Icelandic financial strategy deserves some merit

Iceland is an incredible country. What you might not know about it is that people in Iceland (the descendants of Vikings) are incredibly progressive. When the 2008 financial crisis hit the planet, it hit Iceland particularly hard. Instead of restructuring the entire financial institution through various private and governmental measures, Iceland’s banks simply collapsed. America, as the fourth largest country in the world and with one of the largest economies, was able to absorb the blow and not suffer hyperinflation at Great Depression levels. Iceland’s collapse relative to the size of its economy was the worst in history. The Icelandic stock exchange was virtually frozen to put the country’s economy in suspended animation before it could continue its freefall.

What resulted after that is nothing short of amazing.

America had “Occupy Wall Street.” Iceland, on the other hand, experienced the Kitchenware Revolution, where protestors banged pots and pans outside Parliament. The protests began in October 2008 with a clear goal: to force the government out of office and let a new party step in to resolve the crisis. Protests were staged every Saturday that grew successively until they turned into riots. Police used pepper spray and batons to subdue over 1,000 Icelanders outside the Parliament building resulting in 20 arrests and 20 more trips to the hospital. Protestors were adamant and demanded then-Prime Minister Geir Haarde to step down as they angrily asked why he didn’t try to stop the crisis from happening. The Kitchenware battle cry should resonate with Americans still contemplating our own state of finance: “Treason due to recklessness is still treason.”

On Jan. 26, 2009, Prime Minister Haarde claimed medical reasons (esophageal cancer) to step down from office. On Feb. 1, a new political alliance formed and was sworn into power.

But even with a new government in place, Icelanders realized that it wasn’t just the people in power that were the problem, it was the structure of power itself. A National Forum began on Nov. 14, 2009 to prepare the grounds for a scheduled Constitutional Assembly in 2011. Fifteen hundred people were invited to represent all cross-sections of Iceland’s population: ages spanned from 18 to 88, all six constituencies of Iceland were represented and 47 percent of the assembly was female (arguably the largest assembly of women present at any creation of government).

On Nov. 27, 2010, the votes were cast to elect twenty-five men and women to draft a new Icelandic constitution. Receiving the most votes was Thorvaldur Gylfason, a Professor of Economics. The assembly also included farmers, physicians, journalists, and even a pastor. Like the Forum to appoint the Assembly, all walks of Icelandic life were represented.

The many changes to the Icelandic constitution included: a formal separation of church and state, adding a vote of no confidence to remove the Prime Minister from power, allowing 15 percent of voters to put bills to parliament or call referendum on proposed laws, obliging the state to provide internet access to all Icelanders and declaring Iceland’s natural resources public property.

Any one of these changes has drastic consequences, but to add all of them demonstrates a level of equality that is rare in the Post-Industrial World. For example, the Internet played a crucial role in getting protests organized, in forming the Assembly and promoting change that it would be irresponsible to leave it to chance. Iceland is a small island with no small amount of natural beauty: the government should not be able to exploit the land without the express permission of the people, who should be able to profit off that same exploitation. There’s simply no end to the consequences of these changes.

Iceland has always been a progressive country. The first Vikings to go there escaped tyrannical Norse Kings. While the rest of Europe was arguing for “Divine Right,” Iceland had a Parliament with restricted powers. Aside from being the first modern nation with an openly lesbian head-of-state, Iceland has also managed to charge their bankers for fraud, despite the traditional anti-jail insurance of being rich.

Iceland is a small country, but we shouldn’t take for granted the lessons to be learned. Connecticut is smaller in size, but 13 times larger in population. Imagine a Kitchenware Revolution descending on Hartford, 13 times bigger than the one in Reykjavik. What sort of constitutional changes could we affect here in Connecticut?
We live in an environment where our greatest threats are not indigenous warriors, European empires or sudden starvation at the hands of nature, but economic meltdown. Our constitutions should reflect those changes to prepare for the challenges to come.