Why we need a Universal Basic Income

Article published in Katoikos

Basic Income demonstration in Berlin, 2013. © Flickr stanjourdan

Faced with a future of automation and growing inequality, governments are paying considerable attention to the universal basic income, emboldened by trials in Finland, the Netherlands and Africa.

 The origins of the basic income

The idea of a universal basic income (UBI), i.e. an unconditional weekly or monthly grant for every human being, has been debated for centuries. In his Utopia, first published exactly 500 years ago, Thomas More presented his idea of a perfect society, rejecting the feudal system in favour of a social collective organisation. More reports a conversation between the English Archbishop of Canterbury and the Portuguese Raphael Nonsenso.

Debating the fashion in which England was treating its growing number of thieves, Raphael said, “Instead of inflicting these horrible punishments, it would be far more to the point to provide everyone with some means of livelihood, so that nobody’s under the frightful necessity of becoming first a thief and then a corpse.”

After Thomas Moore’s Utopia, the idea of the UBI was built upon the assumption of a reinvention of the social security system. In the XVIII century, Antoine Caritat, Marquis de Condorcet (1743-1794), wrote the Sketch for a Historical Picture of the Progress of the Human Mind. It contained a brief draft of what social insurance might look like and how it could reduce inequality, insecurity and poverty.

Later in the XIX and XX centuries, British Labour Party member Dennis Milner (1892-1956) published a short pamphlet entitled Scheme for a State Bonus (1918). The essay, based on an eclectic series of arguments, defended the introduction of an income paid unconditionally on a weekly basis to all citizens of the United Kingdom.

Contemporary advocates of UBI are building up an understanding of this theory. The British journalist and author of Post-Capitalism: A Guide to Our Future, Paul Mason, delivered a lecture in Amsterdam, claiming that neoliberalism has failed and a new economic model must be put in its place.

In his book, the author explains why replacing capitalism is no longer a utopian dream, how the basic forms of a post-capitalist economy can be found within the current system and how it could swiftly expand.“Our long-term aim should be to push more and more economic activity to be done outside the market and the state. This requires, in part, that we end the reliance on wages for work […] We need to quickly pursue the experiments with the universal basic income […]  and aim within ten years for states to be in a position to roll out the policy itself,” said Manson.

The basic income is gaining its political momentum. © Flickr Russel Shaw Higgs

“The basic income is not left or right. It’s forward,” said Scott Santens, an American activist for the UBI. Political will is the determining factor for a constructive discussion on the basic income, which could represent a major political reform in political and economic systems around the world.

Yet, such advances would require a whole new level of policy-making and countries that are better off will keep resisting. The current social and political instability threatening Europe may weigh substantially in a country’s decision to adopt the basic income. Nevertheless, it is up to every country to find the most appropriate way to implement the policy according to their own administrative and financial capacities.

Basic Income debated by European governments

Switzerland

Proposals for this concept were presented in Switzerland last June, in an unprecedented referendum that ended with the UBI being overwhelmingly rejected by the Swiss people. Why would the Swiss people waste the power they hold by rejecting the opportunity to set the example? Most likely, the high welfare enjoyed by the Swiss and fears of a sudden influx of undesired migrants were the reasons behind the failure of the plebiscite that could have set a milestone in history.

The Swiss right wing rejoiced. “Theoretically, if Switzerland were an island, the answer is yes. But with open borders, it’s a total impossibility, especially for Switzerland, with a high living standard. If you would offer every individual a Swiss amount of money, you would have billions of people who would try to live here”, said Luzi Stamm of the Swiss People’s Party. Besides, critics of the concept argue that a society where a basic income is granted would encourage slackers. “If you pay people to do nothing, they will do nothing,” said Charles Wyplosz, professor of economics at the Geneva Graduate Institute.

Yet this argument is debatable given that, due to rising inequality, most of the people who would be entitled to this grant would still need to work to be able to enjoy a dignified life, particularly in countries displaying high levels of poverty and wide gaps between rich and poor.

Finland

Contrary to the Swiss, the Finns have seen better days. The Finnish Minister for Finance, Petteri Orpo, received a  letter from the European Commission recommending a reduction of Finland’s deficit by 0.6% of GDP, as the country’s large deficit threatens it with significant hardships. Indeed, the IMF states that Finland was showing “tepid” signs of economic growth.

