Gissurarson delivering his remarks. Next to him: Professor Gwartney.

At Freedomfest in Las Vegas in July 2019, RNH academic director Professor Hannes H. Gissurarson was asked to be a commentator on a paper by Professor James Gwartney on increased global income equality. Gwartney used data from the Angus Maddison Project and from the World Bank which show that income inequality, as measured by the Gini coefficient, was being reduced worldwide. Gwartney argued that the main explanation was the communications and transport revolution of recent times: This revolution was even more important than the Industrial Revolution of late Eighteenth Century, because this time it extended to the whole of the world. Some heavily populated countries had gone from poverty to prosperity. Gwartney suggested that the reason for the relatively even income distribution in the Nordic countries was not government policy, but rather the homogeniety of the population.

Professor Gissurarson devoted his comments mainly to the Nordic countries. He pointed out that they had a long and vibrant liberal tradition. For example, the Finnish-Swedish pastor Anders Chydenius had proposed a theory of the coincidence of private gains and the public good under unfettered competition, some years before the publication of Adam Smith’s Wealth of Nations. Liberal Swedish statesmen of the 19th century had implemented comprehensive economic reforms which had encouraged rapid and continuous economic growth in the country for a long period—the first Swedish model. Gissurarson argued that the success of Sweden and other Nordic countries in the 20th century could be attributed to 1) a strong tradition of the rule of law, including protection of private property rights, 2) free trade and 3) solidarity, a high level of trust and the pursuit of consensus, based on national homogeniety, as Gwartney had indeed pointed out. It was not until 1970 that the politically dominant Social Democrats had changed course and introduced heavy taxation and extensive government intervention.

The second Swedish model, implemented in 1970–1990, turned out to be unsustainable, according to Gissurarson. Sweden had ended up on the wrong side of the Laffer Curve where taxation became elf-defeating: an increase in the tax rate did not result in an increase in tax revenue, but rather in its decrease. The scenario described by Ayn Rand in Atlas Shrugged indeed seemed to apply to Sweden in this period: Those who created wealth either moved away, ceased to produce or desisted from innovations. The only jobs created during this period were in the public sector. However, now the Swedes found a new consensus which could be called the third Swedish model: From 1990 onwards government has tried to encourage private enterprise and keep taxation from becoming self-defeating. Professor Gissurarson’s participation in the conference formed a part of the joint project with ACRE, the Alliance of Conservatives and Reformists in Europe, on ‘Bluegreen Capitalism in Europe’.

Gissurarson gives his paper.

Every summer American conservatives and libertarians hold an annual meeting or festival, Freedomfest, for a few days in Las Vegas, presenting books and ideas and watching films and documentaries relevant to liberty. Organised by the prolific author, commentator and investor Professor Mark Skousen, it is the largest gathering of its kind and with a great variety of participants and topics. RNH Academic Director Hannes H. Gissurarson was invited to give a lecture at Freedomfest 17 July 2019 on ‘Green Capitalism’, on which he had in 2017 written a report for the Brussels think tank New Direction.

In his paper Gissurarson made a distinction between ‘wise use environmentalism’ aiming at a sustainable and profitable utilisation of natural resources, and ‘ecofundamentalism’ where nature is conceived of as an independent bearer of rights superior to ordinary human beings and where the goal is preservation rather than conservation. Gissurarson pointed out that ecofundamentalism seemed to share many traits with religious fundamentalism: it certainly had its sacred cows.

Dr. Richard Rahn, Gissurarson and Professor Mark Skousen.

If on the other hand the goal was conservation, or environmental protection, it required protectors, Gissurarson said. For example, by one stroke of a pen African poachers could be turned into gamekeepers: by appointing them as owners of endangered species, such as elephants and rhinos, whose tusk and horns respectively were much in demand. The most realistic measure to ensure a sensible utilisation of natural resources was to define private property or use rights to them, introduce stewardship. In this context Gissurarson briefly described the Icelandic system of individual transferable quotas in deepsea fisheries which is both sustainable and profitable in contrast to many fisheries elsewhere making huge losses and being a heavy burden on taxpayers.

As the conference was held in the United States, Gissurarson also discussed whaling: the US government has put a lot of pressure on the Icelandic government to stop it. It seemed, Gissurarson observed, that whales were to ecofundamentalists like sacred cows. But in the Icelandic waters, the Icelanders themselves annually harvest about or a little over one million tonnes of fish, whereas whales eat around six million tonnes of various seafood and fish there. In other words, ecofundamentalists were demanding that the Icelanders provided fodder for the whales in their waters, while insisting that they could not harvest them. They were like the truculent farmer who drove his livestock to the pastures of his neighbours, but refused to them any utilisation of this very same livestock. Gissurarson’s paper formed a part of a joint project with ACRE, The Alliance of Conservatives and Reformists in Europe, on ‘Bluegreen Capitalism in Europe’.

