This article was published in Morgunblaðið, Reykjavík,on the occasion of the 85 years anniversary of the independence of those two countries (01.12.2003).

At the end of the First World War – the war to end all wars – several new states emerged on the European scene. Among them were Finland and Iceland and Estonia, Latvia and Lithuania on the Baltic shore. Their high hopes for their newly won independence were to be severely tested during the course of the 20ieth century – the most violent century in the history of mankind, so far.
Iceland achieved its independence from Denmark by a treaty that entered into force December 1st, 1918. That day has since been celebrated in Iceland as the “Day of Sovereignty”, although the remaining ties to the Danish king were not severed until 1944, when Iceland was finally declared a republic. That was done at Thingvellir – where the oldest Parliament in the world was founded – in the year 930. Today Icelanders therefore celebrate the 85th anniversary of their national sovereignty in the modern world.


The 6th of December is the most solemnly celebrated day in the Finnish calender as Finland´s Independence Day. Both nations have a lot to celebrate on those historic dates. Finland and Iceland have since then been the outposts, one in the east, the other in the west, of the Nordic world. The Nordic countries are bound together by common history reaching back for at least two millennia. With home rule for Greenland in the west and the ever growing co-operation between the Nordic countries and their closest neighbors to the east, Estonia, Latvia and Lithuania, we are a part of the fastest growing region in a newly integrated Europe. This is a vast region by land and sea, larger in area than continental Western Europe. More importantly, this is a region endowed with great potential for the future. This is a region that can lead a troubled world – not by force – but by example.


Despite obvious differences, Finns and Icelanders have more in common than seems obvious at first glance. Both nations share long memories of colonial overrule. Both were lorded over by other Nordic rulers. In Iceland´s case by Norwegians and Danes; in Finland´s case by Sweden and later the Russian Zar. Both became independent states at the same time. Neither was given high hopes for the future at the birth of their independence. Both were late-comers to industrialization and modernization. Both have achieved, against all odds, a great success. Both are now prosperous Nordic Welfare States, that have proven their mettle as highly competitive players in the international market place, in their chosen fields of speciality. Both societies have deep roots in their national cultures and a stubborness to match to keep their distinctive culture creative and thriving.

But there are obvious differences as well. The natural environment has moulded the Icelanders since Viking times as a nation by the sea. “The sea is half our fatherland” is a saying fondly quoted by many Icelanders. The Finns have their feet firmly plnated in the soil. The forest is their natural home. Both nations have made the sustainable use of their natural resources their hallmark.

Geographic location has put our nations apart. In the post-war era Iceland has lived under the Pax-Americana whereas Finland survived in the Soviet shadow. We both speak languages which the Scandinavians do not understand. The language of the Vikings survives today in modern Icelandic, with all the ancient Nordic myths, mythologies, pristine poetry and narrative epics. Without it, modern Scandinavians would hardly know where they came from. The origin of the Finnish language is a mystery to most other than the experts. The colonial overlords of the past prevented it from becoming a literary language until relatively late. But it is easy for Icelanders and Finns to find common ground in the Kalevala and the Eddas, although we have to communicate in Finlands-svenska to understand each other.


In the last century it was the war-experience that made the Finns unique. The Finns were the only European nation, apart from the British, to successfully defend their independence against overwhelming odds. But they did so on their own. This was a monumental achievement. This experience has moulded the character of at least two generations of Finns. And it has earned them the respect of all those who know anything about the history of Europe. Even Stalin got the message and admitted it to Churchill at Yalta.
Although Icelanders lost more men at sea than most belligerents, relative to the population, during the battle of the Atlantic, the war made Icelanders rich just as the United States. Finns had to carry the heavy burden of war-reparations, but typically turned even this adversity to their advantage in the end.
It was the war-experience and the ensuing Cold War that set the Nordic countries apart in their endevour to maintain their independence and their security. Denmark, Norway and Iceland became founding members of Nato and Iceland concluded a defence agreement with the US. Sweden and Finland steered free of alliances. And the Finns kept the Soviet menace at bay through skillful – though often misunderstood- diplomacy. But they did so successfully and that is what matters. The post-war era is now over. And Finland has emerged out of the shadow stronger than ever.


In a troubled world where ignorance and poverty, hunger and decease, corrupted and repressive government, fueled by religious fanaticism and violence, are still the scourges of mankind, the simple question: “Why are some nations poor, while others are rich?” is more important than ever.
The answers supplied to this question by the experience of Finns and Icelanders are important, not only for themselves, but for the rest of the world. Those are two nations living under harsh climatic conditions, endowed with limited physical resources and located far away from major markets. None the less they have in a relatively short space of time (in the history of nations) transformed themselves from a long past of poverty and backwardness into highly developed, technologically advanced and prosperous societies, highly competitive in a globalized market, where no quarters are given.

How did they do it? The Lutheran work ethic? Cultural heritage that places the highest value on education? Access to markets? Yes, all of this but still more. Democratic and responsible government (also a function of education). The Nordic experience does not support the reigning “Washington Concensus” that government is a part of the problem but not a part of the solution. The key towards understanding the Nordic success story is the concept of equality of opportunity, guaranteed by free access to education, health-care and social insurance. The Nordic countries are economically success stories, not in spite of their egalitarian social institutions, but because of them. That is why they have so far withstood the test of the globalizing forces of unrestrained market capitalism. They could draw on their educational resources and the strength of their safety net in turbulent times and harness those resources to their adavantage in the emerging “knowledge society”, where it counted: In the international market place.

Finland came out of the turbulence of the “roaring nineties” of the last century with flying colours. So did Iceland – and for that matter all the Nordic countries. And the emerging Baltic countries are likely to do the same, although initially at a different level of developement, once they have been fully integrated into the European Welfare State.


The transformation of Finnish society, from an industrialized state into a leading high-tech player in international markets, is one of the major success stories of our time. Knowledgeable observers of Finland´s performance in Developement Economics and the dynamics of the globalized market place, have even coined a label for this phemonen: “the Finnish Model”.
What is it? It is a Nordic Welfare State. It is rooted in a generally accepted concensus of equal opportunity for all. It puts its money where the mouth is: In education, research and developement and social cohesion, guaranteed by access by all to quality health-care and obligatory social insurance. And it collects relatively high taxes to pay the bill. And the Nordics know the difference between market solutions, where they are applicable or superior, and democratic governance, when it is pragmatically necessary to uphold our values of a humane society: Government of the people, for the people, by the people. That is it.
And it has proven to be highly successful. Which is the most competitive economy in the world? Finland. Which society has the highest quality technical infrastructure? Finland again. Which one is the least corrupted? Finland. And although less well known, Iceland is not far behind.
Put to the test the Nordic countries have turned out to be surprisingly innovative, flexible and adaptable to the changing demands of the market, without forgetting the fact, that there is life beyond the market place. Namely a society composed of human beings, individuals networked into families, single mothers, children, the disabled and elderly, who are also stakeholders in our society, which is glued together by our common humanity and our feelings of solitarity.

The Vikings were once upon a time the scourge of their neighbours, spreading terror where ever they went. No more. The Nordic countries have neither the means nor the mandate to lead the world through military might. We should make virtue out of necessity by a more subtle appproach: To lead by an example. That is after all the only kind of leadership that is both worthy and acceptable.