The best way of tackling environmental damage is free trade and definition of property rights to natural resources; it is much better than trying to prohibit DDT for example, or whaling, or trade in ivory, Professor Hannes H. Gissurarson argued in a lecture 21 August at a seminar on environmental protection in the Summer University on political economy in Aix-en-Provence. According to Gissurarson, the international prohibition on using DDT against the mosquitos transmitting malaria to people has cost the death of millions of people. Whereas DDT was probably over-used in agriculture in the past, it was harmless to human beings.

The international moratorium on whaling was also unreasonable, Gissurarson maintained. For example, the whale stocks harvested by the Icelanders, fin whale and minke whale, were both robust. Whales in the Icelandic waters eat approximately six million tonnes of seafood, including small fishes, a year, while the Icelanders harvest a little more than one million tonne of fish. Whale preservationists seem to expect the Icelanders to feed the whales without being able to utilise them. They were like a truculent farmer grazing his livestock on his neighbours’ meadows.

Neither did the international ban on ivory trade have the consequences desired, Gissurarson said. Undeniably, some elephant stocks in Africa were endangered, but this was because poachers craved the ivory which was much in demand. The wisest move would be to define property rights to elephants, and to allocate them to the communities living next to them. Then, in one stroke, poachers would change into gamekeepers. Environmental protection required protectors, stewards, owners. The old adage was still in force: Everybody’s business is nobody’s business. Gissurarson suggested that the Icelandic system of individual transferable quotas was a good example of the sustainable and profitable utilisation of a natural resource. He gave some other examples of environmental damage and protection from his book Green Capitalism.

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In the seminar, Professor Jean-Pierre Chamoux also gave a talk. He emphasised that freedom meant responsibility. People damaged the environment because they did not bear responsibility for it. Environmental damage cost them personally little or nothing. This had to change, not least by defining property rights to goods. The participation of Professor Gissurarson in the Summer University formed a part of the joint project by RNH and ACRE, the Alliance of Conservatives and Reformists in Europe, on “Bluegreen Capitalism”. In the closing dinner of the University, Gissurarson met with two former chairmen of the Hayek Society at Oxford, which he had participated in founding in 1984: Martin Cox, director of John Locke Institute, and Sunny Chen, still a student at Oxford. During term, the Hayek Society invites distinguished speakers to give papers on the principles and problems of individual liberty.

Small states tend to be more efficient and flexible than big ones, RNH Academic Director, Professor Hannes H. Gissurarson, argued in a lecture 19 August 2019 at a seminar on small states at the Summer University on Political Economy in Aix-en-Provence. Small states usually are more homogeneous, and consequently they have lower political transaction costs and spend less per capita on police and the military. Gissurarson found it no coincidence that the world’s richest countries were small states, Norway, Switzerland and Iceland in Europe and Singapore and Hong Kong in Asia, not to forget the fifty states forming the USA. He pointed out that international free trade enabled small states to benefit from the international division of labour: political units therefore could be smaller. Economic integration facilitated political disintegration, so to speak, as shown by the proliferation of independent states in the latter half of the twentieth century. The most serious disadvantage of smallness was however military vulnerability, as was demonstrated by the countries in Central and Eastern Europe before the Second World War. Small states therefore had to try to provide for their security by alliances with powerful states, as in NATO. Gissurarson is the author of a recent report, In Defence of Small States.

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At the seminar on small states Professor Carlo Lottieri discussed the example of Switzerland, perhaps the richest and most successful country in Europe. Her special features could be traced to the middle ages when the Swiss followed a different course from other European nations, devolving power, not only to cantons, but also to communes, Gemeinde. The Swiss economy consequently did not have to bear the burden of princes, kings, emperors and popes and could grow peacefully and spontaneously. The power to tax was circumscribed and private property rights were respected. Gissurarson’s contribution to the Summer University formed a part of a joint RNH-ACRE project on “Bluegreen Capitalism”. At a reception given in the City Hall by the Mayor of Aix-en-Provence for teachers and students at the Summer University, an old friend of Iceland, Dr. Tom Palmer of Atlas Network, received a medal from the city and gave a talk on the dangers of right-wing populism.

Gissurarson delivering his remarks. Next to him: Professor Gwartney.

