Author’s note: I first heard of Birgitta in 2010. I was amazed by her double stance as a WikiLeaks’ volunteer and parliamentarian in Iceland — as a political hacker. Her country had been blown away by the subprime crisis, another thread in my work. I started following her story and became interested in her ideas and initiatives for freedom of expression and democratic revival. I also stayed up to date on Iceland, the jailing of its bankers, the return to GDP growth, the crowdsourcing of its constitution. After a short burst of activity, Iceland fell back to traditional politics and crony capitalism. Birgitta left WikiLeaks, imported the Pirate Party to Iceland, and remained alive and strong all the way. I wanted to see for myself—to understand her appetite for life, her inner strengths, and the spirit of that sublime country. So I went to Iceland last summer, where Birgitta tried to explain it all to me: the crisis, the hacking, the pirates, true wealth, and the soul of a country so tiny that it can experiment with almost anything it wants. This story is based primarily on those conversations, as well as interviews with other key people involved and published reports. — Flore Vasseur

On the morning of October 7, 2008, Icelanders wake up uncertain of their fate. Will supermarkets be restocked and open today? Since the beginning of the year, the Icelandic crown has been devalued by half. Prices have been skyrocketing, like the debt taken on during the euphoria of the boom. Consumer spending is in a slump, and local businesses are closing. With the country’s financial system about to crash, the government has been forced to choose who was too big to fail: the banking system or the people?

The answer came on live TV the evening before, when a tired-looking Geir Haarde, prime minister of Iceland, enacted an emergency law placing the banking system under state control, effective immediately, and protecting Icelanders’ accounts. “God save Iceland,” he concluded, short of any convincing argument. For the first time in 25 years, a country in the West had requested the assistance of the IMF, in the form of a $10 billion emergency loan. Adrift after the golden years of the miracle boom, Icelanders found themselves back at square one: cut off from the world.

Four days later, a small group gathers on the Austurvöllur Square in front of the Parliament building. Almost 70 years old, the songwriter and actor Hordar Torfasson wants to understand what just happened to his country. Loudspeaker in hand, he stands alone and calls for the representatives to step down. A police officer asks him to be quiet so as not to disturb those in power working inside. Hordar leaves smiling. He comes back a few days later with pots, wooden spoons, and some company: Birgitta Jónsdóttir. The lady is eager to make some proper noise.

Poet, editor, activist, and anarchist, Birgitta Jónsdóttir is “used to be[ing] the ugly duckling.” Tall, dark-haired, with an insatiable appetite for new ideas, she does not belong to any circle. She has no agenda, just a solid track record of speaking loud and true. And she is one of the few on the island with experience mobilizing political protest.

Like a wounded animal

“I am a punk: I am used to people disapproving of me,” Birgitta begins. Her smoker’s voice, made rougher with past shouting, still lilts and teases like a child’s. Feline and physical, she is a wounded animal.

Icelanders hide behind masks; Birgitta’s face tells all her battles. Feminine, she carefully picks her accessories, hairstyle, earrings. Nothing is done randomly; the body is a message. Her figure is stooped by life, her gait altered by back problems. Her hands are manicured, her mineral-blue eyes are alight, her facial features delicate. For years, she has been shouting into the void. To make her voice heard, she has used poems, the internet, painting, performance, activism. As an anarchist, Birgitta resents the Icelandic boom, not only for its consequences but in and of itself: “[I]t was scary. Everything was so sanitized. I really thought we were becoming Luxembourg.”

For 12 centuries, Iceland lived as a castaway. Attention came only at peak oil, around 1997, from a world desperate for energy resources. The next chapter would play out as a financial disaster case study, partly described in John Perkins’s 2004 autobiographical bestseller, Confessions of an Economic Hit Man.

In the book’s plot, a consulting firm arrives with good news: Iceland is sitting on a little-noticed gold mine: geothermal energy. Easily accessible, unlimited, clean, and virtually free, the heat of the land is a gift from heaven. Until then, Icelanders had been using it to heat homes and thermal pools. Now they could become a major energy producer, one of the kings of the universe.

Overnight, this report becomes the government’s “master plan.” Too happy to finally be taken seriously, it all but gives away the country’s resources. The gift of nature becomes the fuel of the “Icelandic miracle.” The aluminum industry comes to the fore, dynamites mountains, damages rivers, and floods valleys for hydropower. The battle of nature against the economy plays out of sight, in the Icelandic steppes — just as Halldór Laxness, 1955 winner of the Nobel Prize for Literature, had predicted, and as Andri Magnason, one of Iceland’s best-known contemporary authors, would depict in his book and film Dreamland.

