Moral Economies of Debt Forgiveness and Enforcement in Postcrisis Iceland

Abstract

Who deserves financial relief in times of crisis, and on what grounds? The 2008 collapse of Iceland's banking system prompted state intervention to mitigate household indebtedness, including forbearance, pension withdrawals, repayment adjustments, and debt reductions. Divergent claims by households about eligibility sparked public moralizations on deservingness, revealing moral tensions about who should receive assistance and why. Drawing on interviews with redress applicants, this article examines the ways claims for support were framed by notions of responsibility, self-sufficiency, and reciprocity, highlighting competing logics about economic and moral obligation. Findings show that redress policies were perceived as selective amnesties rather than as structural reform, generating horizontal frictions among citizens that reinforced questions about equality in a society with historically muted class identities. Calls for moral repair have arisen through rethinking the basis of reciprocity, shifting from capitalist accumulation to restoring moral symmetry. By situating these dynamics within anthropological theories of debt and obligation, the article argues that crisis and recovery are entangled moral and economic processes, shaping ideals of fairness and social repair.