RNH Academic Director, Professor Hannes H. Gissurarson, criticised the theories of John Rawls and Thomas Piketty in a lecture to the Free Summer School, conducted by the Association of Libertarian High School Students, in Reykjavik 1 June 2019. His lecture was mostly derived from a report he wrote for the free market think tank New Direction in Brussels. Gissurarson argued that Rawls was wrong both about individuals not being entitled to the income they created by their different abilities, and about there being somehow a heap of money out there waiting to be distributed. Rawls asked in which kind of system the worst off would be as well off as they could be: he wanted to maximise the minimum. But this implied that his theory was not really about justice. It was about prudence, preparing for the worst rather than hoping the best. It was however, Gissurarson admitted, an interesting question in which kind of system the worst of would be as well off as they could be. Arguably, this was in a free economy such as that envisaged by Adam Smith.

Gissurarson observed that the difference between Rawls and Piketty was that Rawls was concerned with poverty which certainly was a social evil, whereas Piketty worried about wealth which did not by itself seem to be much of a problem when it was not created at the expense of others. But poverty had been greatly reduced in the last few decades in the world. Piketty demanded extortionary international taxes on high income and large fortunes in order to reduce inequality. But he ignored the fact that much inequality was created by government intervention, for example by patents and government guarantees of banks. Piketty also did not make much of another fact, that many enterprises were owned by pension funds. When Piketty spoke about capital, he moreover excluded human capital whose distribution among people was most likely more even that the distribution of physical capital. The evidence suggested, Gissurarson added, that in the last few decades many more billionaires were self-made than before. Inheritance was a dwindling source of wealth. Piketty was fond of quoting Père Goriot by Balzac. But that novel demonstrated the precariousness of wealth, Gissurarson argued, not a tendency for it to accumulate in the hands of a few.  The protagonists of the novel were driven by passions and spent their money wastefully. Be that as it may, the main point was not to increase the size of one portion of the cake by reducing the size of another one, but rather to ensure that the whole bakery was flourishing, turning out more and larger cakes.

The Association of Liberal High School Students operated the Free Summer School in cooperation with Institute of Economic Affairs in London and the Foundation of Economic Education in New York. It was organised by high school students Julius Viggo Olafsson and Hermann Nokkvi Gunnarsson. Other lecturers at the Free Summer School were Aslaug Arna Sigurbjornsdottir, Christopher Snowdon, Gunnlaugur Jonsson, Halldor B. Thorbergsson, Johannes Stefansson, Magnus Orn Gunnarsson and Piotr Markiełaŭ. Attendance was good, and the discussions were lively. Gissurarson’s participation in the event formed a part of the joint project with ACRE on ‘Bluegreen Capitalism for Europe’.

Gissurarson Slides Summer School 1 June 2019

Gissurarson, fmr. Heritage Foundation Director Dr. Ed Feulner, MPS President Prof. John Taylor and Prof. Ichim Kim.

RNH Academic Director, Professor Hannes H. Gissurarson, attended the regional meeting of the Mont Pelerin Society in Dallas/Fort Worth 19–22 May 2019. The meeting was devoted to contentious issues in classical liberalism. One such issue was monetary order: Is a central bank necessary? Or the gold standard desirable? Or cryptocurrencies efficient? Is monetary competition feasible? Professor John Taylor, Dr. Warren Coats, Professor Larry White and other monetary economists debated this issue. Another contentious issue was immigration. Everybody agreed that hard-working, law-abiding immigrants seeking jobs and a better living standard were desirable. But what about immigrants in pursuit of welfare benefits? How far should the West go in opening up its borders to millions of self-proclaimed asylum seekers and thus reigniting xenophopia? Professor Gissurarson made an intervention in this session, arguing that it was undesirable to see closed enclaves or ghettos of immigrants and asylum seekers who willingly were breaking the laws and customs of their host countries, as could be seen in Denmark and Sweden, with both countries now applying stricter rules to such people.

