The resources to the public

The Socialist Party's message in the elections to Althingi on September 25, 2021:Fourth offerpresented to voters around Pentecost:

SOCIALIST TAX POLICY PART III:THE RESOURCES TO THE PUBLIC

It has long been clear to the people of the country that the prerequisite for building a strong and good society here is that they succeed in utilizing the resources of land and sea. This was what the Cod Wars were about, to reclaim the marine resource from foreign fishing companies so that it could become the driving force of a new society. This was also what the development of Landsvirkjun was about at the time, and before that, electricity and heating utilities. The goal was always for the resources to be the foundation of a powerful and robust society.

Up until the neoliberal years, resource utilization was a societal project. Municipalities developed electricity and heating utilities, and the state power later developed Landsvirkjun. And state power was used to bring the fishing grounds under Icelandic jurisdiction. The goals were societal: to provide electricity and heating to families and businesses, to create employment to strengthen society, export revenues to acquire foreign currency, and to consolidate settlements throughout the country.

With neoliberalism, this changed. The marine resource was virtually privatized with the implementation of the quota system. The outcome of the Cod Wars was therefore not that the profits from the ocean's resources trickled through society and became the foundation of societal development, but rather that the profits flowed to a handful of families who quickly became a kind of hereditary class of wealthy people dominating the country. Many fishing communities lost their quotas to the speculation of fishing magnates and have since shrunk, some are still today only a shadow of their former selves.

The energy resources were corporatized, marketized, and profit-oriented, and public energy companies were privatized or their operational form changed, and societal goals abandoned so that today they behave exactly like profit-driven private companies.

The resource inherent in the country's nature, history, and human life became a source of money with the increase in tourists. But its utilization has been unrestrained and largely without oversight and control. The same applies to the degradation of natural and air quality. Instead of protecting these resources and natural assets, the so-called market has been entrusted with controlling their utilization. And this utilization is characterized, on the one hand, by overexploitation and encroachment on natural assets, and on the other hand, by profit-driven operations whose sole aim is to transfer the profits from the resources to the company owners.

Socialists reject this policy. They do not believe that the profit motive of market companies can control the utilization of public resources. The resources are common property and should be managed in that light. The resources are public goods that should neither be sold to the highest bidder nor primarily used to generate profit for the few. Public goods and resources should be utilized as pillars for society as a whole, allowing their utilization to serve the entire community.

Socialists will present a special offer to voters regarding resource utilization, climate, and environmental protection; but here it is unavoidable to discuss resource fees and resource utilization in connection with socialist tax policy.

III. The resources to the public: The marine resource was privatized

Control over the ocean's resources is a prerequisite for building a strong and robust society here. The struggle for this control characterized the first decades of sovereignty and then the republic, and the territorial waters and fishing jurisdiction are undoubtedly the greatest victories of the young republic. The goal of this independence struggle was to utilize the ocean's resources so that they could become the driving force of societal development.

Initially, this worked. The utilization of the marine resource built up communities around the country and was a prerequisite for rapid economic growth, the development of infrastructure and basic societal systems; education, healthcare, and welfare systems. During the first decades of the republic, this development was led by the public sector, not only with leadership in expanding territorial waters but also with an industrial policy that gave rise to cooperative operations, municipal fishing companies, and other social enterprises with societal goals. During the boom period of the fishing industry, the majority of fishing and fish processing companies were under social operation.

With the advent of the quota system and its implementation, the industry was transformed, and with it, the utilization of resources and the distribution of profits from them. Today, the marine resource has effectively been privatized. It is primarily under the control of a handful of super-wealthy families, who dominate fishing, processing, and sales; everything from un-caught fish to the sale of products abroad.

This concentration of power has turned the dream of the young republic into a nightmare. Instead of the resource becoming the driving force of a powerful and decentralized society, it is now sailing into the autocracy of a super-rich hereditary class that asserts itself through wealth and power, while the public has ever less control over the development of society. Many fishing communities have lost their access to the fishing grounds that built them up; they lost them on the speculation table of large fishing companies. The profits from the resources no longer trickle through society but end up in the pockets of the few and super-rich, who use their wealth not for societal development but to buy up other companies, both within the fishing industry and in unrelated sectors. Instead of becoming the driving force of a diverse and decentralized society full of opportunities and innovation, the marine resource has been used to build up the overwhelming power of the few.

