Caught out

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 4x4’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.

The numbers say that Iceland is in recovery. Walking Reykjavik’s busy shopping streets, it certainly looks as if the country has righted itself. Icelanders accepted a £6bn rescue from the IMF and their Nordic neighbours after the calamity of October 2008, and experienced deep pain: 10 per cent tax increases; reduced wages; interest and inflation rates that reached 18 per cent and 19 per cent respectively, and a currency that lost half its value. In a country where many mortgages and almost half of car purchases were funded by debts in foreign currencies, that meant handing back the keys. It was appalling. Icelanders call it the Hrun or downfall, and remember with bitterness the day that the chancellor Alistair Darling invoked anti-terrorism legislation to protect the deposits of British savers caught up in the chaos. In economic terms, though, the hardship is now paying off. Last December, Iceland emerged from recession. The economy will grow 2.3 per cent this year. Inflation is ticking over at 4 per cent. Although unemployment is still eight times higher than pre-crash levels, at around 8 per cent, it is falling.

The numbers barely speak, though. For most Icelanders, the Hrun was more than an economic event. It was the revelation of a national misdeed: an abandonment of the principles of solidarity, honesty and unflashiness that had made life possible on this unlikely island for the last 1,100 years. And what made the abrogation so hard to accept is that it had been committed by other Icelanders. Although the entire, tiny population of 320,000 people was caught up in the boom—Icelanders’ collective rate of cheque, credit card and debit card transactions tripled between 1994 and 2007—an enormous amount of the anger that has arisen since the crash is from the idea that your neighbour was playing the system much better, or at least more deviously, than you were. Trust, as well as savings, disappeared in the crash. “Everyone was very surprised,” Bjarni Jonsson, a management consultant in Reykjavik who has spent the last three years studying the crisis, told me. “But they also thought much more that something had been going on that they were not a part of. But they were part of it, they just didn’t realise it.”

For this reason, Iceland’s return from the abyss has included a campaign—part-utopian, part-vindictive—to reorder society as well. Within weeks of the collapse, the Althingi, Iceland’s parliament, which dates from the year 930, became the setting for protests against a corrupt establishment: its weak-willed politicians and “banksters.” (It is not easy to imagine a popular uprising in Iceland. On my first morning in Reykjavik I kept walking past the Althingi, mistaking it for a small museum). In April 2009, the centre-right coalition that had been in power for 18 years, overseeing the creation of Iceland’s new economy, was thrown out in favour of a left-leaning alliance. The country’s new Social Democrat prime minister, Jóhanna Sigurdardottir—the world’s first openly gay leader—announced that, from now on, government would “be based on new social values.”

Initially, these new values suggested a real departure. Iceland opened accession talks with the EU—a body it had long resisted joining—and for a brief period seemed to be emerging, chrysalis-like, as a groovy, post-capitalist outpost on the limits of the habitable world. It had a new party in parliament, the Citizens Movement, that rejected the idea of a leader; and an MP wanted by the US government for helping out Wikileaks. In November 2009, a group that included a pop singer, a government minister and a theatre director gathered 1,200 people at random from Iceland’s electoral register to hold an assembly to spell out new priorities for the nation. These were projected on a large screen: “Honesty,” “Equality” and “Love.”

Some experiments have lasted. Iceland is “crowd-sourcing” a constitution over the internet. But in plenty of other realms, the mission to remake Icelandic society is stuttering. That is because it goes right to the beating, bloody heart of business and politics, and because an influential minority of Icelanders do not think it needs to take place at all, that this is just a passing, angry populism. The result is an unhappy grinding between the economic recovery and the lack of social reforms to accompany it. “We seem to be pulling through, given several national economic measures, but in other respects… the public has the feeling that we are not moving, we are stuck,” Gísli Palsson, a professor of anthropology at the University of Iceland told me. “Many people, I guess, are sort of giving up.”

