800 Attending Student Conference in São Paulo

The opening session of LIBERTYCON at the Maksoud Plaza Hotel in São Paulo.

The success of the Nordic countries can be explained, not by social democracy, but by free trade, the rule of law and social cohesion brought about by homogeneity and a long shared history, RNH Academic Director Hannes H. Gissurarson argued at a very well-attended conference of (classical) liberal students in Brazil, LIBERTYCON, 12–13 October 2018 in São Paulo. Other speakers at the conference included Brazilian scholars Adriano Gianturco and Bruno Garschagen, Judge Bruno Bodart and some Brazilian libertarian activists and businessmen. Foreign speakers came from Atlas Network, the international Students for Liberty and other organisations. Fernando Henrique Miranda, André Freo and their fellow Brazilian student leaders organised the conference, held at Maksoud Plaza Hotel and attended by more than 800 people, with tickets sold out.

In his lecture Gissurarson recalled that the Finnish-Swedish priest Anders Chydenius had proposed the “invisible hand” before Adam Smith and that the liberal tradition had been strong in the Nordic countries in the 19th century, as was evident from the Constitution which the Norwegians accepted at Eidsvoll in 1814, one of the most liberal constitutions in the world at the time. Johan August Gripenstedt, a disciple of Frédèric Bastiat, was one of Sweden’s most influential politicians. As a government minister in 1848–1866 he laid the foundations for the unbroken period of economic growth in Sweden for a century after 1870. The Social Democrats who came into power in the 1930s enjoyed the fruits of this economic growth. However, their “Swedish Model” of high taxes and rapid expansion of the public sector, implemented in 1970–1990, proved to be unsustainable, and the Swedes have been gradually moving away from it since. Even in tiny Iceland there has been a liberal tradition, defended and developed by Jon Sigurdsson, the leader of Iceland’s independence struggle, Arnljotur Olafsson, the author of the first book on economics published in Icelandic, and Jon Thorlaksson, the founder and first leader of Iceland’s largest political party, the Independence Party.

Gissurarson’s Slides in São Paulo

Gissurarson was asked what advice he could give the Brazilians. He replied that three witches seemed to be hovering over Brazil: Their names were Violence, Corruption, and Poverty. The Brazilians had to drive those three witches out of their country by various means, including that of heavier punishments for violent crimes. With increased public security, the opportunities of poor people to reach prosperity peacefully, by their own hard work, would increase. Foreigners often concentrated on income inequality in Brazil. Possibly at present the wealth of some Brazilians was derived from privileges and monopolies unlike what would be the case in more competitive economies, but experience has taught mankind that the poor did not become richer by the rich becoming poorer. What was most important, Gissurarson said, was to create opportunities for the poor to become richer, while tough competition, especially in the capital market, could see to it that the rich would have to exert themselves in order to maintain their wealth; it was a principle of the free market that a fool and his money were soon parted. Bureaucracy was also stifling the growth of small businesses in Brazil. Gissurarson’s participation in the conference formed a part of the joint project by RNH and ACRE, Alliance of Conservatives and Reformists in Europe, on Europe, Iceland and the Free Market. At the end of the conference, Hélio Beltrão, Director of the Mises Institute in São Paulo, presented Gissurarson with a book, História do liberalismo brasileiro (History of Brazilian Liberalism), by philosopher Antonio Paim.

The organising team, from left Jehan Piero Giuliani Dall’Asta, Ivanildo Santos Terceiro, Fernando Henrique Miranda, Nycollas Liberato and André Freo.

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MPS General Meeting on Gran Canarias

Professor Pedro Schwartz discusses democracy.

Two Icelanders attended the 2018 general meeting of the Mont Pelerin Society on Gran Canarias 30 September to 5 October, Professor Hannes H. Gissurarson, RNH Academic Director, and investor Gisli Hauksson, Chairman of the RNH Board. Founded in Switzerland in 1947, when individual liberty seemed everywhere to be under threat, The Mont Pelerin Society has the sole aim of enabling men of letters from all over the world to meet and discuss the defence and development of liberal ideas. The founders included Friedrich A. von Hayek, Milton Friedman, George Stigler and Maurice Allais, who were all to receive the Nobel Prize in Economics, and philosophers Karl R. Popper and Bertrand de Jouvenel. Many of the speakers at the 2018 meeting have visited Iceland and spoken at RNH events, such as Philip Booth, Eamonn Butler, Nils Karlson and Matt Ridley. The main organiser of this successful and stimulating meeting was Professor Gabriel Calzada Álvarez of Universidad Fransisco Marroquin in Guatemala.

