In the foreword to the book In Defence of Western Culture: Speeches by Six Authors in 1950–1958, Professor Hannes H. Gissurarson argues that Hitler’s National Socialism and Stalin’s Communism were two variants of Twentieth Century Totalitarianism: Modern totalitarians had tried to subdue the soul no less than the body. In this Gissurarson echoes the six Icelandic intellectuals whose speeches from the Cold War are reprinted in the book, Tomas Gudmundsson, Gunnar Gunnarsson, Kristmann Gudmundsson, Gudmundur G. Hagalin, Sigurdur Einarsson and David Stefansson. On the other hand, Professor Stefan Snaevarr doubts that the concept of totalitarianism is useful and does not think that National Socialism and Communism have much in common. Gissurarson and Snaevarr exchange views about the issue at a seminar organised by RNH and the Institute of Public Administration Studies and Politics at the University of Iceland, in Room 101 in Oddi at the University of Iceland, 16–17:30 Friday 17 May 2019. Professor Olafur Th. Hardarson will chair the meeting.

From the London event.

Economic integration paradoxically facilitates political disintegration, RNH Academic Director Professor Hannes Gissurarson said in four lectures given at the Free Market Road Show in the spring of 2019. The meetings were held in Thessaloniki 6 May, Athens 7 May, London 9 May and Stockholm 10 May. Other lecturers included Dr. Richard Rahn, former Chief Economist of the US Chamber of Commerce, and Philosopy Professor Andrew Bernstein. The Austrian Economics Center, under the leadership of Barbara Kolm, organised the Road Show.

Gissurarson recalled Adam Smith’s explanation for the wealth of nations: that it was brought about by the division of labour in the free market. This division of labour became the more beneficial the more extended the market were. The reason why small political units could however flourish was that they had access to large international markets and could therefore benefit from the global division of labour. In 1946, when the United Nations were founded, the number of independent states was 76, but now the UN had 193 member states, not counting the Vatican and Taiwan. Gissurarson pointed out that  nations in small states often were homogeneous so that the cost per capita of law enforcement was not as high as in large, heterogeneous states. Small states were also usually not as aggressive as large ones so that expenditure on the military tended to be relatively low.

Gissurarson discussed in particular the Nordic countries whose success was not, he said, because of, but despite, social democracy. Its main explanations were the rule of law, free trade and social cohesion which led to solidarity and consensus and reduced the costs of operating a state and a market. There was a strong liberal tradition in the Nordic countries, for example in Sweden, Gissurarson pointed out. Indeed, before Adam Smith the Swedish-Finnish priest Anders Chydenius had demonstrated how private and public interests could coincide under free competition. In the 19th century, again, liberal politicians had significantly increased economic freedom in Sweden, and as a consequence economic growth had been faster there than in any other country in 1870–1936.

Gissurarson said that the European Union was in transformation. While it had originally been a forum for the historical and praiseworthy truce between Germany and France, the question now was whether it would become an open market or a closed state, a federation of states or a federal state. The idea of the nation state was becoming relevant again. National socialism had been a disaster, but perhaps the idea of national liberalism, common in the 19th century, had some merit. But a country had to be a home rather than a fortress or, even worse, a prison.

In Stockholm, Gissurarson used the opportunity to meet with two other members of the Mont Pelerin Society, Dr. Nils Karlson of Ratio Institute and investment manager Peter Stein, to discuss further intellectual cooperation between classical liberals and conservatives in the Nordic countries. This meeting formed a part of the joint project with ACRE on ‘Bluegreen Capitalism for Europe’.

At a Liberty Fund Colloquium in Petrópolis in Brazil, RNH Academic Director Hannes H. Gissurarson said that a free economy was purposeless, but not pointless. The point was not to maximise anything, but to bring about the spontaneous coordination of individuals pursuing different and often conflicting aims. American legal philosopher and judge Richard Posner maintained however that judges should aim at wealth maximisation in their decisions. Gissurarson said that this was sometimes relevant, but not always. He recalled the famous decision by King Salomon when two women put forward claims to the same baby. When Salomon had asked for a sword in order to cut the baby into two, he had not been seeking a mean: he had been testing which of the two women valued the child more. This was an example of wealth maximisation. If it would have been known which of the two women was really the mother, she would of course have been assigned the baby. A judge first had to ascertain existing rights and claims, and by default he could try to maximise wealth, transfer goods to those who valued them the most.

One topic discussed at the Colloquium was accidents and the price of human lives. Gissurarson pointed out the enormous waste caused by airport security where passengers had to wait in line for half an hour or more, eight million people every day on average. If human lives could be priced, then it might pay greatly to reduce such security even if it meant that some lives would be lost in terrorist attacks. In a discussion on redistribution Gissurarson rejected the common idea that a dollar was worth more to a poor person than to a rich one so that total happiness or utility would increase by its transfer from the rich to the poor. Often, Gissurarson maintained, the rich was rich precisely because a dollar was worth more to him than to others. Many wealthy people were entrepreneurs who felt the need for all their dollars in new projects. A lively discussion on many related topics took place at the Colloquium which was directed by Professor Eduardo Mayora from Guatemala on 11–14 April 2019.

