As Greece teeters toward collapse because of austerity measures imposed upon it by international lenders, the current doctrine of cutting public employment and programs in the midst of an economic crisis perhaps deserves a reassessment.

In his New York Times column, Nobel Prize-winning economist Paul Krugman describes the austerity doctrine, so in vogue these days, this way:

[A] crisis brought on by deregulation becomes a reason to move even further to the right; a time of mass unemployment, instead of spurring public efforts to create jobs, becomes an era of austerity, in which government spending and social programs are slashed…[But] bailing out the banks while punishing workers is not, in fact, a recipe for prosperity.

Krugman suggests world leaders would be wise to look at an alternative path—that of Iceland, whose banking crisis led to an economic collapse from which it is now recovering slowly, but steadily.

Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net. Where everyone else was fixated on trying to placate international investors, Iceland imposed temporary controls on the movement of capital to give itself room to maneuver.

And the sky over Iceland has not fallen. While unemployment remains high, it has reached its lowest level in two years. Krugman maintains that Iceland’s approach has stopped the employment crisis from becoming much worse. More important, perhaps, is that the expanded safety net not only survived, but continues to protect Iceland’s most vulnerable citizens. But the biggest payoff of all, perhaps, is that by marching to the beat of its own drummer, Iceland, writes Krugman, has preserved “the basic decency of its society.”