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truth is it doesn’t trade in international markets. The krona is simply assigned an arbitrary value by the government for select purposes. Icelanders abroad have already figured out not to use their Visa cards, for fear of being charged the real exchange rate, whatever that might be.
    The prime minister would like me to believe that he saw Iceland’s financial crisis taking shape but could do little about it. (“We could not say publicly our fears about the banks, because you create the very thing you are seeking to avoid: a panic. ” ) By implication it was not politicians like him but financiers who were to blame. On some level the people agree: the guy who ran the Baugur investment group had snowballs chucked at him as he dashed from the 101 Hotel to his limo; the guy who ran Kaupthing Bank turned up at the National Theatre and, as he took his seat, was booed. But, for the most part, the big shots have fled Iceland for London, or are lying low, leaving the poor prime minister to shoulder the blame and face the angry demonstrators, led by folksinging activist Hördur Torfason, who assemble every weekend outside Parliament.
    Haarde has his story, and he’s sticking to it: foreigners entrusted their capital to Iceland, and Iceland put it to good use, but then, on September 15, 2008, Lehman Brothers failed and foreigners panicked and demanded their capital back. Iceland was ruined not by its own recklessness but by a global tsunami. The problem with this story is that it fails to explain why the tsunami struck Iceland, as opposed to, say, Tonga.
    But I didn’t come to Iceland to argue. I came to understand. “There’s something I really want to ask you,” I say.
    “Yes?”
    “Is it true that you’ve been telling people that it’s time to stop banking and go fishing?”
    A great line, I thought. Succinct, true, and to the point. But I’d heard about it thirdhand, from a New York hedge fund manager. The prime minister fixes me with a self-consciously stern gaze. “That’s a gross exaggeration,” he says.
    “I thought it made sense,” I say uneasily.
    “I never said that!”
    Obviously, I’ve hit some kind of nerve, but which kind I cannot tell. Is he worried that to have said such a thing would make him seem a fool? Or does he still think that fishing, as a profession, is somehow less dignified than banking?
    AT LENGTH, I return to the hotel to find, for the first time in four nights, no empty champagne bottles outside my neighbors’ door. The Icelandic couple whom I had envisioned as being on one last blowout have packed and gone home. For four nights I have endured their orc shrieks from the other side of the hotel wall; now all is silent. It’s possible to curl up in bed with “The Economic Theory of a Common-Property Resource: The Fishery.” One way or another, the wealth in Iceland comes from the fish, and if you want to understand what Icelanders did with their money you had better understand how they came into it in the first place.
    The brilliant paper was written back in 1954 by H. Scott Gordon, an Indiana University economist. It describes the plight of the fisherman—and seeks to explain “why fishermen are not wealthy, despite the fact that fishery resources of the sea are the richest and most indestructible available to man.” The problem is that, because the fish are everybody’s property, they are nobody’s property. Anyone can catch as many fish as he likes, so people fish right up to the point where fishing becomes unprofitable—for everybody. “There is in the spirit of every fisherman the hope of the ‘lucky catch, ’ ” wrote Gordon. “As those who know fishermen well have often testified, they are gamblers and incurably optimistic.”
    Fishermen, in other words, are a lot like American investment bankers. Their overconfidence leads them to impoverish not just themselves but also their fishing grounds. Simply limiting the number of fish caught won’t solve the problem; it