Iceland’s recent general election shows that the country’s neoliberal consensus is over. What happens next?

When the Icelandic parliament assembled in fall of 2010, tens of thousands gathered to throw eggs and rotten tomatoes at the politicians. The MPs were participating in a traditional march between the cathedral and the parliament building that marks the beginning of each legislative setting. Protesters repeated their performance exactly a year later, now with an even larger crowd.

These events marked the midpoint of Iceland’s anti-neoliberal rebellion, which had started in the fall of 2008 at the time of the financial collapse. The mass actions represented a definitive break with the neoliberal consensus the country had sustained since 1984.

Any government will now have to understand — and then accept — this popular revolt if it wants to credibly hold power. Old alliances and structures have collapsed, and new ones must be built.

This October’s elections reflected the changed political atmosphere. On the one hand, the results were inconclusive, failing to produce a clear majority that could form a government. On the other hand, they decisively showed the fate of the sitting government, made up of the centrist Progressive Party (FSF) and the right-wing Independence Party (XD). In 2013, they had received a clear majority of votes — each winning nineteen parliamentary seats out of a total of sixty-three — despite their direct responsibility for a number of bank collapses in 2008.

Between 1991 and 2008, XD enacted a unrelenting series of ultra-neoliberal and right-wing policies that led to the financial crisis. The basis for this neoliberal turn, however, was laid in the eighties, when an earlier Progressive-Independence coalition government held power.

How these parties returned to power in 2013 can only be explained by the events between the financial crisis and that election. Their fate in this October’s election gives us a sense of what might come next.

A Disgraced Left

When the Icelandic banks collapsed on October 6, 2008, a powerful mass movement appeared out of nowhere. By late November, it had become a grave threat to the government.

The movement was organized on several levels and had several centers of operations, which were mostly uncoordinated. All of them coalesced, however, in weekly meetings in the center of Reykjavík. On December 1, protesters convened a meeting at Arnarhóll, after which the more radical wing attacked and occupied the Central Bank of Iceland. A full-scale uprising — which many expected — did not materialize.

The movement, however, successfully removed the sitting government and forced a new general election in April 2009. The Social Democratic Alliance (XS, which had also been in the government at the time of the collapse) and the socialist Left-Greens (VG) formed a government.

They inherited de facto IMF rule, which had been imposed right after the collapse. But the government did not need the IMF’s help in becoming extremely unpopular, extremely quickly.

It embarked on a very dubious mission to enter the European Union against the population’s wishes. To do so, it would have to agree to pay all the debts incurred during the Landsbankinn’s Icesave operation.

Before the crash, the bank had launched online operations in the Netherlands and the United Kingdom to allow foreign investors to take advantage of Iceland’s higher interest rates. Money poured into the Icesave accounts, but the collapse wiped it all out. The British and Dutch governments demanded that Iceland reimburse these customers before it could enter the European Union, and the government agreed to the deal.

Icelanders rightly understood that their government had chosen to take on odious debts. A strong movement against this agreement gathered steam, and it was supported by a sector of the Left-Greens in parliament. They were joined by the Movement (the Hreyfingin), a party formed out of the 2008 protests that had received some 7 percent of the vote and won four parliamentary seats.

The two parties successfully demanded a referendum on the plan, which was overwhelmingly rejected in 2010. A second proposal was rejected with a smaller majority in 2011.

The Icesave maneuver cost the government all its credibility. It floundered through the last two years of its term without trying to restore legitimacy.

In spring 2013, the final nail was put in the coffin: an international court ruled the Icesave agreement illegal and declared the Icelandic government under no obligation to repay the British and Dutch citizens who lost money.

This decision not only electorally decimated the left parties, but took the Independence Party with it. The Progressive Party — which had opposed the Icesave agreement — could portray itself as the redeemer of the protesting masses. It received one of the highest vote counts in its history.

Neither of the discredited parties had any chance of entering government. XD meekly accepted FSF leadership and appeared to take the backseat in a government supposedly in tune with the people’s rebellious spirit.

However, it took very little time for this government to become just as unpopular as the last one. Its scheming, wheeling, and dealing to benefit the Icelandic elite was far too transparent.

The Panama Papers finally blew it out of power. The revelation that the prime minister held off-shore, tax-free accounts contradicted his persona as the representative of the protesting masses. On April 4, thirty thousand people rallied to demand his resignation and new general elections. Both demands were met.

Both post-crisis governments fell apart because they could not create a new social consensus to replace the neoliberal contract shattered by the bank collapses.

Representing Rebellion

The neoliberal consensus began in 1984, as certain discourses — like class conflict, solidarity, or the notion the state was responsible for the well-being of its citizens — were suppressed. By 1990, the Contract of National Reconciliation — an agreement signed by government and labor to ensure economic stability — completed this task.

In Iceland, as elsewhere, parties that were built on the idea of opposing capital with working-class interests also supported the pact. By 2007, the the Social Democrats had entered an extremely right-wing government and watched the crisis unfold.

The neoliberal consensus was sustained by widespread prosperity. But when the economy fell apart in 2008, it left the social peace in tatters. The ban on discussions of class and exploitation evaporated.

Thus, the real issue in the recent elections became who could carry the torch of popular rebellion. In 2013, the Progressive Party was temporarily able to present itself as the party of the social movement. When it failed, the Pirate Party stepped in.