John Taylor, MPS President 2018–20.

Many topics were on the ambitious programme, including evolutionary theory in economics, economic development, the international financial order after the 2007–9 financial crisis, competition between jurisdictions, the culture of a free society, the future of cities, entrepreneurship, business cycles, the internet and its enemies, the relationship between Hayek and his compatriot and teacher Ludwig von Mises, political authority, private provision of public goods, separatist movements and independence, and the relationship between the Scholastics and the Scottish Enlightenment. The amusing anecdote was recalled when Mises stood up and left in the midst of a session at the 1947 original meeting, exclaiming as he slammed the door behind him: “You are all a bunch of socialists!” The occasion was that another participant, Frank H. Knight, had expressed his support for a 100 per cent estate tax. At the Gran Canarias meeting, one night Matt Ridley and entrepreneur Peter Thiel engaged in a ‘fireside chat’ on the state of affairs in the world and the future. While the MPS is not a secret society, participants at its meetings are not expected publicly to quote speakers so that discussions can be frank and open.

Professor Gissurarson was a Member of the MPS Board in 1998–2004 and organised a regional meeting in Reykjavik in 2005. He made two contributions at the meeting. First, at a luncheon meeting of Atlas Network on liberalism in Latin America, he pointed out that it was a common belief in Latin America that the countries there had to imitate the allegedly successful ‘Swedish Model’ of high taxes, a large public sector and generous welfare benefits. This belief was erroneous. The Nordic countries were successful despite, and not because of social democracy. The explanations for their success were a strong tradition of the rule of law, an emphasis on free trade and a high level of trust and social cohesion brought about by homogeneity and a long shared history. In this context, Gissurarson referred to a 2016 report he did for the think tank New Direction in Brussels on the Nordic Models.

Daniel Hannan speaking on national identity.

Professor Gissurarson also spoke in the session on separatist movements and independence. Agreeing with two of the speakers in the session, Jesus Huarta de Soto from Spain and Daniel Hannan from the United Kingdom, that there was such a thing as liberal nationalism, Gissurarson pointed out that this idea had indeed enjoyed broad support in the 19th and early 20th centuries, for example in the Nordic countries. But nationalism had to be spontaneously developed, as Ernest Renan had put it when he said that a nation was created and maintained in a daily plebiscite. In order to love one’s country, she had to be lovely. The separation of Norway and Sweden in 1905, of Iceland and Denmark in 1918 and the Baltic states and Russia after the collapse of the Soviet Union (and earlier after the collapse of the Russian Empire) were all desirable steps from a liberal point of view. Gissurarson speculated if the political arrangements in the Aland Islands and in South Tyrol could serve as a model for a compromise in the conflict between Scots and Englishmen and Catalonians and Spaniards. Originally, the Alanders had preferred to belong to Sweden rather than Finland and the South Tyrolese to Austria rather than Italy, but now both peoples had fully accepted their present status, because they had full control over their own affairs.

In Gran Canarias, Professor John Taylor of Stanford University, one of the world’s best-known monetary economists, was elected President of the Mont Pelerin Society for the next two years. The two Icelanders attending the meeting went out one evening with the other Nordic participants:

At gourmet restaurant A. Gaudi 2 October 2018, discussing Nordic liberalism. From left: Prof. Hannes H. Gissurarson, Dr. Nils Karlson, Dr. Carl-Johan Westholm, Gisli Hauksson, Lars-Peder Nordbakken and Håkan Gergils.

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Controversy on the 1991–2004 Liberal Reforms

Jon Sigurdsson. Painting by Thorarinn B. Thorlaksson (uncle of Jon Thorlaksson).

