Abstract

"Economists and the Origins of the Icelandic Economy, 1949-1963"

Sveinn Johannesson, University of Iceland (smj@hi.is)

Prior to 1940, the word “economy” (“hagkerfi” or “efnahagslíf”) was hardly ever used in Iceland—and, indeed, rarely Europe in general. Nor were had the use of concepts such as “economic growth” (“hagvöxtur”), GDP (“þjóðarframleiðsla”), or even “inflation” (“verðbólga”) taken hold. This paper considers the first generation of academically-trained economists in Iceland—trained in the United States, Britain and Sweden—and their role—working within the Icelandic government, the OEEC (later, OECD) and the World Bank—in measuring, planning and managing what by the 1950s was being referred to for the first time as “the Icelandic economy.” As the Icelandic government sought to draw up the required plans to justify Marshall Plan grants, the experts in charge of compiling them found that most of the data was not available. This lack of a comprehensive and accurate picture of the nation’s economic life was widely perceived as the most pressing issue facing economic policy. There were, for example, no national income accounts available for Iceland, or, indeed, many other participatory countries. The paper traces subsequent attempts to create, in Iceland, the entire repertoire of modern economic statistics as they became standardized by the OEEC and the United Nations after 1950. This paper contributes to research on the performativity of economics and the political power of economic expertise. Drawing on historical approaches to the emergence of “the economy” within history and science and technology studies, it explores the place of Iceland in this global story, highlighting how government policies shifted remarkably quickly in response to the emergence of GDP and economic growth from supporting or promoting individual industries or even companies to targeting economic aggregates with the support of macroeconomic models.