Opening remarks by University Chancellor.

Four internationally renowned fisheries economists spoke at a conference held by the School of Social Sciences at the University, RNH and others in honour of Professor Ragnar Arnason 14 June 2019 on “Offshore Fisheries of the World: Towards a Sustainable and Profitable System:” Professors Trond Bjorndal, Rognvaldur Hannesson, Gordon Munro and James Wilen. The conference was opened by the Chancellor of the University, Dr. Jon Atli Benediktsson, who recalled that the Chair in Fisheries Economics at the University of Iceland was established in 1989 and that Arnason—who is now retiring on the occasion of his seventieth birthday—was its first and only occupant. Benediktsson expressed the hope that the University might long enjoy Arnason’s skills in teaching and doing research.

Bjorndal discussed the North Atlantic and Mediterranean Blue Fin tuna, the most valuable fish in the ocean. A highly migratory fish, its harvesting is managed by so many that it has been almost an open access regime, which always means a danger of over-exploitation. Indeed catches fell for many years, but they seem to be on the rise again, as a consequence of sensible management and cautiously set TACs, total allowable catches.

From left: Runolfsson, Bjorndal, Munro, Wilen, Hannesson and Grainger.

Hannesson described the collapse of the Atlanto-Scandian herring in the late 1960s when the stock collapsed. It almost disappeared completely, but recovered slowly in the 1970s and 1980s which showed how resilient nature could be although it could be demonstrated mathematically that this was something rather unlikely to happen.

Munro talked about ITQs, individual transferable quotas, and other systems of fisheries management. There was no doubt, he argued, that ITQs had been very successful. But there was a special challenge with a high number of ITQ holders. Effective cooperation between them was necessary. Game theory provided some insights into the possibilities and limitations of such cooperation. This was ‘the new frontier’ of fisheries economics.

Gisli Hauksson, Jonas Sigurgeirsson and Hannes H. Gissurarson at the reception.

Wilen spoke about the problems and prospects for artisanal fisheries, usually small scale, nearshore, and multi-species. While ITQs were efficient in deep-sea, large scale fisheries, others systems of management might be more appropriate in such artisanal fisheries, such as TURFs, territorial use rights in fisheries, or community managements. There was little doubt that the introduction of such management schemes would increase the income from such fisheries, but there were many obstacles to overcome, especially in poor countries with weak governments.

In his closing remarks, Professor Arnason pointed out that when he first started thinking and writing about the fisheries, in 1980, most fish stocks in the world were over-exploited. Fortunately, this had changed. Now feasible systems of utilising fish stocks were now in place in many countries. Partly this could be attributed to the distinguished economists speaking at this conference, Professors Bjorndal, Hannesson, Munro and Wilen. After the conference, there was a reception at the University where Dr. Dadi Mar Kristofersson, President of the School of Social Sciences, and Bjorndal, Chairman of the Birthday Committee, gave short speeches saluting Professor Arnason. Despite the exceptionally good weather and the fact that the conference was held in the midst of the holiday season, attendance was good and the discussion was lively following the four lectures, and a critical comment by Professor Corbett Grainger. Dr. Birgir Thor Runolfsson, Associate Professor of Economics, chaired the conference.

In the evening, Foreign Minister Gudlaugur Thor Thordarson and his wife Agusta Johnson hosted a dinner for Professor Arnason and his wife, History Professor Anna Agnarsdottir, and a few guests, including the conference speakers. In his salute to Arnason, the Minister emphasised how important the fisheries were to the Icelandic economy, quoting the Icelandic writer Halldor Laxness: “Life is stockfish.” RNH participation in this conference formed part of a joint project with ACRE, the Alliance of Conservatives and Reformists in Europe, on “Bluegreen Capitalism for Europe”. ‘Odinn’ in Vidskiptabladid, the weekly business magazine, wrote an article about Ragnar and his achievements 13 June, and Morgunbladid published interviews with three of the lecturers, Munro, Wilen and Bjorndal, 17, 18 and 19 June. Professor Arnason is Chairman of the RNH Academic Council.

Professor Ragnar Arnason giving a toast at the Foreign Minister’s dinner. From left: Kristjan Loftsson, James Wilen, Anna Agnarsdottir, Ragnar, and Agusta Johnson.

RNH Academic Director, Professor Hannes H. Gissurarson, criticised the theories of John Rawls and Thomas Piketty in a lecture to the Free Summer School, conducted by the Association of Liberal High School Students, in Reykjavik 1 June 2019. His lecture was mostly derived from a report he wrote for the free market think tank New Direction in Brussels. Gissurarson argued that Rawls was wrong both about individuals not being entitled to the income they created by their different abilities, and about there being somehow a heap of money out there waiting to be distributed. Rawls asked in which kind of system the worst off would be as well off as they could be: he wanted to maximise the minimum. But this implied that his theory was not really about justice. It was about prudence, preparing for the worst rather than hoping the best. It was however, Gissurarson admitted, an interesting question in which kind of system the worst of would be as well off as they could be. Arguably, this was in a free economy such as that envisaged by Adam Smith.