At Freedomfest in Las Vegas in July 2019, RNH academic director Professor Hannes H. Gissurarson was asked to be a commentator on a paper by Professor James Gwartney on increased global income equality. Gwartney used data from the Angus Maddison Project and from the World Bank which show that income inequality, as measured by the Gini coefficient, was being reduced worldwide. Gwartney argued that the main explanation was the communications and transport revolution of recent times: This revolution was even more important than the Industrial Revolution of late Eighteenth Century, because this time it extended to the whole of the world. Some heavily populated countries had gone from poverty to prosperity. Gwartney suggested that the reason for the relatively even income distribution in the Nordic countries was not government policy, but rather the homogeniety of the population.

Professor Gissurarson devoted his comments mainly to the Nordic countries. He pointed out that they had a long and vibrant liberal tradition. For example, the Finnish-Swedish pastor Anders Chydenius had proposed a theory of the coincidence of private gains and the public good under unfettered competition, some years before the publication of Adam Smith’s Wealth of Nations. Liberal Swedish statesmen of the 19th century had implemented comprehensive economic reforms which had encouraged rapid and continuous economic growth in the country for a long period—the first Swedish model. Gissurarson argued that the success of Sweden and other Nordic countries in the 20th century could be attributed to 1) a strong tradition of the rule of law, including protection of private property rights, 2) free trade and 3) solidarity, a high level of trust and the pursuit of consensus, based on national homogeniety, as Gwartney had indeed pointed out. It was not until 1970 that the politically dominant Social Democrats had changed course and introduced heavy taxation and extensive government intervention.

The second Swedish model, implemented in 1970–1990, turned out to be unsustainable, according to Gissurarson. Sweden had ended up on the wrong side of the Laffer Curve where taxation became elf-defeating: an increase in the tax rate did not result in an increase in tax revenue, but rather in its decrease. The scenario described by Ayn Rand in Atlas Shrugged indeed seemed to apply to Sweden in this period: Those who created wealth either moved away, ceased to produce or desisted from innovations. The only jobs created during this period were in the public sector. However, now the Swedes found a new consensus which could be called the third Swedish model: From 1990 onwards government has tried to encourage private enterprise and keep taxation from becoming self-defeating. Professor Gissurarson’s participation in the conference formed a part of the joint project with ACRE, the Alliance of Conservatives and Reformists in Europe, on ‘Bluegreen Capitalism in Europe’.

Gissurarson gives his paper.

Every summer American conservatives and libertarians hold an annual meeting or festival, Freedomfest, for a few days in Las Vegas, presenting books and ideas and watching films and documentaries relevant to liberty. Organised by the prolific author, commentator and investor Professor Mark Skousen, it is the largest gathering of its kind and with a great variety of participants and topics. RNH Academic Director Hannes H. Gissurarson was invited to give a lecture at Freedomfest 17 July 2019 on ‘Green Capitalism’, on which he had in 2017 written a report for the Brussels think tank New Direction.

In his paper Gissurarson made a distinction between ‘wise use environmentalism’ aiming at a sustainable and profitable utilisation of natural resources, and ‘ecofundamentalism’ where nature is conceived of as an independent bearer of rights superior to ordinary human beings and where the goal is preservation rather than conservation. Gissurarson pointed out that ecofundamentalism seemed to share many traits with religious fundamentalism: it certainly had its sacred cows.

Dr. Richard Rahn, Gissurarson and Professor Mark Skousen.

If on the other hand the goal was conservation, or environmental protection, it required protectors, Gissurarson said. For example, by one stroke of a pen African poachers could be turned into gamekeepers: by appointing them as owners of endangered species, such as elephants and rhinos, whose tusk and horns respectively were much in demand. The most realistic measure to ensure a sensible utilisation of natural resources was to define private property or use rights to them, introduce stewardship. In this context Gissurarson briefly described the Icelandic system of individual transferable quotas in deepsea fisheries which is both sustainable and profitable in contrast to many fisheries elsewhere making huge losses and being a heavy burden on taxpayers.

As the conference was held in the United States, Gissurarson also discussed whaling: the US government has put a lot of pressure on the Icelandic government to stop it. It seemed, Gissurarson observed, that whales were to ecofundamentalists like sacred cows. But in the Icelandic waters, the Icelanders themselves annually harvest about or a little over one million tonnes of fish, whereas whales eat around six million tonnes of various seafood and fish there. In other words, ecofundamentalists were demanding that the Icelanders provided fodder for the whales in their waters, while insisting that they could not harvest them. They were like the truculent farmer who drove his livestock to the pastures of his neighbours, but refused to them any utilisation of this very same livestock. Gissurarson’s paper formed a part of a joint project with ACRE, The Alliance of Conservatives and Reformists in Europe, on ‘Bluegreen Capitalism in Europe’.