Nevertheless, last August the government passed a bill for an experiment in which a number of unemployed citizens were randomly selected to receive a monthly basic income. Not surprisingly, a survey found that, with hard times knocking at the door, the Finnish people happily welcomed the idea of a basic income.

The Netherlands

In August 2015, the Dutch city Utrecht announced it would run an experiment to assess the impact of UBI. The try-out emboldened the supporters of the basic income and in January this year, the member of the Dutch Parliament Norbert Klein of the Cultural Liberal Party wrote a “note of initiative” to the Parliament asking for a serious and open debate about the idea of a basic income for all over the age of 18 (who have lived in the Netherlands for more than ten years).

Poverty is crushing us

For Nobel Peace laureate Muhammad Yunus, today’s growing social disparities are a “ticking time bomb“, both socially and economically speaking. As for Georges Dassis, president of the European Economic and Social Committee, poverty in Europe is not seeing any progress, “nearly one in four EU citizens (about 120 million people) faces the risk of poverty”.

A study from Oxfam reported that 62 people in the world are now in control of more than half of global wealth. A graphic illustration from the Spanish daily El País has depicted how global inequality is growing, with nearly half of the world’s wealth in the pockets of roughly 1% of the world population. 

Furthermore, a report released by the World Bank stated that, even though poverty has declined in Africa, evidence shows that more people worldwide live in poverty today than in 1990. The study is underpinned by surveys of ten African countries, exploring the levels of inequality of economic opportunity by looking at such factors as ethnicity, parental education and occupation and region of birth. Another approach was to examine persistence in intergenerational education and occupation. “Is a farmer’s son less likely to be a farmer than he was a generation ago?” However, the authors claim that measuring poverty in Africa remains a challenge.

Kibera life, Naiorbi, Kenya, 2012 © Flickr Molly Layde

The study also claims it is possible that the poverty level would have declined even more if the conditions under which the study was conducted – data quality and comparability – had been taken into account. Yet because of population growth, many more people are poor, the according to the report.

Writing in the Guardian, Jason Hickel did not hold back in his criticism of the World Bank’s alteration of the international poverty line from $1.25 to $1.90 per day. “It’s a PR coup for the World Bank: the poverty line appears to have been raised to a more humane level and the number of poor people is lower than before,” denounced Hickel.

As of 2015, the African population is estimated to be around 1.166 billion, a number that is set to expand greatly in the next decade. In Kenya, an experiment conducted by the charity GiveDirectly is granting 6,000 Kenyans a basic income for a decade. Neighbouring Uganda will also take part in the experiment from 2017 for a period of two years. And China, the second world’s largest economy, is conducting research on the benefits of the basic income.

The dawn of the robotic future

Advisory firm Forrester released a report in June 2016, revealing that robots will soon replace 7% of US jobs. “By 2021 a disruptive tidal wave will begin. Solutions powered by artificial intelligence/cognitive technology will displace jobs, with the biggest impact felt in transportation, logistics, customer service and consumer services,” said Forrester’s Brian Hopkins in the report.

Uber recently announced that it expects to have a fleet of driverless cars operating in Pittsburgh soon. Last May, Adidas revealed its new prototype robot-driven Speedfactory in Ansbach, Germany. Adidas will start retailing its first sports shoes manufactured by robots in this factory in 2017.

While machines are taking the jobs of humans, the level of corruption and misconduct in the world is mounting, putting an ever-bigger strain on wealth imbalances. A recent report from Oxfam has reinforced the belief that fraud and corruption are a cancer long embedded in the financial system. The document stated that 90% of the world’s biggest companies operate in at least one tax haven.

 Momentum

Faced with the immense difficulty of tackling such deeply-rooted societal curses, advocates of the UBI believe that granting a basic income to fulfill the basic and natural needs of each human being is the progressive way to empower people and confront the scourge of poverty.

The movement is gaining political momentum and the opportunity to enforce a continued demand for such a universal right is there. The debate over an unconditional grant for every human being must be exhaustive, taking into consideration all the dimensions at stake.

How much would each individual earn? Would all individuals earn the same? Would the money come from national budgets? If so, would social services such as health and education be compromised? Should there be some sort of penalty in the form of community service for those who eventually refused to work? We are yet to discover the full social and economic impacts of such a humanitarian experiment but the road towards an inclusive society is already laid out in front of us.

