"“For the first time in my life I have sympathy with the Bolsheviks; with the French revolutionaries who put up the guillotine.”

A Burkean view of what happens if a society doesn't have a thriving Middle Class on the FT:

"Iceland gives Christmas frosty reception

By Sarah O’Connor in Reykjavik

Published: December 23 2008 20:14 | Last updated: December 23 2008 20:14

On the ground floor of one of Reykjavik’s gleaming office buildings, a well-dressed crowd shuffles and waits. Tinny Christmas songs blare from a small hi-fi by the door.

As numbers are called out one by one, people file into the next room where rudimentary shelves are filled with free tins, fish, clothes, books and wrapping paper.

Some 2,500 people have applied for Christmas relief packages from Iceland’s three main charities in recent weeks, a 30 per cent rise on last year, as growing numbers of the middle class lose their jobs in the wake of Iceland’s banking collapse.

Jon Omar Gunnarsson, a pastor at Hallgrimskirkja, Reykjavik’s main church, says applications to the Church Aid group have doubled.

“It’s mostly middle class people who have all these obligations, mortgages that are going up, many are losing their jobs ... they just can’t carry the burden alone,” he says.

Iceland is still reverberating after its economy crumpled in October in the face of global financial turmoil.

Inflation and interest rates are both at 18 per cent as the country struggles to shore up its currency, which plunged after its three banks collapsed. It has borrowed $10bn from the International Monetary Fund and others which it needs to repay, meaning taxes are rising even as recession deepens."

So, they have:

1) Interest rates at 18%

2) A Falling currency

3) Borrowed $10 Billion from the IMF

4) Higher taxes

5) A recession

"The charities believe more people need help but are too ashamed to ask.

“We should just forget about Christmas, just cancel it,” says Sigridur, 57, waiting for her number to be called.

“My husband lost his job, I don’t have one either – I am recovering from cancer. We cannot even pay for the house.”

Sigridur and her husband are considering moving to Norway where there are jobs in construction. “We would just post the house key back to the bank.”

Asa, 44, will give her children Christmas presents provided by charity this year. “You have to take off your pride,” she says. “It’s very difficult to do it.

“There will be a lot of people who leave this country, just go away. Think of the future here for the children. When they are 95 they will still be paying for this( YIKES ).”

Although growing, the number of people needing food aid is still small. Many of those who have lost their jobs will continue to get paid until February. The government, which owns the three main banks, has promised mortgage holidays for people who cannot meet repayments. But even those who have not been badly hit are changing their lifestyles. This Christmas, people are giving each other books, home-made trinkets and practical presents such as warm socks.

Last year’s must-haves, flat screen televisions and games consoles, are on the list of things people here call “so 2007”.

For many, Christmas brings a welcome distraction from the crisis. But others find it impossible to get into the seasonal spirit.

Sitting in an old fisherman’s cafe by the port, Orn Svavarsson shakes with rage. He sold his health food business three years ago when he was 54 and, like many of his countrymen, put the money into the stock market. It has been wiped out.

“The Icelandic people are too lazy,” he says. “Why don’t we go to the airport and block it until we get answers?

“For the first time in my life I have sympathy with the Bolsheviks; with the French revolutionaries who put up the guillotine.”

Note well the last sentence. If Icelanders should come to lose confidence in the social system as well as the economic system, then things could actually get ugly.