In discussions about the Nordic countries, many mention social democracy, as social democrats rules the three Scandinavian countries for decades in the 20th century. However, there is indeed a strong liberal tradition in the Nordic countries, Professor Hannes H. Gissurarson argued in a paper he read 6 April 2019 at the annual conference of APEE, Association of Private Enterprise Education, on Paradise Island in the Bahamas. Gissurarson recalled that Swedish-Finnish priest Anders Chydenius had advanced a theory about the harmony of private interests and the public good before Adam Smith; and that Swedish statesman Johan August Gripenstedt had in mid-19th century contributed greatly to the first Swedish Model of economic freedom and enterprise. This first model led to tremendous progress: In 1870–1936, economic growth in Sweden was the most rapid in the world. The second Swedish Model was pursued by the Social Democrats in 1970–1990, with high taxes and extensive redistribution, but it proved to be unsustainable, and the Swedes are now following the third Swedish Model, reducing taxation and providing more scope for private enterprise, even if they have not abandoned generous welfare provisions.

Prof. J.R. Clark (right) accepting his Distinguished APEE Fellow award from APEE President Prof. Andrew Young

Gissurarson pointed out that Jon Sigurdsson, the leader of Iceland’s struggle for independence, was a classical liberal, as was clear from his many magazine articles. The authors of the two first books on economics in Icelandic, Arnljotur Olafsson and Jon Thorlaksson, also were committed classical liberals. Gissurarson gave an account of the extensive liberal reforms in Iceland in 1991–2004, privatisation, tax cuts, strengthening of pension funds and an opening up of the economy as a result of membership of the EEA, European Economic Area. He argued that the success of these reforms was best demonstrated by the fact that Iceland recovered quickly from the severe blow of the 2008 bank collapse.

Dr. Jerry Jordan was elected President of APEE, replacing Professor Andrew Young. A monetary theorist, Jordan was President of the Federal Reserve Bank of Cleveland for eleven years. Professor James Ottesen was elected Vice President, Professor Benjamin Powell Treasurer and Professor Edward Stringham Editor of the Journal of Private Enterprise. Professor J. R. Clark was elected Distinguished Fellow of APEE. Gissurarson’s participation in the conference formed a part of the joint project with ACRE on ‘Bluegreen Capitalism for Europe’.

Gissurarson Slides on Paradise Island

In the Icelandic fisheries a sustainable and profitable system has been developed, that of individual transferable quotas, ITQs, Professor Hannes H. Gissurarson, RNH Research Director, said at an international conference on the ‘Blue Economy’ — on security at sea and the utilisation of marine resources — held in Gdynia in Poland 22 March 2019. Polish MEP Anna Fotyga, a former Foreign Minister of her country, organised the conference where topics discussed included the concept of the open sea, possibilities and challenges in the Arctic and aggression by the Russians in the Black Sea and by the Chinese in the South China Sea. Other speakers included Mark Gróbarczyk, Polish Minister of Maritime Affairs, Rear Admiral Tomasz Szubrycht, Rear Admiral Nils Wang, former Head of the Royal Danish Navy, James Bergeron, political adviser to Commander, Allied Maritime Command in Northwood, United Kingdom, and Batu Kutelia, former Ambassador of Georgia to the United States. In his talk, Professor Gissurarson emphasised that the Icelandic system of individual transferable quotas had developed without depriving anyone of any significant right: the only right which had been removed was that of harvesting fish at zero profit, as fisheries economists had demonstrated would be the case under open access; and by definition this right was worthless. Therefore initial allocation of quotas on the basis of catch history (often called ‘grandfathering’) was the only politically feasible way of introducing an ITQ system in fisheries. Gissurarson pointed out that Locke had set the proviso on private appropriation from the commons that nobody be worse off by it, and that this was the case with the initial allocation of individual transferable quotas in the Icelandic fisheries.

Professor Gissurarson has published two books in English on the fisheries, Overfishing: The Icelandic Solution (2000) and The Icelandic Fisheries: Sustainable and Profitable (2015). He also recently published Green Capitalism: How to Protect the Environment by Defining Private Property Rights (2018). Gissurarson’s participation in the conference formed a part of the joint project with ACRE on ‘Bluegreen Capitalism for Europe’.

Gissurarson Slides in Gdynia 22 March 2019

Government ministers, admirals, members of parliament and speakers at the Gdynia conference.

RNH is offering an exciting programme in the next few months. At the end of 2018 two reports in English by RNH Research Director Professor Hannes H. Gissurarson were published by the free-market think tank New Direction in Brussels. One was Why Conservatives Should Support the Free Market and the other one was Spending Other People’s Money: A Critique of Rawls, Piketty and Other Redistributionists. They will be introduced in more detail later. Professor Gissurarson gives a talk on how to make the fisheries sustainable and profitable at an international conference in Gdynia in Poland 22 March 2019. He gives another talk on Nordic liberalism at the APEE annual conference on Paradise Island in the Bahamas 6 April. In May, Gissurarson goes on a lecture tour about his report on Rawls and Piketty, in connection with the Free Market Road Show: in Thessaloniki 6 May, Athens 7 May, London 9 May and Stockholm 10 May. At the annual Freedomfest in Las Vegas, Gissurarson gives a talk 17 July on ‘Green Capitalism’: in 2017, he wrote a report for New Direction with the same name. In November, Gissurarson reads a paper at the Austrian economists’ meeting in Vienna.

