The resources belong to the public
SOCIAL TAX POLICY III. SECTION:
THE RESOURCES TO THE PUBLIC
It has long been clear to Icelanders that the preconditions for building a strong and good society here are that they will be able to utilize the resources of land and sea. This is what the cod war was about, taking over the marine resources from foreign fishing companies so that it could become the driving force of a new society. This was also about the development of Landsvirkjun in its time and before that electricity and heating utilities. The goal was always that the resources would be the basis for a strong and solid society.
Until the neo-liberal years, resource utilization was a social project. Municipalities built up electricity and heating utilities and the government later Landsvirkjun. And state power was used to bring the fishing grounds under Icelandic jurisdiction. The goals were social, to provide families and businesses with electricity and heat, to create employment to strengthen society, export earnings to earn foreign exchange and to strengthen settlements throughout the country.
With neoliberalism, this is changing. The marine resource was almost privatized through the implementation of the quota system. The result of the cod wars was not that the dividends from the sea’s resources were passed on to society and became the basis for community building, but the dividends went to a very small number of families who in a short time became a kind of wealthy class of rich people who rule the country. Many coastal communities lost their quota in the hands of shipowners and have since shrunk, some are still only a shadow of themselves today.
The energy resources were privatized, marketed and profitable and public energy companies privatized or their form of operation changed and social goals abolished so that today they behave exactly like profitable private companies.
The resource that lives in the country’s nature, history and human life became a source of money with the increase in tourists. But its use has been unbridled and largely without supervision and restraint. The same applies to the corruption of natural and air quality. Instead of protecting these resources and natural resources, the so-called market has been entrusted with controlling their utilization. And that utilization is characterized on the one hand by overexploitation and invasion of natural quality and on the other hand by profitable operations that have the sole goal of bringing the owners of the companies dividends from the resources.
Socialists reject this policy. They do not believe that the profitability requirements of marketing companies can control the public’s resource utilization. The resources are common property and should be used in that light. The resources are public goods that should not be sold to the highest bidder or used first and foremost to create dividends for the few. Public quality and resources should be utilized as pillars for society as a whole, let their utilization serve the whole of society.
The Socialists will make a special offer to the electorate regarding resource utilization, climate and environmental protection; but here it is inevitable to discuss resource taxes and the utilization of resources in connection with socialist tax policy.
III. The resources for the public:
The marine resource was privatized
Control of the ocean’s resources is a prerequisite for building a strong and trustworthy society here. The struggle for this domination characterized the first decades of sovereignty and then the republic, and the territorial waters and fisheries jurisdiction are without a doubt the greatest victories of the young republic. The aim of this struggle for independence was to utilize the ocean’s resources so that they could become a driving force for social development.
In the beginning, this worked out. The utilization of the marine resource built up communities around the country and was a prerequisite for the rapid growth of the economy, the development of infrastructure and the basic systems of the community; education, health and welfare systems. In the first decades of the republican era, this development was led by the public sector, not only with the leadership of the expansion of the territorial waters but also with an employment policy that resulted in co-operation, town fishing and other social activities with social goals. During the heyday of the fishing industry, the majority of fishing and fish processing companies were in social operation.
With the introduction of the quota system and its implementation, the industry changed and thus the utilization of the resources and the allocation of dividends from them. Today, the marine resource has in fact been privatized. It is primarily run by a handful of super-rich families, who control fishing, processing, and sales; everything from uncaught fish to the sale of products abroad.
This concentration of power has turned the dream of the young republic into a nightmare. Instead of becoming a driving force behind a powerful and decentralized society, the resource now sails into the dictatorship of a super-rich genocide that thrives on wealth and power while the public has less and less control over the development of society. Many seafarers have lost access to the fishing grounds that built them up, they lost them on the big fishing industry. The dividends from the resources no longer flow through society, but end up in the pockets of the few and the rich, who do not use their wealth to build society but to buy up other companies, both in the fishing industry and in unrelated sectors. Instead, the driving force of a diverse and decentralized society will be full of opportunities and innovation, the marine resource has been used to build the supremacy of the very few.
The greatest victory of the young republic was in the end its greatest defeat. The public’s struggle to free itself from the exploitation of resources by foreign shipping companies and the domination of a distant authority ultimately brought it under the threat of a handful of wealthy rich people, who have become enormously wealthy by exploiting resources that are nominally public property.
