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..

Sunday 20 March 2016

Iceland's crisis and the power of its working class

It is good to see the article in Jacobin magazine online, Iceland’s Revolution by Viðar Þorsteinsson this month that summarises the political situation in Iceland since the 2008 crash. It points out that the lack of a clear left alternative with a coherent strategy for tackling the cuts in living standards and the debt burden, has wasted the enormous angry protests that surged as the crisis unfolded. As we know a lot of nonsense has been written and repeated about the Icelandic establishment putting people before the banks. As Viðar puts it, the story goes; 
“The Icelanders put the bankers in jail. The Icelanders crowdsourced a new constitution. The Icelanders refused to bail out the banks. The Icelanders held a national referendum on sovereign debt.”
The reality, Marxist economist Michael Roberts reiterated on his blog earlier this month is,
Iceland did not renege on the huge debts that its corrupt banks ran up with foreign institutions (mainly the UK and the Netherlands). It eventually renegotiated them and is now paying them back like Greece.
“And devaluation did not mean that Icelanders escaped from a huge loss in living standards. They have done little better than the Greeks on that score – although of course, Icelanders started from a much higher standard of living than the Greeks. In euro terms, Icelandic employee real incomes fell 50% and are still 25% below pre-crisis levels.”
Viðar Þorsteinsson adds that government responses to the crash, “were only modestly progressive...In some cases, debt-relief policies have been outright reactionary in their upward redistribution of wealth.” And that's without mentioning the immediate raid on pensions as the crash unfolded.

Viðar goes on, “Remarkably, popular sentiment against banking and indebtedness has not been channelled into building any long-term prospects for the Icelandic left. Rather, the country's establishment parties have successfully promoted their own weak measures against mortgage plight to recover from the loss of trust they suffered following the crash.” The left will have to address missed opportunities and he concludes;
“Above all the Icelandic experience reveals the urgency of finding an egalitarian and redistributive approach to debt politics; one which can relay popular sentiment without falling into nationalism, limiting itself to superficial reform or making the finance sector a scapegoat for the systemic failures of capitalism.”
This is fine as far as it goes - though I don’t care whether bankers are made scapegoats—theses parasites caused this global financial crisis, but the point here is the systemic failures of capitalism. and Iceland's Revolution does not mention the force in Iceland with the economic muscle to challenge capital. Last summer Iceland's workers went on strike against the cuts they have been made to endure.

Last year opened with doctors in Iceland striking for 11 weeks and winning better terms and conditions. Over April and May some 10,000 workers struck for an increased minimum wage in food processing plants such as slaughterhouses and fish factories, the tourist industry and cleaning services. A general strike began on 26 May at midnight and there were huge protests of angry workers.

The government used legislation to end and ban further strikes while discussions with the unions continued. This affected thousands of workers including striking vets, radiologists, nurses, midwives and lawyers. While unions considered legal action against the government, nurses and radiologists resigned on mass arguing that if the government wouldn’t pay them the same as in other Scandinavian countries then they would work in those countries instead.

Then last October the large unions, the Icelandic Professional Trade Association (SGS) and Flóabandalagið—the Bay Alliance, which includes the unions Efling, Hlíf and the Labour and Seamen’s Association of Keflavík, agreed a deal with the government negotiator. The deal, backdated to 1 May, means an extra 25.000 krónur (kr) a month, then another 5.5 percent raise from 1 June 2016 with at least 15.000 kr extra a month. Wages will then rise another 4.5 percent in June 2017 with a further 3 percent in June 2018. In February 2019 fulltime workers will then get an extra 45.000 kr, with part time workers getting the rate according to their hours. All of this means that the basic wage rate should rise to 300.000 kr for everyone over 18 years old.

It’s a substantial improvement, and would never have happened without the strikes—but it could have been achieved much faster than 2018 if the strikes had continued. This would mean workers organising so that they could overcome vacillating union leaders who tend to fold in the face of underhand new laws. That is how the working class and the left in Iceland could work together to create a serious challenge to capital.

This is not an abstract debate. Like everywhere else in Europe there is a polarisation and rise in racism and a new party has recently been founded, the Icelandic National Front  - Íslenska þjóðfylkingin. This is a nasty chauvinist, Islamophobic party that is feeding off anger at continuing austerity and scapegoating minorities. It can be stopped and capital can be challenged but it will take a coherent strategy and workers' social and economic muscle to do it.


  1. Really interesting article. And shows that its only down to militant action ie strikes that people get justice.