Are the Icelanders Heading for ‘Interesting Times’?

The Icelanders seem to face two alternatives, one safe and a bit boring, the other one irresponsible, exciting and dangerous...

There is a law in politics which I would call Tocqueville’s Law based on some remarks made by the renowned nineteenth century French thinker: The less of a problem something becomes, the more it will be visible and, hence, discussed. It is noticed mainly because it has become an exception, not the rule. A case in point is poverty. In poor societies it is considered an inevitable fact of life and rarely mentioned. In prosperous societies on the other hand it is regarded as a grave problem, with endless debates about it.

Discussing Disappearing Problems

Tocqueville’s Law certainly applies to Icelandic politics, as three examples show:

• Three of the richest countries in Europe are Switzerland, Norway, and Iceland. They are all outside the European Union. Nevertheless, Iceland’s once-dominant centre-right party, the Independence Party, split when a sizeable part of it left and formed a new party, the Reform Party (Vidreisn), wanting Iceland to join the European Union, presumably in order to get richer. (Strictly speaking, Luxembourg is also quite rich, but this is a statistical anomaly, because so many people work in tiny Luxembourg and live in adjacent countries.)
• Iceland has at present the greatest income equality of the Nordic countries, and in Europe only two countries, Slovakia and Slovenia, both much poorer than Iceland, have a (slightly) more equal income distribution. Nevertheless, all the left-wing parties in Iceland campaign fiercely against what they see as the terrible inequality of Icelandic society.
• The elderly in Iceland enjoy on average higher income and better living standards than their counterparts in other European countries, according to all available surveys and studies. This is partly because in the 1980s and 1990s the Icelanders made their professional pension funds sustainable so that they have become financially strong, partly because additional private pension arrangements were facilitated and partly because many people past retirement age (between 67 and 70) have been able to continue working, half time or full time. Nevertheless, some left-wing commentators loudly condemn the ‘shameful’ way in which Iceland ‘treats’ her elderly.  

When the irrefutable evidence on such issues is presented, the zealots and propagandists merely respond by telling anecdotes: I know an old woman who struggles to make ends meet; in Brussels the price of a bottle of wine is much lower than in Reykjavik; and so on. But of course you can find anecdotes to support any cause, to fit any narrative. Even in such a peaceful and prosperous society as Iceland there are bound to be cases of individuals in unfortunate circumstances.

From Stability to Chaos, and Back

Since the 2008 bank collapse, Icelandic politics has been somewhat chaotic. Previously, the political system had consisted of a large centre-right party, the Independence Party, and three smaller left-wing parties, and most of the time the Independence Party had been able to form a coalition government with one of the smaller parties. But rightly or wrongly, the bank collapse was widely blamed on the Independence Party whose support declined from 35–40 per cent to 20–25 per cent, while several small parties appeared on its left. The rapid recovery from the collapse did not help the Party much because of the split over EU membership.

In the parliamentary elections on 25 September this year there will be no less than nine parties competing for votes. They may be divided into three groups. In the first group there are the four or five traditional parties: the Independence Party which is still the largest party; the Reform Party, mostly former supporters of the Independence Party and still enthusiastic about EU membership; the rural-based Progressive Party; the urban-based Social Democrats; and the Left Greens. In the second group there are two populist parties, the People’s Party and the Centre Party, both of them led by colourful characters. In the third group there are two rogue parties running against everybody and everything, the Pirates and the Socialists, both of them trying hard to bribe the voters with other people’s money. Needless to say, they also both embrace wokeism. It would be quite a spectacle if either of them would enter government. This is not likely, however, as they are both essentially irresponsible protest groups. Even if you like occasionally to visit a circus, you may hesitate to make it your home and let the clowns take over.

At present, a coalition government of the Independence Party, the Progressive Party and the Left Greens is in place, led by the pleasant and popular Katrin Jakobsdottir from the Left Greens. It was formed in 2017 after years of mayhem when two governments fell because of scandals that are in retrospect hard to understand. The main reason why the three different parties formed the present government was that their voters craved stability after the preceding pandemonium. Iceland was doing rather well, and the old adage seemed to apply: If it ain’t broke, don’t fix it. The Independence Party Leader, Finance Minister Bjarni Benediktsson, has gained respect as a cautious and prudent politician although he admittedly committed the dreadful crime of being born into a wealthy and influential family. It is certainly a possibility that this government will continue after the elections if it retains its parliamentary majority. The ministers work well together, and the supporters of at least the Independence Party and the Progressive Party are reasonably content. But another possibility, no less likely, is that Jakobsdottir will form a left-wing government of many small parties. Then the Icelanders will definitely discover the meaning of the ancient Chinese curse: May you live in interesting times.