In 2017, RNH Academic Director, Politics Professor Hannes H. Gissurarson, published two papers in the Econ Journal Watch in its series on (classical) liberalism in various countries. The first paper was on the history of liberalism in Iceland till late 20th century, with a discussion on the economic ideas of Jon Sigurdsson and Arnljotur Olafsson in the 19th century and Jon Thorlaksson, Benjamin Eiriksson and others in the 20th century. Olafsson, Thorlaksson and Eiriksson were the authors of the first economic treatises in Icelandic, Audfraedi [Theory of Wealth] (1880), Laggengid [Currency Depreciation] (1924) and Orsakir erfidleikanna i atvinnu- og gjaldeyrismalunum [Causes of the Current Problems in the Economy and Foreign Trade] (1938), respectively. The journal also interviewed Gissurarson (podcast). The second paper was about the 1991–2004 liberal reforms and different narratives on the 2008 bank collapse. As Gissurarson mentioned certain assertions by Sociology Professor Stefan Olafsson on poverty and income distribution in Iceland, the journal offered him a right of reply, of which Olafsson availed himself in the autumn of 2017.

Now the 2018 autumn issue of Econ Journal Watch has appeared with a rejoinder by Gissurarson to Olafsson’s composition. Gissurarson recalls that Olafsson asserted before the 2003 parliamentary elections that poverty was more widespread in Iceland than in the other Nordic countries, and that he asserted before the 2007 parliamentary elections that income distribution (based on figures from 2004) was less equal in Iceland than in the other Nordic countries. According to Gissurarson, the evidence shows both assertions to be wrong. Gissurarson also criticises some assertions by Olafsson on the 2008 bank collapse, which Olafsson would like to blame to a large extent on David Oddsson, Prime Minister in 1991–2004 and Governor of the Central Bank of Iceland in 2005–9.

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Gissurarson’s Report on the Bank Collapse

Benediktsson receives the report from Gissurarson. Photo: Haraldur Gudjonsson, Vbl.

On 25 September 2018, RNH Academic Director Hannes H. Gissurarsion delivered a report to Finance Minister Bjarni Benediktsson about foreign factors in the 2008 Icelandic bank collapse. It was written under the auspices of the Social Science Research Institute at the University of Iceland and commissioned by the Ministry of Finance and Economic Affairs. The main conclusions are, 1) that the British government invoked an Anti-Terrorism Act needlessly against Iceland, as it could have used softer measures to achieve its stated objective of hindering illegal transfers from the United Kingdom to Iceland; 2) that the British government violated the rules of the European internal market by rescuing all British banks save two, Heritable and KSF (Kaupthing Singer & Friedlander), which were Icelandic-owned; 3) that the United States, through its Federal Reserve Board, came to the assistance of Sweden, Denmark and Norway during the 2008 financial crises, but refused any similar support to Iceland. Gissurarson agrees with the conclusion by finance specialists Dr. Asgeir Jonsson and Dr. Hersir Sigurgeirsson in a recent book that in 2008 the assets of the Icelandic banks were probably no worse and no better than assets generally of foreign banks. Gissurarson also gives an account of how assets of the Icelandic banks were captured after the collapse at hefty discounts by well-connected local businessmen in Norway, Finland and Denmark, with the connivance of local authorities.

Gissurarson argues that the response of the Icelandic authorities to the bank collapse was sensible and proved, ultimately, successful. By the Emergency Act of 6 October 2008 they managed to calm the general public while limiting the financial obligations of the sovereign Icelandic state. To make deposits priority claims on the estates of banks, as the Icelanders did, might serve as a model for other countries, thus making government guarantees of banks superfluous. According to Gissurarson, two political conclusions may be drawn from the bank collapse: that discretionary power would always be abused, just like the British government did with the Anti-Terrorism Act, and that Iceland has only herself to rely on, as nobody was willing to help her in her hour of need, except the Faroese and the Polish. Gissurarson’s report is in English, but he also delivered an Icelandic extract and wrote four articles on its content for Morgunbladid, the Icelandic journal of record. In 2017, Gissurarson also wrote a report on lessons for Europe from the Icelandic bank collapse, which was published by the think tank New Direction in Brussels.

Those Icelanders who believe that their nation was solely responsible for the bank collapse and that the 2007–9 international financial crisis had little or nothing to do with it, received Gissurarson’s report angrily, as this cartoon illustrates:

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Well-Attended, Lively Student Conference in Reykjavik

More than one hundred people attended the regional meeting of European Students for Liberty, Nordic Students for Liberty and the Icelandic Association of Liberal Students at Grand Hotel in Reykjavik 22 September 2018. The chief local organisers were Magnus Orn Gunnarsson, Marta Stefansdottir and Sigurvin Jarl Armannsson. Between twenty and thirty students from abroad participated in the meeting.

Vera Kichanova gives an account of Putin’s Russia.

