Iceland has become a laboratory for banking and political reform.
The collapse has radicalized the population to the extent that they
have stepped up to help sort things out in such a way as to thwart
gross self interest exploiting the system. I think that they may
even get it mostly right..
The bottom line is that they now have a growing economy in the face
of a mountain of ruinous debt instruments stuck out there.
Fears related to those precollapse debts are misplaced. Bankers like
to forget that in sovereign debt, that the king does make the rules.
The country is now recovering and can buy the paper for ten cents on
the dollar until they have recovered ninety percent of them, however
long it takes. Then a generation or two from now, you settle
generously on the balance while putting out a congratulatory press
release.
Of course during the recovery, you have built up sound banking
internally and have no appetite for foreign loans at all anyway.
This item tracks what has been happening and it is a lesson to all of
what is still possible.
With New
Constitution, Post-Collapse Iceland Inches Toward Direct Democracy
Sunday, 27 January
2013 07:10By Sam Knight,
When the global
financial system crumbled over four years ago, Iceland played host to
one of the most dramatic economic collapses in modern history. Its
three largest banks were unable to refinance debt roughly ten times
the size of the country's gross domestic product (GDP), causing one
of the world's wealthiest nations to limp with hat in hand to the
International Monetary Fund (IMF). The island became a symbol for
capitalism's systemic failure.
Now, Iceland is making
headlines for more positive reasons: activists there are in the
process of advancing some of the strongest freedom of
information laws and journalist protections in the world, and
the Icelandic economy, while still beset by problems, is
significantly outperforming other crisis-stricken countries.
Most recently, on
October 20, a remarkable constitution - written by an elected
council with help from the public - took a step closer toward
ratification after it was approved in a referendum by a 2-1
margin.
Before the changes are
signed into law, the draft must be approved by the Althingi,
Iceland's Parliament, approved again by referendum and finalized once
more by the legislature after a fresh parliamentary election
in April.
Uncertainty is
swirling around the status of the constitution, however. Those
opposed to it - primarily right-wingers - claim that the 48.9
percent turnout for October's vote doesn't lend the document
legitimacy. There is also fear among the constitution's supporters in
Parliament that some of their colleagues are trying to abrogate the
public's influence by altering the document's content instead of
offering the technical revisions they were given the mandate to make.
"I truly believe
that our democracies have been hijacked by bureaucrats," said
Parliamentarian Birgitta Jónsdóttir, a self-described
"realist-anarchist" elected after the Kitchenware
Revolution protests which ensued following the 2008 financial crisis
and forced the long-ruling conservative government to resign in 2009.
"I don't want the
new constitution to be plagued with their language, but the language
of the people," she insisted in a Skype conversation with
Truthout. "Their time is over. They just can't get over it."
It's unsurprising that
inertia is casting a pall over the constitution's future. In January
2011, the constitutional council's election was controversially
nullified by Iceland's Supreme Court. Parliament effectively
overruled this decision by appointing the 25 candidates who
received the most votes to take seats on the council to rewrite the
constitution.
Regardless of the
document's final status, the drafting process - inspired by
crowdsourcing techniques - has produced a remarkably progressive
legal code and generated significant interest from around the world.
"A PBS TV crew of
seven or eight followed a group of us around the north of the country
before the [October] vote," Thorvaldur Gylfason, an economics
professor and member of the constitutional council, told Truthout.
(The footage will be part of a four-hour series on the US
Constitution set to air in May.)
At home, supporters
are hoping that the constitution can create more momentum for
innovative reform. Information technology specialists who opened
the drafting process to the public through social media are expecting
to set up open data projects in partnership with the government.
There has also been another web-based open government
reform in the city of Reykjavik: the city council passed a law
forcing it to consider 16 citizen-initiated proposals made each month
through a web site called "Betri Reykjavík" (Better
Reykjavik). There has been talk among its boosters that the
constitution could mark the beginning of a gradual movement toward
direct democracy.
But to better
understand the significance and global appeal of the new
constitution, it is worth discussing the state of Iceland's economy,
which has defined both the constitutional movement and international
scrutiny of the diminutive subarctic nation since 2008.
