In the conclusion of a recent editorial of mine on the Grecian uprising, I predicted that protests would continue to spread throughout Europe as the economic crisis hastens the outbreak of political crises. That prediction was barely off the printing press before it was realized, as circumstances would have it, in Iceland. The coalition government was forced by popular disapproval to step down, and a new government has stepped in, including the first openly lesbian prime minister Europe has seen- Johanna Sigurdardottir.

The island nation’s trouble began in late 2008 when Iceland’s banks were in debt to an amount totaling six times the national GDP. The government was forced to take control over the country’s largest banks, nationalizing them. On Oct. 14, the Icelandic stock market crashed, falling an astonishing 77 percent.

Iceland became the first nation in Western Europe since the 1970s to receive a loan from the International Monetary Fund, amounting to $2.1 billion. Iceland received bailout loans from other nations as well, which together with the IMF funding totaled some $10 billion. Keep in mind that $10 billion corresponds to more than half of Iceland’s GDP- the equivalent for the U.S. would be $7.2 trillion worth of loans.

Other woes include a record inflation rate of 17.1 percent and forecasts that the Icelandic economy will shrink a further 10 percent in 2009. The economic hardship prompted a wave of popular protest, which, “though largely peaceful… have seen Reykjavik’s [the Icelandic capital] tiny parliament building doused in paint and eggs hurled at Haarde’s [the Prime Minister at the time] limousine… police used tear gas to quell a protest for the first time since 1949,” the Associated Press reported.

Iceland has a population of just over 300,000 people, that is, approximately half the population of the city of Milwaukee. Thus the protests in that country, which have been growing since the onset of the economic crisis, appear small compared to the scale of the Grecian uprising, but are actually quite significant. The working class is radicalizing, and the new “centre-left” government will prove incapable of reintegrating the working class into the status quo as it will be incapable of quelling the economic crisis.

It’s a common misconception to speak of the western European nations (particularly the Scandinavian countries) as “mixed economies,” or a blend of capitalism and socialism. Confused and sensationalist analysts like to cite the nationalization of banks and certain key industries as evidence of elements of socialism coexisting with capitalism. However, the current economic crisis reveals just how absurd such claims are. The beating all European countries are taking courtesy of the business cycle is enough to show that these nations are capitalist through and through. If these nations had planned economies, they would not be dominated by the blind market forces that drive the business cycle.

All nationalization means is that the state is forced to come to the rescue of failing businesses which have been out-competed on the market. Nationalized industries still operate for profit on the world market. These industries under socialism would be socialized such that the workers democratically plan all the major particulars of the economy – what will be produced, how it will be produced and for whose benefit. This type of economic democracy and working class power exists nowhere today in the so-called “mixed economies.”

Similarly, the severity of the global capitalist crisis elegantly refutes the right-wing ideological assertion that we live in a “post-industrial” society. This so-called “post-industrial” society rests on the economic base of privately owned means of production, wage-labor, capital accumulation and centralization, and the quest for profit – that is, all the characteristics of capitalism. It is not surprising, then, to see that all the contradictions and class antagonisms of capitalism have survived the transition into our “post-industrial” society.

The “post-industrial” society is marketed as a crisis-free society. However, there is no crisis-free capitalism. The powerlessness of “mixed economy,” which is a crafty way of saying “state capitalism,” before the global crisis makes this truth unconditional.