After the Progressive-Independence government fell out of favor in early 2015 — primarily by refusing to fulfill its promised referendum on European Union membership — the Pirate Party benefited. It approached 30 percent support between February 2015 and April 2016. The Greens whittled away some of the Pirate Party’s base, but it stayed around 20 percent in the polls. In the end, the Pirates received only about 15 percent, and the Greens around 16 percent.

The Pirates’ rise in the polls can be attributed, to a large degree, to protest votes; the traditional left and right had lost all credibility, and this upstart party seemed like the only option.

But eight years of protests were also a decisive factor. The size of this movement cannot be overstated: Between 2008 and 2011, the police counted over 1,300 protest meetings of various sizes and shapes — close to one every day. The Pirates appeared as a direct, organized, and electoral representation of these protests, presaging a renewed social contract based on the enormous political activity after the collapse.

An attempt to realize this new consensus materialized two weeks before the election. The Pirates invited three other parties — the Social Democrats, the Greens, and another new party called Bright Future — to create an electoral bloc. Voters would know that if they voted for any of these parties, they would form a government.

The media, controlled by moneyed interests, immediately branded this as an attempt to create another government like the disastrous leftist coalition elected in 2009. Many, especially the corporate-controlled media, viewed the Pirates’ suggestion as a desperate, misguided move on the political chessboard.

A Far Too Successful Party

By October 2016, the establishment was out of tricks. The bloc proposed by the Pirates received 43 percent of the vote, not quite a majority. Its loss is, to some extent, beside the point. In fact, we might even see it as a preferable result; had it received a mandate, the media would have immediately labelled it the new left government and started predicting the economic ruin it would bring. The resulting impasse is far more revealing, uncovering the old system’s complete impotence.

The Independence Party, which earned 29 percent of the vote, now stands alone, naked in its class arrogance. With such a large vote share, it cannot hide behind another party as it wages a class war on behalf of the 1 percent.

The party built on the idea of class struggle — the Social Democrat Alliance —forgot everything about its foundations during the neoliberal consensus. It received around 30 percent of the vote in 2006. Ten years later, it got only 5.7 percent. Throughout Europe, social-democratic parties served as essential props to capital’s power. The Social Democrats’ collapse in Iceland shows the power of the country’s anti-neoliberal revolt.

Meanwhile, a proliferation of new parties are attempting to capture the street movement’s momentum with little success. The Pirate Party hasn’t been able to present a solid social or economic analysis. Instead, it relies on a visceral opposition to the elite, which, on its own, does not equip it to govern. The party’s main plank — a basic income guarantee — reveals a neoliberal influence, as Milton Friedman originally proposed the idea in opposition to generalized social security.

From this perspective, the street rebellion has only created a vaguely anti-establishment party with an equally vague reformist agenda, shot through with half-baked neoliberal ideas.

Two other such parties in parliament — Resurrection and Bright Future — are hollow replicas of the people’s voice, without much conviction or moral power. They are are even more consciously neoliberal than the Pirates, calling for a sanitized neoliberalism that is of course impossible.

That said, their dealings with XD since the election show how far the anti-neoliberal movement has gone. In coalition discussions, these upstart parties tried to force the Independence Party to agree to a major reorganization of the fishery quota system, still a central element in the Icelandic economy. XD’s refusal exposed it as a party for the elite. They also tried (and also failed) to call a vote on European Union membership. These demands — and the parties’ willingness to leave the coalition as a result — highlights how differently political lines are drawn today.

Already it is clear that the Independence Party is unlikely to remain in government. Its only hope is that the Left-Greens — the second largest party in parliament — will turn to it after failing to to establish a center-left government. XD has repeatedly, but so far unsuccessfully, tried to woo the Greens into some kind of all-national government. That the right-wing party’s best partner is now the most left-wing party epitomizes how strange Icelandic politics have become.

The proposed left-wing alliance between the Left-Greens, Bright Future, Resurrection, the Pirate Party, and what’s left of the Social Democratic Alliance doesn’t seem plausible either. But how can three social-democratic parties, one newborn neoliberal party, and one indescribable mess of a party come together to govern?

But they have reached consensus on some major policy changes: strengthening the health and education system and redistributing profits from the fisheries. The question remains whether internal squabbling will prevent this consensus being realized.

Although the previous neoliberal consensus has been decisively shattered, a new one — already present as a mass movement — is struggling to articulate itself as a coherent political project.

Iceland’s circumstances are different enough that this may still come together. Unlike Greece at the time of Syriza’s rise to power, Iceland is not and does not want to join Europe and the eurozone. Further, the broad participation in the anti-neoliberal protests of the past eight years means that nativist or right-wing populist movements have no chance of gaining ground.

These developments have created an atmosphere where five parties on the left and in the middle of the political spectrum could conceivably create an anti-neoliberal alliance despite themselves. At the very least, the neoliberal consensus that existed between 1984 and 2008 has been irrevocably disrupted. A new, reformist hegemony seems likely to take its place in the near future, but it will have to deal with all the pitfalls and dangers of broad coalitions and the burden of governance.

Árni Daníel Júlíusson is a historian in Reykjavík and a member of the board of Attac Iceland.

This article was first published by the Jacobin.

