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Letter From Iceland

A War Cry From the North

by EINAR MÁR GUOMUNDSSON

You who live with an island in your heart
and the vastness of space
a sidewalk beneath your soles.

Hand me the Northern Lights!
I shall dance with the youngster
who is holding the stars.

We peel the skin from the darkness
and cut the head off misery.

This poem, A War Cry from North, serves in many a way as a fitting beginning for this piece, not only because the poem describes the matter at hand; rather, I wrote it at the Sailors’ Home in Klakksvik in the Faroe Islands in February, 1993, when the bank depression devastated the Faroes.

I was there on a reading tour and have related that story elsewhere and do not intend to draw the Faroe Islands into the financial crisis which Iceland now faces. Although the depression is said to be of an international nature, I intend to fix my sights on Iceland.

* * *

In the midst of all this turmoil, the first question that comes to mind must be: Was Karl Marx right? My friend, who has held on to all the volumes of Das Kapital and has read them, tells me this situation, as it appears now, is dealt with in the third volume. But few people, apparently, have read it because the second volume contains a lot of mathematics, according to my friend who does not stop at owning all the volumes but has read them, which is more than I, or most other people, have done.

This friend of mine says that Karl Marx talks about poetic capital, fictive capital, in the third volume of Das Kapital, where there is no real wealth behind the profits, simply an exchange of worthless documents between one individual and the next – worthless in the sense that there is in no reality in place.

Such a web of lies was woven by the Icelandic capitalists who were often called entrepreneurial Vikings and rumored to be spiffy and swell. In their own publications they appeared as demi-gods and pretended to be patrons of worthy causes, with wives who cared about children in Africa. They claimed they wanted to share something of themselves, that they were doing so well because their husbands worked so hard at the office and met with success in almost every endeavor. They bought their way into companies, gained majority stakes, formed new companies and sold them to one another and kept everything of value from the old companies, the possessions of the shareholders, for themselves. Such was the web of deceit. This was the fate of many a valuable company. Then they reappeared in their own publications, having bought ski slopes in the Alps, luxury apartments in Manhattan and yachts in Florida. These were the happy few indeed.

Note, I use the concept a web of deceit. Still, this is not quite the right phrase because all of this occurred in accordance with the laws of the market and with the blessings of the market. No laws, no rules, prevented the shenanigans of the financial grandees. The politicians of Iceland were fast asleep, shrugged their shoulders and clinked glasses with the financial grandees, they even felt insulted if they were not invited to the feast which was enveloped in Hollywood glamor and razzmatazz.

* * *

When libertarians speak of the market, they resort to religious terms: "This is up to the market." Or: "We’ll let the market decide that." One only needs to replace the word "market" with the word "God" and the religious content of libertarianism becomes apparent. The invisible hand becomes the Will of God, irrespective of how people feel about God. But Mammon is shrewd and takes on many forms. This is to say, the entrepreneurial Vikings, the financial grandees, the Icelandic capitalists, or whatever you wish to call them, were only offering due sacrifices to the market or to Mammon. The rules of engagement were in place and they took advantage of them. In addition, there were the astronomical salaries, the options, the bonuses and more things of joy. In Iceland, a new class came into being, a class of the superwealthy who reduced the middle class to paupers and made fools of the lower class. All sense of values was thrown out of kilter. Ordinary vocations, like that of teaching, were considered declassé. No one took the bus anymore. Everyone jumped into a new car, even cars people didn’t own but bought on installment, from the tires upwards.

The directors of the privatized banks proceeded without discretion. They considered their work such an accomplishment that they awarded themselves a monthly salary to the tune of a Nobel Prize. If this excessive generosity towards themselves was pointed out to them, they would grimace and threaten to leave the country. We should have taken a leaf from The Saga of Grettir, wished them a safe journey and asked them never to return. But they claimed to be in such demand abroad. One could even imagine they would be cloned so that the entire world could bask in their reflected glory. Then it was left to the Icelandic biopharmaceutical company Decode to discover the jealousy gene in those who had the temerity to criticize them. One of them even talked about getting a Ph.D. student to conduct research into why the Danes were so jealous of them.

