In late 2007, an Icelandic teenager named Vífill Atlason created a minor international incident when he phoned the White House, told the operator he was the president of Iceland, and managed to set up an appointment to speak with George W. Bush. When the White House figured out what was going on, Atlason was taken away by Icelandic police and questioned for several hours, then told that he would be placed on an American no-fly list. No conversation took place. I, on the other hand, managed to make a lunch date with President Olafur Ragnar Grímsson not long after I arrived in Iceland, simply by bumping into him at an art exhibit and asking. Iceland is a nation of just over 300,000 citizens, a scale at which everything should be and can be accessible to the ordinary citizen as well as the crashing writer. In fact, I was picked up for my date by Dorrit Moussaieff, the president’s Israeli-born second wife, who happened to be heading off with another American to another lunch. This other American, an extremely wealthy New Yorker in well-ironed jeans, liked Iceland so much that he was thinking about settling here, and as we crossed downtown Reykjavík in the chauffeured presidential Land Cruiser, he listed his reasons: clean air, clean water, no crime, and no immigrants. He liked Iceland, apparently, for being a gated community with the whole North Atlantic as its gates, but he still had his concerns. The graffiti lightly spattered over the city bothered him enough to mention it twice.

And then they went to their lunch, and the chauffeur and I rolled onward to Bessastadir, the suburban presidential residence. Built as a school in the eighteenth century, Bessastadir is one of the few old buildings left on this long-deforested island, where for a millennium most structures were made from driftwood and sod. Bessastadir’s cluster of immaculate red-roofed white buildings looks like a small country estate and, though it is set apart from the other houses in the neighborhood by a wide grassy lawn, it has no apparent defense against interlopers, not even a serious fence. The president travels without visible security everywhere in Iceland, showing up at art openings and ribbon-cuttings to mingle and shake hands when he’s not overseas—as he often is—pitching Iceland to investors, talking up the democratic virtues of small states, and organizing climate-change initiatives. Grímsson had lived at Bessastadir for three four-year terms, and the question of his fourth was up in the air when I arrived. The president is by no means as powerful as Iceland’s parliament or its prime minister, Geir Haarde. But he does have real authority in some areas, notably the ability to veto legislation, and—more to the point—he is recognized by most as the nation’s symbolic leader, which is why I wanted to talk to him.

Iceland’s population is one thousandth that of the United States, and I wanted to know if the problems we faced at home were a function of size. An encouraging domestic development during the long years of the Bush Administration had been the tendency of U.S. cities and states to set their own policies, particularly on the environment and climate change—to withdraw from the unaccountable federation to a more responsive, more localized scale. And so I looked toward Iceland with optimism. I was in a country with no army and little crime, where children are free to run outdoors un supervised. Most of the people in Iceland are related to one another, and few of them seem to feel that American anxiety of being adrift without an anchor of stable identity or community. Iceland is one of the most literate countries on earth, with the world’s highest per-capita book sales. Not only does it have a long tradition of writer- politicians but, as a returning émigrée explained it to me (though her sense of things might have been a little out of date), “here the garbageman has read Cicero.” Certain democratic measures are built into the culture: for instance, the way everyone’s surname is just his or her father’s first name with the suffix -son or -dóttir appended; a wife doesn’t take her husband’s name, and even the most distinguished names are rarely passed from one generation to the next. Iceland is the only part of Europe that never begat monarchs or a hereditary aristocracy, and I hoped to find here a kind of perfection of the democratic ideal, or at least a hopeful indication of what could be.

Grímsson himself is an imposing man, exceedingly proper and courteous. He speaks formal English in full paragraphs. When I said to a friend of his that he seemed a bit wooden, she laughed at my caution and said, “He’s wooden all the way through!”

At sixty-five, Grímsson is a year older than his republic (until World War II, Iceland was a possession of Denmark), and his hair is brushed over in an orderly white-blond wave. He grew up in a fishing village on the wild and remote Westfjords peninsula, received a Ph.D. in political science in England, from the University of Manchester, and taught for several years at the University of Iceland before venturing into politics. When we met, he was wearing huge cuff links and a tie patterned with tiny feathers, and he showed me to a small study. The president sat in a high-backed armchair, upholstered in worn tapestry, I sat in an armless version, and for the next ninety minutes we spoke at cross-purposes.