See also Inspired By Iceland… No, really! by Árni Daníel Júlíusson.

It is funny how things can turn around. For decades, Iceland languished in neoliberal hell, with signs of opposition few and far between. Meanwhile the opposition to the neoliberal order of things grew all over the world—with massive protests in Seattle, Genoa and elsewhere—and the beginnings of a world-wide anti-globalisation movement represented by the World Social Forum, first held in Porto Alegre, Brazil, in 2001. Almost nobody in Iceland did or said anything to support these powerful movements against the neoliberal order, with the exception of the brave Saving Iceland organisation. Even the considerable activism surrounding the anti-imperialist campaigns against American military presence in Iceland seemed to die completely down in around 1990. Neoliberalism reigned, Iceland supported the Iraq invasion in 2003 and nobody said or did anything.

Everything changes

In 2008, everything suddenly changed. The Icelandic banks collapsed, and out of nothing there grew an immensely powerful protest movement, leading to the collapse of the ideological hegemony of neoliberal order in Iceland. It was symbolised by the January events of 2009, when saucepans and pots were taken into use by protesters, who drummed the right wing neoliberal government out of office in the last week of January.

Suddenly everyone and her brother was involved in organising some sort of protest, with many thousands turning up at rallies in the centre of town on a regular basis, and hundreds or thousands of people involved in organising alternatives to the prevailing neoliberal order.

Even the president of the country, who had been one of the cheerleaders of neoliberalism, suddenly turned into an invaluable ally of the protest movement against the financial system, enabling two national referendums on the Icesave issue. Under the leadership of Eva Joly a criminal investigation into the whole neoliberal financial scam of the nineties and noughties was organised, and a very thorough investigation on the causes of the collapse was initiated by the Icelandic parliament. There was even a Constitutional Assembly, which was meant to write a new constitution for the country.

Right wing, left wing: both neoliberals

To be sure, instead of the rightwing neoliberal government a leftwing neoliberal government ascended to power after parliamentary elections in April 2009. That was surely not the intention of the saucepan revolutionary movement, and the situation in Iceland has been tense since. An important part of the original protest movement has been paralysed, as it has seen it as its duty to defend the “left” government against what it sees as attacks organised by the right. So the most radical part of the original saucepan protesters, those who are of the opinion that the “left” government is just another neoliberal government, has found tactical allies among the right wing parties, and this alliance has had some victories, like the rejection of the Icesave treaties.

But the Icelandic protest movement against neoliberalism has been powerful enough to inspire people outside Iceland. Yes, indeed, people abroad have really been inspired by Iceland! This was first evident around the Icesave referendum on March 6, 2010. The international anti-globalisation movement followed it closely, for example the Jubilee movement, the international Attac movement and the Tax Justice Network.

Congratulations rained on Icelandic activists after the Icesave treaty was rejected, the so-called Icesave II treaty, wherein Icelandic taxpayers were supposed to pay large sums of money to the citizens of the Netherlands and the UK because of the collapse of the Icelandic bank Landsbankinn. Icelandic taxpayers refused to take responsibility for the wheelings and dealings of the international financial oligarchs, and this was widely admired by anti-neoliberal activists everywhere.

Rumours

But there was more to come. In 2010, rumours started to circulate on the Internet among activists, especially in those former provinces of the Roman Empire comprising the present day lands of Spain, Portugal and France, that there had been some sort of a quiet revolution in Iceland. This revolution was supposed to have been almost systematically shut out of the world media, in order not to present a possible model for revolution in other countries. These rumours appeared on French and Spanish websites, and at last they acquired some sort of critical mass. In December 2010 and January 2011, Attac Iceland started to receive a lot of questions about the quiet revolution in Iceland from members of Attac France and Attac Spain. Activists even started to visit Iceland to find out about the quiet revolution.

When Attac Iceland was slow to respond—and when it did it would not be ready to agree that there had been any sort of revolution in Iceland—it was pointed out by the international activists that the Icelandic banks had been nationalised, that the government had been forced from power, that the governors of the Central Bank of Iceland had been replaced, that Iceland had shown true grit by the rejection of the Icesave treaty. All of which was true, but Attac Iceland has not interpreted this as a revolution, even if it certainly can be viewed as a very powerful and successful protest movement, one of the most powerful popular responses to the collapse of the neoliberal order, and up until 2011 certainly the most powerful. And quiet it was not, as those activists who have come from Spain, Portugal and France to Iceland to investigate have found out.

Iceland as a model of revolt

Then in December 2010, Tunisia erupted in revolt. Egypt followed, and the world watched in amazement as country after country in the Arab world arose in revolution against the established order of American imperialist rule and the rule of US supported despots. There were certainly some references to the Icelandic revolt in these movements. And in May 2011 Spain erupted, with the M-15 movement and the Indignados movement forming as a powerful protest wave against the neoliberal order. Here the references to the Icelandic movement were numerous and quite visible, with public squares in Palma, Mallorca, renamed after Iceland in honour of the quiet revolution, the Icelandic flag being waved on numerous occasions and Facebook groups organised in honour of the Icelandic movement.

This was certainly a rather dramatic turnaround in the position of Iceland in relation to the neoliberal world order. Suddenly Iceland had turned from a model of the quiet, obedient neoliberal outpost, to become a model of protest movements around the world against this same neoliberalism.

