Iceland’s recovery after the bank collapse has been internationally noted. German film makers, The Freedom Today Network, visited Iceland in October in connection with the regional conference of European Students for Liberty in Reykjavik. They interviewed Professor Hannes H. Gissurarson, independent investor Heidar Gudjonsson, parliamentary candidate Aslaug Arna Sigurbjornsdottir and entrepreneur Lukas Schweiger from Austria who lives in Iceland.

Prof. Gissurarson giving his talk.

The Icelandic nation as a whole was neither guilty nor responsible when in 2008–9, at the height of the international financial crisis, it seemed that transactions between the private Icelandic bank Landsbanki and depositors in the UK and Netherlands—the owners of the so-called Icesave accounts—would fail. These were transactions between private parties who bore full responsibility for them. The Icelandic government fulfilled all its obligations by establishing, in compliance with European law, an Insurance Fund for Depositors and Investors. This was the conclusion by Professor Hannes H. Gissurarson, RNH Academic Director, at a lecture he gave 28 October 2016 at the annual research conference of the School of Social Sciences at the University of Iceland. He argued against three of his colleagues, Professors Thorvaldur Gylfason, Stefan Olafsson and Vilhjalmur Arnason, who had maintained that the Icelandic nation was morally responsible for the Icesave accounts and that it consequently should compensate the British and Dutch governments for outlays on which those governments had unilaterally decided, which would have resulted in the Icelandic Treasury paying a hefty sum in interest on “loans” from those two governments, as well as paying a part of the principal, if necessary. (At the time when the arguments took place it was estimated that the Landsbanki estate would only cover 75% of priority claims; it turned out later that it could cover all such claims.)

Professor Gissurarson cpntended that Professors Olafsson and Arnason had misunderstood the Icelandic Emergency Act of 6 October 2008. It had not involved any discrimination between domestic and foreign depositors in the Icelandic banks: Instead, it had given all depositors priority claims, over other creditors, to the estates of the failed banks. It was of no relevance to the case that at the same time Icelandic politicians had issued declarations that domestic accounts were safe. Such public declarations had been issued in many other European countries as well during the height of the crisis and had created no legal obligations.

Professor Gissurarson then presented a philosophical analysis of the concepts of collective responsibility and collective guilt. He submitted that it was sometimes conceivable that one had to share responsibility for something that one had not brought about. For example, a skipper was obliged to help castaways by whom he passed, if possible. It was also conceivable, the Professor added, that one had some moral obligations as a result of one’s identity rather than one’s actions: it might matter who one was no less than what one had done. Examples could be obligations that a son had to his parents or an Icelander to her nation. But collective responsibility had some limitations. First, it should not be used to replace individual responsibility when it was clear that it existed, for example in ordinary business transactions. Second, the responsibility or burden should not be beyond the powers of the collective in question (as Lord Keynes had pointed out in the debate about German reparations after the 1st World War). Thirdly, the notion of collective responsibility should not be invoked to justify collective injustice, for example in demands for sex or race quotas to “correct” past injustices.

Mr. David Miliband and Prof. Olafur Hardarson at the University of Iceland in 2012.

The Icesave case had not been one of collective responsibility by the Icelanders, according to Professor Gissurarson. The Icelandic government had fulfilled all its legal and political obligations and not committed any unjust acts against those British and Dutch depositors who had preferred the high interest rates offered by Landsbanki to other options of using their money. If there was any collective responsibility or guilt in the matter, it was that of the British Labour government which had, quite unnecessarily, imposed an anti-terrorism law on the Icelanders and closed two British banks, Heritable and KSF (both Icelandic-owned), at the same time as it had rescued all other British banks. Later it had emerged that both Heritable and KSF were much sounder than many of the banks which had been rescued. Possibly there was also some collective responsibility or guilt involved in the actions of hedge funds which had planned and performed runs on the Icelandic banks. Finally, Professor Gissurarson expressed his great surprise that the Foreign Minister of the government which had imposed an anti-terrorism law on the Icelanders, David Miliband, had, when giving a lecture at the University of Iceland in 2012, got away with prohibiting any discussion, let alone criticism, of the behaviour of the Labour government in the autumn of 2008.

Dr. Palmer speaking.