Consumerism is Blind

 "When you want more than you have
You think you need
And when you think more than you want
Your thoughts begin to bleed

Society, you're a crazy breed..... "

Iceland’s quest for equality, openness and democracy

People marching for the release of whistleblower Chelsea (Bradley) Manning, United States, Minneapolis, Minnesota, 2013. Wikimedia

As cracks appear in political establishments the world over, Iceland is forging its own path towards an open and inclusive society that puts democracy and its citizens first. Following the parliamentary elections, the Icelanders excel with the highest rate of women in politics. Their crusade for transparency is growing stronger, as is their determination to protect whistleblowers. Despite having suffered a financial eruption in 2008, Iceland is thriving and the way it dealt with the crisis is a considerable example to the world.

Parliamentary elections and Pirate fever

Recently, the Icelandic parliamentary elections were brought into the spotlight by the popularity of the anti-establishment Pirate Party, the highest polling party during the election campaign with over 30% of public support. The Pirates were formed in 2012 to promote libertarianism and direct democracy. However, after counting the votes, the black flags gained just 14.5% of the electorate, significantly below the polling projections, but still an impressive achievement when compared to the 5.1% of votes they collected in 2013. With this boost, the recently created party climbed to the third strongest position in the Althing, Iceland’s parliament.

“The good thing about the Pirates is that they are responding to a demand in society for more openness, more transparency and to some extent more accountability and more direct democracy. On all these points I’m very much in agreement with the Pirates’ ideology,” said the Left-Green Movement Icelandic politician Ögmundur Jónasson in an interview for Katoikos.

The aftermath of the Icelandic parliamentary elections of October 29^th.

In the pursuit of a government

However, the Pirates’ failure to live up to the projections can likely be attributed to uncertainty over where they sit on the political spectrum and to their vague stance on important matters such as the EU and NATO. The past months have seen attempts to form a five-party coalition, but the efforts have failed due to disagreements over funding for the health and education systems. But a compromise seems to be on the horizon. According to Reuters, Birgitta Jonsdottír, the leader of the Pirates, was asked by the Icelandic President Gudni Johannensson to continue talks with four other parties represented in parliament, the Left-Greens, Social Democrats, Bright Future and the Reform Party. 

Nevertheless, the lack of political stability has not prevented the country from thriving. Iceland’s GDP, already among the highest in the world per capita, is back above the pre-crisis level. Fuelled by a booming tourist industry, the economy is poised to grow by 4% in 2016 and 2017 and unemployment stands at a low 2.9%. Moreover, Iceland is also an attractive destination for investors, with a triple A rating from ratings agency Moody’s.

Although a government is yet to emerge, the true winner of Iceland’s recent elections was women’s representation. The volcanic island successfully managed to secure a record number of women in parliament, leading its Nordic peers – Denmark, Norway, Sweden and Finland – in parliamentary equality, a feat that must not go unnoticed.

 

  

 Iceland beats women representation in national parliaments worldwide. © Fortune

The Pirates’ quest to protect whistleblowers

Iceland also stands out for its daring attempt to lead the battle to protect journalists and whistleblowers. The Icelandic Modern Media Initiative (IMMI) is a simple but ambitious project carried out by the Pirate Birgitta Jonsdóttir, which aims to bring together the most progressive media laws from different countries in order to create one comprehensive law. However, for the time being it is a vision that must be further developed. “The good thing about this idea is that we concentrate on the free world, on whistleblowers, on protecting these people,” said Jónasson.

Talking about the core of democracy in a society that is becoming increasingly dominated by trade agreements, Jónasson asked, “Who were the people originally giving us inside information on these behind-closed-doors negotiations? It was Wikileaks who opened up this information that was meant to be secret.” The politician expressed his admiration for Julian Assange’s ideals, saying he “sides with [Assange’s] openness on the secret world of the military and politics”.

As the conversation moved onto the issue of freedom of expression and information secrecy, Jónasson left no doubt as to where his loyalties lie. “I must say if I had to take sides with either Wikileaks or the FBI or the CIA, I would have no difficulty in choosing, I would be on the side of Wikileaks. When we analyse what has happened in recent years and the role played by whistleblowers, we must conclude that we owe them a lot,” the Icelander said.

