Saturday, July 20, 2013

Smaller is Better: Iceland and the American Dream

           Iceland is a small and ancient nation, first colonized near the year 870 A.D. (1), that has preserved its culture and language for more than a millennium and, despite the recent turmoil, today enjoys one of the highest standards of living in the world.  The United States by contrast is a huge nation, the third largest population in the world (2).  Despite their differences, the U.S. and Iceland have many parallels in terms of why they were founded and the goals of the people who subsequently moved there: the Icelandic Dream of the Viking immigrant is similar to the American Dream of the pilgrim, the poor European, the Chinese laborer, and all the other immigrants to America.  Both nations were founded by independent minded people seeking new lands for farming, opportunities for upward social mobility, and an alternative to the oppressive monarchical societies of their countries of origin (3, 4 p. 89).  Both established representative government at times when such governments were rare in the world.  Iceland’s low population has been both an asset and a detriment to its ability to facilitate the Icelandic Dream.  The U.S. is in the fortunate position of having an overarching federal government with subordinate Iceland-sized municipal and state governments.  By taking into account the ways in which small government has been a boon for Iceland as well as the ways in which it has been a challenge, the U.S. can more optimally divide power among its different levels of government.

The Icelandic government is an extraordinary testament to the power and efficiency of local governments.  According to data from the Organization for Economic Co-operation and Development (OECD), Iceland spends less money per student on education than the U.S., yet Icelandic students outperformed US students on a standardized math and science test (5).  Iceland is also home to six universities, three of which are publicly funded, with a combined enrollment of 18,000 students (6).  In the matter of health care, a report by the World Health Organization (WHO) ranked the Icelandic health care system 15th in the world, above Canada (30th), the UK (18th) and the US (37th) (7).  In addition, Iceland has more airports per capita and more miles of paved roads per capita than the US (8, 9).  The Icelandic government, representing a mere 300,000 people, has shown itself more than capable of effectively and efficiently managing education, healthcare, and transportation.

            In the U.S., the federal government which represents more than 300 million people is deeply involved in all three of these areas and does a poorer job at managing them than the Icelandic government.  Recently, the idea of expanding national funding for health care has been a fiercely debated topic in America.  Iceland has shown that a system of universal healthcare can not only deliver excellent service, but can also be managed by local governments.  Nationally in the US, there is very little agreement about the proper way to handle health care, but the example of Iceland demonstrates that it need not be a national issue.  City and state governments are more than large enough to implement whatever kind of healthcare system their citizens think is most appropriate.  Similarly, the key to improving education in America may be to allow it to be managed by the smallest unit of government possible, rather than to put it under the oversight of huge organizations like the Department of Education.  Iceland’s successes and America’s failures show that in matters that impact people’s everyday lives, local management is far superior to national control.

            There are some matters, however, that the Icelandic government has proven itself less than capable of dealing with, and which the American federal government can handle much better than states and municipalities.  Chief among these are national defense and international relations.  Despite a long desire, Iceland was not able to gain independence from Denmark until Denmark was occupied by Germany in the Second World War (3).  During that same conflict, Britain was able to occupy Iceland with absolutely no resistance (4 p. 238).  In the 70’s, Iceland was unable to have its way in the Cod War against Britain except through help from the US and multinational treaties (3, 4 p. 246).  More recently, Iceland has had to rely on loans from the IMF to help it recover from its economic meltdown (10).  In major conflicts and crises, Iceland is at the mercy of its more powerful neighbors.  America is better able to deal with wars and crises than Iceland and has more leverage in international affairs simply because the US federal government represents more people, wealth, and guns than the Icelandic government.

            The purpose of popular government is to provide citizens with a stable environment in which they can pursue happiness and upward social mobility.  Iceland’s successes in the areas of education and healthcare demonstrate that matters that affect people’s everyday lives are best handled by governments that are accessible and responsive to people’s everyday concerns.  For Iceland, where 2% of the population can easily riot at the door of the parliament building, that means the national government, but for the U.S. where the national government is dark and distant, that means local and state governments.  A large national government is not without its uses: America’s military power protects Americans against the whims of foreign nations and provides leverage in international disputes.  If America can learn from Iceland and allow policies to be made by the lowest level of government possible, while still relegating certain powers to the federal government, it can enjoy Icelandic like efficiency, and simultaneously achieve stability against international influence that Icelanders can only dream of.

1.      Diamond. J. (2005). Collapse: how societies choose to fail or succeed. New York: Penguin Group. p.197-210

2.      CIA. (2010). Country comparison::population.  The world factbook.  Washington, DC: Central Intelligence Agency
Available from:

3.      Jónsson, Á. (2009). Why Iceland?. New York: McGraw Hill.

4.      Lacy, T.G. (1998). Ring of seasons. Ann Arbor: The University of Michigan Press.

5.      OECD. (2009). Education at a glance 2009 OECD indicators. OECD.
Available from:

6.      Iceland Ministry of Education, Science and Culture. Accessed Nov. 11 2010
Available from:

7.      WHO. (2000). Health systems: improving performance. Geneva: WHO.
Available from:

8.      CIA. (2010). Europe::Iceland.  The world factbook.  Washington, DC: Central Intelligence Agency
Available from:

9.      CIA. (2010). North America::United States.  The world factbook.  Washington, DC: Central Intelligence Agency
Available from:

10.  Flanagan, M. (2010). Recovery in sight for Iceland.  IMF
Available from:

No comments:

Post a Comment