The regional conference of the ESFL, European Students for Liberty, in Iceland Saturday 8 October 2016 was very successful, not least because of the three distinguished speakers who made the effort to travel all the way to Iceland and to participate in the conference. Dr. Nigel Ashford of the Institute for Humane Studies discussed five schools of classical liberal and libertarian/conservative thought: the Austrian economists, Mises and Hayek, the Chicago economists, Friedman and Becker, the Public Choice school led by James M. Buchanan, the Natural Rights theorists such as Robert Nozick and Ayn Rand, and the anarcho-capitalists, Murray Rothbard and David Friedman. The anarcho-capitalists have often pointed to the Icelandic Commonwealth of 930-1262 as an example of a society ruled by law, but  not by government.

Dr. Barbara Kolm of the Austrian Economics Center presented a liberal view of the European Union, emphasising that there was a conflict between free immigration and welfare provisions for all regardless of contribution. Kolm recalled that the original purpose of the European Union was to defend the four freedoms, but that it had now turned into something less attractive. Dr. Tom Palmer of Atlas Network and Cato Institute argued that liberty was not only about the pursuit of material gains, but that it was rather the precondition for taking responsibility for one’s life and spontaneously developing one’s individual abilities. He spoke on some of the themes of his recent book, Self-Control or State-Control: You Decide.

Two young politicians, Aslaug Arna Sigurbjornsdottir from the Independence Party and Pawel Bartoszek from Vidreisn, discussed current affairs, very professionally and politely. Investor Heidar Gudjonsson offered some concluding remarks about the future which he considered to be bright. After the conference, RNH Chairman of the Board Gisli Hauksson of Gamma invited all participants (which were around 120) to a reception at the headquarters of his asset management company Gamma. RNH’s participation in the conference formed a part of the joint project with AECR on “Europe, Iceland and the Future of Capitalism”.

Yaron Brook speaking. Panelists from left: Father Sirico, Dr. Gregg and Professor Gissurarson.

Classical liberals or libertarians can both be religious and atheists, according to RNH Academic Director Professor Hannes H. Gissurarson who was a commentator in a session on the moral foundations of the free society at the 2016 general meeting of the Mont Pelerin Society in Miami 18–23 September. The speakers in the session were Dr. Yaron Brook of the Ayn Rand Institute who argued that people of reason had to reject religion and Dr. Samuel Gregg from the Acton Institute who maintained that Christianity was compatible with both liberty and reason. Father Robert Sirico was in the chair.

MPS founder F. A. Hayek

Professor Gissurarson pointed out that some more or less pagan societies seemed to have had a firm moral basis, such as the ancient Romans and the Japanese. Undeniably, however, the only real resistance put up against 20th Century European totalitarianism had been by the Christian churches. Christianity presupposed that all men were subject to Natural Law, including those holding power. Christianity implied universalism: In the eyes of God everyone was equal, rich and poor, man and woman, black and white. Totalitarianism on the other hand was extreme rationalism, the attempt by human beings to play god. Unlike some other religious groups Christians wanted to render unto Ceasar what was Ceaser’s and to render unto God what was God’s. In other words, Christianity implied the separation of spiritual and secular powers alien to some other religions. Christ had not been a soldier on horseback wielding a sword, like Muhammad. The ten commandments did not have the logical structure of commands, despite their name, but rather that of prohibitions which made them more freedom-preserving than direct order to behave in a certain way.

Professor Gissurarson offered his own interpretation of two well-known Christian parables. The parable of the Good Samaritan was really about 1) the dangers of highwaymen from the mountain, and consequently the need for strong police and defence forces; 2) the treason of the clerks, namely that of the priest and the Levite who passed the victim of the robbers without helping him; 3) the need for men of means who could afford to help victims; 4) the good deed done with the Good Samaritan’s own money. Professor Gissurarson submitted that the eleventh commandment should really be: “Thou shalt not do good with other people’s money.” In the second placem when John the Baptist had said that a man with two shirts should give one of them to his neighbour having no shirt, he had identified the problem of shirtlessness, but not called for an enforced redistribution of income. The problem of shirtlessness could be solved by enabling people to sew their own shirts, providing opportunities to them. The main objective should be flourishing, moderately-taxed shirt factories in full operation.