This is where fishing comes in. Remarkably for a wealthy developed nation, fishing still plays a pivotal role in the economy. Exports of 35 commercially-harvested species account for more than a third of Iceland’s foreign income—a lifeblood in these years of debt. What is more, nothing is more deeply entwined in Iceland’s social fabric than taking things out of the sea. This is a country where to be “fishy” (fiskni) is to be intuitive or cunning, and where, until 1989, the national Aflakóngur (Catch-King)—the skipper who caught the most fish that year—was presented before the nation each June.

It is rare to meet an Icelander whose parents or grandparents have not worked with fish. Bjarni Jonsson, the management consultant, told me that his grandfather was a celebrated skipper whose heart was broken when his boat was sunk by a German U-boat in the second world war. “We have stories like that,” he said. “It is a strong part of our identity.” As such, fishing has an authenticity that people have craved in these post-Hrun days. Jonsson was also one of the organisers of the 2009 national assembly, and he told me that along with their abstract aspirations, delegates spent a lot of time talking about fish. “People had very strong statements,” he said. “‘We should build up.’ ‘This is our background.’ ‘Here are our possibilities.’”

So it has been hugely uncomfortable to discover that fishing was as implicated as anything else—the currency swaps, the online banking accounts for Dutch and British savers—in Iceland’s bubble. “Everyone said, ‘Let’s go back to the fishing!’” Finnbogi Vikar, a former sailor who now campaigns for the reform of the fishing industry, told me. “But the problem is that the fisheries had also been affected by all this 2007 thinking.” In the saga of introspection that has followed the crash, Iceland’s fishing companies have turned out not to be innocent, old-fashioned naïfs who got carried away like everybody else. Instead, they were among the instigators and risk-takers at the heart of the action. The pages of their accounts from those years show all the marks of the guilty: exuberant debt, political connections and a fixation with the banks and their financial products whose beginning and end were always intangible.

To make matters worse, the aspect of Icelandic fishing that has attracted more wrath and head-scratching than any other happens to be the feature that is most widely admired abroad. Since the mid-1980s, Iceland has had a quota system which governs how much fish it can take out of the sea. But—crucially, and unlike in the rest of Europe—this quota has been owned like private property, bought, sold, rented and speculated upon by the nation’s fishing companies and boat owners.

To its critics, the trade in Iceland’s fishing rights has been the single largest manifestation of the country’s enthrallment to the free market, and an important cause of its near-demise. To its apologists, it is the reason why Iceland has one of the only profitable and healthy fishing industries in the world and is now able, more or less, to pay its debts. During the week that I spent in Iceland this summer, the government cast its lot with the critics, presenting legislation that would begin to transfer the ownership of fishing rights into the hands of the state.

For many Icelanders, the consequences feel vast: to their economy, and to the kind of society that will emerge from the Hrun. “We don’t really realise all the connections that are at stake,” said Jonsson. “It is like you cut a thread and it all comes undone, because you cut a central thread.”

***

My guide in Ólafsvík was Gísli Marteins, who operates a two-man fishing boat with this father. For the last 30 years or so, like hundreds of other Icelandic fishermen, he has been exploiting variations in quota, fishing gear and the price of fish to make a living in amongst the large companies that dominate the industry. “We are like bacterias!” Marteins shouted happily at one point.

Marteins shouts because he is excitable and has spent most of his life communicating over the noise of engines. He drives a white van, whose seats are wrapped in plastic to preserve them from fish rot. On my tour of Ólafsvík, he wore torn, all-in-one overalls with the word OCEAN on the front. We darted into warehouses at the water’s edge, where stout Icelandic women wielded blowtorches and bored young men listened to headphones as they threw salted cods expertly into plastic crates.

The onward selling of fish, mainly cod, is how Ólafsvík interacts with the world. Marteins showed me bacalao bound for Portugal and Spain; fillets for Britain and Germany; dried skeletons for Nigeria; and the delicacies, cod cheeks and chins, for the US and Japan. The town even buys fish, mainly for bait. On the floor of a refrigerated room we came across parcels labelled Lund’s Fisheries Incorporated, New Jersey. I asked Marteins what was inside. “Squod,” he said. “You know squod?” “Squid?” I suggested. “Have you been in Spain? Calamares.” “Squid?” Marteins looked at me as if I was not hearing him. “Squod!”

