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Smári McCarthy interviewed by Metahaven In October 2008, the Icelandic banking sector collapsed. This momentous event was, relative to country size, the largest banking crisis ever suffered by a single state.1 Iceland’s recovery has been a case of democratic and ethical reforms. A 25-strong Constitutional Assembly re-wrote the constitution, together with a crowdsourcing effort which introduced thousands of comments and hundreds of concrete proposals from citizens directly into the legislative dialogue.2 Committed radicals could start making policy, rather than critiquing it. Smári McCarthy is the executive director of IMMI, the International Modern Media Institute, Smári oversees the gradual implementation of the world’s most far-reaching transparency and Internet freedom legislation, made in Iceland. IMMI’s proposals entail both Iceland’s own Freedom of Information Act, as well as media freedom and source protection it provides to others in its sovereign data space. IMMI’s policies are designed to be adopted by other countries – currently, the institute’s representatives travel across the globe to convince governments and private parties of the urgency of doing so. Much of IMMI’s future impact depends on its capacity to have Iceland successfully set new international standards, and to attract companies and organizations to inhabit its media freehaven. Metahaven talks to Smári about his agenda, urgencies, and interests. or right-wing, I’m simply opposed to power structures which are designed to disenfranchize some for the benefit of others. Anarchism is distinct from chaos and lawlessness – in fact, it’s grounded in ordered lawfulness. However that order is not hierarchical order, and that lawfulness is the law of the people, not of the state.
MH Which book are you reading at the moment? SM I’ve recently been flip-flopping between James
Metahaven When we asked you for this interview, you were in Washington D.C. What were you doing there? Smári McCarthy I was attending the Internet at Liberty
conference, where the problems of the current policies governments and corporations are engaging in, with regard to the freedom of the internet, were being discussed and deliberated by a number of international internet activists, bloggers, policymakers, corporate actors, and so on.
MH Describe your own involvement in both parliamentary, institutional, as well as extraparliamentary political affairs in Iceland and abroad. SM My day job is to run the International Modern Media Institute (IMMI), which is an NGO somewhere half-way between a think tank and a lobby group. Through that job I’m engaging actively with both ministries and parliament in Iceland, as well as politicians and others in various national governments and international political entities. For the most part it’s just having conversations with people, writing policy papers, and trying to explain the stance of those who feel that the internet needs to be protected and its values expanded into the world at large. I’m not a member of any political parties, but strive to work with all of them, because generally we’re all in this mess together and need to actively participate in finding solutions. I strongly believe in technical solutions to political problems. MH Your Wikipedia says you are an anarchist. Can we draw any urgent lessons from anarchism? SM I think most of anarchism’s lessons are rather urgent. Nowadays I often use the term ‘decentralization fundamentalism’ to describe my stance: I’m not left-wing
C. Scott’s Seeing Like A State, which is an absolutely excellent account of how government attempts to create order from society and how it fails, and China Miéville’s Embassytown, which is a fun science fiction novel that explores some interesting themes in psycholinguistics, and has some of the most alien-seeming aliens I’ve ever seen. My reading stack currently contains books such as Samir Chopra’s Legal Theory for Autonomous Artificial Agents, A World of Trouble by Patrick Tyler, and a re-read of Deschooling Society by Ivan Illich.
MH The Dutch design institution Premsela has been carrying out an ambitious research project around the mystery of ‘Trust Design’, with uses as its main criminal exhibit the Icesave logo, which brought billions of hard-earned Dutch pensioners’ cash down the drain. Has Iceland abandoned predatory finance? What is your take on the Icesave logo?3 SM I am unaware if it is possible to abandon predatory finance without abandoning finance. Finance in itself is not inherently bad, but when mixed with an economy that makes strong assumptions about scarcity of resources and importance of property rights, it is inevitably going to be skewed towards ethically complicated grounds. The Icelandic banks, pension funds, and so on £have entirely gone back to their pre-collapse practice of starting companies that buy stocks from them (the same banks and pension funds) and sell them back through another puppet company as a way of driving up stock prices and creating fake wealth. They know it’s a bubble mechanism, but since ownership information isn’t public, there’s no real way to track this behavior, and since everybody else is doing it, they either have to participate and hope they last longer than the others, or not participate and become economic road kill. And this isn’t just in Iceland. This is everywhere. If you don’t believe me, try normalizing the changes in GDP or public debt in any country with the changes in the
money supply. You’ll be shocked. Although GDP looks like it keeps going up, it has actually been plummeting alongside government income, while government debt has been rising out of proportion to anything. Hint: If people want to fix the Eurozone crisis, the first thing to do is put a moratorium on the creation of new M2 and M3 instruments – i.e. stop making more money out of nothing.
MH What are M2 and M3 instruments? SM They are types of money. You could simplify it by
core reason why Iceland has bounced back faster than, say, Ireland, after the economic collapse, it’s because Iceland was very careful about managing moral hazard.