Ragnar Arnason

At the end of 2018, the book In Defence of Western Civilisation: Speeches by Six Writers 1950–1958 was also published (in Icelandic). The authors are poet Tomas Gudmundsson, novelists Gunnar Gunnarsson, Kristmann Gudmundsson and Gudmundur G. Hagalin, and poets Sigurdur Einarsson in Holt and David Stefansson from Fagriskogur. Taking their lead from the book, Professors Stefan Snaevarr and Hannes H. Gissurarson debate the concept of totalitarianism at a seminar in Room 101 in Oddi at the University of Iceland 17 May, 16–18. Professor Olafur Th. Hardarson is chairing the meeting. RNH also participates in the organisation of an international conference in honour of Professor Ragnar Arnason in the festivities hall at the University of Iceland 14 June 2019, 16–18. Speakers at the conference include some of the world’s best-known fisheries economists, Gordon Munro, Trond Bjorndal, James Wilen and Rognvaldur Hannesson. The Chancellor of the University, Dr. Jon Atli Benediktsson, addresses Arnason who turned 70 in early 2019. Afterwards there is a reception in Litla-Hama. The University of Iceland Press publishes a festschrift for Ragnar, Fish, Wealth and Welfare, a collection of his scholarly papers, on the occasion of the conference. It also publishes a collection of papers on fisheries economics delivered at RNH conferences in the past.

RNH and the Public Book Club celebrate the 70th anniversary of NATO, the defence alliance of Western democracies, 4 April 2019 by reprinting two books from the Cold War: The God That Failed was written by Arthur Koestler, Ignazio Silone, Richard Wright, André Gide, Louis Fischer and Stephen Spender. The Future of Small Nations: Speeches in the Nordic Countries 1946–1949 is by Norwegian poet Arnulf Øverland. His visit to Iceland in the spring of 1948 had a great impact on public opinion, and a year later Iceland decided to join Norway and Denmark in signing the North Atlantic Treaty, as Øverland had urged. Professor Gissurarson attends the annual meeting of the Platform for European Memory and Conscience in Tirana 3–6 November 2019.

RNH supports the Summer School of the Icelandic Association of Libertarian High School Students in Reykjavik 1 June 2019, and a regional meeting of the Students for Liberty Europe in Reykjavik 6 September, with Daniel Hannan as the keynote speaker. Many of the events being planned form parts of a joint project with ACRE on ‘Bluegreen Capitalism in Europe’. The aim of that project is to show, with arguments and evidence, that capitalism is compatible with care for the less fortunate in society as well as with environmental protection.

The ceremony in front of Government House in Reykjavik on 1 December 1918. Three of the authors of the book published by AB were there: David Stefansson, Gudmundur G. Hagalin and Tomas Gudmundsson, all turning against the communist threat.

Iceland became a sovereign state on 1 December 1918. On the 100th anniversary of Icelandic sovereignty, 1 December 2018, RNH Academic Director Professor Hannes H. Gissurarson published a paper in Morgunbladid. He argued that ever since the foundation of the Icelandic Commonwealth in 930 Iceland had been a sovereign state in a Hegelian sense, as a unifying force, a meeting ground for mutual adjustment. The 930–1262 Commonwealth had been an interesting example of law without government. But Iceland only became a sovereign state in a Weberian sense, as an institution with monopoly of coercion, on 1 December 1918. For decades after that, the sovereign Icelandic state had been threatened by a revolutionary party backed by a foreign totalitarian state: Local communists had fought for what they themselves called Soviet-Iceland, gaining more electoral support than comparable parties elsewhere: 19.5% in the elections of 1946 and 1949. Some distinguished poets and novelists had however confronted them and criticised their attempts, financed by Moscow, to control Icelandic culture: Tomas Gudmundsson, Gunnar Gunnarsson, Kristmann Gudmundsson, Gudmundur G. Hagalin, Sigurdur Einarsson in Holt, and David Stefansson from Fagriskogur. On the 100th anniversary of Icelandic sovereignty, the Public Book Club, Almenna bokafelagid, published speeches by them, In Defence of Western Civilisation (Til varnar vestraenni menningu), edited and annotated by Gissurarson.

Against fierce opposition from local communists, Iceland had enjoyed the protection and support of the United States from 1941 onwards, enabling her in 1952–75 to extend the fisheries limits from 3 to 200 miles, a crucial move for a small nation with little natural resources other than fertile fishing grounds. However, the ‘American Age’ of Icelandic history had come to an end in 2006 when the US military base in Keflavik was closed. After this Iceland has had few friends, as was amply demonstrated during the 2008 bank collapse. Icelandic leaders seemed also to have lost their self-esteem, as was shown by their appeasement of foreign powers in the Icesave dispute. Gissurarson suggested that one reason might be how the Icelandic struggle for independence had been denigrated in modern textbooks. More than two generations of Icelanders had been indoctrinated in schools against the deep and strong national sentiment of the Icelanders, which had found political expression in the foundation of a sovereign state in 1918. Gissurarson’s paper forms a part of the joint project of RNH and ACRE, the Alliance of Conservatives and Reformists in Europe, on ‘Europe, Iceland, and the Free Market’.