The main goal of the Socialists is to break down the power of the rich over society and restore the resources of the people. The aim is not to maintain the constant threat system of the few, but to transfer control of the quota back to the settlements so that they can use the resources to build a new diverse economic activity and a prosperous society.
It is not the goal of the socialists to allow the fishing industry to continue to develop in the same way as hitherto, that the industry consists first and foremost of a very small number of giant companies whose sole goal is to maximize dividends to their owners. It was believed in the neo-liberal years that this was the way, that the profitability of companies was the only guiding light of business development, the amount of money the owner could attract from the operation. In order to achieve this, the aim was to maximize concentration and efficiency, to keep staff salaries and total wage costs down through automation, and to control the entire value chain in order to be able to control where profits ended up. When these goals were achieved, the companies’ operations began to revolve around how tax payments could be avoided, how the share of fishermen could be reduced, how the owner’s benefit could be maximized without any regard for the environment, society, staff or customers.
It is generally accepted around the world that this policy, focusing on dividends to owners, is a derivative guiding light in business operations. It leads to weaker and weaker companies, which have in fact turned against society. We Icelanders know all about it. Suffice it to say one word to explain the consequences of this policy: Samherji.
The breakdown of the big companies in the fisheries sector is therefore not only a democratic necessity, a protection against the build-up of totalitarianism of a very few wealthy families, but it is also a sensible employment policy. Experience shows that smaller fish processing companies that buy fish on the market handle the raw material better and get higher product prices in foreign markets than the large companies that own the entire value chain and have adapted it to maximize the owner’s profit. It is not always in his interest to get the highest price on the market for the product. It may well be that he gets richer by creating a cheaper product with lower labor costs. Or by selling themselves cheaply out of the country and then managing to increase their profits by continuing to sell at even higher prices.
The breakdown of large companies is therefore also a smart way to maximize society’s profit from the resource. It increases with the devolution of power, becomes greater when there is a cut between fishing and processing and when it is prevented that the owners of large companies can hide the profits in the offshore.
The development of the fisheries sector in Iceland in recent decades is in fact an example of the financialisation of the economy. The whole industry revolves around financial instruments and the return on the assets of their owners, but much less about the maximum utilization of resources. In the beginning of neoliberalism, it was argued that this would always go hand in hand, but no one believes that anymore. Experience has revealed where this policy leads. This same policy is still pursued in Iceland, although it is conceptually bankrupt. The reason is that this is a policy that maximizes the interests of the very rich and their wealth comes with a lot of power. The only way to stop this policy is to seize power from the power, for the people to take power over the state and to set a policy for the fishing industry that serves society and not just the few rich and powerful.
Having said that, it goes without saying that the Socialists do not support the idea that the fishing industry will continue to be run in the same format, with the sole aim of maximizing the wealth of very few families, but that fishing fees will be raised. This is a proposal that the public become a collaborator of the wealthy families, get paid to give them all control over their resources. The problem of the fishing industry will not be solved with the big fishing industry because the big fishing industry is the problem of the fishing industry.
The Socialists’ proposal is to reintroduce diversity and decentralization into the utilization of fishing grounds. As will be stated in the Socialists’ offer to voters on resource policy, the Socialists propose free hand fishing and support for small businesses, the development of fish markets and the development of infrastructure that serves smaller parties, improving utilization, quality and prices. But the main proposal is to transfer control of the quota to the settlements, which will then look for different ways to make the best use of the resource for society.
The Socialists are therefore proposing a decentralized, open, democratic and diverse fishing industry instead of the closed and undemocratic system of large companies. It is worth considering this. Unbridled capitalism has not brought us diversity and decentralization as promised, but centralized the threatening power of a handful of large corporations, a system that can be called the dictatorship of wealth and is no less dangerous than other dictatorships.
That said, it is worth noting that the Socialists’ resource offer assumes a resource lease that will flow into a common fund. That fee will be charged at the quay, is a fee for the use of the resource and goes to community development. Although that fee will be lower than the price of rental quotas today, a resource fee that small quota-free fishing companies pay the quota grabbers, it will return many times more money in a common fund than the fishing fee does today.
