Iceland Loses Its Banks, Finds Its Wealth

Ultima Thule learns that small is beautiful.

The most important question about Iceland these days (after “How come Iceland is green and Greenland is icy?”) is what we can learn from its economic recovery. In 2008, the tiny island nation in the North Atlantic became a byword for both boom-time excess and recessionary disaster. After inflating its financial service sector with a pile of foreign-currency debt and risky combinations of short-term debt instruments with long-term loans, Iceland, which is not a member of the European Union, endured one of the most unpleasant recessions in recent memory.

The country’s three largest banks, whose total assets were 11 times larger than Iceland’s GDP, proved too big to fail and then too big to rescue, bankrupting the central bank that took them over and leaving foreign creditors empty-handed. Inflation in the import-heavy economy reached 18 percent, while the stock market plunged by 90 percent. Between 2007 and 2009, according to the World Bank, GDP dropped by 40 percent. The Icelandic króna turned into a pariah currency, and even the country’s durable fishing and aluminum businesses were crippled by heavy leverage. 

A collapse of this size needs a villain, and it will surprise nobody to learn that libertarians, who exert an iron grip on political and economic practice throughout the world, took the blame. In a 2008 story for Fortune, Peter Gumble blamed deregulation and putatively free market reforms for destroying the banking system. New York Times economic poetaster Paul Krugman said the small nation had been “hijacked by a combination of free-market ideology and crony capitalism.” Huffington Post columnist Iris Erlingsdottir blamed the late Milton Friedman (who had once praised 10th-century Iceland’s approach to government) for failing to “take into account the predictably irrational character of human nature,” and concluded, “It is time for the grownups to take over again.”

As always, we had to look to the legendary Icelandic songstress Björk for real wisdom. In a London Times essay blasting the country’s ruling conservatives, Björk lamented the way the boom/bust cycle had wiped out small entrepreneurs as big money pursued an oversupply of aluminum smelters—which was not an excrescence of the free market but a product of public industrial policy. Former Reykjavik mayor and Prime Minister Davíð Oddsson did indeed pepper his tenure as head of Iceland’s central bank with free market rhetoric. But that’s about as far as it went. In their new study of the crisis, Deep Freeze: Iceland’s Economic Collapse, economists Philipp Bagus and David Howden illustrate how thoroughly Iceland’s financial boom combined a Scandinavian nanny state—which consumes 41.1 percent of GDP and features unemployment insurance that provides three years of benefits—with the worst practices of boom-happy central bankers and government agencies everywhere.

For every government-driven bad improvement you can find in the west, you’ll find boom-era Iceland taking it to the next level. Where the U.S. Federal Reserve’s promise to backstop financial institutions was merely implicit, the Central Bank of Iceland in 2001 gave an explicit guarantee to big banks, making it inevitable that they would become bloated with risky and ultimately toxic assets. Our own government-sponsored—and as of 2008, government-owned—entities Fannie Mae and Freddie Mac made a hash of responsible lending by buying mortgages in the secondary market (and as we now know, lying about the poor quality of debt on their books). But Iceland’s government-run Housing Financing Fund managed to do even worse, lending directly to borrowers and competing with private lenders on both interest rates and loan quality. By mid-decade 90 percent of Icelandic households had government loans, and no-money-down home purchases were as common in Iceland as they were in Florida. 

When the predictable emergency hit, neither the government nor the private financial institutions had cash to redeem the large number of foreign-denominated loans. While the International Monetary Fund eventually cobbled together a small bailout package, for the most part Iceland was alone. U.K. Prime Minister Gordon Brown invoked anti-terrorism legislation against the charter member of NATO, trying to force Icelandic banks to repay British lenders. Russia promised a bailout but failed to deliver. The E.U. was, and remains, too preoccupied with its own profligate states to give attention to remote Iceland.

This international neglect turned out to be Iceland’s saving grace. The  crisis ended almost as quickly as it had begun. The Organization for Economic Co-operation and Development expects Iceland’s economy to grow by 2 percent this year and next. That’s not enough to replace the post-2007 loss, but it’s more than enough to return to the pre-boom trend line, and it’s much stronger than the performance of Portugal, Italy, Ireland, Greece, and Spain, affectionately know as the PIIGS economies. Iceland’s long-term interest rate, a not-inconsiderable 8 percent, compares well with a rate of over 13 percent for Greece, which is astounding when you consider that Iceland endured a default that Greece, in name at least, has so far avoided. The difference in unemployment—5.8 percent for Iceland against 16 percent for Greece—is even more striking. Iceland expects to have a balanced budget in 2013.

Paul Krugman naturally draws the wrong conclusion, contending that Iceland saved itself through rapid inflation and capital controls. This is like saying the March tsunami gave the people of Tohoku a nice chance to go swimming: Iceland’s central bank tried desperately to control the króna’s collapse before giving up. Nevertheless, Erlingsdottir is right: The “grownups”—a center-left coalition led by Social Democrat Johanna Sigurdardottir—are back in charge and have done their best to double down on the bad policies of the past, including reducing fish quotas when local fishermen most need to be producing and selling. The government is also, in the face of strong popular opposition, moving toward E.U. membership, which has worked out so beautifully for other troubled European economies.

So what’s causing the recovery? The plain-sight answer is the one nobody will consider. Iceland is coming back specifically because its banks went out of business. That happened in spite of strenuous public efforts, but the removal of the tiny nation’s colossally bloated financial sector turns out not to have eliminated all that much value. 

