Three talks are scheduled at a meeting of Politica, the Association of Politics Students at the University of Iceland, Thursday 12 November 2015 at 19.30 in Room O-101 in Oddi, the Social Sciences House, on “The Oddsson Era”: Mayor of Reykjavik in 1982–1991 and Prime Minister of Iceland in 1991–2004, David Oddsson was a dominant and powerful politician. The speakers are Professor Hannes H. Gissurarson who edited a festschrift on Oddsson’s sixtieth birthday in 2008, Dr Vilhjalmur Egilsson, President of Bifrost College and a Member of Parliament 1991–2003, and Ogmundur Jonasson, a Member of Parliament since 1995 and a government minister for the Left Greens in 2009–2013. Professor Gissurarson writes in his blog: “Much can be said about Oddsson’s Era, even if he was of course not the only person on stage. But it is interesting that Oddsson increased the support of the Independence Party in the three municipal elections which he fought in 1982, 1986 and 1990, irrespective of whether the Indepencence Party was in government or not. It is no less interesting that Oddsson has served longer than anyone else as Icelandic Prime Minister, both totally and continuously.”

Professor Gissurarson’s participation in the meeting forms a part of the joint project with AECR, the Alliance of European Conservatives and Reformists, on “Europe, Iceland and the Future of Capitalism”. Margaret Thatcher, British Prime Minister in 1979–1990, seen here with David Oddsson in 1991, was the protector of AECR.

In a lecture Thursday 5 November 2015, at 16.30 in Oddi House, Room O-101, Professor Hannes H. Gissurarson analyses and criticises the moral defence of capitalism provided by Ayn Rand, the most influential female philosopher ever. Admission is free and all are welcome. Rand’s books have sold in around 30 million copies. Three novels by her, Atlas Shrugged, The Fountainhead and We the Living, have been published in Icelandic translations. The lecture is co-sponsored by the Institute of Public Administration and Politics at the University of Iceland. It also forms a part of the joint project of RNH with AECR, the Alliance of European Conservatives and Reformists, on “Europe, Iceland and the Future of Capitalism”. Sjofn Vilhelmsdottir chairs the meeting.

Professor Gissurarson poses many questions, including these: What is the difference between self-love and avarice? Is Rand’s contrast between creators and parasites well-founded? Which Icelandic entrepreneurs and businessmen correspond most closely to Rand’s description of creators and innovators? Does love always need to be deserved, as Rand asserts? Is there no such thing as social responsibility? What is the difference between the case for capitalism made by Rand on the one hand and by economists Friedrich A. Hayek and Milton Friedman on the other hand? In the lecture, short episodes are shown from a docudrama on Rand (who is played by Helen Mirren) and from the film version of The Fountainhead (with Gary Cooper giving a Randian speech).

Gissurarson Slides on Ayn Rand

Professors Ragnar Arnason and Hannes H. Gissurarson, both members of the RNH Academic Council, read papers at the annual conference on new research in the social sciences, “The Mirror of the Nation,” organised by the Social Science Research Institute at the University of Iceland Friday 30 October 2015. Their papers are given at the same time, 11–12.45, in two seminars, Arnason’s paper in Room 207 in the University Main Building, Gissurarson’s paper in Room 102 in Logberg, the Law Faculty House.

Arnason’s paper is titled “An efficient and sustainable debt situation”. The abstract is as follows: Iceland’s foreign debt situation is problematic. Probably total debt is far beyond what is most efficient from a macroeconomic point of view. However, it cannot be reduced without a corresponding reduction of GDP available for consumption and investment. Lesser consumption implies lower living standards. Lesser investment implies less capacity to produce goods and thus to maintain future living standards. Lower living standards however encourage people to leave, especially people with marketable skills. Thus the nation’s human capital will be eroded which, in turn, will lessen its capacity to continue to reduce debt and to maintain adequate living standards. Obviously, it is therefore important to find out how much foreign debt is sustainable in the sense that it does not bring about an economic crisis. This is what this paper is about. Economic analysis is used to elucidate the most important factors of the situation and their connection. The optimal and the sustainable foreign debt situations are deduced, while the most efficient debt reduction process is described and a criterion offered for that debt reduction which would be required for transforming an unsustainable situation into a sustainable one.

