Thursday 25 August 2011

Taking inspiration from Iceland: a People's Constitution for Aotearoa?

by Vaughan Gunson

The article below tells the largely untold story of the Icelandic people beginning to throw off the shackles of neo-liberal capitalism.

Following the collapse of Iceland's banks in 2008, and the attempt by elites to make the people pay the cost, a struggle for a new constitution emerged. A process facilitated by the use of the Internet to encourage widespread participation and maximise democratic decision making.

This is not only inspiring, but points to a possible line of strategic advance for broad left forces in other countries reeling from the global financial crisis. We know that constitutional struggles have played an important role in the revolutionary processes in Latin America, most particularly Bolivia and Venezuela.

The time is approaching where it could possible for the broad left in New Zealand to push forward constitutional change that explicitly challenges neo-liberalism and makes steps towards a sustainable, democratic and equitable society.

The fact that New Zealand has no formal constitution, but rather a hodge-podge of acts of Parliament; the fact that the Treaty of Waitangi still has uncertain constitutional status, and is easily sidelined if corporate interests are threatened; the fact that there's widespread mistrust of politicians; the fact that New Zealand is in hock to the global banking class and financial pariahs; the fact that there's an ever widening gap between rich and poor; the fact that the degradation of our natural environment continues at pace - all this points to the strategic potential of the broad left leading calls for a new People's Constitution for New Zealand.

The struggle for a new People's Constitution could relate to and build on recent grassroots campaigns, like the Living Wage campaign, Tax Justice, and NZ Not For Sale, as well as the struggle by Maori to protect New Zealand's seabed and foreshore from corporate exploitation.

At a NZ Not For Sale meeting in Whangarei, I raised the idea of left parties, unions and other left-leaning organisations, uniting around a sustained and long-term campaign for a People's Constitution. This sparked some real interest from community activists and Green Party people at the meeting. I'm sure there's many in the Mana Movement that would be keen on promoting a fairer and inclusive constitution, with the Treaty of Waitangi at its heart.

It's a big and bold idea, but one that I think that broad left in New Zealand needs to look at seriously and start discussing.

Iceland's On-going Revolution

by Deena Stryker
1 Aug 2011

An Italian radio program's story about Iceland’s on-going revolution is a stunning example of how little our media tells us about the rest of the world. Americans may remember that at the start of the 2008 financial crisis, Iceland literally went bankrupt. The reasons were mentioned only in passing, and since then, this little-known member of the European Union fell back into oblivion.

As one European country after another fails or risks failing, imperiling the Euro, with repercussions for the entire world, the last thing the powers that be want is for Iceland to become an example. Here's why:

Five years of a pure neo-liberal regime had made Iceland, (population 320 thousand, no army), one of the richest countries in the world. In 2003 all the country’s banks were privatized, and in an effort to attract foreign investors, they offered on-line banking whose minimal costs allowed them to offer relatively high rates of return. The accounts, called IceSave, attracted many English and Dutch small investors. But as investments grew, so did the banks’ foreign debt. In 2003 Iceland’s debt was equal to 200 times its GNP, but in 2007, it was 900 percent.

The 2008 world financial crisis was the coup de grace. The three main Icelandic banks, Landbanki, Kapthing and Glitnir, went belly up and were nationalized, while the Kroner lost 85% of its value with respect to the Euro. At the end of the year Iceland declared bankruptcy.

Contrary to what could be expected, the crisis resulted in Icelanders recovering their sovereign rights, through a process of direct participatory democracy that eventually led to a new Constitution. But only after much pain.

Geir Haarde, the Prime Minister of a Social Democratic coalition government, negotiated a two million one hundred thousand dollar loan, to which the Nordic countries added another two and a half million. But the foreign financial community pressured Iceland to impose drastic measures. The FMI and the European Union wanted to take over its debt, claiming this was the only way for the country to pay back Holland and Great Britain, who had promised to reimburse their citizens.

Protests and riots continued, eventually forcing the government to resign. Elections were brought forward to April 2009, resulting in a left-wing coalition which condemned the neoliberal economic system, but immediately gave in to its demands that Iceland pay off a total of three and a half million Euros. This required each Icelandic citizen to pay 100 Euros a month (or about $130) for fifteen years, at 5.5% interest, to pay off a debt incurred by private parties vis a vis other private parties. It was the straw that broke the reindeer’s back.

What happened next was extraordinary. The belief that citizens had to pay for the mistakes of a financial monopoly, that an entire nation must be taxed to pay off private debts was shattered, transforming the relationship between citizens and their political institutions and eventually driving Iceland’s leaders to the side of their constituents. The Head of State, Olafur Ragnar Grimsson, refused to ratify the law that would have made Iceland’s citizens responsible for its bankers’ debts, and accepted calls for a referendum.