Rejecting a grim Orwellian future, the Icelandic politician spurned the “moves by many states to increase the security surveillance of their own citizens. I don’t think this is the answer at all.” He insisted on the need for an open society, adding that this kind of surveillance “is what people are revolting against”.

Panama Papers hit Iceland

Ironically, in April 2016 Iceland saw its then Prime Minister Sigmundur David Gunnlaugsson resign over the Panama Papers scandal, the biggest leak in history revealing how the rich and powerful use tax havens to hide their wealth. Disregarding national ties, Jónasson said, “This episode definitely falls into the category of good revelations about the political world.”

In fact, Jónasson holds the respectable reputation of being the minister who refused to work with the FBI over suspicions that the “cooperation” was in fact intended to frame Julian Assange, the founder of Wikileaks. “Since they did not have the proper permission from the Icelandic authorities, I immediately broke off all cooperation with them and asked them to leave the country,” he revealed.

Iceland sceptical of the European Union

When searching for a pragmatic solution to the problems facing Europe today, Jónasson came to the conclusion that “the EU has to reconsider its functions very fundamentally”. His major criticism is of the EU’s increasing prioritisation of the free market above social issues. “The emphasis should be changed within the EU. We should be more concerned about inequality and finding ways to make society more equal, to make people feel that this is what we are actually trying to do, that this is our mission, rather than creating a free market,” he said.

As for Icelandic membership of the Union, Jónasson said that his country is not particularly fond of the idea of joining the bloc, as they do not want to give up their fishery rights. But the former minister’s main reason for wanting to stay out of the Union is its ever-growing democratic deficit.

In fact, the reason Iceland was successful in curbing the 2008 financial crisis was in large part down to direct democracy and the fact that its citizens were able to decide on the future of the country in a referendum. This small, glaciar-bound island chose to uphold stability and bring prosperity back to its people, rather than kneel before supranational institutions; a stunt that would surely have been impossible had Iceland been part of the Union.

*You can read the full interview with Mr Ögmundur Jónasson here.

The Icelandic minister who refused cooperation with the FBI: Ögmundur Jónasson in an interview

Interview published in Katoikos

Icelandic minister: ‘I would side with Wikileaks over the FBI’

Famous for standing up to the FBI, Ögmundur Jónasson spoke to Katoikos about whistleblower protection, countering the rise of populism and Iceland’s unique approach to the financial crisis.

Before becoming a member of the Althing, the Icelandic Parliament, Ögmundur Jónasson was a journalist engaged in trade union politics. In 1988 Jónasson became the chairman of BSRB, the Federation of state and municipal employees. A Left-Green Movement politician, Ögmundur has held office as minister for health, minister for justice and human rights and minister for transport, communications and local government. The last two ministries were united to form the Ministry of the Interior at the beginning of 2011 and he became the first Icelandic minister for the interior.

Throughout our conversation, the politician shared his thoughts on the current political situation in Iceland, freedom of information and whistleblowers. Finally, he explained how Iceland overcame the financial crisis and analysed the political setting of the European Union.

 Transparency and disclosure of information are in the hands of whistleblowers. © Flickr .le.

I. Iceland, whistleblowers & data protection

What led you into politics?

I have been politically and socially active all my life. I studied history and politics and was a journalist for ten years — a TV reporter at Icelandic State Radio — and part time lecturer in history at the University of Iceland. Also, for over 20 years, I led the public services unions in Iceland.

I entered politics in 1995 and had a dual role as politician and trade unionist until I became minister for health in 2009. Critics sometimes asked if it was proper to be a politician in parliament while a trade union leader. But after entering parliament I never took pay for my work in the union and was always on the same side of the table whatever my role was!

After serving as minister for health for just under a year I resigned from the government over the “Icesave” dispute — a dispute Iceland had with the British and the Dutch governments on tax-payer responsibilities related to the fallen banks and the financial crisis. I came back into government a year later.

As an Icelandic parliamentarian with 20 years of experience and several ministerial posts, how do you see recent developments in Iceland?

