Of all social democratic parties in Europe none has fared worse at the polls of late than Iceland’s Social Democratic Alliance. Whereas in the parliamentary election of 2003 it won 20 out of 63 seats in Parliament, it barely cleared the 5% threshold in the 2016 election, securing three seats, all in rural constituencies. The reasons for this spectacular fall from grace may hold lessons for other social democratic parties.
Popular support for Iceland´s Social Democrats did not collapse, as some have claimed, because they took their cue from Tony Blair and New Labour in the UK. They didn’t. Rather, the root cause of the debacle is purely local.
The trouble started in 2007 when, following 12 years of a coalition government of the right-wing Independence Party and the centrist Progressive Party, a coalition that had privatized the banks by delivering two of them to political cronies and engineered an unprecedented escalation of income inequality, the Social Democrats set their sights on forming a grand coalition with the Independence Party. Unlike other parties in Parliament, the Social Democrats favoured EU membership.
Forming a government with the Independence Party in 2007 proved to be a catastrophic mistake when the corrupt corporatist policies of the preceding 1995-2007 government culminated in the financial crash of 2008. Ordinary people took to the streets, banging their pots and pans and demanding the government´s resignation. Shortly afterwards, the Social Democrats and the Independence Party replaced their leaders.
The 2009 election, held a few months after the crash, gave the Social Democrats and the Left Greens a majority in Parliament. For the first time, a majority government of the left was formed.
The Social Democrats had made three main promises to the voters. First, they promised to file an application for EU membership; the subtext was that Iceland, having botched its economic affairs so badly, needed to show the rest of Europe and the world that it was willing to share its sovereignty with others and subject itself to imported discipline, including bank supervision. Second, they promised to revamp fisheries policy which had been a hotly contested issue for decades and instead failed to act upon its promise to encourage a fairer allocation of quotas. Third, the Social Democrats promised a new post-crash constitution to replace the provisional one from 1944 when Iceland declared full independence from Nazi-occupied Denmark.
The Social Democrats broke all three promises. They allowed the EU membership application filed in 2009 to be put on ice in 2012, apparently to pacify their opponents who want Parliament to decide the issue without a referendum. They invited the vessel-owning oligarchs to participate in debating the revision of fisheries policy, a sure and successful way to kill the reform effort. And they failed to ratify the crowd-sourced constitution that a popularly elected constituent assembly had drafted and that had won the support of 2/3 of the voters in a national referendum called by Parliament in 2012. In doing so, the Social Democrats stabbed themselves in the back because they had launched the constitutional reform process in Parliament.
This threefold betrayal was exacerbated by the split within the parliamentary ranks of the Social Democrats when an ad hoc parliamentary committee moved that four former ministers and MPs, two from the Independence Party and two Social Democrats, should be brought before a special Court of Impeachment for dereliction of duty before the crash. While other parties voted along party lines, the Social Democrats split, apparently to save the skins of their two members. Hence, only the former Prime Minister from the Independence Party was brought before the Court where he was found guilty on one count, but escaped punishment. He was later appointed ambassador to the US. The episode is telling because it showed the Social Democrats behaving like an interest organization of politicians, a description which seems to fit many political parties.
To make three key promises and break them all reflects a lack of seriousness of purpose, an acceptance of spinelessness as a lifestyle. Most serious of the three betrayals is the one having to do with the constitution because the constitution bill still kept on ice by Parliament will, if ratified, fix the fisheries policy problem and secure the voters´ right to settle the EU membership question without Parliament´s interference.
The Social Democrats, despite valiant efforts by several of their MPs during 2009-2013, permitted themselves to be instrumental in a frontal assault on Icelandic democracy by aiding and abetting their opponents´ attempt to thwart the will of the people as expressed in the 2012 constitutional referendum, thereby jeopardizing Iceland´s standing as a liberal democracy, a fully fledged member of the Nordic family.
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Imagine what the world would think of the UK if the British Parliament had decided to ignore the Brexit vote on the grounds that it was only advisory. The Icelandic Parliament is still playing with fire, ever eager to please the oligarchs. With democracy in decline in parts of Europe and even in the US, now is not a good time for the Icelandic Parliament to ignore the outcome of a constitutional referendum and thus invite the rest of the world to wonder why. When Social Democrats participate in such dealings, they deserve to be punished at the polls. The downside is that parliamentary elections are a zero-sum game.
What can other parties and countries learn from the experience of Iceland´s Social Democrats? Let me suggest three main lessons.
First, politicians must never lose sight of the need to respect democracy and human rights no matter what because, if they do, their moral authority plummets and public trust will be hard to restore; besides, respect for democracy is the right thing to do.
Second, politicians must not permit themselves to lose control of their destiny by selling their souls to oligarchs as many in the US Congress and the Icelandic Parliament have done, resulting in extremely low levels of public trust in the two legislatures. US congressmen spend three days a week on average raising funds for their re-election which may help to explain why Freedom House has recently demoted the US from top rank as a democracy, below that of most West European countries. Icelandic MPs in rural constituencies have been labelled “politically suicidal” if they rise up against the oligarchs.
Third, when constitutional reform is needed, politicians need to outsource the drafting to nationally elected constituent assemblies to ward off self-dealing as was done in the US in 1787 and in Iceland in 2011. While the US constitution was drafted behind closed doors in Philadelphia, however, the Icelandic one was written up in full view of the public, provision by provision, with significant input from ordinary citizens from all walks of life through the constituent assembly´s interactive website.
In sum, political parties need to be on guard against being perceived to behave like interest organizations of politicians for such perceptions tend to undermine public trust, a fundamental pillar of democracy.
Thorvaldur Gylfason is professor of economics at the University of Iceland and Research Fellow at CESifo (Center for Economic Studies) at the University of Munich. A Princeton PhD, he has worked at the International Monetary Fund in Washington DC, taught at Princeton and edited the European Economic Review.