The World War brings unprecedented prosperity to Iceland. Farmers purchase land, build houses, incur larger debts, and educate their children. Bjartur expands to 250 sheep, two cows, three horses, and hired labor, while remaining personally frugal. Hallbera continues living with him, disbelieving in progress and insisting the croft remains cursed by Kolumkilli. Co-operative societies flourish, promising to eliminate middlemen and improve humankind. Peasant culture becomes a national gospel promoted in newspapers, extolling rural virtues and spawning a political party for farmers. Ingolfur Arnarson enters Parliament representing this party, and Bjartur votes for him. Bjartur’s credit with the co-operative grows. State roadmen build a bridge over the ravine on his land. Bjartur visits them and commissions a headstone for Gunnvör. He wants to make amends for centuries of slander against her, viewing her as a misunderstood neighbor who suffered like the nation during hard times. He asks for a dedication from him to Gunnvör, lending her his name through the centuries.

Gvendur is now 17, a strong, promising young man devoted to the farm, owner of six sheep, and fashionable clothes. Bjartur has money in the Fjord savings bank. The Bailiff of Myri visits Summerhouses and offers to sell Bjartur Rauthsmyri for 70,000 crowns, then offers 15,000 crowns to buy back his old sheep-cotes. He also proposes a savings-bank loan if Bjartur decides to build. Bjartur reaffirms his dedication to his own land, envisioning Gvendur carrying on his legacy for a 1,000 years. Gvendur receives a registered letter containing $200 in blue banknotes and a note from his uncle Nonni urging him to come to America now that the war is over. Gvendur instantly decides to go. He informs Bjartur, who tries to dissuade him by praising landownership over emigration. Gvendur remains resolute, explaining this is his one opportunity to be something in the world. Bjartur angrily insists Summerhouses is the only world that matters and will stand alone.

Bjartur stops speaking to Gvendur and works furiously. Gvendur feels sorrow but sees emigration as his only choice. He announces his departure the next day and offers to sell his six ewes to Bjartur, who threatens to drown them. Gvendur says he will give them to Ásta Sollilja. He bids farewell to Hallbera, who seems not to grasp the significance. Gvendur leaves on foot in his Sunday suit. Bjartur suddenly catches up with him. He asks Gvendur to recite two verses he composed for Ásta Sollilja and asks Gvendur to take them to her.

In Fjord, Gvendur becomes a local celebrity because he has money and is emigrating. He enjoys town and spends some money. Before the ship arrives, he visits Ásta Sollilja, now working as a servant for a boat-owner. She has a five-year-old daughter named Bjort. Ásta appears worn and hardened, with a decayed tooth, a more pronounced cross-eye from fatigue, and a cold manner. She is cynical about his emigration, revealing she went to her “own America” and found only a bleak shack and a drunken partner with nothing but dreams. She tells Gvendur he will never be free of Bjartur, because Bjartur is part of him. Gvendur offers her his six sheep. She refuses, declaring that she and Bjort are independent people who would rather die than accept gifts. She mentions refusing money from an unnamed influential man who claimed to be her father. When Gvendur delivers Bjartur’s two verses, she laughs and sends a defiant message: She is engaged to a modern poet who loves her and will never drive her away, unlike Bjartur.

The afternoon before his departure, Gvendur meets a beautiful, golden-haired girl leading two thoroughbred horses. She is excited about his trip to America and invites him to ride with her to the heath. They race at breakneck speed. The horses throw them into a grassy hollow near the summit. She laughs, and they talk about America. To impress her, Gvendur invents stories about his brother Nonni hunting wild animals in American forests. They ride on further, lie on the ground together, and have sex. Afterwards, she mounts and rides away at full speed. Gvendur follows but realizes it is two o’clock in the morning, and he will miss his ship. Unable to turn the horse back toward Fjord, he allows it to head to Summerhouses. He arrives at sunrise, releases the horse in the home-field, and falls asleep in the grass, convincing himself that the love he found is a better America than the one he lost.

The narrator details Ingolfur Arnarson’s rise to political prominence through ideals of improving farmers’ lives via government aid, co-operatives, roads, bridges, and infrastructure. In an upcoming election, he faces a rival candidate, a bank manager backed by capitalists. The rival mirrors and exaggerates Ingolfur’s promises. Ingolfur retaliates by resurrecting an old plan for a 500,0000-crown harbor in Fjord and by matching his opponent’s other promises, distributing projects between Fjord and Vik. The contest becomes one of oratorical skill rather than policy differences. The Fell King visits Bjartur and explains why he has switched his allegiance and custom from the co-operative to his new son-in-law, a merchant in Vik aligned with the banker. He warns Bjartur that building a new house requires support from national banks with 40-year mortgages, not the local savings bank with its high interest and short terms. The Fell King offers to secure such a loan for Bjartur if he switches his vote and custom. Bjartur retorts that his loyalty is to those he deals with and that he has never dealt with the big banks in the south.

