Neoliberalisation and Financialisation Icelandic Exceptionalism - Booms, Busts and Neoliberal Continuity

In this chapter, we argue that the spectacular rise and fall of ‘Viking Finance-Led Capitalism’ in conjunction with the Global Financial Crisis (GFC) 2007-9 follows a deeper historical tendency in Icelandic capitalism of export-oriented booms-and-busts, which, despite modification by the country’s turn to neoliberalism in the 1980s, has been sustained also with the post-crisis turn to a tourism-led accumulation regime. While Icelandic economy’s historical tendency towards boom-and-busts emerged partly as the result of the absence of an institutionalised social compromise (qua the other Nordic economies), its particular reproduction in the finance-led and tourism-led accumulation regimes must be understood against the backdrop of its insertion into the neoliberal world order. While the post-world war boom-and-bust cycle created a volatile political dynamic, neoliberalisation’s prolongation of the cycle has resulted in less short-term political volatility but potentially deeper political crises in the medium term if and when the tourism-led accumulation regime falls upon the sword of its own contradictions. Our chapter intervenes in the international literature on neoliberalism by arguing that Iceland, within the neoliberal world order, has ‘regularised’ a historical pattern of boom-and-bust cycles, but because of its strong crisis tendencies it also serves to delegitimate and thus undermine neoliberalism.