Professor Gissurarson said that Ayn Rand had been a powerful and underestimated thinker, even if he could not personally endorse her militant atheism. Her distinction between creators and parasites was still valid. Rich people should not be ashamed of their wealth, if honestly acquired. Instead, they should be proud of it. Justified pride in one’s own achievements was not the same as arrogance. Entrepreneurs and capitalists performed important and necessary roles in a growing economy. Both religious people and atheists could belong to the Mont Pelerin Society. Professor Gissurarson’s participation in the conference formed a part of the joint project by RNH and AECR, the Alliance of European Conservatives and Reformists, on “Europe, Iceland, and the Future of Capitalism”.

Sir Roger Douglas and Professor Gissurarson.

Speakers at the conference included British historian Niall Ferguson, American sociologist Charles Murray, Chilean economist José Piñera, and some well-known American economists such as Nobel Laureate Edward C. Prescott, Professor John Taylor and Diana Furchgott-Roth. Professor Peter Boettke from the US took over as President of the MPS from Spanish Professor Pedro Schwartz. The general meeting was well-attended and well-organised, and regarded by most attendees as having been quite successful. The next regional meeting of the MPS will be in Seoul 7–10 May 2017 and in Gran Canaria 30 September–6 October 2018. After the MPS meeting, Professor Gissurarson attended the Atlas Network Liberty Forum. The Atlas Network is an umbrella organisation for research institutes looking for spontaneous and voluntary solutions instead of coercive government interventions, and seeking to use price rather than force as a lodestar in human interactions. Sir Roger Douglas, New Zealand Finance Minister in 1984–88, and Ruth Richardson, Finance Minister in 1990–93, described the radical and successful economic reforms in their country in the mid-1980s and early 1990s. The American television reporter John Stossel chaired a meeting about how freedom could be promoted by other means than books alone, such as by story-telling and documentaries and even by dramatic films. Linda Whetstone took over as Chairman of the Board of Atlas Network from Daniel Grossman. Linda is the daughter of Atlas Network founder Sir Antony Fisher.

Professor Gissurarson gives his talk. Diego Zuluaga is in the chair.

In the United Kingdom, considerable interest in the Icelandic system of managing the fisheries can be found, now when the country is leaving the EU and will not be subject to the failed CFP, Common Fisheries Policy. This became clear at a conference on private governance organised by the IEA, Institute of Economic Affairs, in London and Epicenter, a coalition of major European think tanks, in Florence 7–9 September 2016. RNH Academic Director Professor Hannes H. Gissurarson discussed the general common pool problem which is essentially that under open access to natural resources, utilisation of those resources will increase to the point where all possible profit will be dissipated in excessive effort. Common utilisation implies over-utilisation. The solution is often to develop exclusive use rights to the resources—to enclose the commons in one way or another. Professor Gissurarson described some such solutions developed in Iceland over the centuries: Grazing rights in the mountain pastures common to each farming community were allocated to individual farms; in the numerous salmon rivers each riparian farmer holds a right to a certain part of the total effort allowed in the river; and, most importantly, in the offshore fisheries individual transferable quotas, ITQs, amounting to a right to harvest a given proportion of the total allowable catch, have been allocated. Professor Gissurarson said that the ITQ system worked quite well, as was demonstrated by the fact that the chief complaint in Iceland was that the fishing firms were very profitable whereas in most other countries they were operated at huge losses.

Other speakers included German economist Guido Hülsmann who discussed central banks, Brazilian economist Diogo Costa who analysed the share economy, and Chemistry Professor Terence Kealey from England who pointed out the lack of evidence for any positive impact on economic growth from public investment in scientific research, whereas private investment clearly had such an impact. Another topic taken up at the conference was whether the EU could and would develop in a more liberal direction. Professor Gissurarson’s participation in the conference formed a part of the joint project by RNH and AECR, the Alliance of European Conservatives and Reformists, on “Europe, Iceland, and the Future of Capitalism”. Professor Gissurarson used the opportunity in Florence to undertake some research on the life and works of Niccolò Machiavelli. After his stay in Florence Professor Gissurarson went to Rome to meet with Professor Antonio Martino, Italy’s former Foreign Minister and Defence Minister, and a former President of the Mont Pelerin Society, an international academy of liberal scholars. Martino, who was also long Professor of Monetary Theory, is an adviser of RNH.

Gissurarson Slides in Florence 8 September 2016