A Shining Beacon of
Post-Collapse Economics?
According
to bloggers, Facebook memes and some prominent
commentators, Iceland is the shining beacon of post-collapse
economics.
Their narrative paints
a picture of the government, emboldened by protest movements,
refusing to be held to the fire for the mistakes of rapacious
financiers and corrupt politicians, even sanctioning them for
crash-related misdeeds. At least seven bankers have been charged
with criminal offenses so far - two were recently sentenced
to nine months in prison. Those indicted include the once
powerful investor Jón Ásgeir Jóhannesson, who was charged in
December with illegally securing loans worth around $50 million.
And former Prime Minister Geir Haarde was found guilty of not
holding cabinet meetings on important issues - one of four charges
brought against him - although the verdict didn't warrant any
jail time. This justice has supposedly left the country less burdened
by debt and a domineering financial sector that crowded out
sustainable industries.
But like most
political memes bandied about on the Internet, this overly optimistic
commentary must be critically examined.
Iceland is faring
better than most countries hit hard by the global meltdown.
Write-downs and debtor revolts have undeniably mitigated the
consequences of collapse.
Citizens, through
referenda brought on by presidential vetoes, rejected Parliament's
plan to pay billions of dollars claimed by the British and Dutch
governments after one of Iceland's three major banks, Landsbanki, saw
its cross-border savings scheme, known as Icesave, fail.
The establishment -
perhaps influenced by widespread protests that followed the crisis -
has also been somewhat attentive to the plight of debtors. The
Supreme Court ruled that loans indexed to foreign currencies -
commonly issued during the boom, but rendered absurdly expensive
after the krona collapsed - were, in fact, illegal,
significantly reducing mortgage principals overnight. The government
also announced a plan in December 2010 to cap distressed
homeowners' mortgage principals at 110 percent of estimated home
values.According to a financial industry-backed report published
last February, Icelandic banks, since the end of 2008, have
forgiven debt equivalent to 13 percent of GDP.
The government also
didn't directly bail out the three major banks - Kaupthing and
Glitnir being the other two - but nationalized them (albeit
momentarily - more on that later). And crucially, it eschewed
sweeping austerity that the IMF typically favors - a strategy
that seemingly paid off, as Iceland exited the IMF
program in the summer of 2011.
It appears these
developments have given Iceland's economy room to grow. The
unemployment rate in October was at 4.5 percent, and the
country's GDP grew by 3.1 percentin 2011, according to
Statistics Iceland. Fairly impressive when considering eurozone
misery.
There are also
explanations for Iceland's performance that are less dramatic than
frenzied demonstrations and white-collar prosecutions. Emergency
capital controls have prevented a total collapse of the krona. Some
post-crisis years saw net emigration, relieving the labor market
of excess supply. The defunct banks invested in assets, like British
retail chains, that largely retained value after the global
bust - a significant amount of their debts could be covered by
liquidating these assets. Finally, the post-collapse devaluation of
the krona has made Icelandic commodities more competitive on global
markets, giving the country the trade surplus it desperately
needs to amass foreign currency.
But the lionization of
Iceland glosses over persistent systemic problems.
"Look at what's
happening in Europe. The crisis is much deeper and harder in Greece
and other countries. It's just horrifying," Jónsdóttir said.
"But," she
warned, "we could end up exactly like that."
Iceland Held Up as
Just Model, but Bailouts Still Played Role
Iceland's economy, at
its core, remains in a pre-collapse framework. Not long after
Kaupthing and Glitnir were nationalized, the banks - now called Arion
and Islandsbanki - were sold to claimants of the old banks' assets in
January 2010 at a great cost to taxpayers and homeowners. According
to economists Olafur Arnarson, Gunnar Tomasson and Michael Hudson,
the government priced the old banks' mortgage asset portfolios
at 30-50 percent of their value, but allowed the new banks to pursue
market value for them (the government's subsequent plan to cap
mortgage principles at 110 percent hasn't proved effective either -
more on that shortly).
The sale amounted to a
backdoor bailout. Enablers of Iceland's old bankers - its new ones -
weren't "allowed to fail," as the blogosphere has implied.
