Herring and Class Struggle

Capitalism came late to Iceland. At the end of the 19th century this large, wind-swept, thinly populated island was made up of small towns, farms and seasonal fishing stations. Then European capitalists saw another Klondike in the herring-rich waters of the north Atlantic..

Friday 30 September 2011

Into the Hurricane

Tomorrow in Reykjavik there is going to be a demonstration outside the Althing (Parliament) on its 1st day of the new session. Yesterday 300 coppers marched, four days after all 25 of the Suðurnes riot police resigned which they did ‘because our wages don’t reflect our duties,” Hjálmar Hallgrímsson, a police officer, was reported in Morgunblaðið newspaper. This is just a week after the Irish Times ran an article praising the Icelandic economic recovery
‘Three years ago Iceland led the way into an economic abyss. Now, by raising taxes, letting the banks go bust and protecting the public sector, it is showing a way out.’[1]

The basis of this optimism is apparently that inflation and interest rates are low, unemployment has stabilised, the Icelandic Krona is no longer worthless[2] and taxes have gone up so Iceland is paying off its deficit and presumably is on its ways to rejoining the financially respectable. 

The experience of ordinary Icelanders is very different.
Cars and homes have been repossessed, though the government has been shoring up mortgages to prevent mass defaults. Pensions have been wiped out; the real rate of return, measured by consumer price index is;

1999    -           12 billion Isk
2004    -           10.4 B Isk
2009    -           0.3 B Isk
Unemployment for 16-24 year olds is about 16% and overall 7.6%.
In the first quarter of 2011, 18% of the unemployed have been looking for a job for over 6 months. This figure does not reflect all the people working part time or more accurately, short hours. Unemployment would probably be worse but those who have other options have left.

10% of Icelanders have arrears of mortgage payments or rent, with a further 16% for whom housing costs are a heavy burden. 49.3% are finding it difficult to make ends meet.

Inflation has been rising for all of 2011 to 5.7%.
Economic growth in 2010 was -4% on 2009 which was -6.7% on 2008.
Real wages dropped last year [3]
Then there are the incidentals like geography. Iceland has 2/3 of its population living in or around its capital, in the South West corner but the rest of the country is huge and goods and services can cost much more. Outside the reach of the Bonus supermarket chain, food will be at least an extra £500 a year. If you live outside of the towns and aren’t in a geothermal area for your electricity and hot water, you will spend 7 times more than those in the capital or 18.2% of household income.[4]
Icelandic poverty is real, not withstanding the efforts of the Presidents partner, Dorrit.  She turned up unannounced last week, in an expensive coat, to help at the charity-run food bank. She announced that Icelanders don’t know how to hug and asked a bystander if he had stopped drinking yet, his reply was much more polite than mine would have been.[5]

When Lehman Brothers crashed in 2008 I wrote an article in Socialist Review about the Icelandic history of militant resistance to attacks on their wages and conditions during the Depression years. Shortly after, the government of the then prime minister, Geir Haarde was thrown out by a rising tide of protest.

Popular feeling in Kolaport market, Reykjavik Feb 2009

Three weeks ago he was up in front of a court charged with ‘failures of ministerial responsibility’ which is ironic given that Davið 'getting away with it all' Oddsson was both prime minister and governor of the Central bank when he ‘liberalised’ and privatised the banks. Now Davið is editor of the right-wing daily Morgunblaðið when he should be in jail.

Things are bad now but it can get much, much worse. Greece is expected to default by December and the euro is looking into the abyss but there is resistance everywhere. From the Egyptian revolution to growing rebellion in Greece and workers joining the protestors camped outside Wall St. In Britain we will be marching against our government on Sunday 2nd Oct, who are preparing to cut our living standards by 15% and preparing for mass strikes on November 30th. They can be stopped.  Every victory starts somewhere, why not tomorrow, in solidarity. 


  1. It's interesting that Iceland has tried an alternative to austerity orthodoxy but is still depressing workers living standards. I wonder if the Labour left strategy for Britain would lead to similar results?

    Is the Althing dominated by a social democratic party?

  2. The ruling coalition is SDP and the Left Green Alliance. The Prime Minister Jóhanna Sigurðardóttir represents the left of the SDP who refused to go into coalition with the Tory Independence Party. The right of the SDP were in the coalition government with the reviled ex-pm Geir Haarde, this was the government that fell in Feb 2009. Jóhanna was personally popular because she used her own car rather than a free government one, and did not line her own pockets. However she has since been strongly in favour of the IMF deal and described the last referendum, which refused to repay Britain and the Netherlands, as the worst possible outcome. So she is now lumped together with the rest when the protestors were shouting today that the government doesn’t give a damn about ordinary Icelanders.