The greatest victory of the young republic ultimately became its greatest defeat. The public's struggle to escape the resource plunder by foreign fishing companies and the control of a distant authority ultimately brought them under the oppressive power of a handful of magnates, who have become enormously wealthy from the utilization of resources that are nominally public property.

The main goal of socialists is to break down the power of the wealthy over society and reclaim public resources. The goal is not to maintain the unchanged oppressive system of the few, but to transfer control over the quota back to the communities so that they can utilize the resources to rebuild diverse economic activity and a thriving society.

It is not the goal of socialists to allow the fishing industry to continue to develop in the same way as hitherto, for the industry to consist primarily of a handful of giant companies whose sole aim is to maximize dividend payments to their owners. It was believed during the neoliberal years that this was the way, that corporate profitability was the sole guiding principle of economic development, how much money the owner could extract from the operation. To achieve these results, the aim was maximum concentration and efficiency, to keep staff wages and total labor costs down through automation, and to gain control over the entire value chain to be able to control where the profit ended up. Once these goals were achieved, the companies' operations began to revolve around how to avoid tax payments, how to reduce the share of fishermen, how to maximize the owner's benefit as much as possible without any regard for the consequences for the environment, society, staff, or customers.

It is generally recognized worldwide that this policy, focusing on dividend payments to owners, is a flawed guiding principle in business operations. It leads to poorer and weaker companies, which have in fact turned against society. We Icelanders know all about it. It is enough to say one word to explain the consequences of this policy: Samherji.

The dismantling of large companies in the fishing industry is therefore not only a democratic necessity, a defense against the establishment of an autocracy of a few wealthy families here, but it is also a sensible industrial policy. Experience shows that smaller fish processing companies that buy fish on the market handle the raw material better and achieve higher product prices on the international market than 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 market price for the product. It may well be that he profits more from producing a cheaper product with lower labor costs. Or by selling cheaply out of the country to himself and then managing to increase his profit by reselling at an even higher price.

The dismantling of large companies is therefore also a clever way to maximize society's profit from the resource. It increases with decentralization, becomes greater when fishing and processing are separated, and when large company owners are prevented from hiding profits in offshore jurisdictions.

The development of the fishing industry in Iceland in recent decades is in fact an example of the financialization of the economy. The entire industry revolves around financial transactions and returns on owners' assets, and much less around the maximum utilization of resources. At the beginning of neoliberalism, it was argued that these would always go hand in hand, but no one believes that anymore. Experience has revealed where this policy leads. Nevertheless, this same policy continues to be pursued domestically, even though it is ideologically bankrupt. The reason is that this is a policy that maximizes the benefit of the super-rich, and their wealth comes with great power. The only way to stop this dominant policy is therefore to take power from the plutocracy, for the public to gain control over the state power and set a policy for the fishing industry that serves society, and not just the few rich and powerful.

Having said this, it is hardly necessary to state that socialists do not support the idea that the fishing industry should continue to be operated in the same manner, with the sole aim of maximizing the wealth of a handful of families, but with increased fishing fees. This is a proposal for the public to become an accomplice of the wealthy families, getting paid to surrender all power over their resources to them. The problem of the fishing industry will not be solved with large-scale fishing operations, because large-scale fishing operations are the problem of the fishing industry.

The socialists' proposal aims to reintroduce diversity and decentralization into the utilization of fishing grounds. As will be presented in the socialists' offer to voters on resource policy, socialists propose free handline fishing and support for small-scale operations, the development of fish markets, and the development of infrastructure serving smaller entities, improving utilization, quality, and price. But the main proposal is to transfer control over the quota to the communities, which will then seek different ways to best utilize the resource for society.

Socialists are therefore proposing a decentralized, open, democratic, and diverse fishing industry instead of the closed and undemocratic system of large corporations. It is worth considering this. Unfettered capitalism has not, in fact, brought us diversity and decentralization as promised, but rather the centralized oppressive power of a handful of large corporations, a system that can be called the autocracy of capital and which is no less dangerous than any other autocracy.

Having said that, it is worth noting that the socialists' resource offer includes a resource lease that flows into common funds. This fee will be collected at the quayside, is a fee for the use of the resource, and flows towards societal development. Although this fee will be lower than the price of leased quotas today, a resource fee that small quota-less fishing companies pay to the quota barons, it will yield many times more funds to common funds than the fishing fee does today.