The revolution that nobody wants to talk about

Then in the summer of 2011 the indignados started coming to Iceland themselves, organising TV-crews in order to document the Icelandic revolution. And, indeed, they did not find a quiet revolution: In the words of Portuguese document film maker Miguel Marques, who was here in August and extensively documented the activities of the Icelandic movement, the Icelandic revolution was anything but quiet. Another crew came from Spain and interviewed the Icelandic activists, and in October there will be a Venezuelan crew documenting Icelandic activism for the big South American TV network teleSUR.

So, for the Icelandic activists and anti-neoliberalist, the situation is a bit awkward. When finally Iceland produces something worthy of admiration of the international activist community, the activist groups in Iceland have been reluctant to admit to it being what the foreigners perceive it to be. Why is this? Why is the powerful protest movement in Iceland not lauded or presented in a positive light by the Icelandic activists? This is mostly because of the political situation in Iceland.

On one hand, the media, mostly right wing, the academics, mostly right wing or centre left neoliberals, and others of the talking and writing classes have very limited interest in promoting the Icelandic saucepan revolution. On the other hand many in the protest movement now support a neoliberal “left” government in the vain hope that it will eventually, in the distant future, maybe deliver on something of value, and this supports hinders any positive evaluation of the protest movement after the ascend of the “left” government. The radical parts of the protest movement do not have a positive evaluation of the results of the movement, exactly because the results of the parliamentary elections in April 2009 were that the neoliberal dominance in politics continued. So nobody seems interested in taking credit for the very real and positive results of the Icelandic protest movement 2008–2011.

Originally published in the Reykjavík Grapevine.

After Iceland’s three banks collapsed in October 2008 – a bankruptcy bigger than Lehmann Brothers’ in a republic of 300,000 inhabitants – the public overthrew a neoliberal government through mass protest, precipitating a general election. On election day, 25 April 2009, the conservative head of Iceland’s public radio newsroom sighed his relief: ‘Judging from the atmosphere this winter a revolution was foreseeable in spring, some sort of revolution – that something entirely different from what we are used to would take over. Now we know better.’(1)

We certainly do. Whenever someone mentions IceSave, an angel falls on an elf and they both die. That pretty much does justice to the tedium amassed as this single issue drags on: the debate about compensation for money lost by 300,000 British and Dutch depositors has stifled any more radical discourse about change in Iceland for almost a year. Totalling around 10 per cent of the debt accumulated through the ‘good years’, the IceSave saving accounts scheme was established by Landsbanki in 2007, four years after its privatization, in order to solve the bank’s liquidity problems, as investors had become sceptical about its foundations. As democracy had given way to finance, Iceland’s banks were at the time directly involved in every sphere of society. Construction of a music hall in Reykjavík city centre, the cost of which was estimated as around 2 per cent of the country’s GDP, had come to a standstill, but as soon as the IceSave accounts started luring in customers with their promise of high yields, construction began again, in full swing. (2)

Two narratives now compete for the interpretation of the situation – or more precisely, a narrative and a vision. According to the narrative upheld by the current government, it’s a story of Pinocchio getting high with Icarus: whether seduced by flat-screen televisions, large jeeps or yachts and jets (expensive drugs and prostitutes remain at most alluded to), people fell for greed and hubris. The most excessive ones ‘must do some soul-searching and many must show humility’, according to PM Jóhanna Sigurdardóttir.(3) It is time to grow up, take responsibility and compensate for the damage we did in our drunken stupor. On the other hand, the vision upheld by former mayor, former prime minister, former Central Bank manager and now newspaper editor David Oddsson, and most members of his anti-EU republican Independence Party, sets off with a gesture of dismissal: obviously something went wrong – but now is no time to dwell on the past, for Iceland is under siege! As the UK and the Netherlands demand compensation, David has found his Goliath. What this country needs, his admirers exclaim, is a Churchill!

Factually, neither account is false. Yes, those were greedy times. And yes, states seek to preserve their interests. The original IceSave contract was negotiated in June 2009 by a diplomat assisted by a young UK-educated philosopher. The government at first celebrated the conclusion, but the diplomat’s own description of the terms – ‘Iceland is taking on the sins of Europe, like Jesus on the crucifix’(4) – did not convince the public, nor the ‘unruly faction’ of the Left-Green Movement, as social democrats refer to their anti-capitalist partners in government. ‘The sins of Europe’ refers to the general understanding that as the Icelandic banks operated according to European regulation, as well as under British and Dutch surveillance, Iceland was not solely responsible for their catastrophic failure. Iceland must, however, ‘drink that bitter cup’ of restoring faith in the whole banking system, which was considered at stake. Whether seen as lack of vigour or willingness to negotiate, the eagerness to conclude the matter can in part be ascribed to, if not Schadenfreude, then at least a pseudo-Christian sense of guilt and remorse: this is what you get for succumbing to the evil right so willingly and for so long.

These two factually coherent but unsatisfying accounts remain caught in a loop of incessant but immobile talk, prolonged in January 2010 by the president’s veto of the contract known as IceSave II, and a subsequent referendum last March. This 10 per cent of the country’s debt still takes up 90 per cent of the debate. Why?

