So who's to blame? An Icelandic saga

Terry McDonough: I came across the following very interesting reference from Ann Mayhew on the institutional economics AFEEMAIL list. Enjoy.

In the March 9, 2009 issue of THE NEW YORKER there is a very interesting and highly readable account of the financial disaster in Iceland by Ian Parker. One of the people interviewed by Parker was Hannes Holmsteinn Gissurason, described by Parker as a libertarian professor of political philosophy and a free-market intellectual who had considerable influence and wrote “How Can Iceland Become the Richest Country in the World?” Gissurason claims as his heroes Margaret Thatcher and Friedrich Hayek on whom he wrote his Oxford dissertation. Toward the end of the article, Parker reports on a conversation he had with Gissurason about the collapse of Iceland’s banks and economy during which Gissurason blames the disaster on “ten to fifteen guys [who] overreached themselves.” Parker goes on to quote Gissurason as making this, to me, breathtaking statement:

“. . . some of us are to blame indirectly, because we created a climate in which the entrepreneur was applauded. The businessman, the guy who takes over companies, asset-stripping—he was a hero in Icelandic folklore that was created by some of us who strongly supported the free market. . . . Indirectly, I take some blame for it, but, if you think about it, it’s not my fault. It’s the fault of the left-wing intellectuals, who should have been giving a counter-view!. . . You can’t blame people for their successes—you have to blame those who fail. We were too successful with the free-market philosophy.”

So there, left-wing intellectuals, take that! And, I assume that Oxford is proud of the logical rigour they instilled in their fine students.