III. The resources to the public: The energy resources were profit-oriented

The development of Hitaveita Reykjavíkur is one of the achievements of Icelanders. Instead of burning coal, hot water was drilled for, and a new heating system was built throughout the town and later in neighboring communities. This was a societal project that, in terms of scale, foresight, and capability, was far beyond what private companies could manage. Hitaveitan saved foreign currency and rid Reykjavík of the unhealthiness of coal dust and coal smoke. The development of Hitaveitan should be a model for the people of the country for excellent resource utilization with societal goals.

Alongside Hitaveitan, water utilities and electricity utilities were built in the same manner and with the same goals. The public collectively took out loans and paid a reasonable price for the energy so that the utilities could cover the loans. The vision was that over time, the construction costs would be paid down, and residents of Reykjavík and nearby communities could then enjoy cheap, safe, and environmentally friendly energy for all future.

The fairy tale did not end so well. When the neoliberal years arrived, the policy prevailed that the good financial standing of the utilities should be used to embark on new power plants and sell energy to heavy industries. The premise was not that there was a lack of employment, but rather that the utilities had changed their nature, were no longer public companies operated with societal goals, but participants, in fact major players, in a capitalist energy market. And as such, Orkuveitan had only one goal: to expand to generate more profit. These were the years when a company that could increase its profit was considered 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 stain on the city. The company's headquarters, a multi-billion monument to self-importance and snobbery. And the company's staggering debts are a millstone around the necks of city residents. To save Orkuveitan from bankruptcy after the Collapse, city authorities had to sharply increase tariffs. City residents who today should be enjoying an abundance of cheap energy had to pay Orkuveitan out of debt prison with higher energy bills.

This story is told here to illustrate how the authorities' ideas about the energy resource drastically changed during the neoliberal era. Socialists want to return to earlier ideas; that resources should be used to build a good society and not be placed into public limited companies that behave as if they were profit-driven companies owned by capitalists with profit as their sole objective.

Socialists have also adopted the policy that all energy resources should be public property and publicly operated, with the exception of related boreholes and small power plants that people build for their own needs. The energy system is a basic societal system, and its development and operation shall be on a societal basis and with societal goals.

The main utilization of energy shall be directed towards building a strong society here with clear societal plans. Such as large-scale food production to create jobs, strengthen communities, save foreign currency, reduce polluting cross-country transport, and improve quality of life. Such as energy transition from fossil fuels to renewable clean energy in transport, logistics, fishing, and other industries that still use oil, coal, or gas. The goal of this is to reduce pollution, combat climate change, save foreign currency, create jobs, and improve quality of life.

Private companies and public companies, which are operated as if they were private companies, cannot handle such tasks. The main innovation in energy utilization in Iceland in recent years are data centers that run computers with enormous energy to mine for Bitcoin and other cryptocurrencies, an activity that is socially completely pointless and in fact harmful.

In recent decades, an energy policy has been pursued as if there were an energy shortage here. That is not the case. A new energy policy needs to take into account that inevitably some of the heavy industries operated here will close within a few years or decades. The energy policy needs to take this into account. We need to seek funds in agreements with large buyers to pay down all development costs and then utilize the energy as a driving force for the development of new job opportunities and new societal infrastructure, not by pricing the energy at the maximum, but on the contrary, by leveraging the fact that we have paid down the development costs.

Socialists reject ideas of a resource fund that would invest dividends from Landsvirkjun for future use. Behind this is the idea that the people of the country are a kind of capitalist owners of the resource, passive in every way except demanding the maximum profit from their property. The public is the common owner of the energy resources, and they should be utilized for societal projects under public control.

III. The resources to the public: The policy of inaction created chaos

Tourism is based on the common heritage of the people; nature, history, and culture. In addition, tourism utilizes the infrastructure of society; transport, healthcare, law enforcement, etc. Tourists come here to visit and explore Iceland, which is a complex idea that is in turn the common property of all of us. For these reasons, it is important that the development of infrastructure at natural wonders and historical sites is under public control, and that tourism companies collect and pay fees for the strain on general societal infrastructure.

The government's policy of inaction in the spirit of neoliberalism in recent years has meant that despite an urgent need, the development of infrastructure, regulations, and oversight has lagged. The consequence is not only a great strain on nature but also overgrowth and anarchy, manifested not least in poor treatment of staff, wage theft, and oppression. The government's fear of fulfilling its duties, of formulating policy and building a reliable environment for a growing and important industry, has led to chaotic development that has unnecessarily harmed nature and society.