An inherently flawed and morally hazardous credit system was kept on
life support all over the world, and Iceland was no exception.
Despite the fact that lenders failed to do due diligence on the old
banks, they and the vultures to whom they sold some of their claims
were rewarded with a subsidized stake in Iceland's financial sector.
Adding to the
injustice is the fact that no one can identify the
individuals who actually own these banks. There are rumors
that members of the old guard might own a stake in them. AsThe
Guardian detailed in August, former Landsbanki CEO Björgólfur
Thor Björgólfsson is"still living the high life" in
London - not far from where Her Majesty's Loyal Bureaucrats are
trying to claw back the Icesave debt he helped rack up. In
November, it was reported that the junior coalition member Left-Green
party was considering finding out whether or not he and other "Viking
Raiders" are still profiting off of Iceland's banks through a
bill which would force all beneficiary owners who hold more than
1 percent in financial institutions to be disclosed.
And if the old bankers
do own stakes in the new banks, they might again be able to finance
personal ventures with retail deposits. In Iceland, retail banking
and investment banking remain integrated - just as they have been in
American banks since the repeal of Glass-Steagall.
Even disregarding the
financial system's structure and which individuals effectively run
it, some creditors that decided against buying stakes in the new
banks will remain problematic.
"Vulture funds
have bought up the claims for 6 percent of the face value and can
take us to court in New York or Paris and have us pay face value for
something they paid 6 percent for," said independent
parliamentarian Lilja Mosesdottir, explaining via Skype how
"distressed asset specialists" loom over Iceland. Over a
decade after its last financial collapse, Argentina is still battling
vulture funds in a multibillion-dollar case which is currently being
heard by a federal appellate court in New York.
Even if vulture funds
were to relinquish claims, Iceland could see a significant uptick in
sovereign debt with Icesave unresolved, despite voters' persistent
defiance. A European court in Luxembourg is currently
considering whether or not Icelandic taxpayers must pay
Britain$3.1 billion plus interest. According to Moody's, public
debt will remain above 100 percent of GDP until 2014. But
if the court rules in Britain's favor, public debt could rise
overnight to 122 percent of GDP (although much Icesave debt could be
recovered from Landsbanki'sestate.)
Thus, Iceland remains
in peril. Any sort of shock that seems insignificant on a global
scale could be a massive blow to the tiny country. Its GDP, after
all, was $14 billion in 2011 - an amount not much greater
than what JP.Morgan trader Bruno Iksil, a k a the "London
Whale," lost on a single trade (reportedly as high as $9
billion). Any hiccups - Icesave, a vulture fund legal victory, a
global downturn - could drive Iceland back into the arms of the IMF
and, in turn, drive its citizens deeper into trouble. The fund, after
all, advised the government to"recapitalize the banks" even
if it meant encouraging "debt restructuring outside of the
courts."And if Iceland did accept IMF assistance to pay
creditors, it's likely that privatization, environmental exploitation
and austerity would follow, as it has in other distressed countries
where the fund has operated.
Not that Icelanders
haven't experienced pain already. Icelandic politicians might like
to avoid austerity in rhetoric and attempt to avoid it in
policymaking, but evidence of a struggle is there. A proposal floated
by an association of municipalities last September advised local
governments to shorten the school year and reduce electives. The
national police force's budget has shrunk by 25 percent since
2007. Nurses, who make a starting salary of $36,000, have protested
declining real wages. Disabled Icelanders have also organized
demonstrationsagainst pension cuts. In November, the wait to be
treated for depression and anxiety at Reykjavik's main hospital
was four months. A cancer patient who could no longer afford
to pay for his chemotherapy asked friends on Facebook last
March to help him find work. The medical director at a Reykjavik area
clinic has warned of an "imminent collapse" of
the health care system due to cuts and physicians leaving the
country. And representatives from a charity said that an
increasing number of people were in need of its Christmas food
packages this year.
Amid all this
suffering, banks are continuing to assert themselves, as
profit-maximizing entities do. In 2011, it was reported that
the monthly pay of a bank manager reached over $33,000 - an
increase of almost 150 percent since the crash.