Gvendur becomes infamous throughout the district for missing his ship after chasing Ingolfur Arnarson’s daughter, and for spending his American money on an expensive horse. He rides to an election meeting at Utirauthsmyri, hoping to see her. At the political meeting, Gvendur is captivated by Ingolfur’s eloquence and imagines him as a future father-in-law. After the meeting, Gvendur lingers and watches the girl emerge from the house with her father. They get into Ingolfur’s gleaming automobile and drive away without noticing him. Ingolfur stops at Summerhouses to discuss building plans with Bjartur, offering co-operative materials and savings-bank financing while disparaging southern bank swindlers. While Ingolfur confers with Bjartur, Gvendur approaches the car. The girl, smoking a cigarette, pretends not to remember him. She calls him a spineless wretch and a coward for not going to America. He boasts he will build a house as big as Rauthsmyri. She scoffs, saying her father will soon master all Iceland. He pleads that he stayed because of her. She replies she might have liked him a little if he had gone and never returned. Ingolfur returns, dismisses Gvendur with a cursory farewell, and drives away.

Bjartur begins building his concrete house, financed by a short-term loan from the savings bank with the co-operative acting as surety. Ingolfur Arnarson is elected. Bjartur’s construction stalls mid-summer due to lack of money and materials, leaving the house an unfinished shell. An unexpected autumn boom in lamb prices allows Bjartur to obtain more financing and complete the roof. Cracks appear in the cellar, which builders blame on earthquakes in Korea. On a trip to Fjord, Bjartur dictates three modern verses about the war and a lost flower for Gvendur to recite to Ásta Sollilja. Gvendur finds Ásta living in a hovel at Sandeyri with her unemployed fiancé, a modern poet, and his mother. Ásta is pregnant again, coughing, and has had a decayed tooth extracted. When Gvendur recites the verses, she listens with visible emotion but remains silent. He suggests she return home to the new house. She angrily refuses, declaring her love for her fiancé. Her fiancé’s mother complains Ásta is unkind to him. Ásta passionately reaffirms her loyalty, saying that even if Bjartur begged forgiveness on his knees, she would never return while alive, though he may bury her corpse when she is dead.

The new concrete house proves uninhabitable, lacking doors, furniture, and amenities. Bjartur decides the family will spend another winter in the old turf croft, which now leaks severely. The narrator introduces the current housekeeper, Brynhildur (Brynja), a competent, hard-working woman whose youthful physique makes it seem incredible that she could be past childbearing age. She is perpetually aggrieved, believing herself unappreciated and unjustly accused of theft. Bjartur considers that he would be sensible to marry her instead of paying her wages as a housekeeper.

The post-war economic collapse arrives. The Fell King loses his new house and farm to creditors and flees to a hovel in town. Bjartur becomes an “interest-slave” as mutton and wool prices collapse. He is forced to sell his better cow and 100 sheep. Bjartur is denied credit for wheat flour, coffee, and sugar, receiving instead salt fish and government-provided Wormy tobacco for sheep treatment. When he protests, he is told he will be foreclosed if he takes his custom elsewhere. Despite these hardships, the family manages to make one room of the house habitable and moves in. The house is freezing cold and damp; walls sweat and ice over during frost, wind blows through constantly, and snow accumulates upstairs. Hallbera is moved to the cow-shed stall because she cannot die of cold in the house. The new kitchen range fills the house with smoke and must be replaced with an oil stove. Market conditions worsen. Bjartur cannot make loan payments. He goes to the savings bank for help but is told only the bank governor can modify terms. That governor is Ingolfur Arnarson, just appointed Prime Minister of Iceland.

The housekeeper, Brynja, returns from her annual week-long shopping trip to town with a large quantity of expensive groceries for herself, including wheat flour, sugar, coffee, and snuff tobacco—items Bjartur has been forbidden to buy on credit. That night, tormented by a craving for real tobacco, he attempts to steal some snuff from her stash but retreats in shame after accidentally touching her face in the dark and waking her. The next morning, when she serves him real coffee, he rejects it and tells her she must leave. Devastated, Brynja breaks down sobbing, and is gone the following day.