In the end, the government exceeded the consultants’ recommendations. To ease development, officials privatized the banks in 2001 and appointed their friends, all new in finance, to oversee them. Good fellows of the markets, convinced they were making history, they opened the door to its most creative products. Capital flowed. Sovereign wealth funds bought 4.2 billion euros in ISK-denominated debt, the so-called glacier bonds that would later come back to haunt the country during its insolvency. Everyone believed they’d get rich in an instant. Enjoying credit lines backed by almost nothing, they went on a buying and building spree and piled up debt (up to 10 times the GDP). Construction giants and large retail chains arrived. The international airport, a new road network, the magnificent Harpa (a 164 million–euro concert hall), luxury SUVs, and designer houses came out of the earth. The media, also privatized, boasted staggering expansion (between 2001 and 2008, the Icelandic economy grew by 230 percent). Flattering the national ego, it celebrated “Viking business” quick wins, all financed by debt, such as landmark real estate deals in Copenhagen, the former colonial power. They ignored the warnings, the loss of triple-A debt ratings, the price to be paid for this growth boosted by debt: preemption of the future.

While politicians and citizens were gorging themselves on toxic loans and the media looked the other way, Birgitta joined a small activist group that was trying to block the construction of aluminum smelters.

“At that time, nobody wanted to question the basis of the miracle boom. I chose to be broke. And luckily, I have always been poor,” she said. Birgitta didn’t stop then. Nor did she stop when, in the wake of the 2008 Olympic Games, she picketed for a free Tibet every morning for months in front of the Chinese embassy in Reykjavik.

Now, overnight, the country’s collapse creates an unexpected opening: “Society erases your personal behavior,” Birgitta says. “Crisis usually gives us something, a peculiar energy. You get the chance to change. Or not.”

It’s a catastrophe, and Birgitta rejoices. It’s chaos, and Birgitta wants to organize it.

After the shock of October 6, 2008, people begin to speak out again. Something shifts in the county; there is a spark. Icelanders meet in sewing clubs, concerts, thermal baths. For 12 centuries, they have come through all sorts of calamity, starvation, the plague, and cold. Survival is in their genes and optimism in their bones. With 320,000 souls spread over a territory the size of Kentucky, Icelanders are the happiest nation in the world. They’re like a big family.

They think big, love to work, struggle with an ancestral inferiority complex. Their pride wounded by the subprime crisis, Icelanders aim to reclaim their history and identity. In this tiny and almost untouched country, they begin to agitate for a sweeping democratic revival.

More and more people meet outside Parliament with pots and pans. Every Saturday, Birgitta drags her tall frame out to join them. Barely making a living creating websites, she has to care for her younger son, who shows signs of Asperger syndrome. Yet she embraces the rebellion, speaks out, organizes the mobilization. This self-raised punk, entering her forties, has come a long way. All those years, Birgitta had been physically committing to her causes. At last, under extreme circumstances, she is beginning to get some credit.

From October to March, protesters occupy the tiny square in front of Parliament for the second time in history. In 1949, the population rose up against the decision to join NATO and allow a U.S. Navy base in Keflavik. The riots ended in tear gas. Then came the GIs, with their products, brands, and lifestyle, importing the foundations of a liberal economy and nurturing the island’s first boom.

As the temperature drops, the protestors sing, dance, and shout to stay warm. They end up winning—without violence: The government, members of Parliament, and the head of the central bank resign en masse. Geir Haarde exits the prime minister’s house to raw eggs being thrown in his face. The president calls for early elections in two months.

All sorts of new political organizations blossom while the usual suspects hide. Birgitta founds the Civic Movement, an ephemeral party with a budget of 1,500 euros. “We hated each other, but the campaign was so short we didn’t have time to get into really big fights,” she recalls. “My son needed me badly. He was bullied at school because of his condition, which of course got worse. I didn’t want a seat, and we were very low in the polls, but there were not enough women on the list, so I added my name.”