It bears repeating that banks are not creators of wealth. They are places where you store the surplus value generated by productive enterprise. In very narrow circumstances that surplus value can be loaned out at a profit, but a financial sector is the icing, not the cake. This should be common sense, but apparently it is wisdom so rare it can only be learned in countries small and remote enough to avoid the deadly medicine of the global financial markets. 

Tim Cavanaugh is a senior editor at reason.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • WTF||

    Yet the crisis ended almost as quickly as it had begun. Why?

    Bjork?

  • ||

    Just imagine what the Sugarcubes could have done to end the crisis.

  • ||

    Well, motorcrashes and broken windows do interrelate.

  • White Indian||

    Well, agricultural city-States (civilizations) and Collapse do correlate.

    Like 100%.

    We're in the foothills of collapse right now.

    Are you ready to gambol about plain and forest in a Non-State sociopolitical typology?

  • EscapedWestOfTheBigMuddy||

    I'm nursing a strained IT band and doctor says I'm excused from gamboling.

    But I'll try a sashay if you'd like. Or maybe an amble. Certainly I can manage a stroll.

  • Just an Engineer||

    Have you ever spent a night outdoors without any of the conveniences of the modern agricultural city-State (civilizations)?

  • AblueSilkworm||

    I am truly amazed anyone still responds to it. It's even lost any comic value it might have had at this point. Good god, where's Hercule?

  • AblueSilkworm||

    I am truly amazed anyone still responds to it. It's even lost any comic value it might have had at this point. Good god, where's Hercule?

  • AblueSilkworm||

    Woah, my first squirrel attack..

  • Got Somalia?||

    Have you ever spent a day driving without the conveniences of public roads?

    REGULATION VACATION CELEBRATION!
    https://www.youtube.com/watch?v=7QDv4sYwjO0

    Lest we be accused of misrepresenting their views, actual Libertarians have been kicking around this take on Somalia with a straight face for some time now. No shit: mises.org/story/2066

    A more nuanced completely insane view is that Somalia has been awesome-ized by Anarchism, not Libertarianism. reason.com/blog/show/117519.html

    See how that works?

  • ||

    How were Somalian roads back in the good old days of the dictatorship?

  • ||

    No he hasn't.

  • Tobacco Road||

    I'm ready for a smoke.

  • ||

  • IceTrey||

    Because the people of Iceland twice voted to tell the British and Dutch to fuck off and eat their bailouts to creditors.

  • Department of Education||

    Because the people of Iceland twice voted to tell the British and Dutch to fuck off and eat their bailouts to creditors.

    I'm sure Iceland's fearless leaders won't allow the riff-raff to interfere again.

  • ||

    Racial purity? Some sort of Nazi thing going on there?

  • Joe||

    As many 'race' problems we have in this country, it is nothing compared to the racism found abroad.

  • ||

    They're one of the most homogenous human populations on Earth.

  • ||

    Are Icelanders really human? For instance, take Bjork as an example.

  • ||

    They're superhuman. She's clearly not a true Icelander.

    A good friend of mine and I were watching TV at his apartment years ago, and he'd stopped channel surfing for a bit on some program (NOVA, I think) on human genetics. They were doing something on Iceland's homogenousness, when they panned a random street crowd with their camera. We were amazed at the uniform attractiveness of the population on camera.

    I think it is some sort of Nazi plot. Seems Nazi. Very Nordic, too.

  • ||

    The Vikings who colonized the place brought only the good looking females they captured from Ireland, Britain, and Scandinavia.

  • ||

    It's at moments like this that I'm proud to have Viking blood.

  • ||

    The Vikings were all over. Any good Englishman or Irishman had Viking blood. The Normans were nothing but Vikings who settled into Normandy. The first Duke of Normandy was a Viking named Rollo or Rolf depending on the translation.

  • Gojira||

    I love how the English always refer to it as the "Norman" conquest, to avoid mentioning that said Normans, while a couple of generations removed from vikings, spoke French, had adopted French culture, and was a sworn vassel of the French king.

    England was conquered by an uppity French nobleman. They cannot deal with that truth.

  • ||

    And there hasn't been an Anglo Saxon King since Harold. William, the Angjevins and the Plantagenets were Norman French, the Tudors were Welsh, the Stuarts, Scots, and current occupants Germans.

    And yeah, it was called "The Conquest" for a reason. The local anglo saxon aristocracy suffered greatly. There is a reason why the Doomsday Book is so complete. People were that afraid of William the Conqueror that they didn't leave out so much as a chicken when he wanted an accounting of the his new kingdom.

    But in the English' defense, they absorbed the Normans in a few centuries. By Edward I, the English King was more interested in wiping out the Scots and Welsh and ruling all of Great Britain than anything in France. And by Henry V, the king didn't even speak French anymore, the bastard.

  • Gojira||

    Hell, the Anjevins are called that because their powerbase was in Anjou. Richard I hardly even ever set foot in England, and barely spoke English; it was somewhat backward and poor compared to his lands in France at the time.

    Edward I may have been more inward-looking, but his grandson sure as shit had a Continental focus.

  • ||

    Very true. People forget about Crecy. They kicked the French's ass worse there than at Agincourt. They captured the French king and held him hostage. How great is that.

    I love the in the saddle type of English kings. The ones that spent their time hunting and conquering shit. I think Henry II is my favorite. Edward I was just a bit too evil. But who doesn't love Henry V? I don't care if he didn't actually make the Band of Brothers speech. He should have and could have.