MH What type of reforms in Icelandic policy do you consider most relevant of recent time, and especially, if and how they bear a relation with extra-parliamentary social movements or extraparliamentary activism?
just saying ‘“money’”. M0, M1, M2, M3 money types vary in definition from country to country... it’s a bit complicated. Just simplify it down, methinks.. But back to Icesave. The Icesave logo is pretty ugly. It’s an afront to pastel lovers everywhere. It should have been blood red, with vampire teeth, or a big Omega symbol denoting ‘existential hazard’.
MH Icelandic citizens have per the referendum in 2011 refused to pay for the Icesave/Landsbanki losses.4 Iceland is in a smoldering legal battle with the United Kingdom and the Netherlands. It is a refreshing idea, on the other hand, that citizens have a choice whether they want to be held personally liable for the risks taken by the finance sector – a question that doesn’t seem to be asked in the same way anywhere in Europe. Is this organized irresponsibility or radical democracy? SM I reject the premise of the question. The Icelandic
SM After the collapse there was a strong need for more transparency. We’ve been working towards that, both inside and outside of parliament. MH Usually you’re not just the periphery – you are the periphery of something else. What is Iceland the periphery of? SM Iceland appears to be on the periphery of Europe and North America. In fact, it’s split in two. It’s also on the periphery of the Arctic, and stands on the edge of a chasm – inside of which is the global financial system. We have to decide whether to jump over it or dive into it... again. MH Conversely, every periphery is at the center of something. What is Iceland at the center of? SM Iceland is at the center of itself. One might say
citizens never refused to pay for the Icesave losses. This is a common misunderstanding. What the Icelandic citizens refused to do was to allow the government to provide a state guarantee to the Dutch and British governments collateralizing the Icesave losses. As Landsbanki’s previous assets are still being liquidated, there appears to be a very substantial chance that the Icesave losses will be paid for from the bankruptcy liquidation of the private bank. In short: We’re allowing the market to do its thing, for risk of being absorbed by those who accepted it, and avoiding the moral hazard involved in communization of loss alongside privatization of profits. I’d call this a refreshingly responsible approach to capitalism. No more communism for the rich and capitalism for the poor.
MH We agree. But could you clarify this position a bit more? SM The fundamental idea of capitalism is that you
it’s self-centered. In many ways it is. But in that selfcenteredness there is opportunity: it’s currently spearheading what I’d consider the most ambitious attempt at arriving at a comprehensive set of information regulations ever seen. That said, Iceland has had bad experience with grandiose claims, so I’ll add with humility: It’s all uphill from here.
MH Are the new information policies, for example, those pending ratification as part of the IMMI package, affecting Iceland’s international relations with other countries? SM Last year, a comprehensive media law was passed which included strong regulations for transparency of media entities, and good protections for journalistic sources. We’re hoping that by the end of this parliamentary term, there will be a new access to information act as well as some changes to the telecommunications act to better protect our telecommunications infrastructure and reduce the chance of electronic surveillance. This autumn, we’re aiming for four things: First, protection of historical records and databases, such that it will be harder to prosecute people for things published years ago – when the economic value of protecting the publication has dropped to zero. Second, we want to decriminalize libel and make some other changes to the libel law. It’s been relatively unchanged since 1940, and there’s been a lot of abuse of it recently – in part to silence journalists and bloggers. We can’t stand for that. Third, we want to finish abolishing data retention. The European Data Retention Directive has already been rejected by the Icelandic parliament, but we haven’t gotten the provisions that predate the actual directive removed yet. That’s an easy fix if there’s political will. Finally, and probably most difficult, we want to take a shot at getting a good whistleblower protection law. This has been tried a few times before, in the early 2000s, but didn’t get a lot of political support. Things are diferent now, but it’s still one of the most complicated pieces of legislation we’re working on. MH Does Iceland’s small size and population specifically matter in fostering quick political and social change? (Not to say that size is the only thing that matters. Luxemburg is smaller than Iceland and nothing happened there.)
