Iceland, of course, is known for its vibrant art scene, among other things [see "Fire and Ice," May 23, 2008]. A decade ago, the country, which has a population of a mere 300,000, still had an economy oriented primarily towards fishing. The last 10 years, however, have seen an "Icelandic miracle," with the once hard-scrabble island’s living standards rising dramatically.

Alongside this boom, the country experienced a huge flowering of the arts, producing global musical stars like Björk and Sigur Rós, and becoming associated with a crowd of exceptional visual artists, most notably the Danish-Icelandic Olafur Eliasson (who received the "Order of the Falcon" from Iceland’s president earlier this year for his contribution to the country’s culture). A recent survey of the lively Icelandic contemporary art scene at Luhring Augustine in New York, June 28-Aug. 8, 2008 -- which bore the now-ironic title of "It’s Not Your Fault" -- included works that ranged from the pop-culture-savvy performances of Ragnar Kjartansson to the installations of Katrin Sigurdardottir, which play with the relation between nature and architecture.

In retrospect, Iceland’s economic success seems to have been built on sand. As the global credit crunch hit this year, the island’s financial institutions -- including players like Landsbanki and Kaupthing, which were privatized as recently as 2003 -- faced huge losses, having overleveraged themselves fantastically in the last half decade. On Sept. 29, the government was forced to nationalize Glitnir, the country’s third largest bank. On Oct. 9, Iceland shut its stock exchange and seized the last of its private banks amid the mounting chaos. On Oct. 24, Iceland accepted a $2 billion loan from the International Monetary Fund -- the first time the IMF has bailed out a Western country since 1976.

Voted the world’s most desirable country to live in by the United Nations just one year ago, Iceland now faces the equivalent of a depression, with mass job losses and the prices of basic goods soaring as the country’s foreign exchange rates disintegrate.

How has art been affected? Mostly, it is too soon to tell the long-term impact of the crisis. However, one thing is certain: As curator Tinna Guðmunds puts it, "Basically, private funding as we know it is gone."

Guðmunds is director of the "Sequences: Real Time Art Festival," an annual event dedicated to art and performance in public spaces, held in Iceland’s capital of Reykjavík, Oct. 11-17. "When we started planning Sequences 2008 at the beginning of the year, we thought big," she explained. These hopes were dashed when private sponsors jumped ship because of the crisis -- though careful planning allowed events to come off relatively well. "We were fortunate to have finished funding just in time," Guðmunds adds. "If it had been one week later we would have had to call it off."

In some ways, the fact that "Sequences," which is organized by representatives of Icelandic artist-run spaces like the Living Art Museum and Kling & Bang gallery, carried on in the face of adversity was itself a statement. Rúrí, an accomplished Icelandic artist who was guest of honor at "Sequences," put it this way: "The argument was that giving in to the situation would have the effect of tipping the balance further towards collapse, while resisting the economic push and carrying through would be a statement of working towards structuring the future anew."

Still, this future is very much up in the air. As Guðmunds explained, "The next step for the Sequences festival is to go over things and come up with a new strategy."

As for how artists have risen to the challenge of responding to the unfolding economic catastrophe, everyone mentions Björk as a model. The Icelandic songstress, already well-associated with environmental activism in Iceland, has led workshops with creative types and participated in the public debate about the country’s future. On Oct. 28, she penned a scathing editorial for the Times of London, denouncing the bankers who led Iceland into chaos as well as British prime minister Gordon Brown, who invoked anti-terrorism laws to freeze Icelandic assets, exacerbating the crisis.

The most notable instance of a visual artist reacting to the crisis, however, is Snorri Ásmundsson. Ásmundsson has a long history of politically provocative gestures -- his art typically pushes the limits of public participation in democracy -- including running for president of Iceland in 2004 as an art experiment, on a platform that included putting "art in the forefront, as art is an international language necessary and communicable to all" (documentation of his various endeavors is available at www.flotakona.com).

As Iceland’s economy came dramatically unglued, Ásmundsson thrust himself into the spotlight with Resignation, a performance for which he confronted Icelandic prime minister Geir H. Haarde at a press conference on Oct. 8, handing him a letter demanding the resignation of Icelandic central bank president David Oddsson. Photos of the event were picked up by the Associated Press and carried widely with news coverage reporting the meltdown.

After the press conference, Ásmundsson became involved with a committee organizing demonstrations and protests, and has spoken widely at rallies, demanding the resignation of the current government. Ásmundsson also performed at the recent Frieze Art Fair in London, where he staged a symbolic execution of a Teddy bear with Gordon Brown’s face -- a provocation that caused some consternation among British members of the audience, according to the artist.

"As an artist I have felt the need to break up the fixed, formal and intolerable way we look upon politics," Ásmundsson told Artnet News. "We have to remind them that they are not actors, but people like the rest of us, working for the people."

Asked about other Icelandic artists and their reaction to the crisis, Ásmundsson is dismissive. "Artists here in Iceland have been depending on funds and sponsorship from the ‘big guys’ -- the few that there were," he says. "Now that these patrons are all broke and disgraced, artists will have to reorganize their work methods. We have to go back to the basics, like it was before the big boom arrived, 10 to 15 years ago. The problem is that many of us have established personal relations with the millionaires, which are most likely affecting the approach to the crisis now."

"Can artists stand up and say something against their buddies?" he asks. "That’s something that we’ll have to see the coming days and weeks."

Curator Æsa Sigurjónsdóttir, who recently organized the survey "Dreams of the Sublime and Nowhere in Contemporary Icelandic Art" at the Reykjavík Art Museum, disputes the assertion that artists have been compromised to the degree that Ásmundsson claims. "Let’s keep in mind that Icelandic artists and art institutions always have had to fight for their existence," she said. "Art in Iceland has always been strongly connected to real life, to public debate." (Indeed, one of the likely effects of the crisis that Tinna Guðmunds mentions is that artists will have to postpone modest demands of getting a stipend and help with the material costs of mounting museum shows.)

What there is striking agreement on, however, is that the crash of 2008 marks a new period for Iceland, and perhaps an opportunity to reassess values -- a turn that might benefit the arts in the long run. "The shifts we are experiencing here in Iceland are also a great opportunity to reevaluate our status and rethink our place in the world," Sigurjónsdóttir says.

Art dealer Sigrún Sandra, of the recently opened Gallerí Ágúst in Reykjavík, spoke in a similar vein. "We have no idea if the state or the city will be able to continue supporting artists and art venues," she said. "It is very hard to be positive when the lucky ones have ‘just’ lost a big part of their savings, many people are in huge debt and so many are losing their jobs. But I am working with incredible artists who I believe in strongly, and I want them to be a part of rebuilding a healthier society."

"What is incredibly important now," Sandra concluded, "is that the world gets to know the flourishing cultural scene in Iceland. Our small society is about so much more than just greedy bankers."

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