Gissurarson observed that the difference between Rawls and Piketty was that Rawls was concerned with poverty which certainly was a social evil, whereas Piketty worried about wealth which did not by itself seem to be much of a problem when it was not created at the expense of others. But poverty had been greatly reduced in the last few decades in the world. Piketty demanded extortionary international taxes on high income and large fortunes in order to reduce inequality. But he ignored the fact that much inequality was created by government intervention, for example by patents and government guarantees of banks. Piketty also did not make much of another fact, that many enterprises were owned by pension funds. When Piketty spoke about capital, he moreover excluded human capital whose distribution among people was most likely more even that the distribution of physical capital. The evidence suggested, Gissurarson added, that in the last few decades many more billionaires were self-made than before. Inheritance was a dwindling source of wealth. Piketty was fond of quoting Père Goriot by Balzac. But that novel demonstrated the precariousness of wealth, Gissurarson argued, not a tendency for it to accumulate in the hands of a few.  The protagonists of the novel were driven by passions and spent their money wastefully. Be that as it may, the main point was not to increase the size of one portion of the cake by reducing the size of another one, but rather to ensure that the whole bakery was flourishing, turning out more and larger cakes.

The Association of Liberal High School Students operated the Free Summer School in cooperation with Institute of Economic Affairs in London and the Foundation of Economic Education in New York. It was organised by high school students Julius Viggo Olafsson and Hermann Nokkvi Gunnarsson. Other lecturers at the Free Summer School were Aslaug Arna Sigurbjornsdottir, Christopher Snowdon, Gunnlaugur Jonsson, Halldor B. Thorbergsson, Johannes Stefansson, Magnus Orn Gunnarsson and Piotr Markiełaŭ. Attendance was good, and the discussions were lively. Gissurarson’s participation in the event formed a part of the joint project with ACRE on ‘Bluegreen Capitalism for Europe’.

Gissurarson Slides Summer School 1 June 2019

Gissurarson, fmr. Heritage Foundation Director Dr. Ed Feulner, MPS President Prof. John Taylor and Prof. Ichim Kim.

RNH Academic Director, Professor Hannes H. Gissurarson, attended the regional meeting of the Mont Pelerin Society in Dallas/Fort Worth 19–22 May 2019. The meeting was devoted to contentious issues in classical liberalism. One such issue was monetary order: Is a central bank necessary? Or the gold standard desirable? Or cryptocurrencies efficient? Is monetary competition feasible? Professor John Taylor, Dr. Warren Coats, Professor Larry White and other monetary economists debated this issue. Another contentious issue was immigration. Everybody agreed that hard-working, law-abiding immigrants seeking jobs and a better living standard were desirable. But what about immigrants in pursuit of welfare benefits? How far should the West go in opening up its borders to millions of self-proclaimed asylum seekers and thus reigniting xenophopia? Professor Gissurarson made an intervention in this session, arguing that it was undesirable to see closed enclaves or ghettos of immigrants and asylum seekers who willingly were breaking the laws and customs of their host countries, as could be seen in Denmark and Sweden, with both countries now applying stricter rules to such people.

A third contentious issue was the size of government. Professor David Friedman argued that the Icelandic Commonwealth of 930–1262 was an example of the feasibility of private enforcement of law. Professor Edward Stringham recalled many examples of private governance over time and space. At the meeting several other issues were discussed, such as government interference with sex between consenting adults and with the use of addictive drugs. Again, interventionism in international affairs was debated, for example the United States military actions in Vietnam and Iraq. One afternoon, Professor Vernon Smith, the 2002 Nobel Laureate in Economics, chatted about the greatest influences on his thinking, Adam Smith and Friedrich A. von Hayek. It was indeed von Hayek who founded the Mont Pelerin Society in the spring of 1947 to provide a forum for classical liberals to discuss and develop ideas on a regular basis.

Gissurarson’s participation in the Dallas meeting formed a part of a joint project with ACRE on ‘Bluegreen Capitalism for Europe’. Two young economics professors, Benjamin Powell and Robert Lawson, efficiently organised the meeting. The next regional meeting will be in Stanford in California 15–17 January 2020, and the general meeting of the MPS will be in Oslo 1–5 September 2020. Professor Gissurarson attended his first MPS meeting at Stanford in 1980, sponsored by von Hayek, was on the Board of Directors of the Society in 1998–2004 and organised a regional meeting in Reykjavik in August 2005.