A third contentious issue was the size of government. Professor David Friedman argued that the Icelandic Commonwealth of 930–1262 was an example of the feasibility of private enforcement of law. Professor Edward Stringham recalled many examples of private governance over time and space. At the meeting several other issues were discussed, such as government interference with sex between consenting adults and with the use of addictive drugs. Again, interventionism in international affairs was debated, for example the United States military actions in Vietnam and Iraq. One afternoon, Professor Vernon Smith, the 2002 Nobel Laureate in Economics, chatted about the greatest influences on his thinking, Adam Smith and Friedrich A. von Hayek. It was indeed von Hayek who founded the Mont Pelerin Society in the spring of 1947 to provide a forum for classical liberals to discuss and develop ideas on a regular basis.

Gissurarson’s participation in the Dallas meeting formed a part of a joint project with ACRE on ‘Bluegreen Capitalism for Europe’. Two young economics professors, Benjamin Powell and Robert Lawson, efficiently organised the meeting. The next regional meeting will be in Stanford in California 15–17 January 2020, and the general meeting of the MPS will be in Oslo 1–5 September 2020. Professor Gissurarson attended his first MPS meeting at Stanford in 1980, sponsored by von Hayek, was on the Board of Directors of the Society in 1998–2004 and organised a regional meeting in Reykjavik in August 2005.

The Public Book Club (Almenna bokafelagid) on 1 December 2018 published a collection of six Cold War speeches by six prominent anti-communist poets and writers, In Defence of Western Civilisation, with a 40 pp. foreword and 70 pp. endnotes by Professor Hannes H. Gissurarson. In his discussion of the cultural front in the Cold War, Gissurarson applied the concept of totalitarianism to describe and explain the position of the six authors. In a speech reprinted in the book, poet Tomas Gudmundsson had argued that a new kind of slavery had been introduced in modern times, spiritual slavery, where one was not only to obey Big Brother, but also to love him.

Hayek gives a talk on “The Muddle of the Middle” in Iceland 5 April 1980.

At a seminar organised by RNH and the Institute of Public Administration and Politics at the University of Iceland 17 May 2019, Stefan Snaevarr, Philosophy Professor at Lillehammer University in Norway, criticised the concept of totalitarianism. It was wrong to regard national socialism as a branch of socialism proper, he argued: the Nazis had privatised many companies. Socialism was not “the road to serfdom”, as Friedrich von Hayek had asserted in a famous book. Economic planning was compatible with democracy. Gissurarson replied that a distinction had to be made between voluntary and coercive socialism. He had nothing against people forming socialist enterprises like workers’ cooperatives or farmers’ collectives: indeed, the free economy was nothing but a framework around and facilitating individual choices.  Coercive socialism however always implied that people were not allowed to choose for themselves: Force was used to drive them in the “right” direction. Of course Swedish ‘nursery school socialism’ was much better than Russian ‘labour camp socialism’, but classical liberals rejected both these kinds of socialism, instead supporting individual freedom and the responsibility going with it.

Professor Olafur Th. Hardarson chaired the seminar. RNH participation in it formed a part of the joint project with ACRE on ‘Europe of the Victims’. Iceland’s journal of record, the daily Morgunbladid, published an account of the debate on 6 June:

In the foreword to the book In Defence of Western Culture: Speeches by Six Authors in 1950–1958, Professor Hannes H. Gissurarson argues that Hitler’s National Socialism and Stalin’s Communism were two variants of Twentieth Century Totalitarianism: Modern totalitarians had tried to subdue the soul no less than the body. In this Gissurarson echoes the six Icelandic intellectuals whose speeches from the Cold War are reprinted in the book, Tomas Gudmundsson, Gunnar Gunnarsson, Kristmann Gudmundsson, Gudmundur G. Hagalin, Sigurdur Einarsson and David Stefansson. On the other hand, Professor Stefan Snaevarr doubts that the concept of totalitarianism is useful and does not think that National Socialism and Communism have much in common. Gissurarson and Snaevarr exchange views about the issue at a seminar organised by RNH and the Institute of Public Administration Studies and Politics at the University of Iceland, in Room 101 in Oddi at the University of Iceland, 16–17:30 Friday 17 May 2019. Professor Olafur Th. Hardarson will chair the meeting.

From the London event.