The f**k-the-foreigners law

Apart from ordinary local polemics, what makes the IceSave issue such a dilemma is Icelandic authorities’ very first reaction to the collapse of the country’s banks: in October 2008, the Independency Party-led government overnight pushed an emergency law through parliament, fully securing all deposits in local accounts, while unambiguously signalling to the UK Finance Ministry that foreign depositors would get the leftovers at best. With the legislation, known among legislators as the ‘f**k-the-foreigners law’,(5) the right-wing government made sure that local capitalists would not bear an unnecessarily hefty burden of the crisis, buying them out, as one journalist put it, of any subsequent social upheaval. The emergency legislation has mostly remained beyond debate and no one has so far had to justify the policy behind it. If the matter momentarily surfaces it is brushed off as inevitable: ‘Anything else would have caused unprecedented riots.’ In other words: You, the debt-ridden majority of no or little savings, have already joined Europe’s precarious low-wage workforce, so that the upper layers won’t get angry at us. The anger of the upper layers is of a magnitude that you cannot fathom (they have our private phone numbers), whereas your anger (noticeable only when thousands of you gather and set fire to Christmas trees) is already under control. Now, go serve the tourist industry (and don’t leave your smile at home ;-).

The referendum

On 6 March 2010, a referendum was held on an improved IceSave deal, IceSave II. Improvements included an upper limit on annual payments, set at 6 per cent of GDP. The deal was rejected by a 94 per cent majority of those who voted. The 40 per cent of voters who shunned the referendum included Prime Minister Sigurdardóttir and Minister of Finance Sigfússon. They and most of their supporters saw the process as a silly spectacle, orchestrated by the opposition, spearheaded by David Oddsson’s all but militarized daily, Morgunbladid, to divert attention from their own responsibility.(6)

Factually the vote was about details – will we accept this particular deal, with its particular interest rates and terms of payments, or will we negotiate further? However, the deal being voted on was already obsolete at the time of the referendum, as Iceland had already received yet another incrementally better offer. Voting ‘yes’ would have been absurd and so the republic’s first referendum became a purely gestural event, a spectacle of solidarity aimed at the foreign press – but solidarity against what? According to the right, against foreign oppressors, of course.

Much is at stake. The scheduled return to normality in Iceland is dependent on IMF loans, which are conditioned by traditional ‘structural adjustments’ (cuts in welfare, health etc.) and a solution to the IceSave crisis. Some also perceive the solution of the matter as a criterion for Iceland’s will and capability to participate in the EU, for which it has applied. But the anti-EU right-wing opposition is not the only opposition to the deals drafted. The ‘unruly faction’ of the Left-Green Movement has consistently opposed IMF cooperation. Their reasoning, however, does not reach a wide audience. That is not merely due to the media being pro-capital, which they are, but lies deeper. In short, Asterix has been available in Icelandic translations far longer than Immanuel Kant. Icelanders have been raised on a thorough conviction of their own singularity, a sentiment that runs deeper in public discourse than any universal ideal.(7) It is thus mainly thanks to international media and their fortunate oversimplifications that the referendum has been interpreted in terms of a universal anti-capitalist principle at all. A Financial Times leader was far from unique in warning that the UK must settle a deal, for ‘the wrath of the Icelandic public raises the prospect of citizens elsewhere refusing to pay for public debts seen as someone else’s fault’.(8) The implications of a people given legal authority to revolt against bank bailouts are explosive. What started, partly, as a misinterpretation, an exaggeration of the referendum’s factual content, has the retroactive potential to become true.

How to wash invisible hands

While this single matter all but blocks out the attention of the media, Iceland undergoes complete restructuring from top to bottom. On the one hand, the government implements IMF strategies, making severe cuts in health care and education, paving the way for the country’s first private hospital (focusing on liposuction tourism), minimizing public broadcast services, and so on. On the other hand, ‘private enterprise’ is taking care of its own. When Iceland’s banks collapsed new ones were established overnight. As Geir H. Haarde, then prime minister, declared in October 2008, ‘This is not nationalization’ – meaning, this is done purely for the sake of private interests. Funded by the state, the new banks bought the old banks’ loans at a 50 per cent discount.(9) One has already been handed over to creditors and investors; the others are set to be re-privatized as soon as possible. While the 60 per cent of businesses are at the mercy of the new banks, the government has no policy about their operations, or principled criteria for default and resuscitations. As the banks go about their business, piecemeal information gathers into a coherent image: those who already wore tailor-made suits retain the lucrative parts of business, while those who never got out of their jeans and sneakers – employed, self-employed and unemployed alike – foresee a future of paying back the infinite tailor’s bill.(10) Ministers respond that they understand people’s anger and share their grievances. However, ‘more is needed than legislation, regulation or authorial orders’, as Prime Minister Jóhanna Sigurdardóttir explained in her recent address to the neoliberal lobby group Chamber of Commerce: ‘Manipulation is now considered the root cause of the bank collapse’, and so the government remains ‘absolutely opposed to politicians manipulating the financial system’ this time round.