III. The resources for the public:
The energy resources were profitable
The development of Hitaveita Reykjavíkur is one of the achievements of Icelanders. Instead of burning coal, hot water was drilled and a new heating system was built throughout the town and later in neighboring villages. It was a community project that was far beyond the size, foresight and capacity of a private company. The district heating company saved foreign exchange and got rid of Reykjavík from unhealthy coal dust and coal smoke. The development of Hitaveitan should be a model for Icelanders of excellent resource utilization with societal goals.
In parallel with Hitaveitan, water supply and electricity supply were built in the same way and with the same goals. The public took out a joint loan and paid an acceptable price for the energy so that the utilities would be under the loans. The vision for the future was that over time the construction costs would be paid off and the people of Reykjavík and the surrounding area could then have cheap, safe and environmentally friendly energy for the entire future.
The adventure did not end so well. With the advent of the neo-liberal years, the policy became that the utilities’ good financial position should be used to move to new power plants and sell the energy to power-intensive industries. The premise was not that there was a lack of employment, but that the utilities there had changed in nature, were no longer public companies run for social purposes but a participant, in fact a major player, in the capitalist energy market. And as such, Reykjavik Energy had only one goal; to expand in order to make more profit. It was in those years that a company that could increase its profits had to be on the right track. Money was the measure of everything.
We all know the end of this story. This is a tragedy. The former crown jewels of Reykjavík, Hitaveitan and Rafmagnsveitan, are now a disgrace to the city. The company’s headquarters has billions of monuments to self-preservation and snobbery. And the dizzying debt of the company is a millstone around the necks of city dwellers. In order to save Orkuveita Reykjavíkur from bankruptcy after the Crash, the city authorities had to sharply increase their tariffs. Citizens who today have to live with a plethora of cheap energy had to pay the energy company out of debt prison with higher energy bills.
This story is told here to describe how the authorities’ ideas about the energy resource changed rapidly during the neoliberal era. Socialists want to return to previous ideas; that the resources are used to build a good society but are not invested in public limited companies that behave as if they were profit-driven companies owned by capitalists with the sole purpose of profit.
The Socialists have also set the policy that all energy resources should be public property and in public operation, except for boreholes and small power plants that people build for their own needs. The energy system is the basic system of society and its structure and operation must be on a social basis and with social goals.
The main use of energy shall be to build a strong society here with clear social plans. Such as large-scale food production to create jobs, consolidate settlements, save foreign exchange, reduce polluting cross-border transport and increase the quality of life. Such as the conversion of energy from fossil fuels to renewable clean energy in transport, transport, fishing and other industries that still use oil, coal or gas. The aim is to reduce pollution, defend against climate change, save money, create jobs and increase the quality of life.
Private companies and public companies, which are run as if they were private companies, do not handle such projects. The main innovation in energy efficiency in Iceland in recent years is data centers that run computers with enormous energy to dig for Bitcoin and other electronic currencies, an activity that is completely meaningless to society and in fact harmful.
In recent decades, an energy policy has been pursued, as is the case here with energy shortages. That is not the case. A new energy policy must take into account the fact that some of the power-intensive plants operated here will inevitably close within a few years or decades. Energy policy needs to take this into account. We need to raise money in contracts with large buyers to pay down all construction costs and then use the energy as a driving force for the construction of new employment opportunities and new social infrastructure, not by pricing the energy to the top but on the contrary by using what we have paid down the construction cost.
The Socialists reject the idea of a resource fund that would yield dividends from Landsvirkjun for later use. The idea is that Icelanders are a kind of capitalist owners of the resource, inactive in other ways than demanding the greatest possible return on their property. The public is the common owner of the energy resources and they are to be used in social projects under the control of the public.
III. The resources for the public:
The policy of inaction created chaos
Tourism is based on the common good of the people; nature, history and culture. In addition, tourism utilizes the infrastructure of the community; transport, health care, law enforcement, etc. Tourists come here to visit and explore Iceland, which is a complex idea that is again the common property of us all. For this reason, it is important that the development of infrastructure for natural pearls and historical sites is under public control and that tourism companies collect and pay fees for the load on the community’s general infrastructure.
The government’s inaction in the spirit of neoliberalism in recent years has meant that, despite an urgent need, there has been a need to build infrastructure, rules and supervision. The result is not only a great burden on nature, but overgrowth and anarchy, which is manifested not least in the ill-treatment of staff, wage theft and oppression. The government’s fear of fulfilling its responsibilities, formulating policy and building a sound environment for a growing and important industry, has led to a chaotic build-up that has unjustifiably harmed nature and society.