Economic integration paradoxically facilitates political disintegration, RNH Academic Director Professor Hannes Gissurarson said in four lectures given at the Free Market Road Show in the spring of 2019. The meetings were held in Thessaloniki 6 May, Athens 7 May, London 9 May and Stockholm 10 May. Other lecturers included Dr. Richard Rahn, former Chief Economist of the US Chamber of Commerce, and Philosopy Professor Andrew Bernstein. The Austrian Economics Center, under the leadership of Barbara Kolm, organised the Road Show.

Gissurarson recalled Adam Smith’s explanation for the wealth of nations: that it was brought about by the division of labour in the free market. This division of labour became the more beneficial the more extended the market were. The reason why small political units could however flourish was that they had access to large international markets and could therefore benefit from the global division of labour. In 1946, when the United Nations were founded, the number of independent states was 76, but now the UN had 193 member states, not counting the Vatican and Taiwan. Gissurarson pointed out that  nations in small states often were homogeneous so that the cost per capita of law enforcement was not as high as in large, heterogeneous states. Small states were also usually not as aggressive as large ones so that expenditure on the military tended to be relatively low.

Gissurarson discussed in particular the Nordic countries whose success was not, he said, because of, but despite, social democracy. Its main explanations were the rule of law, free trade and social cohesion which led to solidarity and consensus and reduced the costs of operating a state and a market. There was a strong liberal tradition in the Nordic countries, for example in Sweden, Gissurarson pointed out. Indeed, before Adam Smith the Swedish-Finnish priest Anders Chydenius had demonstrated how private and public interests could coincide under free competition. In the 19th century, again, liberal politicians had significantly increased economic freedom in Sweden, and as a consequence economic growth had been faster there than in any other country in 1870–1936.

Gissurarson said that the European Union was in transformation. While it had originally been a forum for the historical and praiseworthy truce between Germany and France, the question now was whether it would become an open market or a closed state, a federation of states or a federal state. The idea of the nation state was becoming relevant again. National socialism had been a disaster, but perhaps the idea of national liberalism, common in the 19th century, had some merit. But a country had to be a home rather than a fortress or, even worse, a prison.

In Stockholm, Gissurarson used the opportunity to meet with two other members of the Mont Pelerin Society, Dr. Nils Karlson of Ratio Institute and investment manager Peter Stein, to discuss further intellectual cooperation between classical liberals and conservatives in the Nordic countries. This meeting formed a part of the joint project with ACRE on ‘Bluegreen Capitalism for Europe’.

At a Liberty Fund Colloquium in Petrópolis in Brazil, RNH Academic Director Hannes H. Gissurarson said that a free economy was purposeless, but not pointless. The point was not to maximise anything, but to bring about the spontaneous coordination of individuals pursuing different and often conflicting aims. American legal philosopher and judge Richard Posner maintained however that judges should aim at wealth maximisation in their decisions. Gissurarson said that this was sometimes relevant, but not always. He recalled the famous decision by King Salomon when two women put forward claims to the same baby. When Salomon had asked for a sword in order to cut the baby into two, he had not been seeking a mean: he had been testing which of the two women valued the child more. This was an example of wealth maximisation. If it would have been known which of the two women was really the mother, she would of course have been assigned the baby. A judge first had to ascertain existing rights and claims, and by default he could try to maximise wealth, transfer goods to those who valued them the most.

One topic discussed at the Colloquium was accidents and the price of human lives. Gissurarson pointed out the enormous waste caused by airport security where passengers had to wait in line for half an hour or more, eight million people every day on average. If human lives could be priced, then it might pay greatly to reduce such security even if it meant that some lives would be lost in terrorist attacks. In a discussion on redistribution Gissurarson rejected the common idea that a dollar was worth more to a poor person than to a rich one so that total happiness or utility would increase by its transfer from the rich to the poor. Often, Gissurarson maintained, the rich was rich precisely because a dollar was worth more to him than to others. Many wealthy people were entrepreneurs who felt the need for all their dollars in new projects. A lively discussion on many related topics took place at the Colloquium which was directed by Professor Eduardo Mayora from Guatemala on 11–14 April 2019.

Participants in the Colloquium. Photo: Daniela Becker.