Reykjavík Grapevine - 12.09.2014, Blaðsíða 10

10
The Reykjavík Grapevine
Issue 14 — 2014
Former Mayor of Reykjavík Jón
Gnarr is still trying to get his
name legally changed to the name
he has been known by for decades.
While the National Registry has re-
jected his request, he intends to ap-
peal the matter to the Ministry of
the Interior. It turns out that the law
on names might be being applied
unevenly, as some people are being
allowed to change their surnames
while others are not. If that turns
out to be the case, could it be the
beginning of the end for the Nam-
ing Committee? It’s difficult to say.
A story about some tourists who
were scolded by a park ranger
for daring their son to jump into
some freezing cold water, and then
subsequently laughing at the child,
prompted many of our readers to
react with surprise and horror. Some
well-meaning American readers
commented that this behaviour was
a shameful representation of Ameri-
cans, while other Americans were
quick to point out that not all Ameri-
cans can be blamed for the actions of
a few Americans. We at the Grape-
vine would like to assure our readers
that no one here thinks Americans
as a whole are heartless, thought-
less, cruel morons who consider hy-
pothermia a form of entertainment.
In spookier news, the former
Chinese Ambassador to Ice-
land Ma Jisheng has apparently dis-
appeared. That is, he left in January
with the expectation that he’d come
back in March, and never did. No one
seems to know where he is, or why
he’s not coming back, and it would be
irresponsible of us to speculate. Suf-
fice it to say that we sincerely hope
he just got a better job offer back in
the mainland, or has finally decided to
start working on that novel he’s been
planning, or is on some tropical island
sipping a cocktail out of a coconut.
Ma Jisheng, if you’re reading this,
drop us a line and let us know what
you’re up to so we can stop worrying.
Opinion | Drugs
Understandably, the institution’s
announcement generated a loud
“whaaat!?!?” across social media, as
people attempted to make sense of this
unexpected addition to the Icelandic
economy. It just made no sense! Why
would the statistics bureau be inter-
ested in boosting measured GDP by
adding criminal activities? What on
earth could be gained by such a move?
A global criminal
conspiracy?
Perhaps indicating the deep distrust
many Icelanders have come to feel to-
ward their government, some imme-
diately speculated that this decision
carried sinister motives. What if the
government—desperate to claim eco-
nomic growth—was in effect cooking
the books, adding some 8.4 billion ISK to
the GDP through creative accounting?
Iceland is not the first country to
include estimates of criminal activity
in GDP calculations. Several Europe-
an countries, including the UK, have
made the move already. The initial reac-
tion has been similar across the board,
as bloggers and commentators specu-
late that their governments are boosting
GDP through adding dubious estimates
of the “value added” from criminal ac-
tivities, and pointing out the state’s sup-
posed hypocrisy for taking credit for
acts they throw people in jail for.
As it turns out, these new methods
for calculating the GDP are not part of
a government conspiracy to deceive the
public as to the real size of the economy.
Rather, they are a part of an interna-
tional effort to reform and standardize
economic statistics and national ac-
counting. In September, all members of
the European Economic Area (the EU
plus Norway, Iceland and Liechtenstein)
are scheduled to have adopted the new
standard, which in turn is a European
version of a UN system of National Ac-
counts that was created in 2008. If this is
a government conspiracy, it involves the
entire EU as well as the UN (admittedly,
many conspiracy buffs would consider
this lending credit to their theories).
Moss vs. marijuana?
Ultimately, there is absolutely nothing
strange or unreasonable about esti-
mating crime’s contribution to a given
nation’s economy. Especially when we
consider the fact that the national econ-
omy is composed of all economic activ-
ity, whether it is reported to the author-
ities or not, and whether or not it is in
total compliance with the law. It makes
no particular sense to measure only the
activity on one side of the fence, and not
the other.
Moreover, the
difference between
illegal and legal
economic activities
is not all that great.
Consider this: why
should the national
production of moon-
shine (estimated
at 0.4 litres of pure
alcohol per person),
a tradable commod-
ity, not be counted
as part of the economy? Clearly, making
moonshine is economically productive
activity, not all that different from what
goes on at the industrial distilleries that
make Víking or Reyka Vodka.
Take domestic marijuana produc-
tion, which has in recent years grown
into a minor industry, yielding at least
one ton of marijuana per annum (that
goes for an estimated 3.5 billion ISK).
While illegal, the trade is in no funda-
mental way different from the produc-
tion and distribution of herbal remedies
made from Icelandic mosses and lichen.
Sure, we might disapprove of
moonshining and cannabis farming,
but we cannot deny the fact that they
are economic activities where value
is added, money changes hands and
consumers derive supposed util-
ity from the end product. Both also
require considerable capital invest-
ment in machinery and inventory.
Why should authorities not include
estimates of such ventures when es-
timating the total
sum of economic
activities on the is-
land?
Cannabis farm-
ing might well be
detrimental to our
society—our cur-
rent legislation cer-
tainly assumes this.
However, we can-
not simply ignore it
out of existence.
We cannot shape
reality to our ideas of what’s proper.
Attempts to describe and document
it will fall f lat if they do not take its
true scope into account.
Statistics Iceland (SI) raised a few eyebrows when the insti-
tution announced that it would as of September include esti-
mates of various illegal activities when calculating Iceland’s
GDP and balance of payments. Drug trafficking, smuggling
and prostitution are now included among the more “tradi-
tional” industries in the state’s official GPD calculations, a
move that SI claims will increase Iceland’s GDP by 0.47%.
Everything
Counts
Calculating crime’s contri-
bution to Iceland’s economy
“Take domestic
marijuana production,
which has in recent
years grown into a
minor industry, yield-
ing at least one ton of
marijuana per annum
(that goes for an esti-
mated 3.5 billion ISK).”
Words by Magnús Sveinn Helgason
Magnús Sveinn teaches economic history at
Bifröst University.
Illustration by Lóa Hjálmstýsdóttir
NEWS
IN
BRIEF