Gissurarson paper 1 December 2018

RNH Academic Director, Professor Hannes H. Gissurarson, gave a talk at the Independence Party Association of Kopavogur Saturday 17 November 2018 on the recent report by the Social Science Research Institute of the University of Iceland about the 2008 bank collapse, a report written under his supervision. Gissurarson rejected some explanations offered for the collapse, such as “patriarchy”, or the liberal Icelandic 1874 Constitution, or “neoliberalism”. He said that the use of an Anti-Terrorism Act by the British government against Iceland in the 2008 financial crisis had been both unnecessary and brutal. Moreover, during the crisis the British government had discriminated on the basis of nationality (which was prohibited according to the rules of the European internal market) by assisting all British banks except the two owned by Icelanders. Gissurarson also criticised some of his colleagues at the University of Iceland for supporting the British rather than the Icelandic cause in the Icesave conflict. He wondered why they had wanted to see the nation driven into a debt prison. Was it because they fancied themselves becoming prison wardens? It was, Gissurarson submitted, a complete misunderstanding that the Icelanders had discriminated against British depositors by the Emergency Act of 2008. On the contrary: They had given all depositors, British as well as Icelandic, priority claims against the banks over other creditors, for example German and American banks. If there was any discrimination according to the Emergency Act, then it was between all depositors on the one hand and other creditors on the other hand, while such discrimination could be justified by force majeure.

Law student David Orn Jonsson chaired the well-attended meeting, and after Gissurarson’s talk many topics were brought up, such as the controversial 2008 emergency loan to Kaupthing, the 2002 privatisation of the banks, and the contrast between the decent behaviour of the Poles and the Faroese while Iceland was struggling and the unhelpfulness of the other Nordic nations. In response, Gissurarson described the course of events in the Kaupthing loan issue. The managers of Kaupthing had told the governors of the Central Bank of Iceland that it was the government’s will that the CBI extended an emergency loan to Kaupthing. One of the CBI governors had contacted the Prime Minister who confirmed this, and a tape existed of their conversation. The governors probably would have preferred extending an emergency loan to Landsbanki, but they did not want to go against the will of the government, although they, and not the government, were ultimately responsible for the decision. For the loan, the CBI governors had taken collateral worth double the loan, and it had been a general collateral, for all Kaupthing’s debts to the CBI. However, the new CBI governor replacing them after the collapse had been tricked into selling the collateral, the Danish FIH Bank, at a fraction of its worth. The buyers, including pension funds in Denmark and Sweden, had made a huge profit, as described in a Danish book, Kunsten at tømme en bank og slippe godt fra det (The Art of Emptying a Whole Bank and Get Away with It).

Gissurarson argued that possibly it had not been sensible to privatise the two government banks at the same time in 2002, but that this had been insisted on by the Progressive Party, the junior partner in the government. The banks would have fetched a higher price in total, if they had been sold one after the other. The two groups of buyers had also been different. The S-Group buying Bunadarbanki had been closely aligned with the Progressive Party, as the leader of the group had been the Party’s Vice-Chairman and a government minister. A covert deal had obviously been made immediately to resell the bank to Kaupthing. The Samson Group of three entrepreneurs buying Landsbanki had on the other hand not been aligned in any way with the Independence Party. One member of the group had been a supporter of the Progressive Party, a second was completely apolitical, according to his own pronouncements, while the third one, Bjorgolfur Gudmundsson, certainly had been an active member of the Independence Party in the past, but then in the opposition to Party Leader David Oddsson. Whereas there was no enmity between Gudmundsson and Oddsson, they therefore could not in any way be regarded at the time of privatisation as friends or political allies. Discussing the bank privatisations, Gissurarson quoted Milan Kundera who said that man proceeds on his path in life, not in complete darkness, but in fog. “But when he looks back to judge people of the past, he sees no fog on their path. From his present, which was their faraway future, their path looks perfectly clear to him, good visibility all the way. Looking back, he sees the path, he sees the people proceeding, he sees their mistakes, but not the fog.” On the wisdom of hindsight, it would have been sensible to sell all the bank shares in open tender, ensuring at least initially widely dispersed ownership, as then Prime Minister David Oddsson originally had wanted, against fierce opposition. Of course, some companies would probably have collected together enough shares to gain control, quite possibly the very same groups who eventually bought major shares in the banks. Gissurarson added that he was not sure the Icelandic bankers would have behaved in any other way under different ownership. Bankers all around the world had engaged in risky behaviour before the financial crisis, and some of them had behaved even worse than their Icelandic colleagues who had been reckless rather than criminal. Gissurarson’s talk formed a part of the joint project by RNH and ACRE, the Alliance of Conservatives and Reformists in Europe, on “Europe, Iceland and the Free Market”.

Gissurarson Slides in Kopavogur