Gissurarson’s paper is titled “Proposals to Sell, Annex or Evacuate Iceland, 1518–1868”. The abstract is as follows: Iceland, a remote country with a harsh climate, and a Norwegian-Danish dependency since 1262, was not much coveted by European powers, despite her fertile fishing grounds, technologically accessible since the early 15th Century. In 1518 and 1524, Danish King Christian I unsuccessfully tried to pledge Iceland against a loan from English King Henry VIII. In 1535, King Christian III also tried to do this, but again Henry VIII turned down the request. In 1645, King Christian IV tried to pledge Iceland against a loan from Hanseatic merchants, but yet again, there was not sufficient interest. Indeed, so harsh seemed Iceland’s climate that in 1784–5, after a massive volcanic eruption and an earthquake, it was seriously contemplated in Copenhagen to evacuate the Icelandic population to other parts of the Danish realm. However, during the Napoleonic Wars the British government briefly considered annexing Iceland. Sir Joseph Banks, who had toured Iceland, wrote three reports, in 1801, 1807 and 1813, recommending this. Ultimately, the British government decided against it: Iceland was not sufficiently attractive. In 1868, a report was written at the initiative of the U.S. Secretary of State William H. Seward on a possible purchase of Iceland, but the idea was so ill-received that Secretary Seward made no further move. The conclusion is that Iceland was a marginal society until it became, in the 20th century, strategically important, enjoying the military and political protection of the U.S. from 1941 to 2006. After that, Iceland became marginal again and thus expendable.

The lectures by Professors Arnason and Gissurarson form a part of the joint project of RNH and AECR, the Alliance of European Conservatives and Reformists, on “Europe, Iceland and the Future of Capitalism”.

Sofia city centre.

At a regional meeting of the ESFL, European Students for Liberty in Sofia, Bulgaria, Saturday 17 October, Professor Hannes H. Gissurarson gives a lecture on “Liberty in Iceland, 930–2015”. He takes the position that the laws of economics must be valid everywhere, also in small societies like Iceland, if they are to be considered laws of economics. Economic analysis can for example explain how and why private enforcement of law, as practised in the 930–1262 Icelandic Commonwealth, worked reasonably well. Ancient Icelanders also developed an effective system of utililising mountain pastures, each of them held in common by a rural community, and thus they escaped the “tragedy of the commons”. Professor Gissurarson also discusses the question why for centuries Icelanders starved while living close to fertile fishing grounds, and finds the answer in the alliance of the foreign king and the small class of local landowners who basically outlawed fisheries as an independent profession. This alliance was finally broken in the 1784–5 Mist Famine. Professor Gissurarson analyses the Icelandic system of individual transferable quotas developed in the fisheries. As a result, these fisheries are both sustainable and profitable: Icelanders have yet again escaped the “tragedy of the commons”.

Professor Gissurarson contrasts the 1991–2004 market capitalism in Iceland to the 2004–8 crony capitalism when a small group of powerful oligarchs used the good credit Iceland enjoyed as a result of sound policies pursued in the previous decade for massive accumulation of foreign debt. Professor Gissurarson maintains, however, that the credit expansion was not the real cause of the 2008 Icelandic bank collapse. The real cause was the refusal of the U.S. Fed to provide liquidity to the Icelandic banks, by dollar swap deals, at the same time as it did so to almost all other banks in Europe. At the same time, the U.K. government closed British banks owned by Icelanders while presenting an immense rescue package for all other British banks, and moreover invoked an anti-terrorist law against Icelandic banks and institutions. Professor Gissurarson argues that the reason Iceland has risen so quickly again is that it was never bankrupt, as British Prime Minister Gordon Brown wrongly asserted during the crisis. The Icelandic economy was, and is, soundly built on four pillars, profitable fisheries, ample energy resources, a booming tourist industry and much accumulated human capital. Professor Gissurarson’s lecture forms a part of the joint RNH-AECR project on “Europe, Iceland and the Future of Capitalism”.