In common with many fishermen, Marteins sees the movement to reform Iceland’s fisheries as little more than an attempt by those who lost out in the crash to appropriate a part of the economy they seemed to have forgotten about. “When everyone in Reykjavik had money, no one spoke of fish,” he said. The decade of money-making leading up to 2008 yielded slender profits for the fishing industry because of a combination of poor cod stocks and the strong Icelandic krona. “My feeling is that the booming years did not come here,” said Marteins. Now the reverse is true: Iceland’s weakened currency has seen the fishing industry enjoy profit margins of around 25 per cent since 2009, and the rest of the country is knocking on the door.

Marteins’ solution is that Iceland should just catch more fish. “We have to find a way out,” he said. “We should take more cod.” We were standing on the dock at this point, surrounded by boats and their lines. I asked if that would lead to over-fishing, surely the greatest danger of them all. “Later on maybe we should take less,” Marteins said. “But it is like if you had a goldfish or something. When you are hungry, you should eat because when you are dead, you cannot. Do you understand?”

One morning, just before 7am, I boarded a boat that could show me the health of Iceland’s fishing grounds. The Ólafur Bjarnason was a 112-tonne trawler owned and captained by Björn Erlinger, a friend of Marteins. On a day of bright sunshine and force six winds, from an always-rolling deck, I watched the six men of Erlinger’s crew, wearing bright orange overalls, land just over 3 tonnes of haddock, cod, plaice and pollock in little more than two hours, within a mile and a half of the shore. Before the seas got too rough the Ólafur Bjarnason was wreathed in birds, from gulls paddling in the water behind, terns swinging over our heads, to great, yellow-cheeked gannets that dived into the dark green sea, trying to steal the fish massed in the great ball of scale and fin on the end of our nets.

In between trawls, and as we made our way to and from the fishing grounds, the men sprawled in the mess below deck. To show the contrasting fortunes of our two fishing nations, they brought out a British chart from 1962 showing the West Fjörds, to the north of the Snæfellsnes, adorned by the name of a now-abandoned dock in Hull. “Other countries have been looking to Iceland and taking an example from how we run the fishing,” said Mímir Brynjarsson, the boat’s second engineer. “Now they are going to take the quota away and we’re going to end up like Hull or Grimsby, tie all the boats up and do nothing.”

Through the anger, though, I was struck by the crew’s confidence in fishing as a source of wealth. The starting salary for a deckhand on the Ólafur Bjarnason is 9m Icelandic krona (£48,000) a year, and a house in Ólafsvík costs around ISK20m (£107,000). “Fishing has a lot of money in it,” said Brynjarsson. “That’s why people are interested in it.” When I asked him whether fishing could save Iceland, Brynjarsson paused for such a long time that I had to ask him if that had been a reasonable question. “I think it is the only question,” he said.

The fish, of course, were here before anyone. Considered from underwater, Iceland is a volcanic outgrowth of the Mid-Atlantic Ridge, a rock that intersects a warm, nutrient-heavy branch of the Gulf Stream and the colder, oxygen-rich waters of the east Greenland current. For millions of years, these currents have collided, providing the prime ingredients for marine life. In time, the continental shelf of Iceland—a mess of fjörds, sandy bottoms, and deep, fathomless places—has become a haven for fish of every kind and size, from the microscopic confetti of plankton to the elephantine grace of whales. Imagine it as a submarine roundabout for million-strong colonies of capelin and shrimp and herring that spawn and feed and die, feeding the names that we know from our menus: halibut, plaice, lemon sole, haddock, monkfish, cod.

For centuries, though, fishing was an occasional activity for Icelanders. Life was on the farm. From February to May, men would migrate to temporary coastal settlements and fill small boats with catch. But Europe soon discovered what Iceland had in its waters, and by the early 17th century, when the island was a Danish colony, there were 150 British vessels fishing off its coast. Trading proper began in 1787, when Denmark relaxed its monopoly, and by the early 19th century fishing, though still primitive, had become synonymous with commerce. Dried cod served as Iceland’s currency for a while (Icelandic coins still carry images of fish) before becoming by far its most significant export.

