The Dog Doesn’t Die

Book reviews & random thoughts

Iceland, the Global Economy, and Culture

Like a lot of people, I’m doing my best to muddle through this economic crisis without having a personal crisis on top of it all. And, like a lot of people, I find myself following the various analysts and commentators as they address the situation. Most recently, I’ve been thinking about Iceland, the global economy, and culture. And the question that arises is, “How did this happen?”

In his Letter from Reykjavik, published in the March 9 issue of The New Yorker, Ian Parker discusses Iceland’s banking collapse primarily from an economic point of view. Parker’s answer to my question is that single-minded men — and they were mostly men, not women — paid no attention to warnings because the warnings didn’t match what these single-minded men wanted to believe. (How familiar is that?)  These are people who would have continued to invest with Bernie Madoff after he was indicted. Parker reports the aftermath: the protests, the occupation of Iceland’s Central Bank, the election of a new prime minister. It’s an instructive article, although the link provides only an abstract for nonsubscribers.

More lively and enlightening is Wall Street on the Tundra, by Michael Lewis, in the April edition of Vanity Fair. Let’s start by copying the magazine’s own blurb on the piece:

Iceland’s de facto bankruptcy—its currency (the krona) is kaput, its debt is 850 percent of G.D.P., its people are hoarding food and cash and blowing up their new Range Rovers for the insurance—resulted from a stunning collective madness. What led a tiny fishing nation, population 300,000, to decide, around 2003, to re-invent itself as a global financial power? In Reykjavík, where men are men, and the women seem to have completely given up on them, the author follows the peculiarly Icelandic logic behind the meltdown.

Lewis covers a lot of territory in this article. From the brusk Icelander who bonks him in the head with a suitcase to the binge drinking to the widespread belief in elves to the fact that everyone there knows everyone else, including Bjork, Lewis provides a sense of who Icelanders really are.  He explains how the country provides few jobs worthy of its highly educated population, and gives some examples of skilled fishermen becoming bankers with no training in the field. Why did they think they could pull this off? They think they’re superior to everyone else. Well, maybe they don’t think that anymore, but they thought it before their banks collapsed. Now, who knows? Many Icelanders have $35,000 Range Rovers with loans worth $100,000, vehicles that some of them simply blow up in explosions that rocked Lewis out of sleep his first night in the country. He also observed that Icelandic men and women have very little to do with each other except when sex is part of the equation. Yes, Icelandic women are well-educated, enjoy equal rights, and fully participate in the workforce. But they don’t seem to interact with men very much; the two sexes often treat each other with open disdain.

Lewis’s answer to my question about how the Icelandic banking crisis occurred would likely be “because of the country’s culture.”

And that leads to the third piece I’ve read about Iceland recently: the Iceland chapter in Eric Weiner’s book, The Geography of Bliss. I’ll be reviewing this book in its entirety on Wednesday, but I want to mention here the chapter on Iceland. Weiner visited Iceland and wrote his book before the economic collapse. His purpose was to visit the happiest and unhappiest places in the world. According to his research, Iceland often ranks as one of the happiest countries.

Why? Keep in mind, Icelanders were flush at that point, buying homes in London, hauling in Elton John to sing at birthday parties for $1 million, purchasing $35,000 Range Rovers that they would incinerate in 2008. But it wasn’t the money that made them happy. They’d been gauged as very happy before the money turned fishermen into international investors. What Weiner pointed out, with no idea of what was to come, was that Icelanders have little to no fear of failure. In fact, they embrace it. They accept it and see failure as a worthy outcome of engaging in a process they enjoy. As Weiner notes, there are a lot of terrible musicians in Iceland, and that’s not including Bjork. They are also career changers who accept that the change might not work. Are you a fisherman who wants to try banking? Even if you know nothing about finance? In Iceland, that’s not a problem, or at least it wasn’t. Weiner interviewed a music producer who had also been a professional chess player, journalist, theologian, and construction company executive. This man was 40. Weiner’s answer to my question about the Icelandic banking collapse might be “they tried out careers that didn’t work.”

Of course, all of this leads me to a new question: Are Icelanders still happy? I hope so, but I wonder if the incredible debts many of them have taken on might have dampened their enthusiasm for failure.


March 14, 2009 - Posted by | random thoughts, travel | , , , , , , , , , , ,


  1. Apparently at Davos this year, an already old joke circulated among the gurus of high finance: Q.: “What is the capital of Iceland?” A.: “About $3.50.”

    Comment by The King | March 16, 2009 | Reply

  2. […] founded in 1786 as an official trading town and grew steadily over the next deca Usefull Posts Iceland, the Global Economy, and Culture « The Dog Doesn’t Die…Lýðveldið Ísland – Iceland « imajica is imajicated…Obama’s New World Order « […]

    Pingback by Hot News » Capital Of Iceland | April 11, 2009 | Reply

  3. Hi, I just stumbled upon your site while searching for happiness in Iceland during (or after?) the crisis… was asking myself the same question as you did. Just to share a result: Weiner thinks they Icelanders indeed still are happy:

    Comment by Fabian | January 10, 2010 | Reply

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