Financing this
opulence is debtor misery. Despite the haircuts that have already
occurred and promises of government help, as of last January,
only 15-20 percent of all mortgages had gone through some stage
of the write-down process. And a Supreme Court ruling confirmed the
legality of loans tied to the consumer price index, rendering state
encouraged 110 percent write-downs relatively impotent: foreign
bondholders have parked money in property due to capital
controls. As a result, property values have surged and inflation
indexing has washed out many principal reductions.
It wouldn't seem
beyond the pale to assume that the situation is indicative of a
housing bubble. In late November, a major mortgage lender called the
Housing Finance Fund - owner of 68 percent of the country's liquid
guaranteed debt market, according to Bloomberg - was
promised an emergency $103 million cash injection by the government.
And there will be considerable pain if the bubble bursts.
Iceland's mortgage bond market was worth an estimated $7.6
billion in May - just above 50 percent of GDP. Creditors will find it
difficult to recoup losses in Icelandic real estate - more so than
when creditors were privy to the failed banks' globally recognized
assets.
Despite these
problems, it's undeniable that Iceland's economy is the envy of many
Western economic basket cases - the least foul smelling of the
world's dirty laundry. And there is truth to the mythology that has
been spun: popular movements have thus far resisted Icesave,
root-and-branch austerity and other socialized losses. The
Kitchenware Revolution was ahead of its time, gripping
the Austurvöllur long before mass demonstrations from
Zuccotti Park to Syntagma Square were regular fixtures.
Because Iceland's
activists and progressive politicians are aware that problems are
destined to linger, they are seeking to consolidate people power
through longer-term solutions - an appropriate response for a country
brought to the brink of ruination, like many others, by instant
gratification.
The constitution is
the most prominent example of this newfound outlook - one that began
to emerge even as the country gorged on cheap credit.
Culture Shock Therapy
Long before the first
container of skyr was pelted at the Althingi, the language of reform
emerged during Iceland's near-fatal addiction to libertarianism. As
with any cultural shift, it would be wrong to pinpoint a single
cause, but a book published in 2006 helped nudge the country's
collective consciouness away from the prevailing wisdom.
A few years earlier,
politicians controversially sold off sweeping tracts of land in the
east to aluminum conglomerate Alcoa to construct a smelter and a
hydroelectric dam to power it. Author, playwright and poet Andri
Snær Magnason was infuriated by the decision and decided
to write about it.
He wasn't just
disgusted by the mutilation of pristine nature. Magnason thought it
was fatally unimaginative for Iceland to put so much faith in a
single company - particularly one with a reputation for leaving
scorched earth in its wake. Fueled by indignation, he penned a sort
of manifesto called Dreamland: A Self-Help Manual for a
Frightened Nation. It set the political landscape alight.
"The book
completely transformed the way Icelanders saw our nature,"
Jónsdóttir said. "Andri Snær is truly unique in the sense
that he manages to write about these things in such a way that
anybody can understand. And it is so admirable that an artist applies
himself in that way, because there were very few doing it."
Dreamland, more or
less, explained the problem as such: unemployment in the region
wasn't particularly problematic - migrant workers had to be flown in
to help build the massive dam; locals presided over tourist-trapping
natural beauty and globally competitive farmland that stood to be
tainted by Alcoa's contributions to the landscape.
Yet leaders welcomed
the imperious project and citizens offered little resistance for
reasons, Magnason theorized, that went beyond the mere corruptive
allure of promised wealth. A fearful mindset informed locals'
decision to sell their golden geese. Anxiety arising from alienation
- from consumers; from the product of their own labor - led
Icelanders to accept whatever plan Alcoa dropped in their laps rather
than collaborate to explore alternatives. Corporate father knew best.
"There was a very
strange psychological dilemma," Magnason explained to Truthout
via Skype. "It's a dilemma that is common in rural areas with
great natural resources - that people are very far away from the
markets, and they, maybe, don't even know why they are doing the
things that they are doing."