“I think the twenty-first century will be a fascinating period,” he said, a period in which we will “see the relevance as well as the renaissance of small states.” But the vision he described as we ate our catfish and salmon seemed decidedly mainstream, even American. He celebrates small states mostly for how they function economically and in the international society of states. Small states move in a more flexible way, he said, which makes it easier for them to solve problems. He gave me an example. He had just come from the tiny, oil-rich nation of Qatar, whose government had hosted a conference, involving diplomats from such similarly tiny neighbors as the United Arab Emirates, that had put a temporary stop to the escalating violence in Lebanon. “They said to me very openly, ‘The reason why we could do it is that we were small Arab countries, we were friends with everybody—we didn’t have any vested interest, we didn’t have any ulterior motives, we did not have any long-term military strategy—so we could talk to everybody on a faithful basis.’” Of course, Qatar is ruled by a hereditary emir. Small may give leaders the flexibility they need to make deals, but it is not necessarily democratic.

Such contradictions left Grímsson unfazed. He began his first presidential campaign, he said, by traveling to every town and village in Iceland, “except two or three very small and remote ones,” to meet with the electorate, and this journey had more profoundly informed his thinking on participatory democracy than even his years as a professor of political science. “Constitutions and formal democratic rules—of course they are necessary and they are essential,” he continued, “but the great force of democracy, especially in modern times, is what we have called the will of the people.” This will, he said, was not always expressed through such traditional means as voting. “There are strong democratic pressures almost in the air without them necessarily having to be organized in a systematic way.”

Indeed, Grímsson may well be a principal beneficiary of the unsystematic way. He stood unopposed in the upcoming election—Icelanders, as one small-town librarian told me disapprovingly, have come to believe that it is “impolite” to run against a sitting president, and it has become customary to let them stay in office as long as they like. And so while Americans were absorbed in another electoral horse race, Iceland had no race at all.

The exquisite rhubarb crisp that ended my meal at Bessastadir reminded the president of boyhood days helping his grandmother put up jars of rhubarb preserves. Nearly every autumn saw a flurry of activity to dry enough fish and salt enough lamb to avoid starvation during the dark and isolated winter, he said, and people who come here now, “who see this ultramodern society,” fail to understand that it has been only a very short time since Iceland was a poor country, “almost a developing country.”

Iceland is marked, maybe even scarred, by several hundred years of such poverty. It began to lessen only after 1902, when Iceland got its first motorized boats, bringing a wave of modest prosperity to the country’s fishermen, who still produce more than half of its exports. World War II brought the next and larger wave: as the Nazis occupied Denmark, Iceland fell under the protection of Allied troops, thereby allowing the nation to liberate itself from centuries of colonial rule and become an independent republic, although the American military continued to maintain a base there from which to monitor the Soviet Union. In 2006, the United States discovered that it had other priorities, recalled its fighter jets and military personnel, and closed the base.

Long before the U.S. military presence ended, the ruling Independence Party began to cast around for something new to pump up Iceland’s economy. The nation had for decades harnessed the turbulent landscape to produce “clean” energy, though geo thermal power and hydropower are not quite as green as we would like to think. They take a toll in the form of toxic emissions and the destruction of wild places, though most of Iceland’s postwar energy developments were small in scale and impact. In the mid-1990s, however, the government decided to offer up Iceland’s vast natural resources to energy-intensive industries such as aluminum production, which also generates significant pollution, in a scheme that involved damming virtually every major river in the country. This willingness to sacrifice Iceland’s wilderness to foreign corporations reflected Iceland’s image of itself as a new player on the world stage, as “modern” (even if giant dams are rather old-fashioned icons of progress) and “high-tech” (even though it still exports more fish than aluminum). One popular claim was that Iceland would become “the Kuwait of the north.”

