Lost.(Iceland's economic situation)

On an afternoon in December that ended in a disturbance that fell short of a riot, a few hundred demonstrators met on a bleak grassy hill in the center of Reykjavik, in Iceland. A cold wind blew in from the sea. It had been two months since the onset of the kreppa, or crisis--the financial disaster in which Iceland's three main banks, having grown to many times the size of the national economy, all collapsed, along with the country's currency and its reputation for pluck. And the question asked by any visitor was also being asked by Icelanders themselves: When a wealthy, First World country--publicly funded medicine, private jets, evenings of chamber music--experiences a catastrophe that shocks its neighbors and brings the International Monetary Fund to its aid, what happens next? How does ruin turn out? Although there were obvious signs of financial turmoil, including newspaper classifieds where the price of a car was negative (sellers offered to pay thousands of dollars to have the vehicle, and its foreign-currency loan, taken off their hands), the bust was not fully formed. To see Iceland this winter was to be reminded of that queasy split second during which a spectacular injury decides on its accompanying level of pain.

But if Iceland's economic misery was largely still to come, its cultural and political trauma had been immediate. Icelanders had been disgraced by October's crash. "Maybe we can become a kind of museum of how not to do things," Jonina Benediktsdottir, a local businesswoman, said to me one day. Citizens were mad at their seemingly blithe political leaders and, to some degree, mad at their own boom-era nonchalance; and in a series of increasingly animated demonstrations--in frozen gray public spaces--Icelanders had been calling for political change and national rethinking. Iceland was having a revolutionary moment, if of a sometimes hesitant and self-mocking sort. "We've never done this before," Hildur Margretardottir, an artist and protester, said. She was carrying, at the end of a long pole, a papier-mache model of a bloody horse's head, which referred to a medieval Icelandic method of upsetting one's neighbors. "We're not the protesting kind. We'd rather stay at home and have things cozy. We don't even know how to dress in cold weather. We're really sofa people."

It was three in the afternoon, which is when an Icelandic winter's day, having just started, begins to wrap things up. Above us was a tall bronze statue--a rendering of the man said to be Iceland's first permanent settler (from Norway, in the ninth century). From the foot of the statue, we had a wide view of Reykjavik, including the 101 Hotel, whose bar, in the expansionist era just ended, was a meeting place for financiers and entrepreneurs--the men sometimes known as Iceland's utrasarvikingar, or modern-day Viking raiders. We could also see a construction site at the water's edge. There, a dark building, half done, was surrounded by motionless cranes and mud. This was a national cultural center--intended to be covered in adventurous glasswork designed by Olafur Eliasson, the Danish-Icelandic artist best known in America for the waterfalls he installed around Manhattan last summer. The crisis had brought a halt to construction. Now, in its unfinished, unclad form, the building had become a national cultural center of the most topical kind. I later spoke to Thorhallur Vilhjalmsson, the building's marketing manager--that is to say, a salaried optimist--and asked whether work would re-start anytime soon. He replied, "Should I say what I think will happen or what I hope will happen?"

Wind filled the black flags of a dozen or so young anarchists, many of whom had theatrically covered their faces with scarves. Some in this group did have experience in rebellion, having joined a continuing fight about the Icelandic government's investment in aluminum smelters--and the power plants required to run them--in rural areas. The other protesters were mostly older; they kept their hands in their coats, and frowned into the cold. Iceland's winter revolt had no unifying color or motif. The closest thing to that was the image, in various forms, of David Oddsson--a former long-serving Prime Minister, who, as chairman of the board of governors of the Central Bank, was the man blamed more than any other for Iceland's embarrassment. He has the baggy face and unruly hair of a French public intellectual, and his visage could be seen on a number of scornful placards, including one in which his head was superimposed on the body of a dwarf in diapers smoking a cigar.

From the foot of the statue, Edward Huijbens, a geographer who teaches at the University of Akureyri, in northern Iceland, spoke briefly. In his thirties, he was a neatly Bolshevik figure, wearing a black fur hat, a white shirt, and a dark tie. I had met Huijbens earlier in the day, when he had risked bringing discredit to his discipline by losing his way on a half-mile walk across western Reykjavik, and had talked about his experience in anti-globalization protests elsewhere in Europe, noting one obvious brake on unruly behavior in a country with a population of three hundred and twenty thousand: "If you're in a rampaging mob running through town, within five minutes you'll probably encounter your uncle." Now, on the hill, he made his short introduction--starting, "Brothers and sisters"--which was followed by words from an economist, a writer, and others. No one kept the microphone for long: we were on a treeless slope in temperatures far below freezing. Fervor was chased off by the wind. The event ended after thirty minutes, with a performance by a spirited Icelandic rapper, who rhymed utras--as in utrasarvikingar--with landrad, meaning "treason." He cried out, "Revolution!," to which I heard one answering cry.

Iceland's Central Bank was just a few steps away. A policewoman and a policeman stood guard. About forty protesters walked swiftly toward the bank and a chant began: "Out with David!" Someone threw an egg that hit a wall and splashed a drop or two onto the policewoman's shoulder. Two bananas landed at her feet. Iceland's protests had a consistently culinary theme: skyr, Iceland's yogurt-like specialty, was often involved; that day, milk and cheese had been thrown onto the lawn in front of the Prime Minister's office; and at an earlier protest I had seen a bag of potatoes spilled onto the sidewalk by the Parliament building--potatoes being the gift brought by Iceland's Santa Claus to children who are out of favor.

A skinny young man--equipped with a ski mask against police pepper spray, and shivering from cold or adrenaline--harangued the police while holding up a flyer for "Zeitgeist: Addendum," the sequel to a loopy but slick online documentary, made in America, that endorses familiar secret-government conspiracy theories (9/11 an inside job, and so on) while arranging them in a vaguely Marxist setting. The ski-mask protester, whose name was Gudjon Valgardsson, had started an Icelandic "Zeitgeist" group on Facebook which had three thousand members, who were perhaps responding in particular to the film's extravagant representation of the U.S. Federal Reserve, and of banking in general. A country that has been let down by its financial institutions might like to think of bankers, and central bankers, as co-conspirators in murder, rather than, say, as heedless incompetents who used to play high-school soccer in Reykjavik with one's father. A country overwhelmed by evil has more dignity than one tripped up by fools. When I spoke to Valgardsson, that evening, he was genial and smart, "Zeitgeist" notwithstanding. He said of the protests, "We are a force that cannot be stopped. We'll be as peaceful as we can ethically allow ourselves to be."