* * *

I’ll get to this later because Karl Marx now insists I give a more detailed account of his views. The difference, it is said, between Karl Marx and most modern economists is that Marx had a historical overview, that he considered history a classroom from which he drew lessons. In this respect his methods are not unlike those of epic novelists, just in a different field. The truth is concrete, said Marx, like the novelist who collects facts which form the basis of his work. Therefore there are correspondences here and they are not unrelated to modern literature, in that there is a correspondence between unrelated fields. Karl Marx would have discerned the reality of the poetic capital from the depression which ran rampant in the middle of the 19th century – in 1859 if I recall – the most dire depression civic society has witnessed, along with the Great Depression of 1930 and the one with which we are now faced. If these depressions are volcanic eruptions, other depressions are earthquakes, various sorts of reverberations, some of which are restricted to specific zones. Around the middle of the nineteenth century there were great transport developments in Europe which crumbled with the same resounding thud as the financial world is doing now.

We also know that the Great Depression of 1930 was caused by overproduction. But now the depression of 2008 is one of overinvestment. Therefore its origins are to be found in investment companies and banks. Faced with the greed which has followed in wake of this newly crumbled financial system, people are of course flabbergasted. For example, some of the Icelandic financial grandees have appeared on lists of the world’s richest men. They travel by private jet and try to outdo one another with all kinds of displays of vanity. Bands like Duran Duran have performed at new year galas and Elton John has sung at their birthday parties. I’m not going to discuss their musical tastes as such, but there are those artists who have become court poets and painters to the billionaires.

* * *

Even the President has trotted around half the globe with them, maybe to watch a single football match and likened them to great men in toast speeches, exalted their daring. They have had the leaders of the social democratic movement in their pocket and these have been like ventriloquist dummies of the wealthy because, all things being equal, the billonaires needed to find an adversary and some of them have found that adversary in Davíð Oddsson who has occupied almost every position imaginable, that of mayor, prime minister, and now that of chairman of the Central Bank of Iceland.

The Baugur crowd, i.e. the wealthy men of Baugur Group, have blamed the financial depression on Davíð Oddsson and made liberal use of their own press for that purpose. The social democratic leaders, Ingibjörg Sólrún for instance, have aped the billionaires in respect to this ridiculous animosity, the billionaires who moan about their families being persecuted when attempts have been made to curb their crimes and immorality. Davíð Oddsson has accused them of greed and corruption, called them highrollers and made full use of his rhetorical skills to mock them.

But Davíð forgets one thing, that he and his party, the Independence Party, paved the way for these men by privatizing the banks and contributed to the utter lack of ground rules surrounding their activities. The Progressive Party, too, must shoulder much of the blame for this state of affairs. When the banks were privatized, Valgerður Sverridóttir, former Minister of Industry and Commerce, and one of the leaders of the Progressive Party, declared: "This is a significant watershed, as this is the most comprehensive act of privatization in the history of Iceland."

And she was in such a hurry to privatize the banks that summer houses and a valuable art collection were thrown into the bargain, free of charge. When someone had the temerity to criticize her for this, she mouthed off.

The politicians are therefore in the role of Dr. Frankenstein and the billionaires are the monsters who have utterly outgrown the economy and plunged the nation into debt to such a degree that when the moral criterion of the nation state is applied, the word "treason" comes to mind and therefore, given the situation in which the country now finds itself, there is no other recourse but to confiscate the properties of these men and then only to pay off debts, the debts they themselves have incurred.

* * *

On the surface, Davíð Oddsson’s rhetoric concerning the corrupt and greedy highrollers is spot on because there has been no end to the disorder and doubledealing. I won’t go so far as to say that we need to go back to Roman times to find parallels; rather we need go back to the twenties, the Roaring Twenties, when the Great Gatsby ruled the roost and fictional characters such as Babbit came into being. In fact, what Babbit has in common with the financial grandees is that the man, as such, is sympathetic but prone to the same shallow greed. But let’s look closer to home. Joseph Stiglitz, Bill Clinton’s economic advisor, himself a libertarian who became disgusted with libertarianism, wrote the book "The Roaring Nineties" which deals with exactly the same things that have been happening in the Icelandic economy, except people like those responsible for the Enron debacle have actually been taken to court in that country, whereas in Iceland the highrollers are invited to dine with the President at Bessastaðir, to whoop it up with the highrolling Martha Stewart who is apparently a friend of the First Lady. Someone might assume that the President owed us, his people, an explanation. When I say that the social democrats have been in the pocket of the billionaires, I do so without malice towards them. The position of the social democrats in recent years has changed in that they have shifted from left to right. They have become, without realizing it, a beast of burden for the libertarians. Tony Blair represents the original incarnation of this policy and Gordon Brown, who wants to finish us Icelanders off, has followed suit. Tony Blair attracted support from the left but implemented a de facto right-wing policy. This man was the greatest idol of the Icelandic social democrats and their leaders.

