Were the movers and shakers in the Icelandic business and political elite so sure of not having to face any personal consequences of their actions that they were oblivious to the risks they were taking?

Apart from some marginal contexts, in the Middle Ages there was no concept of risk. Nor, so far as I have been able to find out, was there in most other traditional cultures. The idea of risk appears to have taken hold in the 16th and 17th centuries, and was first coined by Western explorers as they set off on their voyages across the world. The word ‘risk’ seems to have come into English through Spanish or Portuguese, where it was used to refer to sailing into uncharted waters. Originally, in other words, it had an orientation to space. Later, it became transferred to time, as used in banking and investment – to mean calculation of the probable consequences of investment decisions for borrowers and lenders. It subsequently came to refer to a wide range of other situations of uncertainty.

The notion of risk, I should point out, is inseparable from the ideas of probability and uncertainty. A person can’t be said to be running a risk where an outcome is 100% certain. (Anthony Giddens)

It could be reasonably claimed that before 2008 Icelandic politicians could be almost 100% certain that they could get away with just about anything. Volcanic eruptions had been more common since Iceland gained its independence in 1944,  than ministers or political leaders in state or local politics resigning. If they did, the most likely explanation given would be that they had failed their party somehow, not the nation. When Arni Johnsen, MP of the Independence Party was jailed for embezzlement early in the century, he served his time but promptly asked for a clean slate, a demand almost unheard of and extremely difficult to obtain, so he could run again. The party obliged and he is now back in Althingi. It should be noted that Arni did not resign voluntarily when he faced the charges for which he wsa eventually jailed. Gudmundur Arni Stefansson of the Social Democrats who did resign as a minister in the mid-nineties was afterwards offered a cozy job as an ambassador. The system took care of its own.

Likewise you could be forgiven for thinking that Icelandic business circles were corruption free. White collar crimes were rarely investigated or prosecuted, least of all those of any significant scale. Bjorgolfur Gudmundsson was convicted in the Hafskip affair in the mid-eighties but his reward from the Independence Party turned out to be the gift of a newly privatized Landsbanki. After running that bank into the ground at a huge cost to the Icelandic taxpayer, Bjorgolfur and his son have not been charged with anything serious and their lawyers are hard at work making sure that their assets are left as untouched as possible and that only one of them can be made bankrupt, the older one. Instead of facing charges because of IceSave and bankrupting his bank, the younger one is scoring deals for new investments in Iceland.

Jon Asgeir Johannesson gets to keep 365 media and Hagar’s profitable part while dumping the debts onto the state banks. David Oddson bankrupted the Central Bank but gets to write his own history as the editor in chief of Morgunbladid. Hreidar Mar Sigurdsson is said to be involved with the Havilland bank which took over Kaupthing in Luxembourg, Bjarni Armannsson is investing the billions he made from Glitnir, Halldor J. Kristjansson is respectfully announced as a former CEO of a European bank in Canada. Hannes Smarason is claiming billions in Landsbankinn’s bankrupt wreck and so on and so forth. What risk? They are all well off and are not eating ramen for dinner or loosing the expensive roofs from over their heads (romantically transferred onto the names of their wives in the last couple of years). The Icelandic public is facing the consequences of their action, not the businessmen themselves.

The Independence Party understands this better than everyone else. The husband of Thorgerdur Katrin Gunnarsdottir, former Minister of Education and the party’s vice chairman borrowed hundreds of million from Kaupthing to buy shares in the bank. The debt was written off in the weeks before the crash. Her family’s risk, everyone else’s consequences. Her chairman, Bjarni Benediktsson’s participatipation in a real estate venture in Macau, where the insurance funds of Sjova were used to take immense risk on the company’s behalf did not turn out to have any risk invovled for himself and his family. He stood to gain massively if things would go to plan, but as the deal turned sour, every man, woman and child in Iceland ended up having to pay out 10.000 ISK through the state in life-support for Sjova. The controversial Fund 9 at Glitnir, where the chairman of the Independence Party’s congressional group, Illugi Gunnarsson on the board was bailed out by the taxpayers as well.

The leaders of the opposition today are people who took massive risk and were bailed out by their fellow citizens.  They were not alone.

The political and business elites took massive risks without any consequences to themselves. They sailed carelessly through uncharted waters, and when the boat sunk with everyone aboard, they got away in the life-boats and blamed the reefs, the water and everyone but themselves. They were not only oblivious to the risks they were taking but have so far failed to grasp the significant consequences of their actions because the Icelandic people have failed to make them accountable.

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3. Olafur Ragnar Grimsson’s Dozen Lessons In Business Icelandic Style – “You Ain’t Seen Nothing Yet”
4. A Business Friendly Country
5. Jonas Teaching Business Law and Corporate Responsibility