Icelanders Force Accountability for Banks – Why Can’t We?

George Lakey, Contributor
Waking Times

Ever since Iceland’s economy collapsed in 2008, the country has been busy reinventing itself. The first step was to restore democracy through a turbulent nonviolent struggle, then to force resignations in the financial sector and secure a criminal conviction of their prime minister for dereliction of duty. Now they are exploring getting a new currency: the Canadian dollar.

If Icelanders think their traditional money has lost its legitimacy, why not adopt the euro or the U.S. dollar? Too much influence from the big banks of Europe and the U.S., they believe. Better to risk interference from the smaller and much better-regulated banks of Canada. (Canada, like the publicly-owned state bank of North Dakota, did far better in the 2008 crisis than most of the U.S. and Europe.)

For decades, Iceland was part of the “Nordic model” of social democracy, with the high standards of living, free university education, universal health care, full employment and other benefits. Like Norway and Sweden, in the late 1980s the Icelanders flirted with neoliberalism, but unlike their Viking cousins they went all the way. The right-wing party privatized banks, cut regulations and lowered the corporate tax rate. The banks, in turn, created a bubble through hysterical foreign borrowing, and the bubble broke in September 2008. Banks failed. Unemployment and inflation shot up, and crisis reigned.

In mid-October, the singer/songwriter Hörður Torfason stood in the public square in the capitol of Reykjavik with an open microphone, inviting passersby to speak. Every Saturday people gathered to speak and protest, to the point where 2,000 people gathered outside the parliament building on January 20. They banged pots and pans to disrupt the meeting of parliament – the “Kitchenware Revolution,” they called it.

The crowds grew to 10,000 — out of a total population of 320,000! — and the increasing turbulence forced Prime Minister Geir H. Haarde to announce that he and his cabinet would resign and new elections would be held. Although politicians responsible for Iceland’s financial life were resigning, the campaigners didn’t stop there; they demanded — and won — the resignation of the governing board of the Central Bank.

The social democrats came back into power and started to clean up the mess, with help from Sweden and Norway. Iceland was hurt and people had tough times. However, the social democrats refused to do what capitalist wizards expected. Instead of trying to pacify international investors, Iceland created controls on the movement of capital. Instead of initiating an austerity program, the government expanded its social safety net.

According to The New York Times, “Some economists have argued that the collapse of its banks forced the country to deal with its problems faster and aided a swifter recovery.” Iceland’s economy is expected to grow 2.5 percent this year and next.

But the mood of the cheated Icelanders was not, “Let’s move on.”

In March, Iceland opened a criminal trial against its former prime minister. Continues the same Times article:

Mr. Haarde was charged, in effect, with doing too little to protect the country against the depredations of its bankers as they pursued wildly expansionary lending that resulted in financial disaster for the country.

Haarde was found guilty. Former executives of the failed Kaupthing Bank have also been indicted.

The movement of Icelanders that rejected a European Union-style austerity program and instead put accountability where it belonged did not come out of thin air. Even while some Icelanders were trying to buy glamour through neoliberalism, others spent the years between 2000 and 2006 protesting the Karahnjukar hydropower project that the Icelandic 1 percent sponsored along with the Alcoa and Bechtel corporations.

Decades before that eco-justice campaign, Icelandic women shut down most of the nation for a day in 1975 to force passage of a civil-rights bill for women’s equality.

I see two big lessons that the rest of us can learn from the painful Icelandic experience. First, avoid assuming that activism is a “sometimes thing,” to be put aside after major victories are won. Icelandic activists achieved much but then almost lost it. As Canadian labor unions are fond of pointing out, “The struggle continues.”

Second, it is possible to take your country back from the mismanagement of the economic elite if your campaign’s strategy generates broad participation. Iceland mobilized no less than 3 percent of its population in direct action. For U.S. activists, that implies giving serious attention to campaign organizing and generating allies. The model of just occasional “mass bashes” doesn’t cut it.

This article originally appeared at, an inspirational source of ideas on non-violent solutions to political issues.  Click here to support their noble efforts.

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  • Bruno

    Rob you are correct. Iceland is a Tiny country and has a natural tendancy towards kindness of its citizens. And standing against the US Government would be basically asking for a thorough asskicking by the Military as they are well trained now at ‘Taking Out’ civilian populations, and after all they have the bullets to do so-Big Time. But I think a way to make a strike at the heart of the beat would be to strike where the beasts heart lies. STOP Buying shit. Anything, just STOP. Ban Walmart, start growing your own food, even make your own clothes. I know it sounds flakey, but work to make it a Stand by the Many. And make it know WHY you are doing it. One will be of no use, but one hundred will make the news and one thousand will be a storm and one million will be change. I know this sounds like a tall order, but Ghandi changed a Nation with a similar principle and it worked. The Blacks in the South boycotted busses and it worked. There will never be a mass uprising against a country like the US, but there could certainly be an incremental shift of buying habits, with pride of ones self, that would result in the bowing down of the Criminals who have stolen control. Then we can End the Fed and start taking our country back.

    • Rob

      Good plan, Bruno. I’m in, because I can’t afford much shit. Getting others on board is a problem, though. Many can less afford shit than me, but they continue to buy, and the banksters and big corporations keep on truckin’ us on the highway to hell. What you state doesn’t sound flakey at all, but getting people moving is a difficult task. Pardon me, I meant getting people NOT moving. Be well, Rob

    • Sovereign

      What we need is a national strike…everybody just stay home. Even if only 50% were actively “NOT” involved, a very strong message would be sent to the powers that be.

  • Rob

    Iceland has a population equivalent to a moderate sized western city. Therein lies the problem (for us). While 350,000 CAN unite, millions of us can be set against one another. Years of unity as a small nation, with a sense of caring for (most) all, has given them the strength to fight the carpetbagging banksters. We need to unite as smaller groups, local units with full citizen support, to do what Iceland did.

  • Dan

    “Retire” the entire Congress, and the entire Federal government for that matter. Tell the bankersw, including the Fed, that they will not be paid back. If they don’t like it they can sue the Congress and the rest of the Federal government. How about the state governments too? Print up and distribute our own money. Let the counties handle the printing of money and all other government functions, but very limited scope, and closely watched. If they screw up, try them in court. Bring all armed forces home and close all overseas bases. Stop aid to “That Shitty Little State” and everyone else. Etc. etc., etc. What are the elites going to do, not send us a happy Hanukkah card?

    • Ha, a Happy Hanukkah card! How righteous that would be of them.

    • windy

      Agreed. Ron Paul would lead the country into stability and decency.

      Why are so many americans so stupid?

      • I remember a time when I was ‘stupid.’ I used to listen to Rush Limbaugh and Sean Hannity every day. Being dumbed down and manipulated is different than being stupid and because of this, we try, try and try to wake people up. I’m dong it because someone did it for me. Ron Paul played a role in my awakening but I think that in reality he is still part of the hopeless system we suffer under.

    • Thanks for sharing this with us and giving us all the information. I think everyone tries to get a cheaper insurance if possible. That is one of the fixed cost which people find it expensive.

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