can take risks, and sometimes profit from those risks, but also sufer losses if your speculations were wrong. Whenever you have a ‘bailout’, you’re basically paying somebody for having taken a risk and failed. This creates what’s known as a ‘moral hazard’ – there’s nothing to stop you from doing it again and again. By not bailing out the banks and refusing to provide a state guarantee of repayment of the Icesave loans, we’re rejecting that moral hazard and letting normal bankruptcy liquidation procedures run theirits course. It looks like the UK and Dutch governments will be repayed for the risk they absorbed on behalf of their citizens (beyond that which deposit insurance mandated), which is fortunate, but should not at any point have been considered to be guaranteed. The trend of communizsing loss – i.e., pushing private losses over onto society as a whole – and privatizsing profits – i.e., not pushing private gains onto society – is a great way of rewarding rich people for being rich while messing up everybody else. If there’s any
Hydro Power Geothermal Power Possible Hydrogen Production Site* Data Center Possible Cloud Facility
Thor Data Center Verne Global Data Center
UK Denmark Germany
CANTAT-3 (7.5Gbps) Greenland Connect (2.56Tbps) UK
Canada DANICE (5.1Tbps)
Op en Emerald Express s 20 13 (60Tbps)
* Source: International Journal of Hydrogen Energy 33 ( 2008 )
SM Iceland is 103,000 square kilometers. It’s not small, although it’s not huge. However, it’s sparsely populated. The fact that it’s a tiny population of relatively high homogeneity makes a lot of things easier in Iceland than elsewhere. MH Not so long ago we assumed nation-states were dead and the future was in the network. Iceland seems to have consciously and determinedly used the framework of national democratic politics to detect and undo systemic flaws and to set up future-oriented institutional redesign. Correct? SM That’s an interesting way of putting it. I think here there’s a risk of attributing to Iceland what exists mostly in the minds of a few crazy people like me... but we’re definitely hacking the system a bit. Sit back and enjoy the ride. MH What future do you assume exists for transnational institutions like the UN? Could and would Iceland start its own international standards which other countries could join? SM Transnationality is problematic. It primarily represents a form by which representatives of representatives go around representing each other and not us. The international institutions are an emerging form of postrepresentative democracy that will be our undoing unless we replace them with distributed democratic alternatives. MH One of the most fascinating aspects of IMMI is its proposed ability to offer protection to journalists publishing outside of Iceland. At the time IMMI was first becoming public, this aspect of the proposal was criticized.5 How realistic is this possibility, and what has come of it? SM It’s not a golden bullet and never has been. There are certain protections that can be extended to journalists abroad, mostly in the form of protection from seizure, censorship, and shutdown. We can’t provide indefinite protections though. Journalists can still be arrested, tortured, or killed, not to mention any number of other, probably less terrible but nonetheless pretty awful things. MH Does the IMMI proposal have the potential to transform Iceland into an ‘inverse tax haven’ as Birgitta Jonsdottir has called it, or a ‘Switzerland of Bits’ as Julian Assange has said? SM The ‘Switzerland of Bits’ concept came from
are well catered to, and the legal environment is attractive to investment.
MH You mean physical space, right? SM Yup. Cyberspace versus meatspace. MH However much we would like to, we can’t all move to Iceland. Any advice to foster quicker reforms at home? SM Iceland is not intended to be the one and only
location where this should happen. We’re just trying to make a positive example. If you want to fix your own country, then first stop assuming that you’re powerless. Next, figure out exactly what you want to do and figure out exactly how you’re going to do it. Look through the legal code, the social structure, and pretty easy entry points start to become obvious. Treat society as a Wiki – a publicly editable social space – and be bold. Don’t worry about screwing things up. For almost everything, there’s an undo button.
MH Independent Diplomat’s Carne Ross has recently been advocating new banking structures with Occupy. He has also criticized Occupy for simply looking at the government to foster change instead of being more pro-active. Do you share his criticism? SM Systemic failure is everywhere. Banking, government, education, industry, you name it, we need to fix it. The Occupy movement, and the Indignados in Spain, are focused on criticizing the current models and discussing solutions, but I’ve felt it to be weak on two points. Firstly, they haven’t been as good at implementing solutions. You can talk solutions until you’re blue in the face and it won’t do a bit of good unless there’s concrete output. Secondly, and more importantly, they haven’t been addressing infrastructural issues. Basically, infrastructure is the technology that determines whether we live or die. Your infrastructure will kill you – if it fails, you fail. Governments and corporations control infrastructure. Any systemic change will necessarily require that people either take over existing infrastructure and change its governance model, or provide alternative infrastructure. If you do neither, you can squeeze out a few extra rights, maybe, but nothing will change.
John Perry Barlow, a term he used during a 2008 speech in Iceland where he laid the conceptual foundation of the project. Assange just adopted it after I quoted it to him the night that we came up with the plan of how to actually go about doing it. But, yes. And not just Iceland.
MH How much of the ‘Switzerland of Bits’ notion was clever branding, and how much of it is actual policy? SM It’s mostly an analogy. We could have said ‘Tortola of Transparency’, and indeed Birgitta did for quite a while until she figured out that Tortola isn’t very well known. Whatever it is, the idea that comes to mind when presented with either term is alluring, and basing policy on such an idea doesn’t hurt. MH Are there economic reforms, investments, and incentives that pair Iceland’s newly found freedoms so that it will be not just ethically but also financially sustainable? SM We’re trying. We want to make an ‘Internet Enterprise Zone’, where the meatspace properties conductive to the creation of online economic activity
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‘Cracks in the Crust’ The Economist, Dec.11t 2008, (At: http://www.economist.com/node/12762027?story_id=12762027) ‘The Constitutional Council – General Information’ (At: http://stjornlagarad.is/english/) ‘Icesave for dummies’ (At: http://english.midgardur.net/ 2010/01/15/icesave-for-dummies-including-me/) Jóhanna Sigurdardóttir ‘The Icesave referendum has been oversimplified’ The Guardian, April 13 2011, (At: http://www. guardian.co.uk/commentisfree/2011/apr/13/icesave-referendumuk-payments) Noam Cohen ‘A Vision of Iceland as a Haven for Journalists’ NY Times, Feb. 21 2010 (At: http://www.nytimes.com/ 2010/02/22/business/media/22link.html?pagewanted=2) Cade Metz. ‘Google: We’re Like a Bank for you Data’ Wired Magazine, May 29 2012 (At: http://www.wired.com/ wiredenterprise/?p=20996)
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