  • Gojira||

    Edward III was pretty hoss, no two ways about it. And the Black Prince was shaping up to be every bit the man his father was. Too bad he died when he did; France had some rising military stars who were able to reverse their fortunes for a few decades, but the showdown between them and the BP would have been great.

    Henry V's biggest mistake was leaving that weak little bitch of an heir. I understand he thought he would have more time, but sheesh; his boy lost the entire damn thing.

  • ||

    The Black Prince and Henry V are the two great might have beens in English History. And there is no gaurentee the son will like the father. Edward I was the leopard prince and hammer of the Scots. His son Edward II was a complete loser. You just never know.

  • Gojira||

    I've always considered one of the responsibilities of hereditary kingship to be securing a proper heir to the throne. In Edward's case it's especially negligent, because he knew what kind of man his son was, and what kind of scheming shrew his wife was, and left the kingdom to them anyway. And the result was Bannockburn, and the de facto rule of Roger Mortimer.

    Then again, maybe Edward III doesn't turn out to be such a badass if he doesn't grow up in that kill-or-be-killed political environment. Who knows.

  • ||

    Richard had a few things going for him. He was incredibly brave in putting down the peasents' revolt. His problem was he just wasn't a real Plantagenet. He wasn't rough and didn't instill fear in anyone. If took a serious badass to keep the Dukes and Earls in line back then. And he wasn't it.

  • MJ||

    That'a what happens when you maarry for large tracts of land rather than good genetics (Henry VI apparently took after his grandfather, the King of France, and was more than bit touched by madness). Because of that it was Henry VI's surrogates who lost everything.

  • Cliché Bandit||

    Not entirely true. William's claim was that he was of Briton descent. The Angles and Saxons (both germanic), about 600 years earlier drove the Britons from Britian into Brittany.

  • ||

    But he was the direct descendant of Rollo who was a Viking. He was a bastard child, so I guess he can claim he was a Briton via his mother. But he still was at least half Viking.

  • Cliché Bandit||

    I never said his claim was legit. but the braoder point is that pretty much everyone north of Pari's lattitude is viking. the Britons, welsh, irish, Picts, Scots, Irish, Slavs...all ancient peoples pre roman vikings. The outer hebrides were populated by norse and then raided by norse a thousand years later...crazy. I would say the distinction (although this is almost completely arbitrary) would be the Gaulish/Germanic on south to the Med.

  • Raven Nation||

    See, this is one of the things that is so brilliant about Reason (& libertarians in general). Where else could you read an article on economic re-birth in Iceland AND get a capsule analysis of the British monarchy?

  • Department of Education||

    pretty much everyone north of Pari's lattitude is viking

    All that raping and pillaging really paid off.

  • Robert||

    Norman, oo-oo-oo-oo-oo-oo-oo-oo....

  • ||

    "Rollo Tomase"

  • ||

    Most of mine came from Saxony and the Scottish Highlands. So my Viking descent is half regular Viking, half Viking rape victim.

  • Restoras||

    Don't forget the Rus that, ah, occupied what is now Russia.

  • ||

    "Viking" was a verb, not a noun.

  • Live Free or Diet||

    ... in a vial?

    (Couldn't resist.)

  • EscapedWestOfTheBigMuddy||

    The Vikings who colonized the place brought only the good looking females they captured from Ireland, Britain, and Scandinavia.

    You see now, that's planning ahead. Like that college in oxford that has some oak trees standing by to replace the main timbers in the dining room they put in five hundred years ago.

    I can just see some Viking wars shin deep in the Irish sea arguing..."Oh come on, Erik! Look at her, already. Do ye really want your great-great-great-great-great-great grandson to wake up in bed with that after a hard night's drinking?

  • HMFIC||

    I think it's the general lack of fatness which makes their population attractive not so much anything else.

  • Paul||

    They were doing something on Iceland's homogenousness, when they panned a random street crowd with their camera. We were amazed at the uniform attractiveness of the population on camera.

    And I find that strange. I'm a long-time believer that people get more beautiful when you mix up the races.

    Get black person and an asian person to have daughter, she'll be so crazy hot she'll peel paint of cars.

    For instance, when I look at my heritage: English Anglo Saxon, get thirty pure-bloods of them in the room and the clocks all stop.

  • ||

    See the women in Vietnam who are of mixed French and Vietnamese descent for another example of this.

  • R||

    See, this is one of the things that is so brilliant about Reason (& libertarians in general). Where else could you read an article on economic re-birth in Iceland AND get a capsule analysis of the British monarchy?

    It's a little trucking weird to watch a bunch of minarchists and anarchists speak of monarchs in approving tones, though.

  • Gojira||

    Are Icelanders really human?

    Bjork looks and sounds like an alien female that Kirk would have boned in an old episode of TOS.

    She was on Space Ghost Coast to Coast though, so she can't be all that bad.

  • ||

    I didn't say Bjork was bad--I like her. I just can't tell if she's human or not.

    But she's not green enough for Kirk. Moron.

  • ||

    Don't propagate that myth. Kirk is color and species blind.

  • ||

    It's not a myth that Jim is a moron.

  • ||

    You mean formerly Jim, not Jim Kirk, right? Because I'll friggin' beam you into space if it's the latter. Into space!

  • Gojira||

    If I was more thin-skinned, I would sockpuppet something stupid, and laugh while you blamed it on rectal and called her a manic whore.