Dreamland didn't
just challenge the conventional wisdom; it brought to the fore the
very notion of conventional wisdom as a tool of oppression
Many Icelanders
agreed. The book was a number-one bestseller and nurtured the
movement against Alcoa. One day in September 2006, a few months after
the book's publication, 15,000 demonstrators - 1 in every
20 Icelanders - turned out all over the country to voice
their opposition to the project, heeding a call from a retiring
television journalist named Ómar Ragnarsson. The movement was
noteworthy for a country whose only major protest in the postwar era
was a demonstration against NATO membership in 1949.
Although the dam and
the smelter were ultimately built, Dreamland left an impression that
transcended any one issue. This isn't to credit Magnason himself -
Dreamland argues that invention is a social product, citing the
concept simultaneous innovation as proof. But the book acted as a
lightning rod. Many Icelanders were happy to confront the notion that
reality isn't what the ruling classes cram down peoples' throats.
"People found out
that they needed collaboration and cross-pollination," Magnason
said."Dreamland was kind of part of that movement. The
design people, the tech nerds, the computer geeks, and the
tree-huggers kind of teamed up in a kind of movement of creating
things out of nothing - music, design, and all sorts of innovation.
The political agenda that this was possible to kind of create without
destroying everything."
This mindset is found
all over post-collapse politics. After the crash, a cohort of highly
educated and disillusioned individuals were wrested from lucrative
salaries that incentivized soul-crushing work - "design people,
tech nerds and computer geeks" laboring for the country's
financial barons. Many of these liberated workers not only embraced
start-up culture, but an enthusiasm for social innovation and
grassroots resilience shared by environmentalists and other
activists.
This zeal manifested
itself in almost every aspect of the new constitution, which was
produced using innovative crowdsourcing techniques.
A Constitution By the
People - but to What Extent?
Crowdsourcing might
seem like just a high-tech buzzword, but its potential to alter
statecraft can't be overstated. As Wikipedia (itself
founded on a crowdsourcing model) defines the concept, it
"involves outsourcing tasks ... to an undefined public
rather than a specific body." And if the task at hand is
governance, crowdsourcing can advance an anti-authoritarian agenda;
the Internet has made widespread collaboration cheaper and easier
than ever. What the printing press did for representative democracy,
online social media can do for direct democracy.
To help illustrate how
crowdsourcing techniques produced a hierarchy-averse draft
constitution, it's worth offering a selective post-crash biography of
the IT specialist who eventually became the constitutional council's
chief technology officer.
A start-up enthusiast,
Finnur Magnusson moved back to Iceland from London in 2008. After the
bubble burst in September, he joined in the head scratching,
discussing with other horrified Icelanders how citizens can and
should respond. Magnusson offered whatever IT expertise he could
provide to an entrepreneurially minded grassroots reform group known
as The Ministry of Ideas. Its work proved critical to
constitutional reform.
In late 2009, the
Ministry organized a 1,000-member strong national gathering -
a drill in collaborative "Where do we go from here?"
brainstorming involving randomly selected citizens and a few
handpicked prominent thinkers (Magnusson and Jónsdóttir were
there). Groups of participants bounced ideas off each other,
ultimately formulating a list of shared values. The summit
organizers, through Magnusson and his tech-nerd compatriots, took
those suggestions and came up with an aggregation of cherished mores
in short order. Not long after the discussions finished - thanks to
social media crowdsourcing - Iceland had a decent estimate of
its moral compass.
"The event that
we formatted was pretty tech driven," Magnusson explained to
Truthout via Skype. "We were running around with feedback from
the tables and putting it up on the screen and live on the web. And
it was good fun, you know? It was a good project."
Iceland's center-left
coalition government agreed. In June 2010, the Althingi commissioned
a similarly organized gathering tasked with crowdsourcing a review of
the constitution. Reform-minded Icelanders had been keen on using the
constitution as a post-crash vehicle for reform - the current
document is a barely amended copy of an old Danish constitution. That
review, as per the law that created it, was eventually presented to
the elected constitutional council, which was founded and given a
mandate to draft a constitution by the same law.
After the
constitutional assembly wrapped up, the 950 randomly selected
participants advised the council to codify environmental,
cultural, social, and political protections into law while promoting
transparency, international cooperation, human rights and social
welfare.
And while the draft
constitution strains to account for these concerns, Magnusson warned
against treating the draft like it was written by a cast of thousands
on Google Docs.