In the 20th century, fishing was present at the making of the Icelandic nation. The Nysköpunarstjórn (Modernisation) government that took power on independence in 1944 put boats, processing factories and ports at the centre of its plans. Thanks to this investment, and ever bigger and more efficient trawlers, Iceland’s annual catch increased 15-fold between 1900 and 1980, to 1.52m tonnes of fish a year, or 6,719kg per Icelander. By contrast, Britain fishes about 9kg per person per year.

In the early 1980s, however, Iceland’s fishers, politicians and economists were confronted by a terrible possibility: that fishing was no longer working. In 1975, the Marine Research Institute, Iceland’s official source of fisheries data, had warned of an imminent collapse in cod stocks due to overfishing. The so-called “Black Report” became the main justification for Iceland’s extending its exclusive rights over waters from 50 to 200 nautical miles out to sea—a move that led to the third and final “Cod War” with the British trawling fleet. At the time, around 50 per cent of Iceland’s fish were being taken by foreign ships. Once those boats were gone, there was supposed to be plenty of fish. But in 1981, a strange thing happened: Iceland fished more cod than it had ever fished before (or since): 461,000 tonnes. Yet its fishing companies lost money. There were too many boats fishing too many fish, and prices were too low for anyone to make a profit. The following year, cod stocks did collapse.

What to do about the fisheries became a national conundrum. It captured the imagination of a new generation of political thinkers and economists who, seeing the stirrings of deregulation in the US and Britain, believed that Iceland’s industries were hopelessly encumbered by the state. In 1983, after trying and failing to restrict fishing by other means, Halldór Ásgrímsson, the minister for fisheries and a former economics lecturer, unveiled a new quota system for demersal species (which include cod, the most commercially valuable). Based on how much it had caught in the previous three years, each fishing boat in Iceland would now be given a proportion of the national catch, known as a “quota share.” This would then go up or down, depending on the overall size of the catch, which would be determined each summer by the government.

The use of quota restrictions to protect fish stocks had begun in the 1960s. What distinguished Iceland’s new regime—known as an “Individual Transferable Quota” or ITQ system—was that the shares were tradeable between boats. In part this was common sense: if a boat fished too much, it was allowed to return to shore and buy or rent quota from another vessel to avoid having to throw the fish back into the sea (the phenomenon of “discards” that mars the EU’s common fisheries policy). But there was a larger aim as well. By allowing vessel owners to buy and sell their quota, Ásgrímsson forecast that Iceland’s better fishing companies would buy out their weaker rivals and that some much-needed rationalisation of the industry would take place.

It did not happen at once. At first the ITQ system was temporary; it covered only some species; and it did not apply to boats smaller than 6 tonnes. But in 1991, quota shares were extended to cover all of Iceland’s commercial fisheries, and the same year, they were accepted in its three state-owned banks as collateral. This was the show of confidence that the system needed. Instead of being a restriction on how much a company could fish, quota shares became an asset. In 1992, after running at a loss for 17 out of the last 19 years, Iceland’s fisheries turned a profit, as they have done for 16 out of the 19 years since then.

This transformation coincided with changes in Iceland’s financial system. In 1993, the banks were privatised and the currency was allowed to float. In the new economy, fishing quota was desirable capital, not just to fishing companies looking to borrow and expand, but also to the banks that could show quotas as assets to European investors. With a limited supply of quota, fish prices likely to rise, and a sudden injection of credit into the economy, the value of Iceland’s fishing quota soared, from around $25m in 1984 to more than $4bn (the equivalent of 40 per cent of Iceland’s GDP) 15 years later.

The system was not without critics. By the early 2000s, Iceland’s fishing quota had amassed in the hands of around 20 companies, which controlled 70 per cent of the national catch. The right to fish a single kilogram of cod—handed out for free in 1983—was changing hands for as much as ISK3,500 or £30 (around ten times the market price of the fish). Each time a vessel owner from a small town sold his quota, sometimes depriving the entire community of access to seas they had fished for centuries, the press and local politicians complained. In 2005, two fishermen who could not afford quota brought a case to the UN Human Rights Committee, alleging that a vital component of Iceland’s common property had been arbitrarily given to a group of people who happened to own fishing boats between 1980 and 1983. The Committee agreed, but no action followed.