  • ||

    That would be a profoundly good strategy in attacking Episiarch. Don't tell anyone, though.

  • Gojira||

    Oh, I actually already did it, and it worked like a charm. Gave it a trial run a few weeks ago...just in case Epi ever turned on me. I'm like Batman, keeping a little piece of kryptonite in my utility belt. Episiarch is far too powerful to simply be left unchecked.

  • ||

    I'd be careful challenging him. He operates on Pacific Time. That's a subtle, yet strategic, advantage.

  • Gojira||

    Pffft, I could kick all their asses anyway. When I was in the army, I got a minute and a half added to my run-time when I was stationed at Ft. Lewis (outside of Seattle) because they're so much closer to sea level than where I was living at the time, in West Texas.

    Training in the higher altitude gave me a better workout, which translateed into superior results when exposed to their faggy "sea level" thickness atmosphere. This is scientifically why Seattle is populated with limp-wristed hippies.

  • ||

    I'd be careful challenging him. He operates on Pacific Time. That's a subtle, yet strategic, advantage.

    This is why he has no power over me...

    Of course I am one of the few who actually like epi...these two phenomena may or may not be related.

  • ||

    Of course I am one of the few who actually like epi...

    You poor sick bastard. Seek help immediately.

  • ||

    I'm watching you, Jim. Closely.

  • ||

    And with a three-hour lead! I have to risk dangerous overdoses of the spice, melange, to do such things.

  • Department of Education||

    I'm like Batman, keeping a little piece of kryptonite in my utility belt.

    Didn't Batman become sterile?

  • Warty||

    Are Icelanders really human?

    The evidence is against it.

  • Gojira||

    Haha, you said, "homo".

    Icelanders are all gays.

  • ||

    If they are, that's consistent with my Nazi theory, as many leading Nazis were gay or gayish.

  • Gojira||

    I'm trying to make immature jokes all day to get myself ginned up for the new premier of Beavis and Butthead.

  • Warty||

    new premier of Beavis and Butthead.

    What what what?

  • ||

    They're back. This time, they're Icelandic.

  • Gojira||

    Can't tell if you're making a joke or actually asking, so I'll post this link:

    http://tv.yahoo.com/news/beavi.....00006.html

  • Tim||

    It's twenty years later and Beavis is an investment banker, Butt Head a health policy wonk in the Obama Administration.

    In the pilot, Butthead visits Beavis and they wander down to OWS looking for hippy chicks to bone. Hilarity ensues.

  • ||

    No shit Tim? Is that the plot? Really? If so, I am setting my DVR remotely now.

  • ||

    I just set my TiVo to record the new Beavis and Butt-head. Over the internetz!

    I actually think it's going to be pretty good. I saw a commercial for it during Death Valley and it seemed...funny.

  • ||

  • Warty||

    Does she have little tennis ball fake tits, or is that bra just working very hard?

  • Warty||

    Mike Judge has a talent for coming up with really good ideas and then never developing them, so he should be fine with doing Beavis and Butthead again. He doesn't have to think up bad ideas for resolutions and climaxes and shit.

  • ||

    Mike Judge has a talent for coming up with really good ideas and then never developing them

    That's why Beavis and Butthead was his greatest and funniest achievement. No development needed. Damn, he wasted so much potential in Idiocracy. What a shame.

  • ||

    Conceptually awesome. The execution was shaky, but the idea was great. And it had some excellent moments.

  • ||

    "We've got this...what is it...Buffcoat and Beaver or Beaver and something else. I haven't seen it, I don't watch it, but whatever it is, it was at 7, Buffcoat, and they put it on now at 10:30."

  • ||

    How can you say the guy who made Office Space never developed an idea? The rest of his stuff, sure. But Office Space is one of the best movies of the last 20 years. That is one more great movie than most people make.

  • Warty||

    I didn't say he never developed an idea, I said he didn't develop ideas. The difference is too substantive for me to expect the likes of you to grasp it.

  • ||

    You are just picking on me Warty because I don't have a PHD and you make more money than me. You big bully.

  • ||

    Warty, John... maybe you two should just go to a tractor pull together.

  • Warty||

    Show of hands: who has been to a tractor pull? And who thinks they're awesome?

    Me and me.

  • ||

    I have been to them. And they are kind of cool if loud. I actually will even go to the horse pulls. These guys take these huge draft horses and see who can pull shit.

    I am not sure if that is dorkdum or just weirdness.

  • ||

    Pish. Till you've been to a dog pull, where they strap (mostly) pit bulls to utterly improbable weights (multiples of what the dog weighs), you haven't lived.

  • ||

    I love Office Space, but as a movie... it's a structural trainwreck. "Oh, shit! We're 60 minutes into a 90 minute movie a we don't have a fucking plot yet! I know, let's rip-off Superman 3 and turn it into a half-assed heist movie!"

    He could have stuck with beating up printers and stayed solid gold.

  • ||

    Okay, the heist part is a little weak. But the ending is good. And the part where the protagonist breaks up with Jennifer Aniston because he thinks she had slept with Lumbugh is great.

    I was living in Oklahoma, which is nothing but a more remote version of Texas working a crappy job for a horrible boss right before that movie was made. That movie summed up the 1990s. Plot or no, any movie that sums up a decade like that is great.

  • Zeb||

    It's also Mike Judge's favorite thing he has done. Which just makes me like him even more.