Many Icelanders have been troubled by the decision to sell off the landscape. The signature such debate took place over the Kárahnjúkar Hydropower Proj ect, which involved building several dams along two major glacial rivers, a series of deep tunnels to carry water to hydropower stations, and a new electrical infrastructure to connect those stations to a coastal smelter. The measure became increasingly unpopular as Icelanders got to know something about the massive amount of remote wilderness that would be—and now has been—drowned; about the reindeer that calved there and the pinkfooted geese that nested there; about the serious pollution the hydropowered smelters would emit, even if the electricity itself was emissions-free; and about the scandalous economics of the deal, whereby the citizens would pay billions for the infrastructure and the U.S.-based aluminum manufacturer Alcoa, which would most benefit from Iceland’s increased smelting capacity, would provide only a few hundred jobs to locals in return. In a country the size of Iceland, a few hundred jobs outside the capital count, and there has been a ripple effect on the declining eastern economy and population—but at a cost many think is too high.

To hear ordinary citizens speak about the dams, you’d think they lived under a vast tyranny; they speak of powerlessness, secrecy, intimidation, and loss. And yet little in the way of actual political protest has emerged. Icelandic presidents are barred from party membership, but before he took office Grímsson was a member of the Peoples’ Alliance Party, which in 2000 joined Iceland’s three other center-left parties to become the Social Demo cratic Alliance. The hope was that the coalition could gather enough seats in parliament to defeat the ruling Independence Party, whose website announces its principles as “the freedom to work and freedom of the individual, abolition of any kind of restraints,” and “a dynamic and open economy.” Despite offering a fairly tepid version of Clintonian moderation, the Peoples’ Alliance effort thus far has not succeeded. Kolbrún Haldórsdóttir, an MP who codirects the Left Green Party—founded in 1999, in part to oppose the dam proj ects—suggested that this conservative streak was just a part of the national character. “It is difficult to get people to join political parties. It is difficult to get people to join the associations and ad-hoc groups that are working on these issues,” she said. “We would be much stronger if we had more people. But they are not willing to come.”

There have been few petition drives and no national referendums on the dams. Indeed, the only concerted campaign has come from a small organization named Saving Iceland, which is run, according to its website, not by Icelanders but by “a network of people of different nationalities.” The most dogged and potent local opposition has come from artists, who began protesting outside parliament almost as soon as the proposals were aired. For a 2003 TV documentary about a site soon to be submerged by a dam, the photographer-naturalist Gudmundur Páll Olafsson tore out the pages of his book on the region to demonstrate what was being done to the landscape itself. At an exhibition in downtown Reykjavík this summer, the artist Rúrí mounted a video installation, called Flooding/Nature Lost, that featured footage of geese and other birds sitting on their eggs until the rising waters of Kárahnjúkar’s reservoir dissolved the nests and washed away the eggs. The birds walked away, puzzled and pathetic. Rúrí, a kind, spiky-haired woman in her fifties, has devoted much of the past decade to creating a mournful video catalogue of Icelandic waterfalls, particularly those already or potentially lost. Of the dam projects, she said, “This is sad and ridiculous in a democratic society, especially one that claims to be the oldest in the world.”

Iceland’s national parliament, or Althing—the word for “assembly” being, in Icelandic, thing—was formed in 930 a.d., about sixty years after the first settlers came over from Norway. They met at a site whose name, Thingvellir, “the plain of the thing,” still commemorates this ancient annual gathering, which was a combined parliamentary session, court review, and country fair. I visited it on a pleasant May day when a down jacket and lined gloves were the right attire and wild ducks and geese called overhead. I was driving in my rented car across a high plain strewn with volcanic debris—big, twisting, dark boulders upholstered in pale, thick moss that disguised jagged edges and crevices—when suddenly half the landscape dropped away and I began a descent into the wide valley created by the meeting of the Eurasian and North American tectonic plates. A long ledge of dark gray stone eighty or a hundred feet high ran along the far end, and the Axe River dropped off this ledge (in a foaming waterfall that in another country might itself be a big tourist attraction) and into the grassy valley below, where other streams braided together to create a web of estuaries and tiny islands. On the far side of this riparian oasis was a series of long stony fissures, from a few feet to perhaps twenty feet wide, filled with astonishingly clear deep-blue water, a canyon land in miniature with its own flora of mosses, grasses, and stunted trees. The Thingvellir region, like much of Iceland, is as lush as Ireland and as harshly grand as Utah.

