Prof. Gissurarson speaking at the Peruvian Ministry of Production.

RNH Academic Director, Professor Hannes H. Gissurarson, read a paper at the Peruvian Ministry of Production 26 January 2016 on practical matters concerning the management of fisheries and what other nations could learn from the experience of the Icelanders. According to him, the two key factors in the efficiency of the Icelandic system of ITQs, individual transferable quotas, were that the catch quotas were transferable so that they eventually ended up in the hands of those who were most efficient in utilising them, and that they were permanent, so that owners of fishing firms gained an interest in maximising the long-term revenue of the resource.

Professor Gissurarson discussed the idea of “the property of the nation” often invoked in discussions about natural resources, arguing that the most natural way of interpreting it was to regard it as a stipulation that the long-term revenue from the resource should be maximised. This was definitely not achieved by the state expropriating resources, but rather by allowing individual enterprises to utilise those resources as efficiently as possible. The newly created resource revenue subsequently flowed in natural ways into the economy. The seminar was well-attended.

The University of Iceland Press has recently published a book by Professor Gissurarson in English, The Icelandic Fisheries: Sustainable and Profitable. That book and Gissurarson’s lecture at the Ministry both formed parts in the joint project by RNH and AECR, the Alliance of European Conservatives and Reformists, on “Europe, Iceland, and the Future of Capitalism”.

Prof. Gissurarson giving his talk.

RNH Academic Director, Professor Hannes H. Gissurarson, gave a paper at a meeting organised by the Peruvian Association of Fishing Firm Owners in Lima 21 January 2016 on the problem of initial allocation of quotas. The University of Iceland Press has recently published a book by Professor Gissurarson, The Icelandic Fisheries: Sustainable and profitable. He argued that the quotas should initially be allocated according to catch history, and not auctioned off by the state. In an allocation according to catch history nobody would be made worse off, because fishermen would initially continue to harvest the same proportion of the total catch as they had been doing, and then starting to trade quotas. The only right which people outside the fisheries would be deprived of, would be the right to harvest fish at zero profit, as the economics of fisheries (H. S. Gordon, Antony Scott and others) demonstrated: With open access, effort increased to the level of zero profit where total cost would be equal to total revenue.

Professor Gissurarson pointed out that inital allocation according to catch history fulfilled the Lockean proviso for creating property rights to unowned resources, or enclosing commons: Nobody was made worse off from it. Such allocation was also Pareto-optimal, unlike an allocation in a government auction where some would be made worse off by their inability to pay the required price for the quotas: their investment in fishing vessels, fishing gear and human capital would be wiped out.

The lecture was well-attended. The lawyer Enrico Ghersi introduced the speaker, and after the lecture Elena Contreras, chairman of the Association of Fishing Vessel Owners, said a few words. There is much interest for individual transferable catch quotas in Peru, and one of the attendees was Rafael Rey, who introduced catch quotas in some of Peru’s most important fish stocks, while he was Minister of Production. Professor Gissurarson said that the catch quotas had to be as divisible, transferable and permanent as possible, in order to make the system as efficient and productive as the Icelandic one. The Icelandic system was a good example of how resources could be protected by assigning them to protectors. The lecture formed a part of the joint project of RNH and AECR, Alliance of European Conservatives and Reformists, on “Europe, Iceland, and the Future of Capitalism”. The lecture was taped and can be watched on Youtube dubbed in Spanish:

Gissurarson Slides 22 January 2016

The University of Iceland Press recently published a book by Professor Hannes H. Gissurarson, The Icelandic Fisheries: Sustainable and Profitable, containing four papers which the author has published in English on the most beneficial utilisation of natural resources such as fish stocks. In the introduction Professor Gissurarson recalls the derision with which his suggestion met, at a 1980 conference about the future in Thingvellir, Iceland, that individual and transferable fishing rights should be allocated to fishing firms to solve the problem of overfishing. Still a university student, he published an article in the Journal of Economic Affairs in 1983, arguing further for this idea. The relatively successful Icelandic system of individual transferable quotas in the fisheries had however not been formed in the minds of any scholars: It had developed in a process of trial and error where those with an economic interest in the matter had groped their way towards an efficient solution.

In the introduction, Professor Gissurarson says that three important points are now more clear to him than when he started to think about this problem. First, overfishing is a case of government failure, not market failure. It is caused by the neglect of government to perform its proper task of developing a framework of rules under which individuals would not collide with one another—would not impose harm on one another. In the second place, any major change in the rules applying to an economic sector, such as in this case confining harvesting to holders of fishing permits only, should be Pareto-optimal if possible, which implies that most or all would benefit from the change, while no-one would be made worse-off by it. Initial allocation of fishing permits fulfils this condition, but not an allocation in a government auction. Thirdly, it can be deduced from the analysis of fisheries economists (such as Jens Warming and H. S. Gordon) that the right of which others than the holders of fishing permits under such a system was deprived, was essentially only a right to harvest fish at zero profit, and such a right was, by definition, worthless.

The papers in the book are, 1) Agreeing on the Rules, 2) Non-Exclusive Resources and the Rights of Exclusion, 3) Objections to Individual Transferable Quotas, and 4) The Politics of Property Rights. Professor Gissurarson argues that the disagreements in Iceland about the fisheries can be related to the different views of Locke on the one hand and Marx (and perhaps Henry George) on the other hand on the legitimacy of private property rights, and to the different approaches of Coase on the one hand and Pigou on the other hand to the economic problem of external harm. The publication of the book forms 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”. It is also a fruit of the cooperation betweeen RNH and IDDE, Institute for Direct Democracy in Europe. The book is freely available online as well as on paper.

Browder at the University of Iceland.

