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Did Iceland's government assume responsibility for private debt (as happened in the U.S.?) I am not an expert on what happened there but I have read that the banks were nationalized.

If so, the moral thing for Iceland to do is repudiate that debt. Its banks were not government enterprises. The profits would not have been distributed so why should the citizens be burdened with their debts?

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Did Iceland's government assume responsibility for private debt (as happened in the U.S.?) I am not an expert on what happened there but I have read that the banks were nationalized.

If so, the moral thing for Iceland to do is repudiate that debt. Its banks were not government enterprises. The profits would not have been distributed so why should the citizens be burdened with their debts?

Iceland made a bank law in 1996 where the central bank provides last resort security for all approved private banks. Therefore, according to Iceland's own laws the nationalization was required when the banks went broke. It is precisely because of this law that the UK and Netherlands are pissed off at Iceland from not honoring that law and paying the debt.

I agree that that law was very bad, and most Icelandic voters had no idea what they signed on for, and were rightly pissed off when they discovered what the central banking system ACTUALLY meant. While Iceland has made a huge mistake, they are actually in a rather unique position at the moment to understand the problems of central banking and why all money should be PRIVATE so that ONLY the stock holders bear the consequences of a bankruptcy. Iceland is thus uniquely positioned to understand why it should legalize gold and other means of trade, because they have felt the effects of central banking so strongly. All they need is someone actually explaining it to them. Enter IceFree.

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The IceFree proposal contains something utterly unprecedented: the creation of a new, privileged kind of citizenship that is not even open to Icelanders, one not subject to Icelandic tax requirements, but otherwise entitled to the costly benefits of nordic socialism, save for the direct dole.

Correction: Charter Citizenship IS obviously available to all Icelanders. Worst case is that Icelanders can move abroad and become foreign citizens and then come back and become Charter Citizens. Rather than taking this ridiculous detour it is best just to give the same deal to Icelanders. This is thus NOT a privilege, it is a deal open to ALL. Second, Charter Citizens are NOT entitled to ANY welfare rights. That's the whole point. They give up those rights when they become Charter Citizens. The only cost that Iceland needs to bear is thus legal protection, which is very little. I do however agree that this proposal is utterly unprecedented, but that's not in itself a bad thing.

I mean that Icelanders will not be allowed to enjoy the tax-free life, though these foreigners will. That is a pretty hefty benefit, amounting to something on the order of 40% of your income.I don't see how it will.

1) ANY Icelander may choose to pay the one time fee and become a Charter Citizen (although most won't) 2) in exchange for those 40% the welfare citizen receives free government welfare (health care, pensions etc.), which the Charter Citizen does not, so the benefit is much less.

First, I don't understand what "faith in Iceland" refers to. It can't mean "faith that the Icelandic people have the 'right stuff' and can get themselves out of this mess", because that's exactly what this proposal says they can't do on their own: they need outsider intervention to survive.

You must distinguish between the runner and the weight burden he is carrying. Usein Bolt is the world's best 100 meter runner ever. Would you have faith in him winning though if he had to carry an extra 100 pounds on his shoulders? Restoring faith in Bolt means removing that extra load. THEN you can believe he can be a fast runner again. Same with Iceland. The debt load is so heavy that it completely crushes Iceland's economy.

Second, it 'strengthens the national currency' only by delaying the inevitable reckoning with reality, caused in part by government action such as suspending foreign exchange and freezing bank accounts (real confidence-eroders) and in part by the government bailing out the banks.

No, vanishing debt will strengthen the Krona regardless of any other reality because it allows the Icelandic economy to perform better. There is of course the possibility that Iceland won't learn from its mistake and repeat them and THEN they are in trouble, but otherwise they will recover and their currency will strengthen. Iceland has not done any more government intervention than all the other countries out there.

Confidence ought to be earned -- what is Iceland doing to inspire confidence?

Confidence in Iceland as a people must of course be earned, but that has nothing to do with the reduced confidence due to the burdening debt.

I can't imagine how this helps credit card debt, mortgages and auto loans for example. Nor do I see how this will result in any tax cuts.

It happens in the following way: once the debt burden disappears the Krona rebounds automatically and as a consequence the PRIVATE debt nominated in FOREIGN currencies will be relieved because the foreign currencies weaken relative to the Krona.

At best it will ameliorate tax increases that would otherwise be necessary to keep the central government solvent.

Isn't that the same as a tax decrease then? It only depends on when in time you look at it.