Opening remarks by University Chancellor.

Four internationally renowned fisheries economists spoke at a conference held by the School of Social Sciences at the University, RNH and others in honour of Professor Ragnar Arnason 14 June 2019 on “Offshore Fisheries of the World: Towards a Sustainable and Profitable System:” Professors Trond Bjorndal, Rognvaldur Hannesson, Gordon Munro and James Wilen. The conference was opened by the Chancellor of the University, Dr. Jon Atli Benediktsson, who recalled that the Chair in Fisheries Economics at the University of Iceland was established in 1989 and that Arnason—who is now retiring on the occasion of his seventieth birthday—was its first and only occupant. Benediktsson expressed the hope that the University might long enjoy Arnason’s skills in teaching and doing research.

Bjorndal discussed the North Atlantic and Mediterranean Blue Fin tuna, the most valuable fish in the ocean. A highly migratory fish, its harvesting is managed by so many that it has been almost an open access regime, which always means a danger of over-exploitation. Indeed catches fell for many years, but they seem to be on the rise again, as a consequence of sensible management and cautiously set TACs, total allowable catches.

From left: Runolfsson, Bjorndal, Munro, Wilen, Hannesson and Grainger.

Hannesson described the collapse of the Atlanto-Scandian herring in the late 1960s when the stock collapsed. It almost disappeared completely, but recovered slowly in the 1970s and 1980s which showed how resilient nature could be although it could be demonstrated mathematically that this was something rather unlikely to happen.

Munro talked about ITQs, individual transferable quotas, and other systems of fisheries management. There was no doubt, he argued, that ITQs had been very successful. But there was a special challenge with a high number of ITQ holders. Effective cooperation between them was necessary. Game theory provided some insights into the possibilities and limitations of such cooperation. This was ‘the new frontier’ of fisheries economics.

Gisli Hauksson, Jonas Sigurgeirsson and Hannes H. Gissurarson at the reception.

Wilen spoke about the problems and prospects for artisanal fisheries, usually small scale, nearshore, and multi-species. While ITQs were efficient in deep-sea, large scale fisheries, others systems of management might be more appropriate in such artisanal fisheries, such as TURFs, territorial use rights in fisheries, or community managements. There was little doubt that the introduction of such management schemes would increase the income from such fisheries, but there were many obstacles to overcome, especially in poor countries with weak governments.

In his closing remarks, Professor Arnason pointed out that when he first started thinking and writing about the fisheries, in 1980, most fish stocks in the world were over-exploited. Fortunately, this had changed. Now feasible systems of utilising fish stocks were now in place in many countries. Partly this could be attributed to the distinguished economists speaking at this conference, Professors Bjorndal, Hannesson, Munro and Wilen. After the conference, there was a reception at the University where Dr. Dadi Mar Kristofersson, President of the School of Social Sciences, and Bjorndal, Chairman of the Birthday Committee, gave short speeches saluting Professor Arnason. Despite the exceptionally good weather and the fact that the conference was held in the midst of the holiday season, attendance was good and the discussion was lively following the four lectures, and a critical comment by Professor Corbett Grainger. Dr. Birgir Thor Runolfsson, Associate Professor of Economics, chaired the conference.

In the evening, Foreign Minister Gudlaugur Thor Thordarson and his wife Agusta Johnson hosted a dinner for Professor Arnason and his wife, History Professor Anna Agnarsdottir, and a few guests, including the conference speakers. In his salute to Arnason, the Minister emphasised how important the fisheries were to the Icelandic economy, quoting the Icelandic writer Halldor Laxness: “Life is stockfish.” RNH participation in this conference formed part of a joint project with ACRE, the Alliance of Conservatives and Reformists in Europe, on “Bluegreen Capitalism for Europe”. ‘Odinn’ in Vidskiptabladid, the weekly business magazine, wrote an article about Ragnar and his achievements 13 June, and Morgunbladid published interviews with three of the lecturers, Munro, Wilen and Bjorndal, 17, 18 and 19 June. Professor Arnason is Chairman of the RNH Academic Council.

Professor Ragnar Arnason giving a toast at the Foreign Minister’s dinner. From left: Kristjan Loftsson, James Wilen, Anna Agnarsdottir, Ragnar, and Agusta Johnson.