The old Icelanders gathered here in the uninterrupted light at midsummer every year, and the lögsögumadr, or law speaker, recited one third of the nation’s laws, so that the whole code would be declaimed every three years. Courts met to deliberate transgressions, and new laws were made. Informal lawyers negotiated, and judges settled the penalties for unlawful violence, theft, and other crimes—fines were levied for most offenses and exile imposed for the worst. No one was imprisoned.

I was reading Njal’s Saga when I visited, which chronicles several generations of feuds that were occasionally resolved by the lawyerly Njal’s visits to the Althing. The sagas written down in the twelfth and thirteenth centuries are the great literary patrimony of Iceland, where the language has changed so little that modern Icelanders can still more or less read them. Njal’s careful legal deliberation, though, was an odd contrast to much of the saga’s grisly violence, as though Black’s Law Dictionary had been spliced into Grand Theft Auto. At one point, Njal notes the importance of the rule of law—“With laws shall our land be built up but with lawlessness laid waste”—and not many pages later, his eldest son catches sight of his enemies on an ice sheet beside the river and, in a celebrated passage, decides to make the most of the opportunity:

Skarp-Hedin made a leap and cleared the channel between the ice-banks, steadied himself, and at once went into a slide: the ice was glassy-smooth, and he skimmed along as fast as a bird. Thrain was then about to put on his helmet. Skarp-Hedin came swooping down on him and swung at him with his axe. The axe crashed down on his head and split it down to the jaw-bone, spilling the back-teeth on to the ice.

These mostly Norse settlers were land-hungry but also monarch-weary, and they wanted to do what had not been done in Europe since the time of the Roman republic: maintain order without overlords. This sounds like a remarkable concept, but if you consider the early Icelanders as a people akin to, say, the Algonquins or the Mohicans, who governed themselves quite nicely without crowned heads and tax collectors, the achievement finds its place in a long history of small self-governing societies that didn’t generate fixed hierarchies or bureaucracies. Farmers allied themselves with chieftains who had decision-making power at the Althing, but the farmers could switch their allegiance: they were not vassals bound to a lord, and the chieftains were themselves farmers. The family unit was important. It still is.

Jared Diamond has written that these self-governing Icelanders were “too poor to afford a government,” and they did indeed struggle to survive in the country’s harsh climate—they cherished the right of “driftage,” or the right to collect all the driftwood and debris on a given stretch of coastline. But they also had splendid horses, much land, herds of cattle and sheep, all the fish they could catch, a voice in their own affairs, and a great deal of freedom. It wasn’t a feminist paradise, but women retained meaningful rights and roles, a big difference from the celebrated democracy of ancient Athens, where women were largely housebound and hushed up. In Iceland: The First New Society, the historian Richard F. Tomasson grumbles that Iceland “suffered from the fatal flaw of the old Germanic polity,” which was “an inability to develop any ordered and regular hierarchy of authority.” This “flaw” was hardly fatal, though. The old Icelandic society lasted more than three hundred years, until internal feuding made it vulnerable to a takeover by the king of Norway in 1262. Not a bad run.

William Morris, the great Victorian artisan, writer, and revolutionary, derived such inspiration from the Icelandic sagas that he traveled through the country by pony for several weeks in 1871. His taste for the old stories was partly romantic enthusiasm for a world of fierce, fearless characters and partly an appreciation for lean prose. But the firsthand experience of the visit—“Awful looking are these Icelandic wastes,” he wrote, “yet beautiful to a man with eyes and heart”—occasioned a far more specific epiphany, which was that “the most grinding poverty is a trifling evil compared with the inequality of classes.” The trip was a turning point in his life.

