The elections of June 1971 in Iceland, which brought a self-proclaimed left-wing government to power, caused some initial alarm in imperialist circles. Iceland is a key outpost of nato, and us troops have been stationed there continuously since 1951. nato strategists view the island as a crucial guard-post of the strategic approaches to North-West Europe, and us aircraft fly constant reconnaissance missions from the large base in Keflavik, sweeping the Arctic and Atlantic seas all the way across to the Soviet naval centre of Murmansk. In last year’s poll, the two parties that made the largest electoral advances called for the cancellation of the Defense Treaty that ties Iceland to the usa and these demands, coinciding with Mintoff’s electoral victory in Malta, provoked a considerable stir in nato chancelleries. But despite the sudden foreign attention that Iceland then received, the background to its domestic situation has been generally ignored.
The 200,000 people of Iceland form a distinct community with a special language and culture. Its history dates from the original settlement of the island around 900 ad by Scandinavians and their Celtic slaves. Up to the 13th century, these settlers were independent, but then the local tribal system of early Iceland broke down, and the King of Norway became the sovereign of the island. Later, when Norway and Denmark were united, the King of Denmark became King of Iceland. The country was able for a time to preserve a considerable degree of autonomy, through the Catholic Church, and it was only the conversion of the island to Lutheranism that gave the Danish monarchy the opportunity to become the absolute master of the island. From 1550 to 1850 Iceland was in effect a colony of the Danish dynasty, exploited in the interests of the royal purse and of Copenhagen merchants. There was no accumulation of wealth in Iceland, such as might have formed the basis for the development of an Icelandic ruling class or of a local capitalist develop
However, in the 19th century the economic situation of the indigenous farmers improved and they began to win possession of their own farms. Owing to the peculiarities of the Icelandic landscape, these were usually small plots worked mainly by peasants and their families. In 1900, for example, there were less farm labourers than there were individual farmers, and these farmers prevented the labourers from acquiring any political or economic influence. The 19th century also saw the beginnings of a nationalist movement. Despite the economic exploitation of Iceland by the Danish monarchy, the population had been able to preserve its own national culture, and the political struggle for independence from Denmark included both an intellectual revival and an economic struggle to break the hold of the Danish merchants on the island. The leading role in this was played by the farmers, who by 1900 had formed a strong co-operative movement, before an Icelandic bourgeoisie had been able to establish itself. This peasant nationalism won Icelandic independence in gradual stages. In 1918 Iceland was accepted as a distinct state, tied to Denmark only by loyalty to the monarchy and by a common foreign policy. This has meant that since 1918 Iceland has been able to develop economically and politically outside the Danish orbit. In the inter-war period the island became greatly dependent on British capitalism. Icelandic capitalism was sponsored, and largely financed by, British creditors. In the Second World War British imperialism handed Iceland over to the us, as a preliminary to us participation in the War. One consequence of this was that Iceland acquired full independence in 1944, when Denmark itself was occupied by the Nazis. Iceland was then occupied by the us, and there have been us troops there almost continuously since the original landings in 1941.
The 19th century saw the development of capitalism in Iceland, as villages and small towns began to multiply. As late as 1900, 85 per cent of the population still lived on the land; but in 1920 the percentage was 65 per cent and in 1940 40 per cent. In 1970, it was a mere 13 per cent. At the same time the population grew, from 78,000 in 1900 to 200,000 in 1971. More than half of this population now lives in the extreme South-West: the capital, Reykjavik, had a population of only 5,000 in 1900 but now has 85,000, with an extra 25,000 in the area immediately surrounding it. The transition from subsistence agricultural production to the present bourgeois society has been primarily characterized by a transition from agriculture to fishing as the basic economic activity. Some of the best fishing banks in the world are to be found near the Icelandic coast, and the industrialization of Iceland has consisted largely of the mechanization and augmentation of its trawler fleet. Even in 1914 Iceland had more trawlers per capita than any other country in the world. But social relations in the coastal villages and towns were very different from those in the countryside: fishermen usually did not own their boats, and the fishing industry was marked by none of the egalitarian trends that characterized social relations of petty production in the countryside.
Apart from its concentration on fishing, Icelandic capitalism had other significant qualities in this period of development. It depended from the beginning to a considerable extent on foreign credit. Despite the importance of the co-operative movement, the bulk of trade was in private hands, and although strong in the countryside the co-operative movement was always weak in Reykjavik itself. Foreign trade plays a crucial role in the Icelandic economy, since fish form 95 per cent of all exports and most industrial goods have to be imported. This gave a special strength to the commercial sector within Icelandic capitalism, and these interests, which dominate it, have grown stronger over the years. The combination of Icelandic dependence on foreign capital and the importance of the commercial interests has therefore given Icelandic capitalism a markedly comprador character.