To compensate for the inaction of recent years, a public task force project is needed for the development of service centers at major natural wonders and cultural heritage sites. Such development can be financed with loans that will later be paid down with service fees and operating revenues. To accelerate such development, it is important that the project is under a single management and that surplus revenues from popular sites can be used for development elsewhere, development that will then increase visitor numbers to those sites and thereby the overall revenue. For models, one can look to the British Isles, where a non-profit organization manages all major natural and historical monuments and has undertaken magnificent development at those sites. This development must meet quality standards, both structures and all services, education and catering, as well as sanitation and all assistance to tourists. The goal should be to build excellent service and a framework for an unforgettable visit for domestic and foreign tourists.

To cope with the strain of tourism on general infrastructure, the collection of VAT from tourism should be moved to the general rate once the industry has recovered from the coronavirus pandemic. The decision to keep tourism at a lower rate effectively encouraged the industry's overgrowth and the strengthening of the króna as a result, which ultimately increased the price of services more in foreign currency than a VAT increase would have done.

Furthermore, an overnight stay fee should be collected, which would go to municipalities, as they bear significant costs from tourism but have little revenue from it. Such a fee is imposed worldwide for these reasons, and we have no excuse not to adopt that system.

Arrival fees should be imposed on tourists, and it should be investigated whether this can be used to manage tourist flows, for example by increasing it during peak summer but lowering it to a token fee during the quietest time in winter.

The government's inability to manage the development of tourism has harmed nature, the industry itself, its staff, and society as a whole. It is the government's role to provide a clear framework for the economy and to manage infrastructure development to support and strengthen economic activity. And it is the government's role to protect staff and customers from unscrupulous speculators. It is an absurd idea that tourism thrives best in anarchy. On the contrary, the experience of all states is that economic life thrives best under a clear industrial policy that combines public development, oversight, and taxation.

Socialists view tourism as resource utilization where the state, municipalities, and other public entities play a significant role in its development. The path of the industry growing haphazardly based on inflated business ideas of individual speculators with harmful consequences must be reversed. Societal goals for the development of tourism need to be clear so that companies can shape their operations within them.

III. The resources to the public: Polluters must be taxed, fined, and banned

The climate crisis is one of the consequences of inequality and power imbalance in society. The few rich and powerful have not had to answer to anyone but have gotten away with dismantling human society, public safety nets, and institutions intended to support equality and justice. And they have gotten away with encroaching on the Earth's natural assets; polluting, wasting, destroying, and spoiling.

A prerequisite for tackling the climate crisis is to take power from the plutocracy, the perpetrator. It can never be part of the solution. To achieve success in climate matters, fees, taxes, and fines must be imposed on companies that pollute the most and most severely encroach on common goods.

The danger is, given current climate policy, that capital and company owners will seek grants from the state treasury to finance obvious changes to their operations. The consequence will be that the public will bear both the damage from pollution and the cost of stopping it.

It is a matter of course and necessary to allocate public funds to develop new solutions and technologies to combat the climate crisis. But those funds should flow into societal projects and into public research institutions. Companies must take care of themselves. If they do not change, their operations will be banned. Their owners cannot drain their own company's funds to pay themselves dividends and then seek funds from public coffers to address a long-foreseeable problem.

Socialists therefore propose progressive carbon and pollution taxes to protect the environment and nature, and significant public investment to accelerate energy transition, strengthen domestic food production, land reclamation, and forestry.

III. The resources to the public: Socialists' offer

The socialists' fourth offer to voters for the autumn elections on resource utilization entails that control over public resources be placed under social management so that they can be used to build a good, safe, and beautiful society. The goal is to break down the power and control of the few. The utilization of resources is a long-term goal that should not only serve society today but also build up and strengthen society for future generations. Taxes, fees, and leases will be used to guide development, and a clear industrial policy will create a framework for companies.

One main theme of this policy is decentralization and increased power for communities. If they are to undertake these tasks, the revenue base and independence of municipalities must be strengthened. This is what the fourth chapter of the socialists' offer to voters on a socialist tax system is about: how to restore municipal revenue generation and thereby ensure increased decentralization and democracy in society.

Here you can read Part IV of the offer:Municipal revenues securedApproved at a joint meeting of the executive and policy boards of the Socialist Party of Iceland on the Saturday before Pentecost, May 22, 2021