Many topics were covered in the programme. Before noon, Professor James Lark III from the US spoke about “Economic Fallacies: Discussion of Some Common Fallacies and Misconceptions about Economics”. Lark was also a speaker at the first ESFL regional meeting in Reykjavik. Kyle Walker from the US then spoke about “Ideas and People: How SFL is Changing the World”. In the first afternoon session Gil Dagan from Israel spoke about “How free trade can help the Middle East” and the US social media activists Matt B. and Terry Kibbe about “Reaching skeptics with liberalism”. Matt Kibbe is the author of the 2014 bestseller Don’t Hurt People and Don’t Take Their Stuff: A Libertarian Manifesto. In the second afternoon session Bill Wirtz from Luxembourg spoke about “The European Case Against the European Union”, Grace Morgan from the US about “IGO Watch: Global Taxpayers at Risk”, Vera Kichanova from Russia about “Fighting the Russian Leviathan: Libertarians against Putin” and Professor Antony Davies from the US about “Cooperation, Coercion, and Human Development”. Icelandic Foreign Minister Gudlaugur Thor Thordarson contributed some final remarks.

RNH has regularly supported the regional meetings in Iceland of the European Students for Liberty. This is the fifth and so far the best-attended ESFL meeting in Reykjavik, and the participants were in good spirits. Friday night RNH Academic Director, Professor Hannes H. Gissurarson, invited all speakers, local organisers and foreign participants to a reception at his home, and Saturday night all participants met at an Open House. The day after the meeting the foreign students went on a ‘Liberty Trip’ outside Reykjavik, looking at geysers, glaciers, waterfalls, lava fields and other natural wonders in Iceland. The support by RNH of the ESFL regional meetings forms a part of a joint project with ACRE, Alliance of Conservatives and Reformists in Europa, on ‘Europe, Iceland and the Free Market’.

Lark giving his talk at the meeting. Johann Ari Sigfusson in the chair.

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Gissurarson: Failure of Communism Systemic, Not Accidental

RNH Academic Director Professor Hannes H. Gissurarson was one of the speakers at an international conference on communism organised by the Estonian Institute of Historical Memory on 23 August 2018. His participation in the conference formed a part of the joint RNH-ACRE project on ‘Europe of the Victims’. Gissurarson argued that it was not a coincidence, and rather an inevitable outcome, that everywhere communism had led to totalitarianism, oppression and misery. The originators, Karl Marx and Friedrich Engels, had been full of hate and violence, as their writings, not least their exhange of private letters, showed. The two of them had also adhered to extreme scientism, believing that science was the possession rather than the pursuit of truth. Thirdly, after a revolution there was always the danger that the cruellest and most ruthless filled the vacuum left by the former powers, as Edmund Burke had pointed out in his critique of the French Revolution.

Oksanen and Gissurarson in Tallinn. Photo: Mari-Ann Kelam.

Gissurarson elaborated on two further reasons why communism would develop into totalitarianism. In a country where the state was the sole employer, any opposition would encounter almost insurmountable difficulties: the really significant freedom was the freedom to dissent. Fifthly, the core communist programme was the abolition of dispersed ownership and freedom of trade, but it was precisely under those conditions that the dispersed knowledge of individuals was utilised, as Friedrich A. Hayek had demonstrated. If the state operated all the means of production, it would have to reduce and simplify human needs in order to implement its plans and decisions. This the state could only do by seizing control of the most important means of moulding human souls, such as schools, the media, the courts, art, science and sports, but it was precisely such a system that would be defined as being totalitarian. At the conference, Gissurarson introduced his two recent reports, Voices of the Victims: Notes Towards a Historiography of Anti-Communist Literature, published by New Direction in late 2017, og Totalitarianism in Europe: Three Case Studies, published by ACRE in early 2018.

Other speakers at the conference included Finnish-Estonian author Sofi Oksanen, author of best-selling novel Purge, and Professor Richard Overy, who has written an acclaimed comparative study of Hitler and Stalin. In conjunction with the conference, the President of Estonia, Kersti Kaljulaid, inaugurated a Memorial to the Victims of Communism in the outskirts of Tallinn. Guests at the ceremony and the conference included the ministers of justice of the three Baltic republics, Poland, Ukraine and other countries.

President Kaljulaid lays a wreath at the Memorial to the Victims of Communism. Photo: Martin Andreller.

 

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