The festivities hall of the University of Iceland was crowded Friday 20 November when US investor Bill Browder told his story at a meeting arranged by RNH, the Public Book Club (Almenna bokafelagid) and the Institute of International Affairs at the University of Iceland. The grandson of American communist leader Earl Browder, Bill Browder grew up in a left-wing environment of intellectual excellence and little interest in pecuniary affairs. Rebelling against his family, he decided to become a businessman, studying finance at Stanford University and moving to Russia after the dissolution of the Soviet Union in order to operate a hedge fund there. For a while, his Hermitage Capital had great success, even if conditions were unstable: In one day, the fund lost 900 million dollars, which it managed however to regain later. In Russia, Browder witnessed the outrageous behaviour of the Russian oligarchs and their allies in power. For a while, he welcomed Putin as a reformer, but his view was to change. Putin turned against Browder; he was denied entry into Russia; and his friend and legal adviser Sergey Magnitsky was imprisoned, maltreated and eventually left to die. This had much impact on Browder who vowed not to rest until the perpetrators of this intentional crime had been brought to justice.

Browder’s audience 20 November 2015.

Eventually, Browder succeeded in having the US Congress pass a law whereby Magnitsky’s murderers were blacklisted in the United States. He is advising other legislatures around the world on similar laws. The European Parliament has already passed resolutions about the Magnitsky case, but the European Commission has not implemented them which would mean blacklisting Magnitsky’s murderers in Europe. Browder had stated his case in the news magazine 60 minutes and in countless television and radio interviews, as well as in films on Youtube and in a best-selling book, Red Notice, which the Public Book Club has just published in Icelandic. At present, Browder’s book is appearing in 22 languages. Wherever he has the opportunity, Browder warns against the Putin regime in Russia which is, he says, both cruel and corrupt. Browder’s visit to Iceland was widely reported in the local media: The news magazine of the government television station interviewed him, and he was also featured in the daily Morgunbladid and in the business weekly Vidskiptabladid.

Many of those who attended Browder’s lecture blogged about it. Former Justice Minister Bjorn Bjarnason who chaired the meeting wrote: “This is an unbelievable, yet true story which is reminiscent of past accounts of individuals against a totalitarian regime in Russia—a regime which operates without any regard whatsoever for human rights. Vladimir Putin’s methods become ever more unpleasant, and he increasingly builds his power on fear, creating the belief that national security is at risk, if he does not have his way both home and abroad.”

Literary critic Ragnhildur Kolka wrote: “The incredible story of a man fighting the mafia of Russian President Putin. I could have remained there for a day listening to his talk, how he became a super-investor in Russia after the dissolution of the Soviet Empire, and how he gained billions, only to lose much of it again to the oligarch mafia. The story is utterly absorbing, but it is also the tragic tale of a young man who participated in this fight and became the victim of the criminal elements in Putin’s regime.” The RNH participation in this event forms a part of the joint project with AECR, Alliance of European Conservatives and Reformists, on “Europe, Iceland and the Future of Capitalism”.

RNH Academic Director Professor Hannes H. Gissurarson gave a talk at the annual conference of the Platform of European Memory and Conscience in Wroclaw City Hall in Poland 17–18 November 2015, describing the  joint project by RNH and AECR, the Alliance of European Conservatives and Reformists, on “Europe of the Victims”. An important part of the project is the production online of works which were published in the past against totalitarianism, while a limited number of copies are also printed for libraries and others interested. In 2015, three books were published in this series, Articles on Communism by British philosopher Bertrand Russell on 17 June, the 60th anniversary of AB, the Public Book Club; Women in Stalin’s Slave Camps by Elinor Lipper and Aino Kuusinen on 19 June, the 100th anniversary of women’s voting rights in Iceland; and Out of the Night by Jan Valtin (aka Richard Krebs) on 23 August, Memorial Day for the victims of communism and national socialism in Europe.

In 2016 it is planned to publish five works on totalitarianism, both online and on paper: Khruschev’s Secret Speech on Stalin 25 February, 6o years after the speech was delivered; El campesino: Life and Death in the Soviet Union, by Valentín González and Julián Gorkin, 17 July, 80 years after the outbreak of the Spanish Civil War; Baltic Eclipse by Ants Oras and Estonia: A Study in Imperialism by Andres Küng, both on 26 August when a quarter of a century has passed since Iceland was the first Western country to resume diplomatic relations with the three Baltic countries; and Service, Servitude, Escape by Aatami Kuortti 25 December, a quarter of a century after the collapse of the Soviet Union. More works are being prepared for republication, including The Hungarian Revolution by Erik Rostbøll and I Chose Freedom by Victor Kravchenko.

In Wroclaw City Hall. Prof. Gissurarson in centre of 2nd row.

Conference participants were invited to a special meeting celebrating the 50th anniversary of a public declaration by Polish bishops on the necessary reconciliation of Poles and Germans after the terrible events of the past. “We forgive and ask for forgiveness.” Three cardinals were present at the meeting, as well as the Polish Minister of Culture and the Mayor of Wroclaw. At the conference the threats faced by the Ukrainians were discussed, and also attempts by old communists in Central and Eastern Europe to limit access to documents and other evidence of their past misdeeds. At the end of the conference Professor Gissurarson asked for the floor and expressed his own gratitude and that of other participants for the great efforts Dr. Neela Winkelmann, the Executive Director of the Platform, has undertaken in the service of a good cause. He welcomed her continuing employment by the Platform. Göran Lindblad, former MP for the Swedish Moderate Union, was re-elected Platform President. Three members joined the Board of Trustees, American author Anne Applebaum, former Slovenian Prime Minister Janez Jansa and Czech actor Ondrej Vetchý. At the conference, three institutes and associations were accepted to the Platform which now counts 51 members.