"The one thing I
ask of you is please don't put 'crowdsourced constitution' in the
title," he stressed. Open and inclusive the drafting process may
have been, but crowdsourced it was not; the drafting itself was done
by a handful of elected officials.
Magnusson also said
that the participation rate put a damper on the feel-good factor of
the process. About 2 percent of the population weighed in on the
draft.
"The interest has
been more from abroad than in Iceland," he said. "There's a
very hard-to-translate saying in Icelandic: 'Nobody's a prophet in
their own country.'"
Dreamland Awakens
Organizers and
activists behind the constitution were prophetic in that their leap
of faith has, thus far, been widely accepted (or, at least,
unopposed). The constitutional assembly might have - somewhat
controversially - involved less than a thousand randomly selected
people. But its sample size and horizontalist framework seem to have
led it to extrapolate widespread sentiment from a chosen few.
"That
cross-section was a very interesting concept itself," Andri Snær
Magnason opined, "because even in a group of ten friends,
there's always one friend that, you know, would organize the next
party. Or who will be kind of the leader of the group. What this
does, this randomness - it boycotts all the people that would want to
be a leader in a very small group."
One example of how the
dynamic might have effectively boycotted special interests pertains
to environmental anxieties that were raised in Dreamland -
fears that have been exacerbated since the collapse. These concerns
were raised frequently in both the 2009 and 2010assemblies.
On the October ballot, alongside other questions pertaining to
constitutional articles, voters were asked if they approved of a
provision that put unowned natural resources into public ownership -
unavailable for sale, but leasable for "a modest period of
time." It passed by the widest margin of all the questions,
with 82.5 percent of voters favoring public ownership.
"I think it's a
response to this extreme capitalist greed that people were
witnessing, and the possibility of somebody just coming in and buying
everything up in a fleeting moment in our history," Magnason
said.
Foreign investors have
already tried to snap up natural resources since 2008. A Canadian
company called Magma Energy purchased a local-government-owned
geothermal utility called HS Orka in September 2009. The national
government only bought back a majority share inNovember 2011, after
a popular outcry and a series of protests led by singer Björk.
And Chinese billionaire Huang Nubo attempted to purchase 118 square
miles of land (roughly 0.3 percent of the country's landmass) to
build a luxury resort, but was thwarted by a law stopping
non-Europeans - as per European treaty agreements - from owning land
(Magma sidestepped law this by starting a shell company in Sweden).
Even before Iceland
privatized its banking system, natural resource allocation was a hot
topic. There has been longstanding discontent over fishing policy -
no small matter on an island nation.
"The rights to
fish were given to individuals and they could then sell this as an
asset. Many of them became extremely rich," Magnason said.
The fishing barons
also bankrupted villages "by moving the quota out,"
according to Jónsdóttir.
"There is this
underlying anger towards them. I think that people just have had
enough of the way they use money, influence and media to interact to
get their will," she said.
Economist and
constitutional council member Thorvaldur Gylfason wrote in an email
to Truthout that for decades opinion polls have shown Icelanders in
favor of making fishing giants pay more for their quotas - roughly 70
percent of the electorate has consistently supported vessel resource
depletion fees. Vessel owners were given quotas, which were made
permanent in 1990, and they have only been forced to pay the
government "a nominal fee" for them since 2004.
"Political
parties, liberally oiled by interested parties, no doubt - as they
were by the bankers - have managed to thwart the popular will in
Parliament," Gylfason said.
"The
constitutional bill aims to correct the situation," he added.
But the importance of
the natural resource provision mustn't be exaggerated.
Parliamentarian Lilja
Mosesdottir pointed out that Icelanders don't need either the private
sector or foreigners to plunder their country.
"The
constitutional clause will make sure that property rights to the
natural resources are in the hands of the Icelandic people, but they
may utilize it completely and destroy it," she said.
Jónsdóttir echoed
this point, stressing that the resources should be in the
guardianship, not the ownership, of the nation.
"Nobody owns
nature. That's a crazy concept," she argued.
Nor should the
provision be thought of as some sort of bold radical act, she added,
lamenting that the constitutional draft neither nationalizes
resources nor explicitly mentions water rights.
