We shall discuss the political strategy and thinking of two young economists, who, in the years after 1956, got a dominating position in the economic policy of Iceland. We shall examine what was already known at that time as well as later findings. The two economists were Gylfi Gislason, who was appointed Minister of Commerce in 1956, and Jonas Haralz, who advanced swiftly to the position of the government's chief advisor in economic policy. The public has known two things: the economic measures in 1960 which indeed corresponded to undertakings in 1950, and the intention to join Iceland to EEC which at that time was under reconstruction. They both maintained that EFTA, The European Free Trade Association, would soon come to an end, and, that, consequently, EFTA membership would not be an alternative for Iceland. They acted in accordance with this for some years; Jonas Haralz had then become Head of Ministry. This work came to an end without any public declaration.

However, what at this time was not known was the motivation behind Mr. Gylfi Gislason´s engagement for Iceland´s membership in the EEC. This he explained much later in a seminar he led at the economics department of the University of Iceland (a university seminar is a public forum). At that time he had just returned as a professosr, after 16 years´ abscence due to his political activities. The governor of the Central Bank of Iceland opened the seminar, which dealt with how the bank came into existence, and the bank´s tasks. During the subsequent discussion the professor disclosed what he had been confronted with when, in 1956, he was appointed minister for the first time. He had then felt, he said, as if he had been met by a thousand spears; the promises the public had got, and which he was expected to fulfill, went far beyond what could ever be realized. To protect himself against the people´s demands and expectations he felt that the only way was to submit Iceland to EEC.

It is not known how economic advisor Jonas Haralz explained his motivation in this matter apart from his public argumentation as a civil servant. Later, however, he submitted the statement, repeated ad nauseum, concerning Iceland´s place among European states, that the country had no discipline in economic policy, and that, on the other hand, Iceland would get it by joining what is now the EU.

Discipline can mean taking responsibility and showing self-discipline, or it can mean simply obeying. Many an Icelander has been expecting to get that kind of discipline from the EU. Recently, one has observed how EU´s control is expected to reduce misrule in the individual states. Misrule means that the government is not able to establish economic-political coordination; or, that in  a case where coordination has been established, it lasts only for a short time. It was this kind of misrule Mr. Gylfi Gislason had experienced as an economic advisor and politician.

In this connection it is in its place to point out how fund voting invites to discipline and self-control. In fund voting every participant is submitted to limits through votes which are allotted to his fund. It costs him votes to influence an issue; this implies limits and discipline. In fund voting it will show how every participant has managed his votes and how much every issue has cost every participant in number of votes. It should now be known how issues of different types can be handled in fund voting, for example communication plans, school organization—thereunder university structure, and not least forming finance budgets and finance law. This we call fund voting in major issues.

In fund voting issues may form a complex of issues. The wishes involved in a given issue may be perceived as a thousand spears by the authorities, but in fund voting the participants can attach the handling of every single issue to the handling of other issues, among them the total expenditure. This is the core of self-control and self-discipline in fund voting.

 

Coordination—fund voting is definitely coordination—can be revised by taking up the handling of a single earlier issue in a complex of issues. Any such revision is bound to the discipline which follows the general rules of fund voting. Consequently, coordination will not be disturbed. To begin with, minor issues can be handled in fund voting. It is not necessary to establish a law on fund voting as a set of procedures—no more than is needed for other forms of sounding out.

 

Morgunbladid 22 November 2012 [translated from the Icelandic]