Anti-politics is on the rise. I think we are experiencing similar developments in Iceland as elsewhere, meaning a growing distrust in representative democracy. In parallel, traditional political dividing lines are becoming unclear. We are moving into an age of uncertainty. There are new discernible horizons with new opportunities and positive openings, but there are also dangers that we should take very seriously. I say with great concern that in this new age democracy and the rule of law should not be taken for granted.

What’s the meaning of the Pirates’ rise and why it is occurring?

The Pirates are responding to a demand in society on both sides of the political spectrum for more openness, more transparency and to some extent more accountability, more democracy, more direct democracy. On all of these points I agree with the Pirates’ ideology and vision.

But this also means that people with strong left or right political affiliations would not vote for the Pirate party even if they agree with their basic principles.

When sharing their views with the electorate on issues other than freedom of the Internet and transparency, the Pirates became unclear and diffuse — particularly on privatisation, NATO, fishing policy, etc.

Because they focus on a very limited scope of politics, the Pirates aren’t as radical as they may seem. The IMF recently claimed that the Pirate Party posed no threat. That is not a compliment in my mind!

This explains why the Pirates ranked so high in opinion polls but got much less when it came to the actual elections.

The longer the campaign dragged on the less support they became, and they plummeted from 30% in the opinion polls down to 14,5% in the election.

The Pirates’ idea is better than their flesh and blood. But I suppose, this applies to all of us politicians. We all look better at a distance than close up.

What kind of government do you expect to be formed now?

All kinds of constellations are being tried. I long for a left-leaning government led by the Left Greens, including the Pirate Party and Social Democrats. The problem is that we would need five parties to form such a majority.

Besides, the whole political spectrum, including my own party, the Left Greens, has moved to the right. The Social Democrats are very much in the European mould.

The worst scenario is a right-wing coalition. Some compromise might also be on the cards. We will see this shortly.  

Extrapolating from Iceland, how could recent developments affect other European countries?

Here we have some contradictions. While the institutional political world has been moving to the right there has been a radicalisation at the grass-roots and in political discourse there. See what happened to Syriza in Greece where expectations had been high and then came disillusionment at grass-roots level. It happened also to some extent in Iceland when we, the left, came to power in 2009 on a radical surge. We did indeed do many good things and most importantly we did not do what the right wing no doubt would have done, namely use the shock of the crisis to privatise and sell off the infrastructure. But we were expected to introduce systemic change, especially in the banking world.

When we didn’t live up to these expectations many people were disappointed, and rightly so. If the institutional world of politics does not give radical solutions to extreme conditions, the dangers are that these two worlds drift apart. And this is what is happening with uncertain and in some instances alarming consequences. The left – not least social democratic parties but also the socialists – must rethink its approach to politics. I fear it has a long and winding road ahead.

You are “the minister” who refused to cooperate with the FBI because you suspected their agents on mission in Iceland were trying to frame Julian Assange. Do you confirm this?

Yes. What happened was that in June 2011, US authorities made some approaches to us indicating they had knowledge of hackers wanting to destroy software systems in Iceland. I was a minister at the time. They offered help. I was suspicious, well aware that a helping hand might easily become a manipulating hand! Later in the summer, in August, they sent a planeload of FBI agents to Iceland seeking our cooperation in what I understood as an operation set up to frame Julian Assange and Wikileaks. Since they had not been authorised by the Icelandic authorities to carry out police work in Iceland and since a crack-down on Wikileaks was not on my agenda, to say the least, I ordered that all cooperation with them be promptly terminated and I also made it clear that they should cease all activities in Iceland immediately.

It was also made clear to them that they were to leave the country. They were unable to get permission to operate in Iceland as police agents, but I believe they went to other countries, at least to Denmark. I also made it clear at the time that if I had to take sides with either Wikileaks or the FBI or CIA, I would have no difficulty in choosing: I would be on the side of Wikileaks.

Do you think that whistleblowers should be protected?

Yes, I think that it is very important. The role played by whistleblowers could be seen as public service. We owe a lot to Manning. We owe a lot to Snowden. We owe a lot to Assange. We owe a lot to Wikileaks. It’s not only about the Iraqi war and other illegal military aggression and immoral power-political manoeuvres, but also the recent international trade agreements TISA, TTIP and CETA.

Who were the people originally giving us insight into these behind-closed-doors negotiations? It was Wikileaks who revealed what was meant to be secret. The stakes are high in these negotiations. This is not just about trade, it is about giving international capital access to the infrastructure of our societies. We are talking about handing over the very heart of democracy.