Regarding the voting question, let us suppose that the tax protections become constitutionally guaranteed (necessary, since they are currently constitutionally prohibited). As a prospective customer for this proposal, you need to persuade me that it's easy enough to change the constitution to do this.

Well, technically you don't have to put any money on the table before the constitution is changed, and Charter Citizenship introduced. I don't see why you have to be convinced beforehand. Seeing is believing.

But you also have to persuade me that it's not equally easy to undo this. How? Faith, I guess, and yet the government actually did do the unthinkable, voting to join the EU.

I know that the Norwegian constitution requires a 2/3 majority to change, and I think it is the same in Iceland. Similarly it requires a 2/3 majority to undo it, and this means that the sentiment of the Icelandic people needs to change from 2/3 for to 2/3 against. That's a very major change, and it is certainly a lot harder than simple majority. I think this would be sufficient to convince investors it is safe. Also, it is even possible to put into the constitution that Charter Citizenship can never be revoked (or alternatively requries 9/10 majority)

In contrast to actual elections with hard-coded dichotomies, the Freeiceland proposal is unacceptable to an Objectivist in light of the alternative of real capitalism.

This third option is not realistic at present. In fact normally the opportunity for increasing liberty is rare and one should take it when it presents itself. In Iceland one has a unique and possibly once-in-a-lifetime window of opportunity of creating the freest country on earth with something which is very close to laissez-faire, far freer than, say, Hong Kong. One has to be mad as a brush not to try to utilize this opportunity. It is never a moral compromise to INCREASE liberty. That's what happening here. In all scenarios you have to pay taxes, but in this scenario you may possible never pay more than $25,000 in taxes ever again. That's an unprecedented tax relief for most people. To call this a moral compromise is not just wrong, it's insane. Exactly what are you compromising? With IceFree you end up paying less taxes than at present anywhere on earth. How is that a compromise? And who would be sufficiently reality dysfunctional to prefer the high tax alternative because reducing the tax burden to anything above zero is immoral!?

To compromise your values means giving up some of your values and getting nothing in return. With IceFree there is only GAIN, and consequently it is obviously in your rational self-interest.

But let's focus on whether this is a plausible proposal. Maybe as you say 10,000 people will decide to take the offer and move to Iceland. That yields a quarter of a billion dollars, which is a tiny fraction of Iceland's external debt.

This is absolutely true, but you forget that it is not primarily people who will move to Iceland, but corporations. (Corporations need employees so there will be people moving there too) You do not need many companies that pay 5% of their annual revenue as a one time fee to pay down all of Iceland's debt.

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This is absolutely true, but you forget that it is not primarily people who will move to Iceland, but corporations. (Corporations need employees so there will be people moving there too) You do not need many companies that pay 5% of their annual revenue as a one time fee to pay down all of Iceland's debt.

If you want to create a tax haven, you should lower your rates. Being overly greedy is a bad idea. No one will give you 5% of their annual revenue, when there are several tax havens in the middle of Europe, with much better offers:

1. In Andorra, the annual cost of registering a business is 670 euros.

2. The Principality of Monaco has zero income tax and zero direct line inheritance tax, for all non-French residents. It also has a long tradition of property rights and the might of the French military safeguarding those rights from any foreign aggression.

3. In Lichtenstein, a foreign company pays 0.1% net worth tax, while a foreign trust pays 0.075% of the same. There is of course no income tax for either.

And if you want to create a free country, you should start advocating for sound principles, and forget about using politics to extort money out of people altogether.

Edited by Jake_Ellison
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Correction: Charter Citizenship IS obviously available to all Icelanders. Worst case is that Icelanders can move abroad and become foreign citizens and then come back and become Charter Citizens.
That is not how the proposal is described on their page. Obvious if they change the actual plan, that would be an improvement. And I'm sure you well know that you cannot simply magically become a foreign citizen elsewhere.
Second, Charter Citizens are NOT entitled to ANY welfare rights. That's the whole point. They give up those rights when they become Charter Citizens.
There are numerous socialist non-welfare "rights", e.g. the right to an education, health, barnehage (whatever they call it), not to mention general government subsidies of life (power, water, heat, trash, roads). If an alternative proposal if floated that also eliminates these socialist entitlements, then that would change the argument.
1) ANY Icelander may choose to pay the one time fee and become a Charter Citizen (although most won't)
Okay, show me where it says that in the proposal.
I know that the Norwegian constitution requires a 2/3 majority to change, and I think it is the same in Iceland.
Article 79 states:

Proposals to amend or supplement this Constitution may be introduced at regular as well as extraordinary sessions of Alþingi. If the proposal is adopted, Alþingi shall immediately be dissolved and a general election held. If Alþingi then passes the resolution unchanged, it shall be confirmed by the President of the Republic and come into force as constitutional law.