In part that was because what really had the world’s attention was the financial success of ITQs. Vessel owners from unglamorous harbours became known as “Quota Kings,” worth millions. Encouraged by the banks, they borrowed to buy more quota and broadened their commercial interests, exploring Iceland’s new array of financial products and overheating stock market. One evening in Reykjavik, I met Thorstein Masson, a former captain, who told me about the time a bank offered him a 100 per cent mortgage to buy a fishing boat that was for sale with 200 tonnes of quota. Masson bid ISK137m (around £1.2m) but narrowly failed to get the boat. “For two years I just looked at it and saw the price [of quota] going through the roof and I thought of all these Range Rovers I could have had,” he told me. “But I’m not a genius. If I had sold it I would have said, ‘Take all my money and invest it in Icelandic banks.’”

Iceland’s politicians and economists pondered the wealth they had created. Ásgrímsson, the former fisheries minister, became prime minister in 2004. He spoke of his dream of making Iceland a great financial centre. In 2007, the Icelandic chamber of commerce published a study about the rapid expansion of the financial services sector, from 1 per cent to around 10 per cent of the economy in just ten years. In a section called “Where does the money come from?” it listed two sources: “1) Privatisation of the previously state-owned Icelandic banks in the early 1990s, 2) and the new wealth created in the fisheries through the ITQ-system.”

As the smoke cleared in late 2008, Iceland’s fishing companies emerged with a dual identity. The country desperately needed their foreign income but they were heavily implicated in the business practices that had bankrupted it in the first place. As a sector, their borrowings—chiefly to fund the acquisition of new quota—had reached ISK560bn, or £2.6bn, the same size as the national budget. Three years on, 20 per cent of Iceland’s fishing companies remain technically insolvent, typically with a member of bank staff seconded to restructure their debts.

As Icelanders began to seek out those responsible for the Hrun, vessel owners and the political elite also began to look like conspirators. In just nine years, people noted, the Ásgrímsson family had grown its fishing company, Skinneyjar-Thinganes, into the 11th largest in the country. During the same period, Iceland’s main newspaper, Morganbladid, a consistent defender of the quota system, had ended up in the hands of Gudbjörg Matthíasdóttir, the wealthy widow of a fishing magnate. When David Oddsson, another former prime minister and director of Iceland’s Central Bank—popularly regarded as the Icelander with the single greatest responsibility for the crash—was finally forced from office in early 2009, Matthíasdóttir made him her editor-in-chief. Fishing, it seemed, was as compromised as everything else.

The villains were the Quota Kings. Their lobby, the Federation of Icelandic Fishing Vessel Owners, is known to everyone by its Icelandic initials, the LIU. One afternoon, I went to meet its chief executive, Fridrik Arngrimsson, on the Borgartún, a wide street of corporate headquarters in Reykjavik.

Earlier that day, the government had finally placed its fisheries reforms, two years in the making, before parliament. Last November, a special committee appointed to investigate fishing had presented its findings, which turned out to be unsatisfactory to both fishers and reformers. The final legislation, however, was more radical. It contained a new windfall tax on fishing companies, and the doubling of an existing tax on quota owners. It also outlined the transfer of 15 per cent of fishing quota from private to state ownership by 2026, to become a common resource for the people of Iceland. “We regard this as nationalisation,” said the LIU’s spokesman when it was announced. “This is Moscow in the sixties.”

Tall and bluff, a former ship’s mate, Arngrimsson was calmer. “The quota system, it is just the common sense,” he said. According to the LIU—and the substantial body of thought in Brussels arguing in favour of a EU-wide ITQ system—tradeable quota enables things that are otherwise impossible. Commercial fishing is brutally competitive: new technology makes boats 5 per cent more efficient every year; the workforce halves every decade; there is a shortage of fish. Since 1984, Iceland’s fishing companies have balanced these forces and mostly turn a profit, despite catching a third of the cod they caught 30 years ago. (Compare that to the EU, where 90 per cent of the seas are over-fished, and the common fisheries policy pays more than £500m in subsidies each year.)