Let us make clear, before we move on to critique, that there is a world of difference between the current administration and the 1991–2008 administrations led by the Independence Party: the Independence Party and its businessmen are more akin to a highly organized criminal gang than a political party. As they held legislative power for so long, and as party members remain highly influential in business and society, it is uncertain what legal action can or will be taken – but let it suffice to describe one example, important but not unique, as a hint of the corruption at stake. When Landsbanki’s privatization was under way, in 2002, one man, Steingrímur Arason, resigned from the privatization committee, citing differences in opinion. Only after the 2008 collapse did the nature of that difference become clear: Prime Minister David Oddsson had decided, contrary to the committee’s advice, to hand Landsbanki over to his allies, father and son Björgólfur Thor and Björgólfur Gudmundsson. Whereas ‘distributed ownership’ had up to that point been a catchphrase of privatization, a new one was coined: ‘ballast-investors’. A single nautical metaphor seemingly moved the issue beyond debate. The Björgólfurs were said to have made their fortune with a beer brewery in St Petersburg, and so had the financial means to provide the required ballast. In 2009, however, it was revealed that half the purchase fee had been borrowed from the other recently privatized bank, Kaupthing, the managers of which were reluctant but gave in to political pressure. When both banks were returned, insolvent, into state hands in 2008, father and son had not paid back a single króna of the loan. In retrospect, the whole procedure amounts to an elected public official lending a bank to his friends for a few years, to have some fun – ‘go buy yourselves an English football team’. Meanwhile, the debt collected through Landsbanki’s IceSave accounts alone, the payment of which Oddsson now vehemently opposes through his newspaper, amounts to more than sixty times the purchase price the father and son pretended to pay for the whole bank in 2003. The damage done by the bank reaches further still, as has recently been revealed: a great deal of the Icelandic banks’ income in the twelve months preceding their collapse was derived from short-selling Icelandic currency – that is, essentially betting on the diminishing total worth of the Icelandic economy.(11) And diminish it did.

There is no reason to suspect the current government of any such corruption. It has, however, taken on empirically verifying Slavoj Žižek’s postulate that whereas conservative parties tend to represent some particular (old) money, social democrats are more apt to represent capital as such. Minister of Finance Sigfússon, head of the Left-Green Movement, represents the values of ardent industriousness and integrity. In spring 2009, he arrived at government negotiations driving an ageing Volvo. Meanwhile, the silent, dignified proletarian Prime Minister Sigurdardóttir serves as the symbolic guarantor of fairness – under their insignia measures can be taken that would cause outrage if accompanied with MBA portfolios and the stupid glee of their holders. But no matter how socialist their aura, the fundamental political decision not to interfere with how the insolvent banks redistribute the country’s wealth may be the biggest single act of laissez-faire implementation in Iceland’s economy yet. What remains left, as capitalism is brought back to life with injections of public funds, are compassionate utterances of grief and scolding, better defined as poetry than politics. Poetry in the pre-modern, romantic sense; poetry before Rimbaud or Walt Whitman; poetry, to paraphrase Søren Kierkegaard, as so much ornamental boo-hoo.

Letting off steam?

Kierkegaard famously elucidated the nature of poetry by analogy to an execution device: a brazen bull-shaped kettle designed for the Sicilian tyrant Phalaris. The victim was led through a door into the belly of the bull, the door shut, and fire set beneath, roasting the prisoner inside. The diabolic detail of the design, however, was a system of brass tubes attached to the bull’s head, which turned the victim’s screams into ‘the tenderest, most pathetic, most melodious of bellowings’.(12) Analogously, noted Kierkegaard, the poet’s agony, by virtue of his expressive nature, sounds like music to others’ ears. And, analogously still, we are all poets now. ‘The lid on the social kettle is shut triple-tight, and the pressure inside continues to build.’(13) Inside this kettle that unites us, you have the right to remain silent, but anything you say can and will be interpreted as a boo or a boo-hoo.

In his book about the Iraq invasion, Iraq: The Borrowed Kettle,(14) Slavoj Žižek employs a well-known anecdote from Freud, about a man asked by his neighbour to return a kettle he borrowed: ‘Kettle? Which kettle? I borrowed no kettle, the kettle was broken when I got it, and there’s nothing wrong with it anyway.’ In much the same way, for the last twenty or thirty years, whenever someone mentioned the kettle that confines us, when someone spoke of capitalist oppression, a neoliberal Candide would be close by to reply: ‘Kettle? What kettle? There is no kettle, and anyway it’s a necessary kettle, the best kettle you could be in, the temperature’s just right, besides there’s no way out, so why bother?’ Kierkegaard’s analogy now describes a universal situation. Inside the kettle: we, the people, linguistic creatures of flesh and blood. Outside the kettle: the abstract tyrant of capitalism, operating beyond the symbolic field, beyond the scope of words and meaning. Operating, that is, through violence.

No more Mr Niceland

In his splendidly researched Meltdown Iceland, Roger Boyes writes:

By the spring of 2009, with the days longer and wetter, Skuggahverfi [‘the subpolar Manhattan’ district of Reykjavík] had become an urban graveyard. Someone had scrawled CAPITALISM R.I.P. on the side of one of the buildings. Squatters had moved in. One group converted an abandoned house into a cozy café, the kind of place where you could strum a guitar and check your e-mails. The Reykjavikers cheerfully welcomed the return of some kind of life to Skuggahverfi. The developers, however, did not approve. So, just after Easter, the riot police were sent in, men in black, with a chain saw to hack through barricaded doors and pepper spray to disable the young squatters. The cleanup was nasty, brutal, and short: it was the official end of Niceland.(15)

