Protests against the Icesave Deal at the President’s Residence. Photo: Omar Oskarsson for Mbl.

The Report of the Special Investigative Commission, SIC, into the 2008 Icelandic bank collapse was informative, but it did not explain the collapse itself. The SIC’s explanation was that the banks had grown too rapidly and become too big. But this was a necessary and not a sufficient explanation for their collapse, Professor Hannes H. Gissurarson argued at a luncheon meeting of the Icelandic Historians’ Association 17 October 2017. According to him, five decisions made abroad turned a predictable economic downturn into a total collapse: Hedge funds targeted Iceland as the weakest member of the European inner market; European central bankers, irritated over deposit collection by the Icelandic banks and their use of loan facilities at the ECB, refused to provide them with liquidity; the US no longer acted as Iceland’s protector and ally; the British Labour government rescued all British banks except the two of them which were under Icelandic ownership, and thus it felled Kaupthing in Iceland; and the British Labour government imposed an anti-terrorist act on Iceland.

Gordon Brown. Photo: Murdo Macleod for the Guardian.

Gissurarson gave a brief account of the relationship of Iceland to the UK and the US over the centuries. As Lenin pointed out in 1920, with the introduction of airplanes and submarines Iceland had become strategically important. Therefore the US had been a protector and ally of Iceland in 1941–2006. The British had never been interested in seizing Iceland, but they wanted a say in who would be ruling her. In 2007, the Scottish Nationalists were challenging Labour’s traditional stronghold in Scotland, speaking of an “arc of prosperity” stretching from Ireland through Iceland to Norway and suggesting that Scotland should be a part of it. Both Gordon Brown and Alistair Darling regarded the Nationalists as a direct threat. They had therefore been quick to grasp the opportunity to demonstrate the perils of independence.

Gissurarson claimed he had evidence which he would publish in a forthcoming report for the Icelandic Ministry of Finance that it was not at all inevitable for the UK government to impose an anti-terrorist law on Iceland. He asked where the European Commission had been when the UK government discriminated against British banks by closing down only those two which were under Icelandic ownership (KSF and Heritable) while rescuing all other British banks. It was however, he said, a blessing in disguise that Iceland was left out to fend for herself. With the Emergency Act passed in the collapse the Icelanders had paved the way for a new system of banking in Europe, as suggested by the fact that the EU recently had adopted priority of depositors’ claims. It would however have been desirable if Iceland could have avoided the agony and bitterness which were the consequences of the bank collapse. A lively discussion followed the lecture, where participants included Bjorn Bjarnason, former Minister of Justice, Professor Ragnar Arnason, former banker Ragnar Onundarson and former Icelandic Ambassador to France Tomas I. Olrich. The lecture was recorded and can be accessed on the website of the Historians’ Association. Both Bjorn Bjarnason and Sigurdur Mar Jonsson, Press Secretary in the Prime Minister’s Office, wrote blogs about it, and Morgunbladid gave an account of it 19 October. Gissurarson’s lecture formed a part of the joint project with ACRE, the Alliance of Conservatives and Reformists in Europe, on “Europe, Iceland and the Future of Capitalism”.

Gissurarson Slides 17 October 2017

Friedman lecturing at the seminar.

What would it be like to live under law, but without government? When Professor David D. Friedman was reflecting on this question in the 1970s, he realised that people had already done so, in the Icelandic Commonwealth of 930–1262. At a well-attended seminar jointly organised by the faculties of law, economics and history at the University of Iceland Monday 2 October 2017 Professor Friedman shared some of his idea about the Commonwealth. Under the ancient Icelandic system all legal conflicts were tort; no crimes against government existed. For example, the family of a man killed could either demand compensation for him or seek revenge. A weak party such as a poor farmer could obtain the support of his chieftain or he could transfer his case to a more powerful individual. Often special mediators were also appointed in order to stop feuds. Friedman noted that the Icelandic Commonwealth was relatively stable. It was in place for three hundred years without much bloodshed unlike what for example happened in the conquest of England. The adoption of Christianity had also been surprisingly peaceful. Friedman added that he could identify several contradictions between the description in the sagas of Icelanders of legal operations and the stipulations in the Icelandic law-book, Gragas, which was now available in an English translation.

Professor Jesse Byock was the commentator on Friedman’s lecture. He submitted that the contradictions identified by Friedman were probably mostly caused by people not following to the letter all the stipulations of the law-book. The sagas of Icelanders and Sturlunga saga were better evidence of the daily life of Icelanders in this period. Some scholars of the past had emphasised the sagas as literature and even exaggerated their literary quality, but he conceived of them more as descriptions of how to live under law and without government. They were about resolutions of conflicts in a stateless, poor and primitive island. The ancestors of the Icelanders had emigrated from Norway in search of plots of farm land where they would not have to pay taxes. This had moulded their political system which made it difficult to compare it with rules developed among the Romani people or the Somalis, as Friedman had attempted. Byock agreed with Friedman that the Commonwealth had been more peaceful than many had thought. For example, archeological excavations demonstrated that farmers’ houses were rarely burned down during conflicts.