So the procedures are a bit different. This could of course be fixed by making it harder to amend the constitution.

This third option is not realistic at present.
The FreeIceland proposal is also not realistic at present, so we're dealing in competing fantasies. From an Objectivist POV, my fantasy is much better. As a corporate tax haven, the Iceland proposal is inferior to other corporate tax havens. As a scheme for shielding individual investment income, it isn't one since you're still subject to your national income tax (e.g. US income tax). If I move to Iceland and draw off my US investments, I still have to pay US income tax (and pay the cost of living in Iceland).
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I think you two have gotten into this debate needlessly, Jake I think you assume that Onar is asking us to "buy our freedom" which you see as immoral, but in fact we are all free naturally, by right. If I'm wrong about your assumption then I apologize and please correct me, but I think the issue can be solved by simply pointing out that we are not buying our freedom; we are buying a right to live and work in their country. A government, if it exists properly, has every right to control immigration. Just as a man has a right to dictate who enters his home and under what conditions he enters, so a government has the right to dictate who is allowed to enter its borders and under what conditions. therefore it is not immoral for Iceland to say "anyone who lives here has perfect economic freedom and doesnt pay taxes, if you want to live here, pay us X amount of money.

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A government, if it exists properly, has every right to control immigration. Just as a man has a right to dictate who enters his home and under what conditions he enters, so a government has the right to dictate who is allowed to enter its borders and under what conditions.

Define "proper government". You clearly don't mean what Ayn Rand described as "a government only there to protect individual rights". If a government claims to own a country the way I own my home, then I'm not interested in living in his home, and buying their permission to do so.

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therefore it is not immoral for Iceland to say "anyone who lives here has perfect economic freedom and doesnt pay taxes, if you want to live here, pay us X amount of money.

I have to side with Jake on this one. A government does not own the country. It is a protection agency, not an owner. It is most certainly immoral for the government to demand money for freedom, but it is LESS immoral to demand a small amount of money ONE TIME than to have large taxes going on forever. The question is whether it is a moral compromise (and hence immoral) to propose a concrete plan for increasing liberty in Iceland. It should be obvious that it is not. From an egoistic perspective a moral compromise means to be altruistic, i.e. to give up values and get less in return. Thus, using one's free speech to propose a scheme which would REDUCE liberty is a moral compromise. Proposing a concrete and realistic scheme to INCREASE liberty is selfish and hence moral, unless there exists a possibility of increasing liberty even more.

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That is not how the proposal is described on their page.

It follows logically that if a foreigner can pay for a Charter Citizenship then obviously an Icelander can too. It's just equality before the law. The point is that Charter Citizenship is not FORCED upon Icelanders. They can choose to be part of the welfare state.

There are numerous socialist non-welfare "rights", e.g. the right to an education, health, barnehage (whatever they call it), not to mention general government subsidies of life (power, water, heat, trash, roads). If an alternative proposal if floated that also eliminates these socialist entitlements, then that would change the argument.

All of these things you mentioned are part of what in Europe is called welfare. ALL of them will be eliminated in the Charter Citizenship. No entitlements to education, health, kindergarten etc. including NEW roads. If they want to develop land then they would have to pay for everything themselves including roads. Existin6g roads (there are very few of them in Iceland, mostly in the city of Reykjavik) would be available to Charter Citizens for general use, just like it is for tourists.

So the procedures are a bit different. This could of course be fixed by making it harder to amend the constitution.

I know that the constitution of Honduras contains a mixture of several articles with different protection. One of the articles explicitly states that it can NEVER be changed. (It was invoked during the constitutional crisis in Honduras last year) This could be a working model also for Iceland. That is, to make only certain articles in the constitution impossible to revoke, or at least requiring 9/10 majority.

As a corporate tax haven, the Iceland proposal is inferior to other corporate tax havens.

It is quite possible that the one time fee needs to be lowered in order to make the deal attractive for corporations but that is a detail that can easily be changed. That's just supply and demand. Andorra has no corporate tax, but then again it also has no central Register of Corporations and thereby making it unsuitable for headquarter transfer.

As a scheme for shielding individual investment income, it isn't one since you're still subject to your national income tax (e.g. US income tax). If I move to Iceland and draw off my US investments, I still have to pay US income tax (and pay the cost of living in Iceland).