The narrator satirically describes how Ingolfur Arnarson’s ideals are realized through government programs offering grants, subsidies, and loans for land cultivation, machinery, sewage systems, and house building. Only wealthy farmers like the Bailiff of Myri and the speculator who bought the Fell King’s property can take advantage of these programs. Poor farmers like Thorir, Olafur, Hrollaugur, and Einar remain trapped in poverty, unable to benefit. Thorir survives through his daughters’ unpaid labor. Olafur, Hrollaugur, and Einar struggle with crushing debts and deteriorating conditions. Bjartur spends a second winter in his new house, which remains unbearably cold and damp. The market for Icelandic sheep collapses completely; the government sells fishing rights in exchange for a foreign country purchasing some salt mutton. Bjartur still cannot make any payments, and meaningful relief remains out of reach.

An official notice announces the mortgagee’s sale of Summerhouses farm. Bjartur says nothing, focusing on his remaining livestock: 100 sheep, one cow, three horses, and a yellow “bitch.” He tells Hallbera he is being forced to sell. She blames Kolumkilli’s curse, claiming she never made Summerhouses her home but was merely a “lodger.” Bjartur asks to lease her abandoned croft, Urtharsel, on Sandgilsheath. They reminisce about her late husband, Ragnar’s, good dogs. Bjartur reflects that a man always has memories of his dogs, which cannot be taken from him. At the spring sheep marking, Thorir of Gilteig condescendingly lectures Bjartur, attributing his own success to keeping his children at home. Bjartur retorts that his children have been independent.

The bailiff buys back his old Summerhouses sheep-cotes for the mortgage amount. Bjartur, now calling himself Bjartur of Urtharsel, moves his stock and goods to Sandgilsheath, leaving Hallbera behind for later transport. He and Gvendur go to Fjord for supplies using Bjartur’s aged horse Blesi and can obtain goods only on Hallbera’s credit. A labor strike is underway over wages for Ingolfur’s promised harbor project. Forced to spend the night in town, they sit hungry by the roadside. Gvendur suggests visiting Ásta Sollilja, but Bjartur angrily refuses. A tall, thin striking worker approaches and invites them for coffee. On the way to the strikers’ barracks, the worker steals a loaf of bread from an archdeacon’s widow. Bjartur is appalled, saying he has never been a thief. The worker persuades him, arguing capitalism is the only real thief. At the barracks, they are served coffee with the stolen bread. A young striker tells Bjartur about Russian peasants overthrowing the Czar and capitalism. Bjartur, seeing everyone eating, finally accepts bread, feeling it is his greatest defeat. He tells Gvendur to stay and fight with the strikers against the authorities. Bjartur lies awake all night, sick and ashamed from eating other people’s bread.

Bjartur wakes at dawn, still feeling guilty. He considers taking Gvendur but sees him sleeping and decides to let him stay and fight. He reflects on the other sons he has lost and finds comfort in the thought that the Czar has fallen. He leaves and wanders to Sandeyri, the poorest part of town. He finds a thin-faced little girl making mud-cakes in the road and recognizes his granddaughter Bjort, who is ill with whooping cough. She leads him to her hut, a hovel with torn paper walls and broken windows. Inside, he finds Ásta Sollilja, thin, pale, and ill, in bed with her younger child and the old woman who owns the hut. Seeing him, Ásta cries out and runs to him barefoot, embracing him and pressing her mouth to his throat. He tells her to dress quickly because he is taking her and her children home. He explains he ate stolen bread the night before and left Gvendur with men who will use pick-handles on the authorities: He has broken his principles so he might as well come and get her.

On their last day at Summerhouses, Ásta tells Hallbera she has “risen from the dead” (479). That evening, she looks at the ruined concrete house, the palace Bjartur built dreaming of her return, and misses the old turf cottage. The next day, Bjartur begins the journey to Urtharsel, placing Hallbera and the two children on old Blesi. Ásta walks beside him. As they pass Gunnvör’s cairn, Bjartur topples the headstone he commissioned into the ravine, acknowledging the eternal struggle: Gunnvör lies with Kolumkilli still, and the lone worker’s enemy remains the same from century to century. They leave the main road and head north over difficult moors. A mile into the journey, Ásta collapses from exhaustion, coughing blood. Hallbera looks at her and murmurs that she will live to kiss one more corpse. Realizing Ásta cannot walk farther, Bjartur lifts her into his arms and leads the horse onward. She whispers that she is with him at last. He tells her to hold tightly around his neck. She promises to hold on as long as she lives, calls herself the flower of his life, and insists she will not die for a long while yet. They continue their journey over the moors.