What do you think of Julian Assange?

I don’t know him personally, although I met him when he came to Iceland. But I look at what he stands for and that is where I side with him; his endeavours to open the secret world of the military and of power-politics.

How do you see the possibility of Iceland giving citizenship to Edward Snowden?

I have raised this issue in our Parliament on several occasions. By granting Snowden asylum we would be paying tribute to democracy, to openness and to all the whistleblowers of the world. But there has not been political consensus. Iceland is part of NATO and such a decision would be strongly objected to by the US. The Cold War lingers on. Or it might just be the power of the big and mighty.

How do you read the “hero vs. traitor” paradox around whistleblowers?

They are certainly not villains in my view. However, this is a reminder of how we tend to see the world in black and white. Either we are for whistleblowers and openness or we are against them. But the real picture is more complex. We are not only for openness. We also find ourselves in a world where it is important to protect privacy. We don’t want the American secret services listening to our phones, or the Russian secret services, or the Chinese! We are therefore limiting our demands for transparency and openness to matters that are relevant to politics.

This should be open, but at the same time we want to prevent attempts to break into the private world of individuals. So what I’m really saying is that we need to have a very deep and serious discussion about how to balance the open world and the private world. Whistleblowers fight the real villains who refuse to respect our rights, including our right to privacy. So when judging them, we must always ask ourselves who they are, why they are acting, to what extent and to what end?

Iceland is about to become an international transparency safe haven for journalists and whistleblowers. Will the Icelandic Modern Media Initiative (IMMI) resolution be strong enough to protect future whistleblowers?

I think this is quite a long way off. It is an idea that has to be developed much further. The good thing about it is that we concentrate on freedoms and democracy, on whistleblowers and on protecting these people. But then of course when it comes to protection of freedom on the Internet there are darker sides as well. We certainly don’t want to be a haven for paedophiles. I do not want to talk this idea down because I see its positive side, namely the protection of whistleblowers. But there are more dimensions to this and we should avoid being naïve on this issue.

The term “cyberwar” has become commonplace in recent times. In 2012, Forbes London bureau chief Parmy Olson claimed in her book We Are Anonymous that WikiLeaks members contacted hackers because they wanted help “infiltrating several Icelandic corporate and government sites”.  What do you think of such actions as a politician in office at the time?

I have nothing positive to say about this, but then I must say that in this world of cyberwar I don’t take anything for granted. I think we should be critical towards Wikileaks as we are towards others: they are not infallible. But we should remember that there have been attempts to smear them in order to undermine them. I want all the facts on the table before coming to any conclusions.  

What about the resignation of your former prime minister over the Panama Papers leak?

This definitely falls into the category of good revelations. Panama Papers revelations involving Iceland proved politically important and led to a discussion that is still ongoing. They are likely to change the political world. We have covered this issue extensively in the Council of Europe, where I have been active. This is about political morality, taxation and tax evasion, the welfare system, openness, transparency and accountability. We are not finished with this subject, in Iceland or on the world stage.

In today’s world, we are confronted with increasing security challenges. How do you balance security needs with the right of citizens to know what their governments, and security agencies in particular, are doing, and the right of citizens to preserve their privacy from governmental intrusion.

Before meeting security challenges, we must ask why we are facing these challenges. And in seeking the answer we should get hold of some useful working tools: I suggest a mirror.

The rich part of the world should start by looking at its own reflection and asking what it is doing to itself. In other words, it should ask, what is my role? Could it be that the poor parts of the world, the ostracised, the uprooted and unwelcome immigrants, the unemployed, see the rich and the powerful, the military machines of state power, as the real security challenge to their lives?

 
If this is the case, the answer to security threats would be to remove the conditions that make people feel threatened. And then we would need more social justice, more equality in society, more security. We must analyse why it is that millions of people leave their homes against their will and flock to the rich parts of the world, which in turn become obsessed with security.

In South East Turkey, 450,000 Kurds are on the move, uprooted from their homes after longstanding curfews by Turkish authorities. These people will end up as asylum seekers. And who is the terrorist: the one who is killed by a drone or the one who kills with the help of a drone? Let us start by using the mirror, holding it up to our own faces and asking all these questions. 