* * *

This development is not a question of a sudden change of heart, rather its causes are rooted in historical events such as the fall of the Berlin wall and the ensuing reality which has been associated with postmodernism. Nothing is absolute, all things are relative and the concepts of left and right are redundant and so on. This position goes hand in hand with the decline of trade unionism, the waning powers of organizations and lack of solidarity. This is crystallized in the fact that social democrats do not represent a policy but rather they come up with something they call deliberative politics which has parallels in postmodernist relativism. During the last election I remarked to a social democrat how sad it was that his party had such little concern for the working class. The social democrat looked at me and said, "The working class! What working class? This is a handful of foreigners." One cannot expect much of a policy from an environment where this is the prevalent spirit. It is exactly this position that has given the advocates of capitalism and libertarianism a free run and complete leeway to do as they please. The chairman of the Social Democratic Party – Samfylkingin – has sung the praises of the billionaires and commiserated with them in their self-pity and resentment, and almost made it her policy that they be given the run of practically everything, not just commerce and business, but also the media. In this environment there has been no opposition of note to the war in Iraq or anything at all for that matter. The politicians have been allowed to put on airs on talk shows, almost like actors delivering their lines, and a large number of our youth is lost to the worship of gadgets and financial snobbery. Boobification has run rampant, the penny dreadful is the literature du jour, revered by the shallow-minded.

As a consequence we are not only dealing with a financial depression which is rattling the homes of this country and all the foundations of society, but a profound spiritual depression which makes it even more difficult to face the financial one, or to be more precise, the ruling class will get off scot-free and the people will be left in the clutches of the IMF, which, given its record, will demand even further privatization and that the welfare system be demolished even more thoroughly than is already the case.

* * *

We find ourselves in a fairy tale called The Emperor’s New Clothes and the weavers have said, "If you do not see how clever we are, then you’re just stupid, and not only stupid but jealous, which is really worse than being stupid, because stupid people can be sent on a course in our good schools. Hand the fishing waters over to us, hand over the banks to us, and the water, the waterfalls, the energy companies, and we’ll gallivant around the globe with the President and say: "We are the greatest in the world, and if you do not see this, you’re not only stupid, but also jealous." Perhaps Iceland is a testing ground for things to come, and if not, an exaggerated version of the condition, the depression, which has been made apparent by the fact that the financial companies have run up a debt to the tune of the gross national product times twelve. If I recall, the American housing system was first shaken last summer, and it’s an old and new philosophy that when America sneezes, the rest of the world catches a cold, but the Icelandic economy isn’t just suffering from a cold, but from a case of pneumonia which is attacking its entire infrastructure. At the same time, it becomes more and more apparent that the US housing system which collapsed, and the Icelandic bank system, which has now also collapsed, are more like a pair of doppelgängers from the world of literature than two distinct marvels, although these are surely amazing phenomena.

Still, it’s too early to determine what the depression means and how it will play out. It is apparent that a vast number of people are left bankrupt and perplexed and that the party has drawn to a close. The ensuing hangover will be a long-term one, but if the system has hit rock-bottom, we can expect better days ahead. The avarice can be seen as an addiction, a constant form of abuse, where imaginary money is pumped into the economy and the addiction demands more and more of it, and there is no way back until everything crumbles.

As is, the IMF will probably be given the task of picking the juiciest bits from the welfare system, privatizing our natural resources and welfare system, thus fulfilling the purpose of libertarianism. But you never know whether the fat servant will come to, now that he has become a whipped slave, and then the words of the poem will squeal at reality.

You who live with an island in your heart
and the vastness of space
a sidewalk beneath your soles.

Hand me the Northern Lights!
I shall dance with the youngster
who is holding the stars.

We peel the skin from the darkness
and cut the head off misery.

Einar Már Guðmundsson is one of Iseland’s best-known poets and novelists.