Saga - 2011, Page 103

Abstract
hre fna róbert sdótt i r
e I G H T e e N T H - C e N T U Ry S O C I e T y
economic Thought and Manufacturing in the Old Society in Iceland
In the mid-18th century, local officials introduced wool manufacturing in Iceland by
establishing the country’s first textile workshop. While production was based on
age-old european techniques, these were new to Iceland. A joint-stock company
called Hið íslenska hlutafélag (The Privileged Icelandic Company) was formed to promote
such workshops and other undertakings, and was partially financed by the Danish
king. At about the same time, the monopoly-trade companies were organising
putting-out production of yarn for export. Here the results of studies into these
developments are described, drawing together manufacturing policy, contemporary
economic discussions, and the organisation of wool manufacture in certain localities.
The current thinking about Iceland’s economy is reconsidered in light of develop-
ments in Denmark, noting the local impact of the new ideas and addressing issues
of change and stability, possibilities and restrictions in the Icelandic economy.
The article examines ideas and perspectives on manufacturing and economy,
both in Denmark and in Iceland. economic thought reflected both stability and
expansion: maintaining a balance in agriculture while strengthening artisan man-
ufacture and adapting it to rural society under a tightening of employment regu-
lations. Surveying exports of yarn, knitwear and woven goods reveals stark region-
al characteristics in wool manufacturing which grew even more distinct during
this century. Increasing specialisation became evident; for instance, labour was
divided by sex and also between separate farms, with an eye to the proportional
profits expected from the work. Finally, the article explains artisan manufacturing
as an embodiment of social structures. Since the goal of Danish authorities was bet-
ter to utilise resources in the kingdom as a whole, the economic boundaries around
Iceland were clarified. The founding of the manufacturing workshops in the mid-
dle of the century and of chartered towns in 1786 were steps in the same process.
The principal hypothesis here is that the 18th-century introduction of manu-
facturing can be interpreted as internal utilisation within the old order. The moral,
social and economic aspects of manufacturing were intertwined in the policy of
progress and in economic thought of that time. Innovations in Iceland’s economy
in the second half of the century were part of the expansion of manufacturing and
reflected the contemporary early modern society rather than linking ideological-
ly and economically to such 19th-century social changes as the introduction of
wage labour and the factory production of woollens. During the 18th century,
Iceland resembled other Danish dependencies and outlying provinces by joining
in general development throughout the kingdom. Contemporary policy dictated
that each place should not only contribute to the general good of the realm but
also strengthen its own internal economy.
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