That is NOT true. If you have US stocks you do NOT pay income tax or capital gains tax for non-residents.

http://www.investopedia.com/ask/answers/06...residenttax.asp

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It is most certainly immoral for the government to demand money for freedom, but it is LESS immoral to

Would you deny that Ayn Rand thought aiming for the "less immoral" is the most immoral thing in the world?

Just to clarify, given no choice, accepting the less immoral over the greater evil is fine, but advocating for the less immoral is not, since the choice is always there to advocate for the moral.

Edited by Jake_Ellison
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If you have US stocks you do NOT pay income tax or capital gains tax for non-residents.
You are assuming that I would renounce my US citizenship to live in a foreign tax haven where I do not have the right to vote and determine my political future. That's not a reasonable assumption.

Really, the main flaw with the proposal is the idea that as a fund-raising scheme it ought to be aimed at individuals with an urge to move to Iceland. The cost is simply not worth it. But if you target corporations, many of the objections go away: for example, corporations don't vote, anyway. The objections based on the half-assedness of the improvements to liberty are still there, but then they might be countered by the prospective reality of the proposal (where one can point to other European corporate tax havens and show that it does work). No constitutional amendments are required, because corporations are not citizens.

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Would you deny that Ayn Rand thought aiming for the "less immoral" is the most immoral thing in the world?

She certainly viewed this as very immoral.

Just to clarify, given no choice, accepting the less immoral over the greater evil is fine, but advocating for the less immoral is not, since the choice is always there to advocate for the moral.

I think you confuse a proposal with advocation. It is perfectly possible for someone to *advocate* laissez-faire while at the same time *proposing* an concrete incremental step towards full fledged freedom, realizing that LF does not come in one huge bulk, but comes stepwise and piecewise.

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On further thought, I don't think this proposal is less immoral than whatever is being cooked up in the hallways of Icelandic power as the magical solution. I think it's a step in the wrong direction, because it further rationalizes away the reality of who made the bad decisions, and who deserves to pay for them.

Let's forget what this is being called by its proponents, and what is being promised in the future, and let's look only at what this proposal is.

First, what it aims to do: It aims to save the Icelanders from themselves.

How it plans to do it: By giving them money they haven't earned, to pay the debts they willingly assumed.

Where that money comes from: It is taken from foreign producers, economic refugees who, presumably, wish to escape the even worse conditions of other mooching nations.

Any addiction specialist will tell you, the first step for a recovering addict is to fully admit their addiction, and immediately, not in small increments, give up their drug. That's because small evils aren't helpful, and will not move you forward, to a better place, they will move you further into the abyss, only at a slower pace than bigger evils. In Atlas Shrugged, John Galt decided to quit trying to slow down the fall, and speed it up instead, allowing the addict to hit bottom and begin its recovery in his lifetime.

If you, an outsider, for some reason wish to take a country that you consider in even bigger trouble than most others including your own, and save it, you should go about it by making them understand what their problem is and getting them to embrace the moral principles of Objectivism, as the solution. (yes, moral principles, this goes far beyond Rand' ideal political system, the way to reach that point is by applying her Ethics)

Offering Icelanders some magical fix, by claiming the unearned from people who have nothing to do with the cause of their troubles, instead, is the action of a drug dealer, tempting its victim to another hit. And it will end the same way, since reality is the ultimate barometer of justice, and it does not permit anyone to have something for nothing. Icelanders ate their cake, now it's time for them to sit their asses down and bake another one. They shouldn't expect their neighbor to come over and bake them one on the promise that this is the only time he will be asked to perform the chore, and from now on he will get payed a fair price for any subsequent cakes.

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On further thought, I don't think this proposal is less immoral than whatever is being cooked up in the hallways of Icelandic power as the magical solution. I think it's a step in the wrong direction, because it further rationalizes away the reality of who made the bad decisions, and who deserves to pay for them.

I don't think that is the case at all. Most people who make mistakes are NOT addicts. For instance, there are plenty of people in Norway who go out skiing in the mountain with too little clothes, too little food and too little equipment and are thoroughly surprised when bad weather sets in. These people are naive or inexperienced, not addicts of irrationality. You cannot judge solely from someone's mistakes whether it is a genuine lack of knowledge or irrationality. Would you say that the right thing to do to people who get stuck on the mountain is that they deserve to suffer the consequences of their actions and freeze to death, otherwise they will just learn that it is ok to repeat the problem? I certainly hope not.