Birgitta Jonsdottir outside her home in Iceland. Giles Clarke/Getty Images

The place to be

The Civic Movement wins 7.2 percent of the vote. “[I]t felt like belonging to a sports team that won the game,” Birgitta says. Parliament opens up to amateurs and to Birgitta. Out of nowhere, with no political experience, she jumps in, ready to use any weapon that comes to hand: “My intuition is my compass. I know I could be quite scary. I have a lot of energy but not a lot of time.”

The country aims to learn from its mistakes. Eva Joly, the Norwegian-born French magistrate, joins the Special Investigation Committee (SIC) on economic crimes. The SIC highlights political mistakes and blames media blindness. Run on private capital, the press became the “cheerleaders of the banks,” ignoring negative comments, concludes the committee.

The SIC also blames the population’s general immaturity: “Icelanders should develop realistic, responsible, and moderate identities and engage in critical thinking and media literacy in order to resist the hollow propaganda of marketing and branding.”

Three bankers are each sentenced to 5.5 years of prison for market manipulation and insider trading (to date, 26 bankers have been prosecuted and convicted for financial crimes, with an average sentence of three years behind bars). Geir Haarde, the former prime minister, is found guilty of negligence but manages to avoid a prison sentence. Yet for the first time, politicians’ responsibility for the financial crisis has been put on trial.

New faces rise. The anarchist comedian Jon Gnarr runs for mayor of Reykjavik. Playing on the absurdity of political campaigns, he mocks his traditional opponents by promising a Disneyland in the capital. His candidacy is a joke; the voters put him in office. Iceland becomes the place to be. Even Lady Gaga visits to take a selfie.

Yet the situation remains difficult. Icesave, an online bank that drained 2.7 billion euros from English savings and was once the very symbol of the miracle boom, has drowned with Landsbanski, its parent company. Great Britain is pressing a broke Iceland to repay. The Icelandic president calls for a referendum. By popular demand, the people vote no.

Slapped in the face by citizen power, British Prime Minister Gordon Brown puts Iceland on the list of terrorist states and freezes Icelandic assets in the UK. While the tiny country defies the markets, it ventures into an incredible political experiment: crowdsourcing its new constitution.

A group of 950 randomly selected citizens define the major guidelines that experts will use to draft 700 pages of recommendations. A constitutional assembly of 25 officials, lawyers, singers, househusbands, and people from all generations are elected to create the final text.

The whole country joins in the experiment. On the internet, everyone can share their views on the separation of powers, transparency, access to the internet, protection of natural resources. Each session of the constitutional assembly ends with a song.

Four months later, the new constitution is adopted in a nonbinding referendum with 67 percent approval. It’s an amazing burst of initiatives. Birgitta is all over the place. When not in Parliament, she joins her natural tribe — the artists, anarchists and activists—to rally for a free internet.

The internet took off as soon as it reached Iceland’s shores. Erasing distance, it connected the island to the world, breaking 12 centuries of insularity. Today, Iceland is the most connected nation in the world, with more than 95 percent of the population online.

It’s difficult to understate how completely the internet has transformed Iceland, for centuries cut off from and mostly ignored by the rest of the world. Icelanders jealously guard their newfound online rights. When Julian Assange turns up for a conference on digital freedom in 2009, he is welcomed as a rock star. He’s looking for a safe place to host his WikiLeaks servers, which are loaded with classified material. From the stage, Assange pitches the idea of turning Iceland into a haven, not for taxes, but for freedom of expression. In the wings, Birgitta, who speaks next, jumps on the idea.

A freedom activist and a coder herself, Birgitta immediately sees the idea as a way to get her country onto the worldwide stage. The island’s deserts (72 percent of the territory) could host giant server farms cooled by its freezing air and powered by its cheap and clean geothermal energy. Birgitta also wants to seize the political opportunity. Old democracies are about to get caught spying on the world and their own citizens. The island could make a statement by providing legal protection for whistleblowers and position itself in favor of freedom.

By turning Iceland into Assange’s “paradise for bits,” Birgitta envisions jobs, international significance, and the economy of the future.

The parliamentarian offers Assange the chance to make it happen. Flattered by the representative’s attention, he stays in Reykjavik with a few volunteers. For months, they benchmark the best laws in privacy, free speech, and source protection and come up with a complete legal package for Iceland. Through her party, the smallest in power, Birgitta convinces Parliament to pass it. The government turns the proposal into a resolution, the Icelandic Modern Media Initiative (IMMI), set to transform Iceland on the world stage.