Engineering the Economy through Austerity: The Influence of International Economic Expertise in Iceland after the First World War
This essay explores how Iceland, a newly independent state on the northern European periphery, responded to the international agenda for post-war stabilisation set out by economic experts after the turmoil of the First World War. It shows that the government of the so-called Austerity Alliance, led...
| Published in: | Contemporary European History |
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| Format: | Article in Journal/Newspaper |
| Language: | English |
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Cambridge University Press (CUP)
2024
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| Online Access: | http://dx.doi.org/10.1017/s0960777324000110 https://www.cambridge.org/core/services/aop-cambridge-core/content/view/S0960777324000110 |
| Summary: | This essay explores how Iceland, a newly independent state on the northern European periphery, responded to the international agenda for post-war stabilisation set out by economic experts after the turmoil of the First World War. It shows that the government of the so-called Austerity Alliance, led by Jón Þorláksson, adopted austerity policies devised at the international financial conferences in Brussels (1920) and Genoa (1922). To please external experts and creditors, it implemented a comprehensive fiscal and monetary policy of austerity and created a new central bank that was independent of politics. The aim, however, was not to divorce markets from government in a return to a pre-war era of laissez-faire as the scholarly literature suggests. Offering the first analysis of ‘the Icelandic business cycle’, the Þorláksson government enforced austerity by carving out ‘the economy’ – a measurable entity legible to expert management – that greatly expanded the role of the state. |
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