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Abstract
The political party system of Iceland has since the 1980s developed from decay to crisis. This article explains this development with the real critical conjuncture in 1979–1983 that marked the introduction of the neoliberalist societal regime of Iceland. It argues that despite the crisis of the regime and the political party system, the traditional parties and new political movements such as the Pirates are not likely to create a real critical juncture that will generate post-neoliberalist regime change. Hence, due to structural strains of Iceland as a small economy that suffers from high levels of oligopoly, and because of the persistence of the neoliberalist societal regime of Iceland, it is likely that this regime will generate another financial crisis in the years to come.
Acknowledgements
Many thanks to Joan Nymand Larsen, the Polar Journal team, the two anonymous referees and Lilja Mosesdottir for comments on an earlier version of this paper.
Notes
1 See Jonsson, Hegemonic Politics; Mosesdottir et al., Evaluating Equal Pay.
2 On 1 January 2015 the population size was 329,040.
3 Jonsson, Hegemonic Politics; Jonsson, West-Nordic Countries in Crisis; Statistics Iceland.
4 Jonsson, West-Nordic Countries in Crisis, 64–89.
5 Favouritism refers here to cases when the elites of the administration and the political elite distribute pay-offs to favourite groups while plutarchy, or the rule of wealth, refers to a society ruled by the rich who use their power to accumulate ever more wealth and power. Plutarchy leads to increasing poverty, class conflict and corruption.
6 Jonsson, “Explaining the Crisis of Iceland.”
7 Critical junctures are often referred to as turning points as e.g. in Neo-Schumpeterian theories of long waves or Kondratieffs in which lower and upper turning points mark long-term downswings and upswings, see Jonsson, Political Economy of Innovation and Entrepreneurship, 52–3.
8 Capoccia and Kelemen, “Study of Critical Junctures,” 341.
9 Barrington, Social Origins of Dictatorship and Democracy.
10 Capoccia and Keleman, “Study of Critical Junctures,” op.cit., 342.
11 Capoccia and Keleman, “Study of Critical Junctures,” op.cit., 343.
12 Laswell, Preview of Policy Sciences, 1, 4, 27–33.
13 The concept of contingency in social sciences refers to path breaking events that cannot be reduced to deterministic social or economic laws. Hence, social development is partly unforeseen.
14 Jonsson, “Explaining the Crisis of Iceland,” 7–8; Archer, Realist Social Theory, 90; Lewis, “Realism, Causality and the Problem of Social Structure,” 260, 264.
15 It is good to keep in mind that many scholars do not use the term “regime”, but use terminology such as “polity”, “political order” or “constitution” instead of “regime”.
16 Gates et al., “Institutional Inconsistency and Political Instability.”
17 Concerning difference between “ideal types” and “real types”, see Eucken, Foundations of Economics, 347–9.
18 Ibid., 896.
19 Ibid., 897.
20 Ibid., 906.
21 Rather than temporality and simultaneous.
22 Tilly, Regimes and Repertoires, 14.
23 See Yin, Case Study Research, 52–6.
24 Ibid., 143.
25 Indridason, “Theory of Coalitions and Clientelism”, 453.
26 In the 1983 parliamentary election, the support of the Independence Party increased, while the Progressive Party, Peoples’ Party and the Peoples’ Alliance lost support. The main reason for the loss of the two last mentioned parties was that two new parties took part in the election, the Women’s Party and the Alliance of Socialists which was a splinter party from the People’s Party. The two new parties gained 12.8% of the votes. The Women’s Party criticised the establishment parties for their deep-rooted patriarchal ideology while the critique of the Alliance of Socialists emphasised the establishment parties’ lack of democracy and emphasis on direct democracy. In comparison, the neoliberalist regime of UK rose in the context of weak Labour due to internal ideological rivalries and critique from left-wing socialists. Unlike this, in Iceland feminism and the request for direct democracy played crucial role.
27 For analysis of similar break and introduction of the neoliberalist societal regime in Britain in terms of “macro social innovation” or “societal innovation”, see Jonsson, Political Economy of Innovation and Entrepreneurship, 155–76.
28 Fridriksson and Dalmann, “Lög á verkföll á Íslandi 1985-2010,” 160.
29 Vikar, “Vilja \xFEjóðareign á náttúruauðlindum.”
30 Olafsson and Sigurdsson, “Poverty in Iceland,” 83.
31 Olafsson and Kristjansson, Áhrif fjármálahrunsins á lífskjör \xFEjóðarinnar, 7.
32 Statistics Iceland, Various Data Bases.
33 The situation in Iceland was not similar to the era of “stagflation” in many OECD countries in these years when increasing inflation accompanied increasing unemployment. Unemployment was much lower in Iceland than in the other OECD countries. Unemployment in Iceland was on the average 0.4% during the years 1971–1980. During 1981–1990 unemployment increased and was on the average 1.0%, while during 1991–2000 it was 3.7%. In 2001–2008 unemployment increased to 2.9%, but was on the average 7.0% during 2009–2012. In 2013 and 2014 it was 5.4 and 5.0%, respectively. The respective figures for inflation were 34.2; 34.9; 3.2; 5.6; 6.6 and 3.0% in 2013–2014. See Jonsson, Hegemonic Politics, Statistics Iceland, Tölfræðihandbók, 60–2; Statistics Iceland, Landshagir, 73–4; Statistics Iceland, Various Data Bases.