  • Tman||

    The fact that they will be commenting on shows like Jersey Shore makes it impossible to miss..

    http://www.youtube.com/watch?v=b1_xSX8rzsw

    "This is like a family tree if your family was made of whores.."

  • WTF||

    Made me laugh just reading it.

  • Cliché Bandit||

    OMG I need to see this.

    "your underware is in the dryer, My underware is in the dryer...wanna do it?"

  • Ice Nine||

    The fact that they will be commenting on shows like Jersey Shore makes it impossible to miss.
    http://www.youtube.comwatch?v=b1_xSX8rzsw

    So basically BAB3000, I guess. Great!

  • ||

    Rhoemite!

  • Tim||

    You're homogenophobic?

  • Very White Icelandian||

    We must be free again to gambol about the fields and plains and the other cities of Europe. Just as our ancestors did and for the same reason.

  • Neanderthal||

    Go back to Africa, Cro-Mag bastards!

  • ||

    Icelanders are probably the most Neanderthal of us all.

  • Gojira||

    No, he's being racist against the protagonists from Sliders. They came from Africa. Tanzania, I believe.

    http://en.wikipedia.org/wiki/Kromagg

  • Gojira||

    Err, antagonists, sorry.

  • ||

    Let's say mantagonists and be done with it.

    By the way, I think I just chanced upon a new term for the lovely nuts at Jezebel. Among others. Assuming the Internet hasn't once again preempted my neologistic efforts.

  • Gojira||

    Mantagonists...I like it. Rolls off the tongue. I'll add that to the vocabulary, right next to "santorum" and "gambol".

  • ||

    And bellirrhea. Which actually is original. Surprisingly.

  • celtigirl||

    I think it's the double consonants FTW, Pro L.

  • ||

    I'd have doubled all of them if I could've gotten away with it.

  • WTF||

    "Mantagonists", "bellirrhea", "santorum" and "gambol" - this is why I love H&R.

  • Ashlyn||

    This and the impromptu history of the French and English monarchy. Or, on some other article, maybe you'll find an esay on why and in what capacity one particular firearm is better than another. Read a science-y article, and all of a sudden the comments might be discussing the feasability of colonizing Mars in great technical detail...

  • yonemoto||

    you forgot the Basques

  • ||

    Shhh. I'm trying to breed the two populations.

  • Domesticated vs. Wild||

    Consider that you've been already bred to be domesticated, docile, compliant, and submissive to the agricultural city-State.

    Do us wild humans scare you?

  • ||

    No, no, no. I'm trying to restore the Neanderthal to preeminence.

  • Domesticated vs. Wild||

    Neanderthals died out 30,000 years ago.

    The earliest estimated domestication didn't occur until 14,000 years ago.

    So your ancestors were wild. For a long time.

    I wonder how much shame they'd express at observing how domesticated, docile, compliant, and submissive to the agricultural city-State their progeny have "progressed."

  • yonemoto||

    Look man, even though the bombings have stopped, don't you dare call the ETA "docile and compliant"

  • ||

    If the Basque have more Neanderthal blood than other Europeans--not proven, of course--then maybe their language stems in some part from Neanderthal language? Perhaps jai-alai was a Neanderthal ritual of some sort?

  • White Indian||

    We must be free again to gambol...

    That's the spirit!

    It's not surprising that there is some vestiges of reason in people's minds, and that my logical advocacy of freedom, non-aggression, and Non-State sociopolitical typography -- based on volumes of empirical data -- is being absorbed and voiced.

    Thanks for providing the teacher of true liberty for mankind some feedback.

  • KDN||

    Gambolcube!

  • Officer, am I free to gambol..||

    ...about plain and forest?

    How long will the lockdown state's Land enTitlement program restrict the movement of free people to live in the natural lifeways of a Non-State sociopolitical typology?

  • Live Free or Diet||

    When offered a chance to actually live the way you advocate, as a hunter-gatherer, you attacked the very part of the property most likely to keep you alive. Hunter-gatherers create forest edge habitats to encourage the kinds of large animals they need for food. (Plus, it's much harder to bring down an animal with a bunch of trees and brambles in the way.)

    As disconcerting as us civilized folks find the idea with our investments in livestock, crops and wooden structures, hunter-gatherers regularly set fire to the land. American Indians did it, twice a year in some places. Australian Aborigines still do it even today.

  • White Indian||

    hunter-gatherers regularly set fire to the land.

    Yes, they did! Super! It's a great way to create a beautifully gardened landscape of Oak Savannah Food Forest here in the temperate forests of North America.

    If a gardening technique builds soil fertility instead of creating erosion and eventual desertification like agriculture does, I'm all for it.

    Even swidden horticulture (slash-and-burn) can be sustainable. It's how the Amazon rainforest was created. Biologists are now realizing that the Amazon rainforest is largely a human creation.

    But there's a vast difference between small scale slash-and-burn and large scale forest destruction for agriculture.

    It's basically the difference between a little "slap and tickle" while making love with the wife, and tying up a woman and raping a woman.

    Agriculture is rape. (Don't take my word for it, study ancient Greek literature. They too recognized agriculture is rape, with the rape of the goddess of agriculture and grain, Demeter, and her daughter Persephone.)

    See more here:

    Agriculture or Permaculture: Why Words Matter
    http://www.rewild.info/anthrop.....ds-matter/

    Permaculture Food Forest
    http://www.permaculture.org/nm.....od-Forest/

  • Old Mexican||

    Re: White Imbecile,

    Biologists are now realizing that the Amazon rainforest is largely a human creation.