To make up for the inaction of recent years, a public initiative is needed to build service centers for the main natural gems and cultural monuments. Such a structure can be financed with credit, which will later be repaid with service fees and operating income. In order to speed up such development, it is important that the project is under one management and that excess income from popular places can flow to development elsewhere, a development that will then increase attendance at those places and thus the income of the whole. To look for role models, you can go to the British Isles, where a private institution oversees all the main natural and historical monuments and has been responsible for the elegant structure of those places. This structure must meet quality requirements, both structures and services, education and catering, as well as toilets and all assistance to tourists. The goal should be to build an excellent service and framework around an unforgettable visit of domestic and foreign tourists.
In order to cover the burden of tourism on public infrastructure, the collection of VAT on tourism should be moved up to a general level once the industry has recovered from the crown pandemic. The decision to keep the tourism industry at a lower level actually contributed to the overcrowding of the industry and the strengthening of the króna, as a result of which the price of the service rose more in foreign currency than the increase in value added had done.
An accommodation fee must be collected which goes to the municipalities, but they bear a high cost of the tourism service but have little income from it. Such a fee is imposed worldwide for these reasons and we have no pity for adopting that system.
Tourist fees should be imposed on tourists and it should be examined whether they can be used to control the flow of tourists, for example by raising it during the high summer but lowering it to a picture fee during the dullest time during the winter.
The inability of the government to manage the development of tourism has harmed nature, the industry itself, the staff within it and society as a whole. It is the role of the government to create a clear framework for the economy and manage the development of infrastructure to support and strengthen the activities. And it is the role of government to protect staff and customers from unscrupulous crooks. It is an absurd idea that tourism is developing best in anarchy. On the contrary, it is the experience of all countries that the economy thrives on a clear employment policy that combines public structure, supervision and tax collection.
Socialists see tourism as a resource utilization where the government, municipalities and other public bodies play an important role in the development. The path must be reversed so that the industry grows by accident according to the blown-up business ideas of individual traders with harmful consequences. The societal goals for the development of the tourism industry must be clear so that the companies can shape their operations within them.
III. The resources for the public:
Taxes, fines and the need to ban pollutants
The climate crisis is one of the consequences of inequality and power imbalances in society. The few rich and powerful have not had to answer to anyone but have managed to break down human society, public safety nets and institutions designed to support equality and justice. And they have come up with a way to walk on the natural good of the earth; pollute, waste, destroy and spoil.
A prerequisite for mastering climate change is taking control of the resource, the perpetrator. He can never be part of the recovery. In order to be successful in climate change, tariffs, taxes and fines must be applied to the companies that pollute the most and work hardest on a common quality.
The risk is, based on the current climate policy, that capital and business owners will apply for grants from the Treasury to finance obvious changes in their operations. As a result, the public will bear both the damage caused by the pollution and the cost of stopping it.
It is a matter of course and necessary to spend public money to build new solutions and technologies to combat climate change. But that money should flow into community projects and into public research institutes. The companies have to take care of themselves. If they do not change, their activities will be banned. Their owners cannot drain the funds of their own companies to pay dividends to themselves and then apply for money from public funds to meet long-foreseeable problems.
The Socialists are therefore proposing incremental carbon and pollution taxes to protect the environment and nature and significant public investment to speed up energy transition, boost domestic food production, land reclamation and forestry.
III. The resources for the public:
The Socialist Party’s fourth offer to voters for this autumn’s election on resource utilization involves placing control of the public’s resources under social control so that they can be used to build a good, safe and beautiful society. The goal is to break down the power and domination of the few. Utilization of resources is a long-term goal that should not only serve society today, but build society and strengthen it for future generations. Taxes, fees and rents will be used to manage the structure and a clear employment policy will create a framework for companies.
One of the main themes of this policy is the devolution of power and the increased power of the settlements. If they are to support these projects, the income base and independence of the municipalities need to be strengthened. This is what the fourth chapter of the Socialist Party’s offer to voters about the socialist tax system is about, how the revenue collection of municipalities can be rebuilt and thereby increase the distribution of power and democracy in society.