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.
Before she was arrested, tortured, stripped and subjected to a “virginity exam” — all for her pro-democracy activities — Salwa al-Housiny Gouda admired the Egyptian Army.
Her odyssey is a reminder that the Egyptian revolution that exhilarated so many around the world in January and February remains unfinished. The army is as much in charge as ever, and it has taken over from the police the task of torturing dissidents. President Hosni Mubarak is gone, but in some ways Mubarakism continues.
Ms. Gouda, a 20-year-old hairdresser, is unmarried and strong-willed. She threw herself into the democracy movement early this year, sleeping in a tent on Tahrir Square, also known as Liberation Square, the movement’s epicenter.
Like the other activists, she focused her rage initially on Mr. Mubarak and on the police, rather than the army. “I trusted the army,” she told me, and she and other protesters often chanted slogans like, “The army and the people are one.”
But that was an illusion. Never squeaky clean, the army has increasingly taken over the role of domestic security from the police and seems fed up with disorder.