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

Bled in Slovenia.

The Platform for Memory and Conscience held its annual general meeting in Bled in Slovenia 15 November 2018. On behalf of RNH, Professor Hannes H. Gissurarson attended. Prior to the annual meeting, an international conference on “The Dark Side of the Moon” took place in Ljubljana 13–14 November, about the memories of the nations in Central and Eastern Europe oppressed by communism after the Second World War, only regaining their freedom in 1989–1991. At the Ljubljana conference, Gissurarson gave a lecture on the voices of the victims, proceeding from Elie Wiesel’s observation, that the executioner always kills twice, the second time by silence. Gissurarson lamented the fact that communism was generally not condemned as clearly as Nazism, even if there was ample reason to do so, bearing in mind man-made famines, mass executions, deportations of nationalities, operation of slave camps, terror and squalor.

Gissurarson Dr. Pawel Ukielski and Dr. Lukasz Kaminski. Photo: Peter Rendek, Platform.

Gissurarson described six ways to break the silence, to bring light to the dark side of the moon. 1) Universities, especially faculties of humanities and social science, had been captured by the hard left. Therefore, independent institutes had to provide opportunities for anti-totalitarian scholars to pursue their studies. 2) It had to be ensured that students in publicly-funded schools received proper information about the historical crimes of all totalitarians, communists as well as Nazis. For example it had to be recalled that Stalin had been Hitler’s ally in the first two years of the Second World War. 3) Memorials about the victims and Museums on totalitarian terror had to be established and maintained. 4) All public recognition of people guilty of totalitarian crimes had to be withdrawn, such as statues, street names, medals and other honours. T-shirts of Che Guevara were just as inappropriate as of Himmler. 5) Conferences and seminar had to be held regularly to make available new research on totalitarianism, for example the remarkable new light thrown on the terror regime of the Chinese communists in Frank Dikötter’s recent trilogy, and the path-breaking Black Book of Communism, published in 1997.

The seventh way of breaking the silence about and of the victims was to make relevant but out-of-print works on totalitarianism accessible, as the Public Book Club (AB) was doing in Iceland with its series about the history of communism. Already ten books had been reprinted in the series, including Essays on Communism by Bertrand Russell, Baltic Eclipse by Ants Oras, and I Chose Freedom by Victor Kravchenko. Gissurarson said that three books would be published in the series in the near future: The Future of the Small Nations, by Norwegian poet Arnulf Øverland, The God that Failed, by six prominent intellectuals, including Arthur Koestler, André Gide and Ignazio Silone, and In Defence of Western Civilisation: Speeches by Seven Writers in 1950–8, the authors being poet Tomas Gudmundsson, novelist Gunnar Gunnarsson, novelist Kristmann Gudmundsson, the Rev. Sigurdur Palsson, novelist Gudmundur G. Hagalin, poet the Rev. Sigurdur Einarsson, and poet David Stefansson. History sometimes reduced people to numbers. Our task was, professor Gissurarson said, to turn numbers into people.

Gissurarson Slides in Ljubljana

The Ljubljana conference was held in Parliamentary House in the city centre. Slovenia’s President, Borut Pahor, and the Speaker of the Slovenian Parliament, Alojz Kovšca, addressed the conference, which was also attended by former Prime Minister Janez Janša and the ambassadors of Ukraine and Poland to Slovenia. At the annual meeting in Bled, Professor Łukasz Kamiński from Poland was re-elected President, and also the members of the Executive Board, Dr. Andreja Valič Zver from Slovenia, Dr. Wolfgang-Christian Fuchs from Germany, Dr. Toomas Hiio from Estonia and Zsolt Szilágyi  from Hungary. Peter Rendek was hired as executive director, replacing dr. Neela Winkelmann. Gissurarson’s lecture formed a part of the joint project of RNH and ACRE, Alliance of Conservatives and Reformists in Europe, on “Europe of the Victims”.

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.

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.

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.