 Iceland does not seem to be a prospective EU member. © Wikimedia

II. Iceland and the European Union

How do you think that the EU could counter the recent surge of populism?

What do we mean by populism? Sometimes I think we should not use this term because it is a little arrogant, being popular is close to democracy, is it not? What we understand by populism, presumably, is that prejudice is being exploited in order to gain power and then to use that power to further entrench prejudice; that populism is manipulative and fascist in nature. I think these should be the terms we use. I think most people would agree that uncertainty and insecurity provides the breeding ground for prejudice, and when people feel threatened they are more apt to become aggressive. Aggressive insecurity is a deadly cocktail.

The unemployed may feel threatened by the influx of immigrants. So full employment should be on every government´s agenda.  That would be a realistic move against rising populism, or fascism, as I would prefer to call it.

Another source of prejudice is ignorance. In segregated communities, as many parts of Europe are becoming, it is again a deadly cocktail. So what do we do? We try to do away with segregation and have people learn about each other, talk to one another and learn that at heart we are all the same. These are only some answers. But this is the solution, the methodology of the solution.

How do you see the EU evolving, especially in its capacity to satisfy the electorate on social issues?

I think the EU has to reconsider its fundamental principles. In the last two decades, the social model of the EU has been based on a market system. The emphasis should be on the social side, not the market. And people criticise the centralising tendencies within the EU and how central power has been used to enforce marketisation. That is why many people on the left in Britain voted for Brexit.

Now Brexit is a reality and it should not be used as a pretext for revenge but for reconsideration and revaluation. Originally, the EU was designed to bring the nations of Europe together, to reduce tensions between them and avoid war. But once you create a central state with a common monetary policy and a central authority with punitive powers, you create the very tensions you wanted to avoid. This tension is now increasing between the rich and the poor, the Germans and the Greeks. Europe should once again become a looser union. It should place more emphasis on human rights, regionalisation, culture, and less on centralisation and the visible hand of capitalism.

Is the EU’s lack of room for manoeuver in social policy behind Iceland’s rejection of EU membership?

There are two reasons why Iceland is outside the EU. First, we do not want to defer Icelandic fishing rights to the EU. Second, the EU’s democratic deficit is not very convincing. I’m sceptical about joining the EU because of it. But I want to emphasise that I’m all for European cooperation. I have been much involved in European cooperation and I want to strengthen it, but please don’t try to force the power of capital upon us. Let us rather give power to the people. The EU needs to become more social and more democratic before it becomes appealing to sceptics like me.  

 Icelandic voters rejected debt repayment plan in a referendum, 2010. © Google

III. Iceland and the financial crisis

Iceland did an amazing job managing the financial crisis. Do you think that the EU should have imitated the Icelandic model?

Some of the things we did could inspire the EU, namely that in times of crisis limits should be place on the extent to which difficulties in the world of finance can be shifted onto the shoulders of the general public. What we did – and this proved to be crucial in saving us from ruin – was to make a clear dividing line between the real economy and the world of speculation. We did not allow the taxpayer to pay for the mistakes of the bondholders.

Many households went through great hardship and many lost their homes. And here we could have done more. The IMF would not agree with me on that, which tells us a great deal. The crux of the matter is that capital interests are too powerful within the EU to allow democratic will to threaten these interests. The dispute with the Netherlands and Great Britain about Icesave that I mentioned before illustrates this. 

How did Iceland manage to successfully exit the financial crisis?

Iceland was assertive. Who was to pay for the private debts of the banks, the taxpayers or the investors and capital owners? The British and the Dutch governments tried to force us to make the taxpayer foot the bill, but in the end this was taken to a referendum and the majority of the people said “No, we are not paying”. Now, the EU, the IMF and all these international guardians of capitalism, were utterly shocked, not by our decisions themselves, but by the way these decisions were reached. A matter of this nature should never be referred to the people. The reason is obvious: democracy is dangerous to capital interests.

This is what made Iceland unique in dealing with the crisis; the people were empowered. In Iceland the bankers, or “banksters”, as they were often referred to, were prosecuted and held accountable. Many of them are now in prison. I’m not joyful about that, but it is important in the eyes of the public that justice should be served for white-collar crimes. From this point of view, we handled the crisis correctly. We still have a long way to go. But at least we now know the direction.