    "And after this statement, your honor, we contend that White Imbecile is totally incompetent to stand trial... or go to the bathroom by himself, for that matter."

  • Got Somalia?||

    the Amazon rain forest may be largely a human artifact
    www.theatlantic.com/magazine/a.....1491/2445/

    There ya go, old and ignorant mexican. Too many multisyllabic words in The Atlantic for ya?

  • ||

    Charles C. Mann, a journalist who spent a week in the Amazon to write a short story, is your source?

  • DD_NYC||

    An area within Bolivia is NOT the Amazon rainforest... nice try, though

  • Marian Kechlibar||

    Don't be so cocky. The fact that current Amazon is covered with thick forest does not mean that it was always so. You have some counter-examples close to home. The Yucatan Peninsula and the territory are covered with a dense tropical forest, yet they contain remains of large stone cities that held 50 thousand and more citizens at a time. It takes just a few generations in humid hot climate for the nature to conquer most traces of human activity, and if the ancient Maya were not such prolific builders, we might never know them, or, worse, scoff at the idea that a large civilization could have existed there.

    There are fairly recent archeological and biological studies that show that the Amazon plain was much more densely populated in the 1400s than today, and that some of the current forest is actually a 500-year-old abandoned previously cultivated territory.

    The first two indications that drew the scientists in were the soil and the frequency of human-edible fruit. Large patches of soil in the Amazon are not "natural" when it comes to the concentration of elements, and seem to be artifically fertilized in ancient times. Second, too many of the trees there provide human-edible fruit - way more than an average primordial forest (compared to, say, New Guinea) should. A possible explanation is deliberate planting by humans. On large scale.

    Unlike Mexico, Amazon does not have any serious sources of stone for building, and any possible buildings and settlements must have been built from more perishable materials. That is why you do not have any equivalent of the Moon Pyramid there.

    But that does not mean that the territory wasn't inhabited by a civilization before.

  • Rick Fisk||

    What the article fails to mention is that the people of Iceland didn't just sweep out the fascists that were ruining their currency, they voted down overwhelmingly any attempt to expand the bailouts.

    Whatever anyone thinks about the occupy movement it should be noted that denigrating it ignores the common ground. The media wants to divide us but even anti-capitalist elements in the movement and free-market advocates can agree that bailing out banks is just wrong.

  • ||

    There's a version of than Venn Diagram going aorund, but the middle part completely misses the point.

    The central thing that unified the Tea Party with the Occupy protestors is that they both hate the bailouts.

    WHoever made the veen diagram somehow managed to avoid noticing that.

  • ||

    The media wants to divide us but even anti-capitalist elements in the movement and free-market advocates can agree that bailing out banks is just wrong.

    Oh really?

  • Rick Fisk||

    Yeah, your own link validates what I said. Over half agree with free market advocates and see bailouts as corporate welfare. In fact, I bet that if you were to re-frame the issue of bailouts and just call them what they are (corporate-welfare payments) the common ground would grow to near 90%.

  • Paul||

    I'm not sure I agree. Did anyone get a percentage of tea partiers that supported the bailouts? I'll bet bailout support in the tea party movement was in single digits.

  • ||

    I refuse to do anything but denigrate a movement made up of little wanna-be Rudolf Hesses and Che Guevaras. And why are libertarians once again, in a stupid quest for allies on the left, ginning up the Andres Nin Project?

  • Irish Hand Dancing||

  • White Indian||

    Small is Beautiful. ~E.F. Schumacher

    I've been repeating that poignant saying that for years.

    Good going, Reason. +1

  • White Indian||

    It bears repeating that banks are not creators of wealth.

    White Indian is in agreement.

    Now, keep such an honest accounting of wealth moving forward, as follows:

    It bears repeating that agriculture is not a creator of wealth. It merely strip mines the fertility of the soil -- Mother Nature's productive enterprise.

    It bears repeating that city-states are not creators of wealth. They are places where the hierarchical elite concentrate and squander the strip mined value generated by Nature -- until the city-lization collapses.

    Proper accounting is so very important to human survival, and a lack of it is why there is a whole history of collapsed civilizations.

    Civilization is like fiat money - both create a short term boom of illusory gains.

  • WTF||

    Well, there goes this thread.

  • ||

    Unlike anal warts, if you ignore him, he will go away.

  • ||

    I guess rectal's depressive cycle is over. Too bad.

  • ||

    I'm sure it's all your fault somehow.

  • Soviet Psychiatry alert!||

    Is dissent is a disease?

    Do enemies of the agricultural city-State need medicated?

    Weird beliefs you got there, Statist Episiarch.

  • Old Mexican||

    Re" White Imbecile,

    Do enemies of the agricultural city-State need medicated [sic]?


    Well, they sure need some good grammar....

  • White Indian||

    You make such a perfect secretary for me, OM. I appreciate your hard work catching my clerical errors.

    You'rs truley,
    White Indian

    P.S. I left you another couple errors on purpose, cuz I bet you like a little spanky now and then...

    Secretary - MOST FAMOUS SCENE
    http://www.youtube.com/watch?v=km5AWoC7B7s

  • Old Mexican||

    Like a little girl, girly-man, after being stung by bees when trying to steal their honey if in your "original affluent society."

    Like a little wussy girl. Waa waa waa.

  • Original Affluent Society||

    Thanks for passing around the word on the Original Affluent Society.

    Could I buy you dos cervezas?