Magnason also pointed
out that the provision isn't exactly "some kind of socialist
revolution of taking people's assets."
"Most of the
hydro and geothermal energy has been kind of under the government
authorities already, anyway," he said
Gylfason added that it
would be wrong to describe the move as nationalization.
"It is matter of
the rightful owner of the country‘s natural resources being paid
proper rent for someone else’s use of the resources," he said.
But future legislation
affecting Iceland's natural resources and the stability of its
ecosystems will, at least, be open to challenges by voters if the
draft constitution passes. The electoratewould be afforded
considerable checks on Parliament. One article would mandate that
international agreements - for example, whether or not Iceland should
join the EU - must be put to a popular vote. Another provision would
allow 10 percent of voters to demand a referendum on newly signed
laws up to three months after they're passed. The draft also affords
citizens the chance to introduce legislation to Parliament -
counterproposals must be put to referendum. Voters would also be
granted the power of approving constitutional amendments and the
removal of a president by Parliament. And speaking of that office,
presidential candidates would have to be endorsed by 1 percent of
voters.
"What's coming
out of the crisis is this demand for greater democracy, that the
people should interfere when their representatives are not doing
their jobs," said Mosesdottir, by no means an ardent supporter
of the constitutional movement. "A lot of people felt when the
banks crashed that their representatives did not make sure that the
interest of the people was safeguarded."
Radical safeguards
punctuate the draft in other ways, too. The new law of the land would
grant protected status based on disability, sexual orientation, and
genetic character, and would oblige the government to guard against
rights violations committed by non-state actors.
Even if the movement
fails, organizers could learn from the methodology the council used
to draft such a comprehensive egalitarian set of laws.
Social Media, IT
Concepts Nudge Iceland Toward Direct Democracy
Although the
crowdsourced part of the drafting process - the assembly - was
completed before the constitutional council put pen to paper, the
council's members attempted to adhere to the open and inclusive
spirit of the project.
Gylfason said
that suggestions made by the public were all read "carefully"
and "virtually all of them" were considered.
"For example, a
couple of suggestions came from farmers who wanted us to make sure
that the environmental protection provision protected both private
and public lands from cross-fence grazing, a centuries-old problem in
Iceland. Others came from Internet specialists who were keen on
seeing a state-of-the-art freedom-of-information clause. They got
one. Their input was very helpful," he said.
Not all suggestions
were adopted. Gylfason said a Europol official encouraged the council
to adopt a clause that would have facilitated asset forfeiture "in
the spirit of modern European legislation."
"We did not go
for that one, not as a constitutional issue," he said, "even
if the case that was made by the police officer was very well put."
The ways in which
outsiders were given opportunities to influence the drafting boiled
down to the way start-up culture informed the process. The council
used an iterative "quick sprint" methodology - inspired by
software developers seeking as much constructive criticism as
possible.
"You do quick
iterations and you try to get as much feedback as you can. And you
keep iterating until you have a final product," Magnusson said.
Rather than revising obsessively behind closed doors, the council
invited the public via social media to help.
"That enabled us
to get a lot of feedback and involve many more participants within
the nation," he claimed.
Whether or not
organizers could have solicited more input is up for debate. But a
group of scholars from The Comparative Constitutions
Project described the approach as "novel" and hailed
the constitution as "one of the most inclusive in history."
The iterative approach
is, in many ways, symbolic of the grander significance of the
constitution itself.
"I'm pleased with
this as the next very big, big step towards a more open and direct
democracy," Jónsdóttir said,
She acknowledged that
there could have been more crowdsourcing, but that distractions -
time constraints and affronts to the constitutional council -
hampered efforts.
"There were some
very serious attempts to destroy the process by the conservatives,"
she lamented.
Magnusson stressed
that the imperfections of the drafting process shouldn't be
downplayed - particularly in the context of whatever comes next.
Using the current reform for more inclusive crowdsourcing-inspired
endeavors could build "a foundation for a more direct
democracy," he said.
"We have a way to
go until we put the voting buttons on the Internet," he added.
That Icelanders are
even discussing this endgame is reason for the rest of the world to
take notice.