Participants in the Colloquium. Photo: Daniela Becker.

In discussions about the Nordic countries, many mention social democracy, as social democrats rules the three Scandinavian countries for decades in the 20th century. However, there is indeed a strong liberal tradition in the Nordic countries, Professor Hannes H. Gissurarson argued in a paper he read 6 April 2019 at the annual conference of APEE, Association of Private Enterprise Education, on Paradise Island in the Bahamas. Gissurarson recalled that Swedish-Finnish priest Anders Chydenius had advanced a theory about the harmony of private interests and the public good before Adam Smith; and that Swedish statesman Johan August Gripenstedt had in mid-19th century contributed greatly to the first Swedish Model of economic freedom and enterprise. This first model led to tremendous progress: In 1870–1936, economic growth in Sweden was the most rapid in the world. The second Swedish Model was pursued by the Social Democrats in 1970–1990, with high taxes and extensive redistribution, but it proved to be unsustainable, and the Swedes are now following the third Swedish Model, reducing taxation and providing more scope for private enterprise, even if they have not abandoned generous welfare provisions.

Prof. J.R. Clark (right) accepting his Distinguished APEE Fellow award from APEE President Prof. Andrew Young

Gissurarson pointed out that Jon Sigurdsson, the leader of Iceland’s struggle for independence, was a classical liberal, as was clear from his many magazine articles. The authors of the two first books on economics in Icelandic, Arnljotur Olafsson and Jon Thorlaksson, also were committed classical liberals. Gissurarson gave an account of the extensive liberal reforms in Iceland in 1991–2004, privatisation, tax cuts, strengthening of pension funds and an opening up of the economy as a result of membership of the EEA, European Economic Area. He argued that the success of these reforms was best demonstrated by the fact that Iceland recovered quickly from the severe blow of the 2008 bank collapse.

Dr. Jerry Jordan was elected President of APEE, replacing Professor Andrew Young. A monetary theorist, Jordan was President of the Federal Reserve Bank of Cleveland for eleven years. Professor James Ottesen was elected Vice President, Professor Benjamin Powell Treasurer and Professor Edward Stringham Editor of the Journal of Private Enterprise. Professor J. R. Clark was elected Distinguished Fellow of APEE. Gissurarson’s participation in the conference formed a part of the joint project with ACRE on ‘Bluegreen Capitalism for Europe’.

Gissurarson Slides on Paradise Island

In the Icelandic fisheries a sustainable and profitable system has been developed, that of individual transferable quotas, ITQs, Professor Hannes H. Gissurarson, RNH Research Director, said at an international conference on the ‘Blue Economy’ — on security at sea and the utilisation of marine resources — held in Gdynia in Poland 22 March 2019. Polish MEP Anna Fotyga, a former Foreign Minister of her country, organised the conference where topics discussed included the concept of the open sea, possibilities and challenges in the Arctic and aggression by the Russians in the Black Sea and by the Chinese in the South China Sea. Other speakers included Mark Gróbarczyk, Polish Minister of Maritime Affairs, Rear Admiral Tomasz Szubrycht, Rear Admiral Nils Wang, former Head of the Royal Danish Navy, James Bergeron, political adviser to Commander, Allied Maritime Command in Northwood, United Kingdom, and Batu Kutelia, former Ambassador of Georgia to the United States. In his talk, Professor Gissurarson emphasised that the Icelandic system of individual transferable quotas had developed without depriving anyone of any significant right: the only right which had been removed was that of harvesting fish at zero profit, as fisheries economists had demonstrated would be the case under open access; and by definition this right was worthless. Therefore initial allocation of quotas on the basis of catch history (often called ‘grandfathering’) was the only politically feasible way of introducing an ITQ system in fisheries. Gissurarson pointed out that Locke had set the proviso on private appropriation from the commons that nobody be worse off by it, and that this was the case with the initial allocation of individual transferable quotas in the Icelandic fisheries.

Professor Gissurarson has published two books in English on the fisheries, Overfishing: The Icelandic Solution (2000) and The Icelandic Fisheries: Sustainable and Profitable (2015). He also recently published Green Capitalism: How to Protect the Environment by Defining Private Property Rights (2018). Gissurarson’s participation in the conference formed a part of the joint project with ACRE on ‘Bluegreen Capitalism for Europe’.

Gissurarson Slides in Gdynia 22 March 2019

Government ministers, admirals, members of parliament and speakers at the Gdynia conference.