Many other issues of the Icelandic Commonwealth were discussed, in a spirited exchange of opinions. The audience at the seminar included Justice Minister Sigridur A. Andersen, former Social Democratic Leader Jon B. Hannibalsson, Philosophy Professor Vilhjalmur Arnason and Economics Professors Ragnar Arnason and Asgeir Jonsson. Professor Birgir Thor Runolfsson chaired the seminar. RNH’s support for it forms a part of the joint project with ACRE, the Alliance of European Conservatives and Reformists, on “Europe, Iceland, and the Future of Capitalism.”

Friedman gives his talk.

RNH supported the regional meeting of the European Students for Liberty and the Icelandic Association of Liberal High School Students, held at the University of Reykjavik Saturday 30 September 2017. Three speakers were sponsored by RNH, Dr. Daniel Mitchell, and Professors Edward Stringham and David D. Friedman. The meeting was well-attended and successful. Mitchell recalled the undoubted existence of the so-called Laffer Effect: At a certain tax rate tax revenue will reach a maximum and after that it will fall with an increased rate. He stressed however that the objective should be to maximise economic growth, not tax revenue. This was almost certainly achieved by a lower tax rate than that leading to a tax revenue maximum. Stringham pointed out that in free transactions people could resolve many issues without resorting to government compulsion, using examples from a recent book of his, Private Governance, published by Oxford University Press in 2015. Friedman spoke about law without government, on which he is now writing a book. He is the author of many books on law and economics and has done research on the Icelandic Commonwealth.

Before noon, Erna Yr Oldudottir chaired the meeting, and in the afternoon Ragnhildur Kolka. Its chief organisers were Magnus Orn Gunnarsson, Marta Stefansdottir and Isak Hallmundarson, with a group of committed high school students. Some foreign students also attended the meeting. RNH Academic Director Hannes H. Gissurarson invited the foreign lecturers and some other guests to a barbecue at his house Friday evening, and asset management company Gamma gave a party for all participants Saturday evening at its headquarters. Participants also received T-shirts and books which philosopher Tom Palmer has edited for Atlas Foundation, Why Liberty: Your Life, Your Choices, Your Future, and Peace, Love & Liberty. RNH’s support for the meeting formed a part of its joint project with ACRE, the Alliance of European Conservatives and Reformists, on “Europe, Iceland and the Future of Capitalism”. RNH’s Academic Director, Professor Hannes H. Gissurarson, offered a few concluding remarks:

Yeonmi, Prime Minister Bjarni Benediktsson and publisher Jonas Sigurgeirsson.

North Korean refugee Yeonmi Park gave a talk on “Life in North Korea” to a packed Festivities Hall at the University of Iceland Friday 25 August. Prime Minister Bjarni Benediktsson introduced Park, whose book In Order to Live has been a best-seller in Iceland for months. Park said that she found it hard to describe the situation in North Korea to foreigners. After the Second World War, the three Kims had one after the other reigned with utter ruthlessness, being treated as gods, with supernatural powers. She was therefore relieved to meet a friendly and unpretentious prime minister like the Icelandic one. In her own region in North Korea, as many people had lost their lives in the famine of the early 1990s as the whole population of Iceland, more than 300,000. She had been surprised when she had for the first time seen a dustbin abroad. In North Korea there were no dustbins: Everything was used.

Park, soon to become 24 years, is a student at Columbia University.

In her talk, Yeomni Park described her escape with her mother ten years ago to China where they had been captured by human traffickers and sold as wives to Chinese workers. After two years of slavery and mistreatment in China they fled by walking over the Gobi Desert to Mongolia, eventually escaping to South Korea. It had been difficult for her to get used to the freedom in South Korea. For example, she had not known how to answer when she was asked about her favourite colour. In North Korea everybody was supposed to fancy red, as it was the colour of the revolution and the working class. North Koreans often found life in South Korea a challenge because they were used to obey and not to choose for themselves.

Vera Knutsdottir, Director of the United Nations Association in Iceland, chaired the following discussion. Yeonmi Park said that the key to future developments North Korea was to be found in China. The communist régime in North Korea still enjoyed the protection of the Chinese government. The liberation of North Korea had however to be made by the Koreans themselves and not by others. She did not consider it likely that North and South Korea would unify in the near future. The inhabitants of those two parts of Korea had grown apart, even formed different vocabularies. Yeonmi encouraged NGOs working for human rights to try and alleviate the plight of the North Koreans and asked the West, beset as it might be with problem, not completely to forget North Korea.

The meeting was held by RNH, the Public Book Club (Almenna bokafelagid), which had published Park’s book, and the Institute of International Relations at the University of Iceland. This very successful event formed a part of the joint project by RNH and ACRE, the Alliance of Conservatives and Reformists in Europe, on “Europe of the Victims: Remembering Communism”. The talk was streamed, both to the next rooms at the University and at the online site, visir.is. Around 5,000 people watched the streaming online. The event can also been watched here. Iceland’s main newspaper, Morgunbladid (The Morning Paper), wrote a leading article on Park’s visit and her message. An interview with Park was broadcast on the evening news magazine of the government television station 29 August.