Fishing made Iceland rich, then spurred its financial meltdown. To banish that horror, Icelanders may now abandon a winning formulaby Sam Knight / July 20, 2011 / Leave a comment
Published in August 2011 issue of Prospect Magazine
The oldest trading village in Iceland is a place called Ólafsvík. A few hours north of Reykjavik, it sits near the end of the Snæfellsnes peninsula, a long, westward-reaching arm of mountainsides, ruffled grasses, and folklore. Jules Verne chose the Snæfellsjökull, a glacier sitting on a volcano that overlooks the cliffs and the sea, to be the starting point for A Journey to the Centre of the Earth. In 1810, a Scottish mineralogist named George Mackenzie astonished the locals by climbing it in a day.
Mackenzie spent the rest of his time in Ólafsvík observing its chief activity, fishing. It was spring, and the beaches lay covered with the flattened bodies of drying cod. “The facility with which the fishing is carried on by the natives is really astonishing,” he wrote. “In the morning they go out in small skiffs, to the distance of a few miles from the shore, and in the afternoon return with as many fine fish as their boats can contain.”
These days there is no sign of old Ólafsvík. Like many towns in Iceland, its inhabitants are mainly concerned with the practicalities of life on the rim of the Arctic Circle. Their roads are wide; their cars 4×4’s; their buildings new. Bulldozers perch on rocky ledges, fulfilling improbable tasks. The wind, like a lateral force of gravity, blows so steadily that people joke that should it ever relent, all the old people would fall over.
The fishing, however, remains. The 1,000 people of Ólafsvík caught 15,000 tonnes of fish last year, and when I was in the town recently, it was obvious that it dominates their lives still. Yet almost three years after its great crash, fishing is pulling Iceland apart. In 2008, the world watched as the country—a newcomer to sophisticated, international banking—was overwhelmed by the financial crisis. Its three main banks, whose assets had swollen to 11 times the size of the economy, collapsed and were nationalised. At first glance, fishing seemed a million miles away. Unlike banking, it was something that Iceland knew itself to be good at. But in time, the industry has become a totem, a test case for the kind of society that Iceland wants to be after its financial reckoning. No one knows what it is yet—but it feels as if the status quo won’t last. The resulting disquiet has implications for the EU, whose newly-minted reform of the common fisheries policy is partly modelled on Iceland’s pioneering use of quotas to manage its fish, and for all of us, as we think about what kind of societies we want to emerge from the financial crisis.