A critique of neo-mercantilist analyses of Icelandic political economy and crisis

Iceland’s journey from rags to riches in the 20th century is related, in the dominant discourse, to its gaining independence in 1944. This discourse played a significant role in both the legitimation of the finance-dominated growth model in the 1990s and 2000s and in the latter’s defence as it came under scrutiny before its collapse in October 2008. It is therefore ironic – or perhaps, in some sense, logical – to find dominant analyses of the crisis arising from the neo-mercantilist tradition. Drawing on Marxist critiques of neo-mercantilism, we challenge these interventions and thus seek to redress the neglect of social struggle in the dominant discourse

A critical review of smaller state diplomacy

In The Peloponnesian War, Thucydides (1972: 402) highlights the effects of the general, overall weakness of smaller states vis-à-vis larger, more powerful ones in a key passage, where the Athenians remind the Melians that: “… since you know as well as we do that, as the world goes, right is only in question between equals in power. Meanwhile, the strong do what they can and the weak suffer what they must.” Concerns about the vulnerability of small, weak, isolated states have echoed throughout history: from Thucydides, through the review by Machiavelli (1985) of the risks of inviting great powers to intervene in domestic affairs, through 20th century US-led contemporary political science (Vital, 1971; Handel, 1990) and Commonwealth led scholarship (Commonwealth Secretariat, 1985). In the context of 20th century ‘Balkanization’, the small state could also prove unstable, even hostile and uncooperative, a situation tempting enough to invite the intrusion of more powerful neighbours: a combination, according to Brzezinski (1997: 123-124) of a power vacuum and a corollary power suction2: in the outcome, if the small state is ‘absorbed’, it would be its fault, and its destiny, in the grand scheme of things. In an excellent review of small states in the context of the global politics of development, Payne (2004: 623, 634) concludes that “vulnerabilities rather than opportunities are the most striking consequence of smallness”. It has been recently claimed that, since they cannot defend or represent themselves adequately, small states “lack real independence, which makes them suboptimal participants in the international system” (Hagalin, 2005: 1). There is however, a less notable and acknowledged but more extraordinary strand of argumentation that considers ‘the power of powerlessness’, and the ability of small states to exploit their smaller size in a variety of ways in order to achieve their intended, even if unlikely, policy outcomes. The pursuance of smaller state goals becomes paradoxically acceptable and achievable precisely because such smaller states do not have the power to leverage disputants or pursue their own agenda. A case in point concerns the smallest state of all, the Vatican, whose powers are both unique and ambiguous, but certainly not insignificant (The Economist, 2007). Smaller states have “punched above their weight” (e.g. Edis, 1991); and, intermittently, political scientists confront their “amazing intractability” (e.g. Suhrke, 1973: 508). Henry Kissinger (1982: 172) referred to this stance, with obvious contempt, as “the tyranny of the weak”3. This paper seeks a safe passage through these two, equally reductionist, propositions. It deliberately focuses first on a comparative case analysis of two, distinct ‘small state-big state’ contests drawn from the 1970s, seeking to infer and tease out the conditions that enable smaller ‘Lilliputian’ states (whether often or rarely) to beat their respective Goliaths. The discussion is then taken forward to examine whether similar tactics can work in relation to contemporary concerns with environmental vulnerability, with a focus on two other, small island states. Before that, the semiotics of ‘the small state’ need to be explored, since they are suggestive of the perceptions and expectations that are harboured by decision makers at home and abroad and which tend towards the self-fulfilling prophecy.peer-reviewe