Of course the international community only increased the pressure on Iceland. Great Britain and Holland threatened dire reprisals that would isolate the country. As Icelanders went to vote, foreign bankers threatened to block any aid from the IMF. The British government threatened to freeze Icelander savings and checking accounts. As Grimsson said: “We were told that if we refused the international community’s conditions, we would become the Cuba of the North. But if we had accepted, we would have become the Haiti of the North.” (How many times have I written that when Cubans see the dire state of their neighbor, Haiti, they count themselves lucky.)

In the March 2010 referendum, 93% voted against repayment of the debt. The IMF immediately froze its loan. But the revolution (though not televised in the United States), would not be intimidated. With the support of a furious citizenry, the government launched civil and penal investigations into those responsible for the financial crisis. Interpol put out an international arrest warrant for the ex-president of Kaupthing, Sigurdur Einarsson, as the other bankers implicated in the crash fled the country.

But Icelanders didn't stop there: they decided to draft a new constitution that would free the country from the exaggerated power of international finance and virtual money. (The one in use had been written when Iceland gained its independence from Denmark, in 1918, the only difference with the Danish constitution being that the word ‘president’ replaced the word ‘king’.)

To write the new constitution, the people of Iceland elected twenty-five citizens from among 522 adults not belonging to any political party but recommended by at least thirty citizens.

This document was not the work of a handful of politicians, but was written on the internet.

The constituent’s meetings are streamed on-line, and citizens can send their comments and suggestions, witnessing the document as it takes shape. The constitution that eventually emerges from this participatory democratic process will be submitted to parliament for approval after the next elections.

Some readers will remember that Iceland’s ninth century agrarian collapse was featured in Jared Diamond’s book by the same name.

Today, that country is recovering from its financial collapse in ways just the opposite of those generally considered unavoidable, as confirmed yesterday by the new head of the IMF, Christine Lagarde to Fareed Zakaria. The people of Greece have been told that the privatization of their public sector is the only solution. And those of Italy, Spain and Portugal are facing the same threat.

They should look to Iceland. Refusing to bow to foreign interests, that small country stated loud and clear that the people are sovereign.

That’s why it is not in the news anymore.


Paul P. said...

Fascinating! However,your proposal for a new constitution for NZ already assumes a basic sine qua non - the Waitangi treaty. A document agreed between the feudal leaders of most (not all) Maori tribes and the feudal Crown of the colonial power. A genuine new constitution, as in the Icelandic example you have given us, has no such historical preconditions.

Paul P.

David said...

It’s true that the Treaty was signed between the British Crown and chiefs representing some, but not all Maori. And that’s a good reason to question the idea that it should be the basis of a future constitution.

Socialists and other revolutionaries have often rejected the legitimacy of the Crown, as a representative of the exploiting classes, the figure head for a system of force, fraud and theft. But this revolutionary republicanism rests not on the rejection of the monarchy as a feudal hangover, but on rejection of the whole social order. And by 1840 the social order of the British Empire was well and truly capitalist, not feudal.

The monarchy may have been a hang-over from feudalism, but the royals and other aristocrats had embraced capitalism since the “Glorious Revolution” of 1688, and the capitalists had by and large accepted the Royals. After all it was from the Royal Navy and bureaucrats from the Colonial Office who signed and approved the Treaty, not Queen Victoria.

More significantly, traditional Maori society was not feudal. Although ancestry was important, and mana (status, prestige and authority) could be inherited, there was no hard divide into classes such as “commoner” and “lord”. Chiefs (rangatira) who inherited mana from their parents could also loose or gain mana, and so loose or gain leadership with in their whanau or hapu through their own actions.

One of the best ways to gain mana was to give away any wealth you may have acquired – very different from the feudal system of tribute and taxes where wealth was hoarded by the lords. And unlike feudalism, members of a tribe were not bound to follow their chiefs in war. There were no “bodies of armed men”, no state standing over the commoners, forcing them to do as the chiefs ordered.

Maori leaderships were highly localised, lived side by side with and were accountable to those they lead, who were also their close kin. This is reflected in the fact that the various copies of the Treaty were signed by about 500 Maori, 200 signed in Northland alone. There certainly weren’t that many iwi or hapu in Northland, which suggests than many communities had more than one leader whose consent was needed to ratify an agreement like the Treaty.

Maori today (or at least those who engage with this question) generally accept the legitimacy of the way their ancestors chiefly authority or rangatiratanga. And regard the fact that the Maori version of the Treaty guaranteed “tino rangatiratanga” (complete chieftainship or total sovereignty) as a commitment that Maori leaders would not give up control of their communities or resources to the Empire.

On the Crown’s side, matters are complicated by the fact that the Crown (either in its imperial, colonial or independent guises) has never had much interest in honouring the Treaty, but at the same time bases much of it’s claim of sovereignty over these islands and the people who live here on that Treaty.

So the call to “honour the Treaty” and its recognition as a “founding document” can be used to both legitimise and de-legitimise the Crown.

And if the emphasis is on the right of Maori communities to shape their own destinies, control their own resources and hold their leaders accountable, independently of the state, why shouldn’t all communities do the same?