  • White Indian||

    You've got to accentuate the positive
    Eliminate the negative

    ~Johnny Mercer & The Pied Pipers
    https://www.youtube.com/watch?v=f3jdbFOidds

    Cannot White Indian be in agreement with Reason without your negativism?

    Get some positive music in your life a-goin'!

  • Old Mexican||

    Re: White Imbecile,

    "Waa! The squirrels got my food that I spent 3 hours gathering! Waa waa!"

    Yes, girly-man: That's you.

  • Paul||

    Shorter White Indian:

    'Cause I be trolllliiiinn... and they be haatiiiinnn...

  • White Indian||

    Me no Ridin' Dirty.

    Me White and Nerdy Indian.

    Paul, you rapper! ;) LOL

  • Irish Hand Dancing||

  • ||

    It bears repeating that banks are not creators of wealth.

    Well not all wealth...probably not even the majority of it...in fact it is probably less then 10%.

    Still they are creators of wealth.

    If Banks did not they would not exist in the first place.

  • States create wealth too LOL||

    Still they are creators of wealth. If Banks did not they would not exist in the first place.

    Oh, great logic going there, Joshua!!!

    If States did not they would not exist in the first place.

    If Governments did not they would not exist in the first place.

    If Wars did not they would not exist in the first place.

    If POLIce did not they would not exist in the first place.

    If POLIs (city-states) did not they would not exist in the first place.

    You probably agree with it all, at least when it's convenient for an argument.

  • Old Mexican||

    Re: White Imbecile Who Can't Read,

    Still they are creators of wealth. If Banks did not [create wealth: implicit from the previous sentence] they would not exist in the first place.


    Besides, you would cry like a little girl at the sight of your food-rat outrunning you if in your "original affluent society." Like a little wussy girl.

  • White Indian||

    You're a domesticated poodle who lives in fear of wilderness, thus psychologically projecting his anxiety.

    But you do a good job of it.

  • Old Mexican||

    And you would cry like a little, little girl, White Imbecile, when having to facea wolverine if in your "original affluent society"

    Like a little girl, girly-man. Waa waa waa.

  • Little, Little Girl||

    I resent this comparison.

  • Old Mexican's girly-man||

    Old Mexican humiliates me all the time like this. But I like it. And he loves it. The turn-about playtime on the weekend is fun too, when we can have more time together.

    He really knows girly-men, as you might infer from his grasp of the subject.

  • The Derider||

    Yeah, seriously. A loan is a product that provides more consumer surplus than it costs to create. That's pretty much the definition of wealth creation.

  • Rick Fisk||

    So you are correct but your final statement is wrong. For one, not all farming depletes the resources.

    Some resources are called "renewable" for a reason. On the other hand, I personally have to disagree with anyone who says that wealth can be "created". If matter itself can neither be created nor destroyed, then wealth (real wealth not perceptions of wealth) can also not be created (or destroyed).

  • Old Mexican||

    Re: Risk Fisk,

    Please don't feed the disgusting troll.

  • ^^Disgusting Troll Above^^||

  • Build or stripmine fertility?||

    Does a cultivation technique build soil fertility or stripmine soil fertility?

    That's the main moral question facing us today.

    I support any techniques that build soil fertility. Let's garden the Earth, not rape it, for goddess' sake.

  • Department of Education||

    If matter itself can neither be created nor destroyed, then wealth (real wealth not perceptions of wealth) can also not be created (or destroyed).

    Applying labor (including thought) allows matter to be reconfigured such that it is more useful in the new configuration, hence wealth creation.

  • Paul||

    Yet the crisis ended almost as quickly as it had begun. Why

    I haven't RTFA yet, but I'd bet it might have something to do with the fact the Icelanders said "fuck you" to bailing out their banks?

  • Old Mexican||

    Paul Krugman naturally draws the wrong conclusion,


    Doesn't he always?

    [...]contending that Iceland saved itself through rapid inflation and capital controls.


    Sure, they saved the boat by bailing out the ocean.

    Krugman is a mountebank.

  • CatoTheElder||

    Like the OWS crowd, Krugman simply cannot recognize that capitalism and crapitalism (aka "crony capitalism") are two entirely different things.

  • mad libertarian guy||

    He knows the difference perfectly well. He simply can't let on that he knows the difference because then his readers might get the idea that capitalism isn't all that bad.

  • ||

    In which Krugman surrenders any pretense of understanding how economies work. At this point, anyone citing him for his economical ideas may fairly be labeled a partisan hack.

  • ||

    Hey, Hercule's back! Awesome!

  • ||

    Unless an argument breaks out between him and White Indian, you will never convince me they are all not the same person.

  • ||

    Are you kidding? Not even close.

  • ||

    No I am not kidding. I am believer in the unitary troll theory that all trolls come from a single great troll.

  • ||

    Well, I do happen to know that there is an archetypal troll from which all trolls have sprung, but I depart from you if you're positing any unitary troll theory.

  • Paul||

    Personally, I believe that Lucy is the earliest known troll.

  • Gojira||

    We need to call an ecumenical council, either at Nicea or Worms, to hash this out.

    And whoever loses has to promise not to go schismatic. That's what the Mohammadans are waiting for.

  • ||

    It's not debatable. The Urkobold is the original source of all trolling.

  • ||

    Don't infect the thread with Urkobold's heretical views that there is one great troll but two natures. It is all the same nature and troll.

  • ||

    You believe what you want to believe. It's your taint.