Iceland past and present confirmed in Morris his own radically democratic desires, and he afterward devoted much of his life to bringing about his vision of utopian anarchism. In Morris’s novel News from Nowhere, a protagonist much like the author falls asleep after a rancorous meeting of various left-wing activists: “there were six persons present, and consequently six sections of the party were represented, four of which had strong but divergent Anarchist opinions.” They have been talking about what would constitute the ideal society after the revolution, and the protagonist wakes up the next morning in twenty-first-century London, a world that is Morris’s own vision of what a postrevolutionary nation could become. One of Morris’s guides shows him the Houses of Parliament, now used to store manure. “’Now, dear guest, let me tell you that our present parliament would be hard to house in one place, because the whole people is our parliament,’” he explains. “‘I must now shock you by telling you that we no longer have anything which you, a native of another planet, would call a government.’” The guide then jokes that what can be said of politics in this country is what was once famously (and truly) said of snakes in Iceland in the very short chapter of an eighteenth-century natural history: “There are no snakes in Iceland.”

In Morris’s utopia everyone participates in governance and no one is a politician; it is direct rather than representative democracy—and a fantastic vision only in that it requires the existence of a passionately engaged civil society. Such direct democracy has been deployed by the loyalists during the Spanish Civil War; by the Zapatistas, who withdrew from the Mexican government in 1994 and have governed themselves ever since in the state of Chiapas; by traditional peasant cultures, such as the Regantes of Bolivia; and by much of the direct-action movement against corporate globalization at least since the Seattle WTO shutdown in 1999. I bring up Morris’s vision not to argue that Iceland, or for that matter the United States, is ready to become a direct democracy but only to remind us that, as the chant goes, this is what democracy looks like. The sign at a Zapatista village I visited late last year declares, “Here the people govern and the government obeys.” In Iceland, as in most representative democracies, neither claim is true, at least most of the time.

Like Olafur Grímsson before him, Svanur Kristjánsson is a political science professor at the University of Iceland. Whereas Grímsson’s focus was on theories of power, however, Kristjánsson has specialized in the theory of democracy, which means that he notices the practice is not ideal in most places, including his own country. Kristjánsson is rumpled and fair-haired, with sad eyes and English polished at the University of Illinois at Urbana– Champaign, in the 1970s. When I met him at his book-filled office in an ugly modern campus building, he told me that being small hadn’t done much for Iceland. Indeed, he noted as much in a 2004 paper in the journal Scandinavian Political Studies:

The positive aspects of the Icelandic political tradition still reflect the assumption, often unspoken, that democracy means citizen control. In the republic of Iceland, tradition has it that the people alone should hold sovereign power. This golden past stands in sharp contrast to the present state of affairs, which can best be described as muddling through in the search for democracy…. The Icelandic system of governance has become a rather messy and complicated political arrangement, resembling the situation in other modern democracies.

I asked him what had happened. “You can run into your prime minister at the store,” he said. “You know the minister, the president—you can make an appointment with the president.” But at the same time, there is “an incredible lack of civic courage” within the governing class, “a lack of people standing up and telling the truth,” and this vacuum was quickly filled by action from others—from aluminum companies, from international investors, from Iceland’s new class of the super-rich. Which is to say that representative democracy fails wherever its citizens let it fail, even on a charming island with a thousand-year democratic tradition.

Kristjánsson gave two cases in point. The first took place a quarter century ago, when the government devised a fishing-quota system, ostensibly to protect Icelandic waters from overfishing. This seemed like a good idea—the fish stock really was being depleted—but the government had also come under the sway of fashionable ideas about privatization. Owners of fishing vessels were given quotas based on their current catch, but those quotas could be sold and compounded, and so the big trawlers soon began to amass permits and the small fishermen began to go extinct. The fish, Iceland’s patrimony and its richest asset for centuries, became private property, and the villages themselves faced extinction. Now dozens of boats sit ashore in old fishing towns like Stykkishólmur, the rows of permits in their windows not renewed since the 1990s. “Those who owned the quota, they sold it and then they moved away,” Kristjánsson said, his voice catching at the memory. His father was a fisherman too, he said, and he saw that sell-off as a betrayal.

Then Kristjánsson told me about an older, less acquiescent approach to dealing with change. In 1970, the government decided to dam the Laxá River. “It’s one of the most beautiful places in the world,” he said, alight again with the passion many Icelanders have for their countryside. Farmers in the valley behind the dam, threatened with the loss of their land and their livelihood, tried every legal means to stop construction, with no success, and so they decided to take another, more direct approach. On the appointed night, more than two hundred citizens gathered at the construction site. Some of them manned tractors to dig a hole in the earthen dam, others placed dynamite in that hole, and a third group set off the dynamite. “The people went there and they blew it up,” Kristjánsson said. “They blew it up.”