***

What alarmed Arngrimsson was that the very principle that holds Iceland’s system together is under attack. The idea that a few companies privately own the right to catch the nation’s fish is what offends many Icelanders, but it is also what makes that group good stewards. Companies have the financial stability to invest and powerful ecological incentives: if you plan to pay for your quota over the next 20 years, you will be more inclined to ensure that there will still be fish left during that time. As Arngrimsson sees it, transferring even a small percentage of quota from companies to the state will risk the collapse of an edifice that has been almost three decades in the making. Not that he thinks the reformers will stop there. “They want to confiscate all the quotas,” he said. “This is just the start.”

It was impossible to disagree with the main tenets of Arngrimsson’s argument. In a world of over-fished seas and impoverished fishermen, Iceland’s quota system may not be perfect, but there are few better alternatives. It is ironic that the man leading its reform, Jón Bjarnason, the Left Green minister for fisheries, is also in charge of Iceland’s “no” campaign to EU membership—in which the horror of being submitted to the common fisheries policy is a regular theme. Unpicking the last, best-functioning part of the Icelandic economy for a stab at redistributive justice looks like a bad idea. Reclaiming some of its assets for the state, under whose control the fishing industry almost crumpled in the early 1980s, looks nearly mad.

Yet the social consequences of Iceland’s ITQ system—the sense of injustice, the divisions that have accompanied it—have been real. For the rest of Europe, wanting to believe in the financial and ecological possibilities of privatising a common resource, it is instructive to consider the stress of a community that has tried it for a generation. Iceland is a special case: its smallness makes it an outlier; fishing has a disproportionate significance for its population; the Hrun has shaken it up and down. But people seem to have an instinct for what might apply beyond its shores. It is no surprise that Westminster is broadly behind introducing tradeable quota into the EU, while Holyrood—alert to the parallels between some of Iceland’s and Scotland’s more vulnerable fishing communities—is dead against.

In Iceland now, the angst belongs to everybody, not just those who feel left out, or unfairly impoverished by the crash. Towards the end of our conversation, I asked Arngrimsson whether he thought that fishing companies had a responsibility to help rebuild the nation. “We definitely do,” he said. But then he paused, and confided. “I don’t know how much you have heard of it, the discussion. We are in the eyes of some of the politicians we are like the…” Arngrimsson searched for the word. “We are blamed for everything.” “The mafia?” I suggested. “That is one word,” he replied. “It is more like the Jews in the country that we know some 60 years ago. It is unbelievable.”

But his persecutors will not stop. They include men like Finnbogi Vikar. A blond, stocky former sailor, who lives in a tiny village in the far northeast of Iceland, Vikar, like Arngrimsson, is a member of the national committee appointed to study the fishing industry. Vikar represented the Citizens’ Movement, the new leaderless party, and during meetings of the committee, he despaired at the testimony of those from the banks and the fishing companies, who insisted that the sector should not be reformed. “They told me everything was OK but I didn’t believe them,” he said, when we met in Reykjavik.

Disenchanted by the committee, Vikar went to the tax office and started buying copies of the accounts of hundreds of Iceland’s fishing companies to carry out his own investigation into their debt. His conclusion—held as implacably as any fishing vessel owner—is that the introduction of the ITQ system in Iceland created an convergence of interests between the country’s politicians, bankers and fishing companies that almost brought the country to its knees. “They grew together an unfixable system,” he said. So it has to go. “It is corrupted,” said Vikar.

We became hungry, so Vikar took me to one of Reykjavik’s most famous restaurants, a hot dog stand called Bæjarins Beztu on the waterfront. We ate in the cold wind. Then we headed for the ministry for fisheries, where I had my next appointment. As we went down a steep hill, Vikar explained that the Hrun could not pass without some metamorphosis, some readjustment for Icelanders. “I can take on my shoulders the income taxes. I can say, ‘OK, I cannot drive these fancy cars. I have to reduce everything.’ I can take a lot,” said Vikar. “But if we change the quota system, which is like a big wound on Icelandic soul, it makes everything what we are doing worthwhile.”