The Viking Banksters

Thorgerdur-UVic-2

Photo by P. Baer

Thorgerdur Einarsdóttir, professor of Gender Studies, University of Iceland, gave a Richard and Margaret Beck Lecture today, Feb 8, on “Finance Vikings, Masculinities, and the Economic Collapse in Iceland“. It proved to be a popular title for the audience kept arriving and arriving and arriving. People made Viking forays to nearby rooms for chairs, sat on the steps, stood against the walls. As John Tucker said, pleased as punch but bemused, “You just never know how many people will turn up.“

As I´m sure everyone knows, there was a special Investigation Commission in Iceland to investigate the banksters. However, readers may not know that there was a gender review of the SIC done by Einarsdottir & Pétursdottir.

The banks grew 20 times in size in seven years. The economic policy from 2004 contributed to the imbalance in the economy. Deregulation and financial liberalization meant a  lack of control over the bankers. The employment policy, the lowering of taxes and the financing of  houses plus the political ideology mindset contributed to the crash.

How does gender matter? The events leading up to the crash was controlled and directed by men. National ideas of masculinity fueled the ideology behind the events. Rah, rah, we‘re Vikings, lets go raiding. One gets the feeling that some of the bankers had read too many sagas when they adolescents.

Transnational business is largely male and within that context, Icelandic men saw themselves not just as bankers but as the Financial Vikings. Their financial exploits were a way of showing everyone how powerful they were.

There was nothing to stop all the testosterone fueled risk taking. The business tycoons were praised by the media, by politicians, by the bankers, the president himself. Wow, look at our Vikings! From 1997 to 2008, magazines chose the financial Vikings as Man of the Year. As I listened to the lecture, I got the image of the banksters arriving on the shores of Iceland in Viking long boats while worshiping crowds sang their praises.

The Viking heritage was seen as strength, daring and sound knowledge of business that created success quickly in investing abroad. Björgvin G. Sigurðsson, the Minister of Business Affairs praised the Viking qualities of the businessmen who were taking huge financial risks.

Ölafur Ragnar Grímsson repeatedly praised the so-called Viking qualities of Icelandic business. He said “Icelanders focus on the result rather than the decision-making process…go straight to the task and do the job in the shortest possible time“.

He also said, “Elements in our culture and history have played a part …qualities we have inherited from our ancestors give us an advantage in the international arena“.

When the bankers were borrowing and buying there was complacency and arrogance: the Icelandic Chamber of Commerce said Iceland should “stop comparing itself to the other Nordic countries since Iceland already is way ahead of them anyway“.

Thorgerdur showed a video called Mindset made by Kaupthink bank. (www.youtube.com/watch?v=Rkz-hipch38)that drew a lot of laughs. The laughter was because the claims are so vain, so unrealistic, so absurd that one could do nothing but laugh. I have been told all my life that the worst sin an Icelander can commit is to brag but self-importance and vanity drip from the film.

After the collapse, the former chair of the Financial Supervisory Authority, Lárus Finnbogason, said that maybe the supervisory authority over the banks should actually have been in direct contact with the top managers. The statement seems utterly bizarre. What he was saying was that the people trusted to supervise the banking system had no direct contact with the people who were borrowing vast sums of money and creating schemes like IceSave. They were too impressed  by them.

A Norwegian bank specialist said after the collapse that “Icelandic bankers…seemed to hold the view that they had invented something new, that they had superior competence and a better understanding of risks and profit possibilities as compared to more traditional and conservative bankers, and that, in their view, the sky was the only limit.“ This was the view of one of those other Scandinavian bankers that the Icelandic chamber of commerce thought were so far behind.

The view of the Icelandic banks was not as flattering as the banker‘s view of themselves. The Trade Council´s report said Icelandic companies “were young companies with young management“ and there was “Something infantile and nouveau-rich about the expansion.“

What allowed the disaster to happen was that there was an old boy´s network made up of friendship and family ties and the gender review showed that it was very definitely a boy´s network. No girls allowed.

When the banks were privatized, people were told that there was clear understanding that the state getting out of the financial markets and allowing private business to run the banks was highly important. However, in actual fact, the two state banks were divided between the ruling parties. This was cronyism at its worst. When I heard this I thought this was every bit as bad or worse than the cronyism of the Southern American states at the beginning of the 20th Century. So much for all the times I had been told while I was growing up in Gimli, Manitoba, that Icelanders were so  honest that they only had one jail and had no need for policemen.

How much the system was dominated by a few members of Iceland´s elite upper class could be seen by a statement by Sigurjón Þ. Árnason, CEO of Landsbanki. “Generally speaking, David didn´t call  me. This is the way the system worked: David spoke to Halldór, Sturla spoke to Jón Thorsteinn or to me. Me and Stulli are friends, we sat side by side in college, that´s the way it is in Iceland, therefore, we know each other pretty well, even if we are not friends today but we know each other, historically speaking, and we can therefore talk to each other, independent of work. Therefore, we sometimes talk to each other, but generally speaking Jón Thorsteinn communicated with him.“

If you lost money in the crash, your savings, your investments, your house, anything, this statement by Sigurjón Þ. tells you exactly how it was done with backroom deals among the power elite who think no rules apply to them and that they are entitled to take anything they wish. When Thorgerdur showed us this statement, I thought about my research into the 1800s in Iceland and thought also of Laxness´s novel, Independent People, and thought Icelanders may have more cell phones than anyone, they may have a computer in every home, but nothing much has changed. The elite still believes that it has the right to take whatever it wants. The ordinary people are still Bjartur of Summerhouses. The rich give themselves money and the ordinary people are dispossessed.

Prime Minister Geri Haarde said “Sigurjón Þ. Árnason CEO of Landsbanki is my neighbour… and I got him to walk over to my place three times in the month of March…to discuss the Icesave accounts“.

After the crash, The Observer said “Iceland´s spectacular meltdown was caused by a banking and business culture that was buccaneering, reckless — and overwhelmingly male.“

One of the most interesting slides that Thorgerdur showed was a diagram of the relationships of the various men involved in creating the crash. It was shocking. It made clear that a small group of privileged men created the boom, benefited from it and caused the crash is made absolutely clear.

Thorgerdur ended with a set of recommendations to include women in decision-making roles in government and business so that the testosterone fueled disaster won´t happen again.

After the lecture, I was fortunate to have lunch with  Thorgerdur and some members of the audience. She is charming and intelligent. She has done a good job as both an investigator and a reporter of the follies of the testosterone driven crash. However, I came away from this lecture saddened. It is obvious from this lecture and from others I have attended that the Icelandic elite believed it had the right to take and keep whatever it wanted during the 19th C, that it believed it in the 20st C. and that it still believes it.

Unfortunately, it looks like many ordinary Icelanders still believe that this select few do have the right to take what they want and will vote them back into power. In this, they are not unique. It is often the working class, the underprivileged, the exploited, who support the Republican party and the right of the one percent in the United States to have and to hold their wealth and privileges no matter how they got them. Why should it be any different in Iceland?