34 For detailed analysis, see Jonsson, Hegemonic Politics.
35 Jonsson, “Transnational Capitalist Class.”
36 The Navy TV station in Keflavik base started in March 1955. The Icelandic state TV started in 1968. The American forces started radio broadcasting in collaboration with the Icelandic state radio already in 1941.
37 Jonsson, Hegemonic Politics; Jonsson, West-Nordic Countries in Crisis; Jonsson, “Explaining the Crisis of Iceland.”
38 “Societal paradigms” concern the fundamental principles upon which societal development is to be based. These principles refer to fundamental ideas of how society is best organised, and when they become dominant they shape societal development over long periods. These paradigms are mediated through hegemonic politics (Jonsson, Hegemonic Politics, 60–75; Jonsson, West-Nordic Countries in Crisis, 32–44) in which organised socio-economic forces struggle for their interests within the framework of alternatives that structural conditions allow. For more detailed discussion, see Jonsson, “Societal Paradigms and Rural Development”, 331–2.
39 Lipietz, Mirages and Miracles, 32.
40 Benko and Dunford, Industrial Change and Regional Development, 8.
41 Dunford, “Theories of regulation,” 307.
42 Jonsson, Hegemonic Politics, Table 7.33.
43 Esping-Andersen, The Three Worlds of Capitalism; Mosesdottir et al., Evaluating Equal Pay.
44 An example of this would be the case when the Icelandic Minister of foreign affairs. B. Benediktsson, of the Independence Party, requested in 1951, that the US Navy should not send black soldiers to Iceland. This ban lasted until the US Minister of defence, R. McNamara, unilaterally broke it in 1963 and sent black soldiers to Iceland.
45 “Ordoliberalism” is a version of neoliberalism that has its grounds in the work of the German economist Walter Eucken and Franz Böhm. Influenced by Ordoliberalism, the German “Social market” approach developed as a compromise between the main factions within the German Christian Democratic Party (CDU); that is, Christian socialists who were powerful in the German labour movement and the market-orientated faction led by Konrad Adenauer and Ludwig Erhard. In the era of the cold war, influenced by the Ordoliberalism and its adherents in the Freiburg school of economics and having learnt from the experience of Nazi Germany and the societal power of oligopolistic companies, an ideology emerged which was directed against both the liberal laissez-faire doctrine and the doctrine of the planned economy. See van Kersbergen, Social Capitalism, 73–6; Goldschmidt and Wohlgemuth, “Social Market Economy,” 267–9.
46 The neoliberalism in Iceland in the post-1983 era was an Anglo-Saxon type neoliberalism, i.e. “laissez-faire” type rather than “Ordoliberalist” or “anarcho-capitalist”, see Jonsson, “Explaining the Crisis of Iceland.” On Ordoliberalism in the Independence Party, see Jonsson, “Nýr landsmálagrundvöllur.”
47 Jonsson, “Nýr landsmálagrundvöllur”; Jonsson, Political Economy of Innovation and Entrepreneurship, 155–76.
48 Jonsson, “Explaining the Crisis of Iceland,” 21; IMF 2009.
49 A detailed analysis of the rise and fall of the neoliberal regime in Iceland is to be found in Jonsson, “Explaining the Crisis of Iceland”.
50 Gallup, Traust til stofnana.
51 A coalition government of the Independence Party and the Social Democratic Alliance had been in power since 2007. Following the crash of the financial system, mass protests and riots started in November 2008 and reached a climax in January 2009 (Juliusson and Helgason 2014, 198–201). Protesters claimed that the government and the Governor of the central bank were responsible for the crisis. The protests were not against the neoliberal regime as such, let alone capitalism. The protesters required that the Governor of the central bank would be dismissed and the government would resign. The government resigned and parliamentary elections were held on 25 April 2009. Following the elections, a coalition government of the Left Greens and the Social Democratic Alliance was established.
52 Pressan, “Skýrsla Landsbankans”; Visir, “Um 39% heimila skulda.”
53 Some older generation activists in the IP reject the laissez-faire neoliberalism of the party elite, and promote Ordoliberalist type of neoliberalism, but they have little influence in the party, see e.g. Gunnarsson, “HugmyndaðstefnuskráSjálfstæðisflokks,” 26.
54 Gallup, Fylgi stjórnálaflokka. These figures are rather shaky as 28% of respondents do not answer which parties they would elect in parliamentary election if such election would have taken place in August 2015.
55 Pirates, Platform.
56 “The word ‘epistocratic” refers to procedures in which formal experts have great influence on choice of knowledge and how it is used to frame policies and influence political decisions.
57 Capoccia and Kelemen, “Study of Critical Junctures,” 355–7.