As Naomi Klein argues in The Shock Doctrine, from Haiti through Chile, Iraq and China, neoliberalization has been backed up by brute physical force, at the hands of police or military forces. On 11 March 2010, the end of ‘Niceland’ noted by Boyes was clearly underlined as the public prosecutor pressed the first charges related to the 2008 financial collapse. Corruption and fraud may have all but bankrupted the country, but the people prosecuted were nine protesters, who in December 2008 entered the open public benches of parliament, presumably to make noises. Among those select nine are people who also took part in the lawless return of life to Skuggahverfi, so efficiently quenched by police. Those nine are charged with threatening the safety, autonomy and sanctity of parliament and public order, and face possible life imprisonment. There was a famous moment during the collapse of communist East Germany, when the Stalinist Erich Mielke, minister of state security – head of the Stasi – addressed Congress to convince its members that the Stasi had a singularly good connection to the public. It is November 1989. The members of congress laugh. ‘Ja, wir haben den Kontakt, ja wir haben den Kontakt’, says Mielke, agitated. As he addresses the congressmen as ‘liebe Kameraden’ some openly oppose and ask him not to use that expression. But that’s a purely formal question, objects Mielke, and then makes history with the painfully pathetic exclamation: ‘Ich liebe doch, ich liebe doch alle Menschen!’ Congress burst out in laughter. That emperor never found his clothes again.

The day after the IceSave referendum, leaders of all the country’s political parties made a thoroughly ‘Mielkian’ impression on television: almost every sentence uttered invited ridicule. What set the situation apart, however, was that no one present was capable of the mocking laughter – something taken care of by reinstating the national ‘we’ in the 2009 election. ‘The fact is’, the current leader of the Independence Party exclaimed,

‘what I’ve been trying to point out is that you’re wearing no clothes! You’re wearing no trousers, no shirt, no coat…’ As his mouth keeps talking his eyes are deeply anxious, begging as it were: please mock me, make me stop. ‘Now, that’s quite daring of you, isn’t it’ interrupts Finance Minister Sigfússon, ‘that’s very daring of a man who hasn’t worn any clothes for years, the leader of a party where no one, as it seems, has had clothes on for decades! If we are wearing no clothes, and I’m not saying this is the case, but if we are wearing no clothes, that’s your clothes that we’re not wearing. In your position, I would stay quiet.’

This effect of shared responsibility, this mutual hostage situation of critique, shows democracy at its worst, democracy as a successful means to eliminate any outside. As everyone involved has already invested in the route decided upon, there is no one around to make the truth-gesture of pointing and laughing at the naked emperor, the gesture assigned to a child in Hans Christian Anderson’s anecdote.

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Notes

1. Editor’s blog, www.ruv.is/heim/frettir/innlendar/kosningar/2009/blogg/meira/store807/item261997/ (link is no longer active).
2. Culture journalist Hjálmar Sveinsson noted this first: http://blog.eyjan.is/hjalmarsveinsson/2010/01/26/8/ (accessed 13 March 2010).
3. Prime Minister Jóhanna Sigurdardóttir at the Iceland Chamber of Commerce’s annual congress, 17 February 2010, www.forsaetisraduneyti.is/media/frettir/Vidskiptating.170210.pdf.
4. Svavar Gestsson interview with Morgunbladid, 8 June 2009. Summary: http://eyjan.is/blog/2009/06/08/svavar-thetta-er-leid-ut-ur-fataektinni-en-ekki-leidin-til-fataektar/ (accessed 13 March 2010).
5. According to historian Gudni T. Jóhannesson, in Fréttabladid, 10 March 2010: ‘if deposits in the Icelandic banks had not been guaranteed we would have faced chaos … that was among the issues at stake in the so-called emergency law, the ‘f…k the foreigners-law’ as some of those who authored it called it amongst themselves.’ http://silfuregils.eyjan.is/2010/03/10/gudni-icesave-og-rikisabyrgdin/ (accessed 13 March 2010).
6. Cf. Egill Helgason, Reykjavík Grapevine, March 2010: www.grapevine.is/Home/ReadArticle/How-to-Succeed-in-modern-business-Olafur-Ragnar-Grimsson-at-the-walbrook-club (accessed 13 March 2010).
8. Financial Times, 26 February 2010, www.ft.com (accessed 13 March 2010).
9. http://eyjan.is/blog/2010/03/12/lan-voru-faerd-i-nyju-bankana-a-meira-en-helmingsafslaetti-langmest-afskrifad-hja-arion/ (accessed 13 March 2010).
10. See, for example, http://eyjan.is/blog/2009/10/01/ar-lidid-fra-hruninu-audmennirnir-halda-enn-fyrirtaekjum-sinum/ (accessed 13 March 2010).
11. Around 1 trillion ISK were supposedly gained through these short positions, or €5–6 billion at current rates. http://eyjan.is/blog/2010/03/12/sedlabankinn-stod-ekki-vaktina-bankar-foru-offorsi-i-gjaldeyriskaupum-foru-gegn-landi-og-thjod/ (accessed 13 March 2010).
12. The Works of Lucian of Samosata, Clarendon Press, Oxford, 1905, ch. 28.
13. The Invisible Committee, The Coming Insurrection, Semiotext(e), Los Angeles, 2009, http://tarnac9.files.wordpress.com/2009/04/thecominsur_booklet.pdf.
14. Slavoj Žižek, Iraq: The Borrowed Kettle, Verso, London, 2004.
15. Roger Boyes, Meltdown Iceland, Bloomsbury, London, 2009, p. 186.

