it seems however clear that they would include two appointments to the Supreme Court, of Olafur B. Thorvaldsson in 2003 and Jon S. Gunnlaugsson in 2004. But both appointments could have been made on other grounds. Thorvaldsson was the only applicant in 2003 who was chief justice in a district, and therefore the candidate who best fitted the bureaucratic model of predictable advances ina hierarchy. Gunniaugsson was a renowned attorney. His reputation as an able and tough lawyer was amply confirmed in 1989, when a Supreme Court judge was impeached: of all the defence attorneys he had seen practising, he chose Gunnlaugsson to argue his case. Moreover, when Gunnlaugsson was appointed to the Supreme Court, two leading Social Democrats, one of them a former chairman of the party, the other one the chairman of the left-wing book club, wrote in support of him.244 The governmer minister aopointing Gunnlauasson undoubtedly

Johannesson’s ‘normal life’ included a private Dassault Falcon 2000EX jet, a Heesen 4400 yacht, a luxury flat in Manhattan and a chalet in Courchevel. He had therefore plenty of opportunity to spend time abroad. But unlike him, the problems did not go away. says Gunnarsson, the adviser. ‘| don’t think celanders suddenly became incredibly clever overnight. This often happens in economies that are liberalised. People are willing to take bigger risks than you would in a more mature economy.’ Jon Asgeir shrugs it off. He believes his opponent, now without political power, is finally vanquished. ‘It’s going to be safer now. As these people go away, so will the problems. The businessman in Iceland can lead a normal life. But he expects to spend much of the future outside the country.?5”

the ‘reckless complacency’ of both the institution that was supposed to regulate the banking sector, the IFSA, and the institution that was supposed to ensure financial stability, the CBI. However, in the very thorough and long SIC report, many examples were given of the warnings to both the banks and the government by the CBI, as has been mentioned here. Nonetheless, the SIC charged the CBI governors with negligence on two grounds. One was that in August 2008, after the British Financial Services Authority had insisted on strict conditions for a possible transfer of Landsbanki’s Icesave accounts from a branch to a subsidiary, the CBI should have verified both the reasons for FSA’s conditions and Landsbanki’s financial position. The second criticism was that in September 2008 the CBI should have consulted with specialists before offering to buy 75% of Glitnir for €600 million.78 a strict regulatory system in America, whereas the Icelandic banks were allowed to do things that should have been regulated.’72 The third SIC member, Pall Hreinsson, a former professor of law and a Supreme Court judge, was a distinguished legal scholar who had written a thorough and comprehensive doctoral dissertation on grounds for recusal and disqualification in public administration.

296 Moliére, The Hypochondriac, The Works of Moliere, Vol. 5 (Glasgow: John Gilmour, 1751), p. 350. 297 On Danske Bank, see the television documentary Sikke en fest (2012), http://finans.tv2.dk/nyheder/article.php/id-60667554:danske-bank-var-tet-pa- afgrund.html Also Niels Sandge and Thomas Svaneborg, Andre folks penge: Historien om den danske finanskrise (K@benhavn: Jyllands-Postens Forlag, 2013) Ba ec icee emeem: Be On ne ee he most common explanations offered for the 2008 Icelandic bank collapse are implausible. They only explain why the Icelandic banking sector was vulnerable, but not why it collapsed. As noted earlier, it is almost a tautology to say that the Icelandic banks fell because they were vulnerable (prone to fall, in other words), and then to go on and list all their vulnerabilities. It is like saying that glass breaks because it is breakable or that opium puts people to sleep because of its sleeping power, an idea ridiculed by Moliére in ‘The Hypochondriac’: an arrogant doctor asks a pretentious student why opium causes sleep, and the student replies that opium has virtus dormitiva, which is simply Latin for sleeping power.2%6 Banks elsewhere were also vulnerable, and they would have failed if they had not been saved, even such big banks as RBS in Scotland, UBS in Switzerland, and Danske Bank in Denmark.?9” It was a great mistake that the hearings of the SIC did not take place in public and that the documents which it obtained were not immediately put in the public domain. Moreover, while its report provides much valuable information, especially about the sometimes- shocking manoeuvres of the Icelandic bankers and businessmen, it has four main shortcomings. First, as noted earlier, and perhaps a minor issue, the SIC was overly formalistic, demanding that decisions that had to be made in a hurry, on the basis of limited information, were backed by paperwork and formal consultations. In the second place, the situation, or even trap, in which Icelandic bankers and politicians found themselves was not adequately analysed, even if it would have been intellectually interesting to do so. These people were really in what game theorists call the ‘prisoners’ dilemma’, where nothing they could do was likely to lead to the desired outcomes.?%

inexpensive ‘Falklands Factor’. In the second place, it may have had an interest in trying to divert the attention of the British public from the fact that with its huge bailout package announced on 8 October 2008 it was mainly rescuing the two large Scottish banks, RBS and HBOS, Halifax Bank of Scotland, with both Prime Minister Gordon Brown and Chancellor of the Exchequer Alistair Darling coming from Scotland. Thirdly, it may have been keen to demonstrate to the Scottish nation that independence could be risky. Indeed, in his memoirs Chancellor Darling gleefully writes, ‘Iceland, along with Ireland, was part of what Scotland’s nationalist first minister, Alex Salmond, like to refer to as an “arc of prosperity”, to which he yearned to attach Scotland. It was now an arc of insolvency.?3 Was this a Freudian slip? The second decision taken by the British Labour government was to impose on 8 October 2008 an anti-terrorist law on Landsbanki and briefly, also, on the CBI, the IFSA, and the Icelandic Ministry of Finance.*" This meant not only that Landsbanki, and also briefly the CBI and the Icelandic Ministry of Finance, were put on the same list maintained at the UK Treasury’s website as terrorist organisations such as the Taliban, Al-Qaida, and rogue countries such as Sudan and North Korea, but also that almost all financial transactions to and from Iceland were immediately halted. The alleged purpose of the act was to hinder illegal transfers from Landsbanki’s London branch, but this was an excuse and not a reason because five days earlier, 3 October 2008, the FSA had issued a so-called Supervisory Notice to Landsbanki, prohibiting it from transferring money out of the UK without obtaining three days in advance the written consent of FSA; Barclays Bank, which technically did the transfers, was also notified of the Supervisory Notice.*" It was therefore unnecessary to impose the anti-terrorist law.

311 HM Treasury, Landsbanki Freezing Order, 8 October 2008, http://www.legislation.gov.uk/uksi/2008/2668/pdfs/uksi_20082668_en.pdf 312 Financial Services Authority, First Supervisory Notice, Landsbanki, 3 October 2008, https://www.fca.org.uk/publication/supervisory-notices/landsba' PT} The Icelandic Parliament, on the advice of the CBI, had passed an Emergency Act on 6 October 2008,

318 Ossur Skarphedinsson, Ar drekans (Reykjavik: Sogur, 2013), p. 305.