Anyway, the Grapevine's feature article is its own piece on the genesis and collapse of the Icelandic economic crisis. Titled The End Of Neo-Liberal Neverland, it argues that Iceland was a testbed of radical Chicago-school economics, and/or a victim of what Naomi Klein calls the Shock Doctrine:
President Grímsson was not the first to mythologize Iceland's rapid implementation of global capitalism with Viking references. In the late 1970’s and early 80's, a handful of young men, members of the so-called Locomotive group [Eimreiðin], made themselves busy importing Milton Friedman's free market ideology. Davíð Oddsson was a prominent member of this group. He would later implement Friedman’s ideology as the Independence Party leader, Prime Minister (1991-2004) and, since 2005, chairperson of the Central Bank. Milton Friedman’s dogma is now well known: privatize, deregulate, then look away. In The Shock Doctrine, Naomi Klein has exposed to us how Friedman’s disciples went about doing this, by using the disorientation caused by traumatic events, such as natural catastrophes or economic depression, to push through programmes that otherwise would never have been democratically approved.
A lesser known proponent of ‘more radical capitalism’ is Milton Friedman’s son, the self-professed 'anarcho-capitalist' David Friedman. In 1979, Friedman jr. published an article entitled 'Private Creation and Enforcement of Law: A Historical Case'. The historical case in question is medieval Iceland, when law was not upheld by a state, but by individuals: “Medieval Icelandic institutions […] might almost have been invented by a mad economist to test the lengths to which market systems could supplant government in its most fundamental functions,” wrote the young Friedman. In such a society, he goes on, seats in parliament are a commodity and justice is upheld by the threat of thralldom as punishment for any offence. The Old Norse term ‘thralldom’ is a bit of an obscurity in modern English. Its modern Icelandic variant – Þrældómur – is transparent enough; it just means slavery.
Most of the country’s citizens live in debt but precise statistics are hard to find. Thatcher’s dictum ‘There is no such thing as society’ was taken very seriously by policy makers under Oddsson’s rule, and institutes that had the role of providing social data were disciplined and silenced, or simply shut down. When the National Economic Institute repeatedly published unsuitable information, Oddsson passed law through the Parliament to abolish the institute. That was in the late 1990’s. He then redirected the institute’s role to the Central Bank and years later appointed himself as Central Bank manager. This is why key figures, such as the international Gini index, meant to measure equality of wealth distribution, do not exist for Iceland.The article then asks how deep the rabbit hole goes; whether Iceland wasn't set up from the start:
Neoliberal Iceland was run as a secret conspiracy worthy of a James Bond screenplay: it was exchanged for gambling money in a plot involving Russian oligarchs, offshore accounts in the Caribbean, and luxury yachts no less kitschy than your average dictators’ – not to mention Elton John, Tina Turner and Duran Duran entertaining in private parties, and a lot of cocaine. Or so they say. Rumours abound, but no details, no facts: no single money transaction has been publicly verified. In Iceland, no businessperson, politician or civil servant has been charged with any crime.
The first revolutionary stroke in Iceland’s history re-established the possibility of meaning. Just that. Then everything is left unsaid and undone. How far back do the lies reach? Was Iceland rigged up to feed the US army? It may not be much harder to forge a national identity than decorating a Pizza Hut: one Nobel Prize here, Viking myths there, put a ‘The world’s oldest democracy’-plaque on the wall ….
We have every reason to fear that they and other representatives of global market interests will want to use this opportunity for a full-scale Friedmanite Shock Doctrine. Already in early October, right-wing forces tried to create consensus on the dogmatic “Now nothing can be holy”, i.e. now is the time for environmentalists, feminists and socialists to shut up and let business do its business. Venture capitalists have made bids at the state’s total real estate. It’s Don Corleone’s world, full of ‘offers they can’t refuse’. We know little about the IMF’s agreement with Icelandic authorities, only that they promised each other to suspend the full force of the collapse until 2010. It’s a gluey sort of Apocalypse. 8000 of the country’s 300 thousand inhabitants are currently studying business and finance, acting as if nothing happened. Everyone still acts as if money has a function and basically every trick in the hysteric’s toolbox is currently applied to hide the fact that there is no way back. Tomorrow may be capitalist, but tomorrow’s capitalism would be a dystopian remix of Fukuyama’s universe, without any pretences towards freedom.