When I later read about the incident, I saw that the outcome was even more surprising. “It is evident from the documents from the hearings that everyone was proud of his act,” reports Haraldur Olafsson in a 1981 article in Environmental Review, “and through interviews and other sources I find that many more than were prosecuted would have liked to have been in the group that was judged.” Only sixty-five were convicted and fined, and the Supreme Court ultimately overturned even the fine itself. One of the participants remarked to another reporter, “We ought to earn the Nobel Peace Prize, since we actually used Nobel’s invention to re-establish peace between man and nature.”

Listening to Icelanders, I felt like I was hearing a fairy tale told backward, a tale in which they had been dispossessed of their great gifts and birthrights. First the right to fish was privatized, the fish were made into an alienable commodity, and the small coastal villages began to wither. Then, in 1998, the medical data and genealogical records of everyone in the country were—famously, absurdly—sold to a private corporation, which retained the exclusive right to benefit from discoveries made from studying this homogeneous population’s most intimate genetic secrets. Simultaneously, the wilderness, or at least a major chunk of it, was sacrificed to produce cheap power for Alcoa’s smelter, and the other rivers were offered up soon thereafter. It was a tragedy of privatization and of acquiescence.

Icelanders are aware of the problem and yet seem unable to fix it. In Dreamland: A Self-Help Manual for a Frightened Nation, Iceland’s best-selling book in 2006, Andri Snær Magnason writes, “It is not overstating the case to say that Iceland’s greatest natural treasures have been on clearance sale for the last thirty years, without the nation ever having had it explained to them what was on sale.” This sentence, with the people it mentions sounding so strangely passive, could be rewritten to say that Icelanders had not demanded explanation with sufficient force. Iceland had been, Magnason remarked to me in an anarchist-collective café in downtown Reykjavík, living in “an end-of-history era” until the dam and smelter plans shattered the contentment. In the late Eighties and early Nineties, Björk was becoming Iceland’s first major celebrity export, everyone was planting trees, the fisheries seemed well-managed, and the country had the world’s first demo cratically elected female president, Vigdís Finnbogadóttir. But this paradisical state didn’t last. Iceland’s deep attachment to place is clashing with its fantasies about becoming rich, and fighting back is not easy for everyone to do. Magnason joked, “We talk about our Viking heritage, but we always skip the fact that fifty percent of the settlers were slaves. We talk about our businessmen and their Viking mentality, but we also have a slave mentality.”

The day that Olafur Ragnar Grímsson gained his fourth term as president of Iceland, the sun rose over Reykjavík as it usually does on June 28, less than three hours after the official sunset at midnight and after another night without real darkness. There had been no media circus, no polls, no fund-raising, no competing claims, no placards, no debates, no scandals, and, of course, no campaign and no election. No one had even bothered to run in even token opposition, as a single-issue nut.

There was no election, but there was, coincidentally, a free public concert featuring Björk and Iceland’s new international superstars, Sigur Rós, the stated purpose of which was to “raise awareness for environmental issues in Iceland.” I had hoped that the “eco-concert,” as its organizers had called it, might engender some sort of upsurge of passion and engagement, a sort of latter-day Althing, or at least launch grass-roots dissident activity with consequences. And, in fact, nearly 30,000 people—about a tenth of the population of Iceland—gathered in a Reykjavík park on a golden summer evening when the temperature was in the mid-forties. The music, particularly Sigur Rós’s majestic, fey meandering, was spectacular. Images of those distressed birds on nests lapped by floodwater were projected on the giant video screen, but no one said anything about the environment until the very end, when Björk, after shouting out her anthem, “Declare Independence,” chanted, “náttúra, náttúra, náttúra, náttúra”—nature, nature, nature, nature! And that was that. I ran into Magnason, who had helped organize the event, the next morning and asked him why at a concert for the environment no one had said anything about the environment, or politics, or democracy, or dams, or actions people could take to make a difference. “They didn’t want to preach,” he said firmly, as though it were the most reasonable thing in the world.