In order to judge Icelanders you need to look at the specific context. Ever since the early 1990s Iceland has been on a liberalization streak. Publicly owned companies were privatized, industries were deregulated and taxes were cut. As a consequence of these actions Iceland became one of the freest countries in Europe in a short time. Furthermore, if you ask Icelanders if they knew that private banks were able to operate secured by tax payer collateral then most of them will profess their ignorance, and I believe them. Central banking is very unsexy and very complex. No wonder most of them never heard about it. I would deem the Icelandic case as one mostly of ignorance, and hence not deserving moral condemnation.

I think that Icelanders already have suffered a lot of bad consequences from the financial crisis and that if someone at this point came along and saved them they would very grateful, much like someone lost on the mountain would be grateful for being saved. People who get lost on the mountain due to inexperience learns from their near encounter with death, and I believe Icelanders will learn from their encounter with near national bankruptcy if they are saved at this point by private citizens and corporations all over the world.

If you, an outsider, for some reason wish to take a country that you consider in even bigger trouble than most others including your own, and save it, you should go about it by making them understand what their problem is and getting them to embrace the moral principles of Objectivism, as the solution. (yes, moral principles, this goes far beyond Rand' ideal political system, the way to reach that point is by applying her Ethics)

a) I am an egoist, not an altruist. I have no intention of devoting my life to saving Iceland just for the sake of saving Iceland. The reason I am focusing on Iceland right now is because it represent a once-in-a-lifetime window of opportunity to create a beacon of liberty in the Western world. b ) I alone as an individual have virtually zero chance of influencing Iceland philosophically. I will not get airtime in Iceland and newspapers won't write about me as an individual. I as a representative of the international coallition Free Iceland on the other hand CAN get a lot of attention, especially if we succeed in bringing about IceFree and save Iceland. Then there will be much media attention in Iceland and much gratitude and goodwill towards the people and ideas behind the initiative. THEN I will be able to sit on national television and explain in detail to a captivated audience why the central banking system caused this debt crisis, why liberty is the moral and practical alternative etc.

Now in which of these two scenarios do you think that I will be able to influence Iceland the most philosophically? Why should I bang my head against the wall in socialist Norway when there is a once-in-a-lifetime window of opportunity to make real changes in my neighbor country Iceland?

Edited by Onar Åm
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I would deem the Icelandic case as one mostly of ignorance, and hence not deserving moral condemnation.

I don't agree, but whatever. I have no idea what morality you're using, so there's no point in arguing about it. However, accepting your proposal, to fleece some foreigners to fix their "mistakes", would in itself clearly be a conscious, immoral choice.

As an aside, I'm sure the government of Iceland is just like mine, and claims to own half the damn country. Why don't they just suggest selling some land in exchange for that money, to make it a transaction instead of a robbery? That way, people would actually buy something in a country that's inching its way to laissez-faire, instead of being expected to be naive enough to agree to an immoral act in exchange for the promise of future morality.

If your hypothesis is correct, and being in the new Iceland will have such a great value, being a landowner there should be of an even bigger value.

Edited by Jake_Ellison
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I have no idea what morality you're using, so there's no point in arguing about it.

I stand for rational self-interest.

However, accepting your proposal, to fleece some foreigners to fix their "mistakes", would in itself clearly be a conscious, immoral choice.

Why? These foreigners are not moving to Iceland to be nice, they do it because they profit from it. It's a way of permanently reducing their taxes.

As an aside, I'm sure the government of Iceland is just like mine, and claims to own half the damn country. Why don't they just suggest selling some land in exchange for that money, to make it a transaction instead of a robbery?

Very likely not going to happen, but duly noted.

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Why? These foreigners are not moving to Iceland to be nice, they do it because they profit from it. It's a way of permanently reducing their taxes.

We're going in circles. You already admitted it's the "less immoral" solution, once. I'm not going to get into explaining why taking the unearned, especially by force, is immoral.

These foreigners are not moving to Iceland to be nice, they do it because they profit from it.

That's an argument used by slave masters, the Mafia, and modern governments alike. Objectivism does not define rational selfishness that way, it is entirely opposed to the use of force irrespective of who profits from it.

Edited by Jake_Ellison
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We're going in circles. You already admitted it's the "less immoral" solution, once. I'm not going to get into explaining why taking the unearned, especially by force, is immoral.

Sorry, missed the part where you referred to the Icelanders. My point was that it is NOT immoral to make a proposition to increase liberty in a country, and it is NOT immoral for the foreigners to take this deal.

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