  • Gojira||

    Pope John and Patriarch Pro Libertate, don't do anything rash, like excommunicate eachother.

    Clearly what's needed is to prevent the barbarians (Episiarch) from converting to Arianism.

  • ||

    Pro Liberate is an anti Pop and agent of Satan, the French Crown, the Templers, and the International Elks Club. Anyone who takes communion from him or his agents is excommunicated and subject to eternal damnation.

  • Liberty and Non-State troll?||

    How is somebody who advocates real freedom, Non-State society, and truly principled non-aggression a troll?

    Is it because those things are mere debate conveniences to those whose real goal is to accumulate stuff, no matter the privation to others?

  • Old Mexican||

    Re: White Imbecile,

    "Waa! I got a boo-boo trying to catch my food! Waa waa!"

    Yes, that's you, girly-man.

  • Are you scared?||

  • Old Mexican's girly-man||

    Old Mexican humiliates me all the time like this. But I like it. And he loves it. The turn-about playtime on the weekend is fun too, when we can have more time together.

    He really knows girly-men, as you might infer from his expert grasp and intense interest of the subject.

  • Department of Education||

    Unless an argument breaks out between him and White Indian, you will never convince me they are all not the same person.

    And how would that prove they are not the same person?

  • Paul||

    Hercule Triatholon is the Bill SerGIO of Hit&Run;.

  • goneGalt||

    [BEST.TROLL.EVER!]

  • AblueSilkworm||

    I summoned Him!

  • Supreme Generalissimo Fluffy||

    Right, but not bailing out the banks meant that some rich people became poor people, and that can never be allowed to happen, ever.

    It is more important to maintain the composition of the upper class than to rapidly recover from recessions. All serious economists think so.

  • Paul||

    What's so very strange is the OWS kidz agree with this...

  • Supreme Generalissimo Fluffy||

    The OWS kidz think that the bailouts were the right policy, as long as the "price" of the bailouts was the forgiveness of student loan debt and mortgage debt.

    If the bailout policy had been part of some grand bargain that eliminated the debts of the right people, OWS would have no complaint to make.

  • ||

    And the OWS kids are often the sons and daughters of the very people who benefited from the bailout. They are the establishment.

  • Paul||

    Didn't they say the same thing about the hippies in the 60s? That they all came from suburban, middle-class Eisenhower homes and families?

  • ||

    They did. And it was mostly true. Poor and middle class kids were busy getting drafted and getting jobs.

  • Serious Economists||

    It's not like we actually want markets to clear or anything.

  • Old Mexican||

    Iceland is coming back specifically because its banks went out of business. That happened in spite of strenuous public efforts, but the removal of the tiny nation’s colossally bloated financial sector turns out not to have eliminated all that much value.


    a) Because most of that "value" was phony,
    b) Because the bad debts were liquidated, clearing the slate.

    ABCT as been vindicated once again.

  • robc||

    Just want to state that Tim is the best writer at reason, IMO.

    For example, this:

    A collapse of this size needs a villain, and it will surprise nobody to learn that libertarians, who exert an iron grip on political and economic practice throughout the world, took the blame.

    Instead of sarcastic mocking, Chapman would have found a way to blame Ron Paul.

  • ||

    A collapse of this size needs a villain, and it will surprise nobody to learn that libertarians, who exert an iron grip on political and economic practice throughout the world, took the blame.

    Still. Laughing.

  • ||

    Wow, cited in consecutive posts. And I didn't even read the one immediately above!

  • Mr Whipple||

    A collapse of this size needs a villain, and it will surprise nobody to learn that libertarians, who exert an iron grip on political and economic practice throughout the world, took the blame.

    I blame Nigel Farage.

    http://www.youtube.com/watch?v=muw0DGI_DIs

  • White Snakes||

    Me must be free to gambol about this motherfuckin' plane!

  • EscapedWestOfTheBigMuddy||

    Tune of Bad Boys

    I know you, you know me
    I'm the White Indian that's me
    I'm in an' out of troll'in
    I'm the talk of the blog
    I get wild on the plain
    When the sun goes down...
    I gambol 'round, like a White Indian
    Dancing 'til the break of day
    Bad Boys
    Gamboling in the moonlight
    Bad, bad Boys
    Getting wild once again, wild not the city
  • All your gambol...||

    ...are belong to us.

  • Department of Education||

    Me must be free to gambol about this motherfuckin' plane!

    Along with the snakes.

  • Kevin Carson||

    I hear periodically from Smari McCarthy and Birgitta Jonsdottir, who are involved in the Icelandic Modrn Media Initiative. The primary goal is freedom from censorship and libel for whistleblowers -- making them a haven for hosting such operations as Wikileaks. They don't want to take on digital copyright at the same time for political reasons. But Smari is a pretty hardcore anticopyright activist, and the due process guarantees included in their proposed Internet freedom provisions would make it almost impossible to enforce something like DMCA or ACTA.

  • Neu Mejican||

    Iceland's economy is tiny...with the help of the IMF a 12 billion dollar economy recovered. Not sure it is proof of principle.

  • Luke Skywalker||

    No. No! That's not true! That's impossible!

  • IMF||

    Search your feelings! You know it to be true!

  • Neu Mejican||

    Too bad the Old Mexican v. White Indian death match fizzled. Logic torture porn of epic scale could have developed.

  • ||

    SEE Inside Job. Did anyone notice that CW is right? I think somehow I found Troll Limerick Land here...

  • العراق||

    thank you

  • Reverse Loan Rates||

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