The Struggle So Far
The campaign to defend Europe’s greatest remaining wilderness continues. For the past five years summer direct action camps in Iceland have targeted aluminium smelters, mega-dams and geothermal power plants.

After the terrible destruction as a result of building Europe’s largest dam at Kárahnjúkar and massive geothermal plants at Hengill, there is still time to crush the ‘master plan’ that would have each major glacial river dammed, every substantial geothermal field exploited and the construction of aluminium smelters, an oil refinery, data farms and silicon factories. This would not only destroy unique landscapes and ecosystems but also lead to a massive increase in Iceland’s greenhouse gas emissions.

Political Landscape
Saving Iceland has reintroduced civil disobedience and anarchist ideas into Icelandic grassroots and demonstrated numerous methods of direct action, many of which were utilized in a highly successful manner in the ‘Kitchen Utensils Uprising´ of last year, where experienced Saving Iceland activists constantly stood in the forefront pushing boundaries. Saving Iceland and our work throughout the years was a major catalyst in toppling the corrupt pro-heavy industry ‘Alcoa government’.

However, last year´s general elections were a major blow for the environmental movement in Iceland, with the ‘Left Greens’ booting their own minister of the environment out for being genuinely concerned about environmental values. The leader of the party denounced their own environmental policies for being too ‘puritanical’ to be applicable in such times of financial crisis. With this and the continuing of the People’s Alliance in government we are still looking at a heavily fortified pro-heavy industry government, doing away with any pretence of being green or even remotely progressive. On top of this, corrupt labour unions are firmly in the grip of the aluminium lobby calling for job growth regardless of the environmental costs.

The Situation Now
The deep financial and ethical crisis that hit Iceland in the autumn of 2008 caused the energy companies temporary difficulties in obtaining foreign loans for their projects, but the aluminium lobbyists are more bloody minded than ever. Now their argument is that with the economic collapse, Iceland can simply not afford to take note of environmental concerns. This actually exposes the underlying truth that the aluminium lobby have always been aware of the validity of the environmentalists point of view. The aluminium lobby want to further their horrors, on grounds of a crisis which they are largely responsible for having created.

The banking side of the crash tends to be overemphasized while other major drivers of the crash are often ignored. The report of the Special Investigation Commission (SIC), which looked into the events leading up to and causing the financial crash, has however focused on the effects of heavy industry in a key chapter of their report. The expansion of Iceland’s financial system beyond the country’s sustainable limits, is unequivocally traced back to the enormous projects of the heavy industry build-up. This chapter has been ignored by the media, and so has another chapter that stated the media’s own culpability as unquestioning servants of the bank and industrial establishments.

A fundamental problem with the SIC report and the general atmosphere of denial that greeted it is that the report comes from within the very heart of the rotten State of Iceland. As such its real function is to keep all the options for dealing with the huge amount of corruption and democracy deficit safely within the sphere of the courts and parliamentary politics: Firmly under the control of the very establishment that created all this power abuse in the first place.

In case of the financial frauds this will mean years of long, drawn-out court cases which will gradually loose all meaning to the public, which have been left to pay the massive debts generated by the frauds.

In case of the deep rooted culture of corruption and the climate of fear which the aluminium corporations and power companies so thrive in, the promises of transparency and democracy are nothing but a smokescreen for an even greater corporate plunder of the countries’ energy resources. This plunder, supported by restructuring obligations in loan agreements with the IMF, is a continuation of a deeply corrupt policy of privatisation and ruthless industrialisation, the very same policies that created the crisis.

Current action targets
The Century aluminium smelter in Helguvík, targeted by Saving Iceland last two summers, is still slowly being built. Where the electricity for the plant is to come from is still uncertain, but it will require up to eight new power plants, at least seven of which will be geothermal on the Reykjanes Peninsula (HS/MAGMA) and Hellisheiði (OR – Reykjavik Energy). One of the geothermal plants powering Century’s smelter could be in Bitra, close to Hengill, and the eighth power plant will probably be a large dam on the beautiful Þjórsá River that Landsvirkjun (National Power Company) is eager to build as soon as they can. Norðurþing is in negotiations with Alcoa about an aluminium smelter in Bakki/Húsavík with energy coming from fragile wilderness areas in the north. Platina Resources want to do gold and other mining research in the Eastfjords.

Take action!
This year, instead of organizing a summer protest camp, we call for resistance throughout the seasons. We especially call for Icelanders to take action all year round but also environmentalists worldwide to come to Iceland, where we will warmly welcome any kind of individual actions against the aluminium corporations and the energy companies active in destroying the environment.

Symbolic actions have turned out not to be enough to stop the forces of destruction. The aim of actions should be to prevent any further rape of the land. Saving Iceland gives its wholehearted solidarity to any actions that hit the aluminium industry and the power companies where its most effective.

Even if you can not come to Iceland to do direct actions your help to our struggle with solidarity actions, donations, translations and by spreading the word will be invaluable.

For information on targets read:

The Nature Killers

The Saving Iceland European Target Brochure

S.I. European Target Brochure Update