Iceland: Where's the Lesson for Us?

A simple question: what is it, exactly, we're going to do as a nation now the idea that we can surf the 'Great Moderation' (RIP) as a provider of financial services has died the death. This seems to me to be a bigger question that simply who owns the economy: if we take more of it into public, social or mutual ownership what is it we're going to do with it?

But the financial sector is only -only! - 20% of the UK economy. It was a fair bit more in Iceland.
Haukur Már Helgason teaches philosophy at the Iceland Academy of the Arts. He is a founding member of the experimental literary band Nýhil*. He tells it like it is there in the LRB:

"Today, personal security is the only growing sector of the economy. Politicians and stock exchange ‘entrepreneurs’ are surrounded by bodyguards. After several years of private ownership and staggering growth, the country’s three major banks collapsed in the space of a week, unable to pay their debts. ... This is now the position of a neoliberalised country that until April considered itself one of the most affluent on earth.

The average Icelander owes euro 30,000. ... The country is caught in a web of international debt. Because it has its own currency, there isn’t much difference between our situation and so-called ‘truck systems’, whereby a labourer buys goods from the company he works for. His work and his consumption are noted in a single book of debits and credits, and the worker sees little or no ‘real’ money for his work. Young people, who took out big loans to pay for overpriced apartments in an inflated market, now find themselves stuck....the flats are impossible to sell, and since the loans are tied to the retail price index, in times of inflation the debt grows.

The result of all this is a very stressed society in which everyone is always running to stand still because they’ve never done enough to pay the bills at the end of the month; and if they’re late with payments, staggering default interest will sooner or later hit them.

There is such a thing as collective guilt, and I am guilty, by association with this tribe, of having participated in casino-capitalism. ....We had the chance to be decent people,and we blew it."

So what is Britain going to do now? Because relying on the banks sorting themselves out and re-establishing the City of London as the greatest casino on the globe seems like a really, really bad idea to me.

* Does this make him a Nýhilist?