 9 Is Medieval Iceland an example of "anarcho"-capitalism working in practice?

   Ironically, medieval Iceland is a good example of why
   "anarcho"-capitalism will not work, degenerating into de facto rule by
   the rich. It should be pointed out first that Iceland, nearly 1,000
   years ago, was not a capitalistic system. In fact, like most cultures
   claimed by "anarcho"-capitalists as examples of their "utopia," it was
   a communal, not individualistic, society, based on artisan production,
   with extensive communal institutions as well as individual "ownership"
   (i.e. use) and a form of social self-administration, the thing -- both
   local and Iceland-wide -- which can be considered a "primitive" form of
   the anarchist communal assembly.

   As William Ian Miller points out "[p]eople of a communitarian nature. .
   . have reason to be attracted [to Medieval Iceland]. . . the limited
   role of lordship, the active participation of large numbers of free
   people . . . in decision making within and without the homestead. The
   economy barely knew the existence of markets. Social relations preceded
   economic relations. The nexus of household, kin, Thing, even enmity,
   more than the nexus of cash, bound people to each other. The lack of
   extensive economic differentiation supported a weakly differentiated
   class system . . . [and material] deprivations were more evenly
   distributed than they would be once state institutions also had to be
   maintained." [Bloodtaking and Peacemaking: Feud, Law and Society in
   Saga Iceland, p. 306]

   At this time Iceland "remained entirely rural. There were no towns, not
   even villages, and early Iceland participated only marginally in the
   active trade of Viking Age Scandinavia." There was a "diminished level
   of stratification, which emerged from the first phase of social and
   economic development, lent an appearance of egalitarianism - social
   stratification was restrained and political hierarchy limited." [Jesse
   Byock, Viking Age Iceland, p. 2] That such a society could be classed
   as "capitalist" or even considered a model for an advanced industrial
   society is staggering.

   Kropotkin in Mutual Aid indicates that Norse society, from which the
   settlers in Iceland came, had various "mutual aid" institutions,
   including communal land ownership (based around what he called the
   "village community") and the thing (see also Kropotkin's The State: Its
   Historic Role for a discussion of the "village community"). It is
   reasonable to think that the first settlers in Iceland would have
   brought such institutions with them and Iceland did indeed have its
   equivalent of the commune or "village community," the Hreppar, which
   developed early in the country's history. Like the early local
   assemblies, it is not much discussed in the Sagas but is mentioned in
   the law book, the Grgs, and was composed of a minimum of twenty farms
   and had a five member commission. The Hreppar was self-governing and,
   among other things, was responsible for seeing that orphans and the
   poor within the area were fed and housed. The Hreppar also served as a
   property insurance agency and assisted in case of fire and losses due
   to diseased livestock.

   In addition, as in most pre-capitalist societies, there were "commons",
   common land available for use by all. During the summer, "common lands
   and pastures in the highlands, often called almenning, were used by the
   region's farmers for grazing." This increased the independence of the
   population from the wealthy as these "public lands offered
   opportunities for enterprising individuals to increase their store of
   provisions and to find saleable merchandise." [Jesse Byock, Op. Cit.,
   p. 47 and p. 48]

   Thus Icelandic society had a network of solidarity, based upon communal
   life:

     "The status of farmers as free agents was reinforced by the presence
     of communal units called hreppar (sing. hreppr) . . . these [were]
     geographically defined associations of landowners. . . the hreppr
     were self-governing . . . .[and] guided by a five-member steering
     committee . . . As early as the 900s, the whole country seems to
     have been divided into hreppar . . . Hreppar provided a blanket of
     local security, allowing the landowning farmers a measure of
     independence to participate in the choices of political life . . .

     "Through copoperation among their members, hreppar organised and
     controlled summer grazing lands, organised communal labour, and
     provided an immediate local forum for settling disputes. Crucially,
     they provided fire and livestock insurance for local farmers. . .
     [They also] saw to the feeding and housing of local orphans, and
     administered poor relief to people who were recognised as
     inhabitants of their area. People who could not provide for
     themselves were assigned to member farms, which took turns in
     providing for them."
     [Byock, Op. Cit., pp. 137-8]

   In practice this meant that "each commune was a mutual insurance
   company, or a miniature welfare state. And membership in the commune
   was not voluntary. Each farmer had to belong to the commune in which
   his farm was located and to contribute to its needs." [Gissurarson
   quoted by Birgit T. Runolfsson Solvason, Ordered Anarchy, State and
   Rent-Seeking: The Icelandic Commonwealth, 930-1262] The Icelandic
   Commonwealth did not allow farmers not to join its communes and "[o]nce
   attached to the local hreppr, a farm's affliation could not be
   changed." However, they did play a key role in keeping the society free
   as the hreppr "was essentially non-political and addressed subsistence
   and economic security needs. Its presence freed farmers from depending
   on an overclass to provide comparable services or corresponding
   security measures." [Byock, Op. Cit., p. 138]

   Therefore, the Icelandic Commonwealth can hardly be claimed in any
   significant way as an example of "anarcho"-capitalism in practice. This
   can also be seen from the early economy, where prices were subject to
   popular judgement at the skuldaping ("payment-thing") not supply and
   demand. [Kirsten Hastrup, Culture and History in Medieval Iceland, p.
   125] Indeed, with its communal price setting system in local
   assemblies, the early Icelandic commonwealth was more similar to Guild
   Socialism (which was based upon guild's negotiating "just prices" for
   goods and services) than capitalism. Therefore Miller correctly argues
   that it would be wrong to impose capitalist ideas and assumptions onto
   Icelandic society:

     "Inevitably the attempt was made to add early Iceland to the number
     of regions that socialised people in nuclear families within simple
     households. . . what the sources tell us about the shape of
     Icelandic householding must compel a different conclusion." [Op.
     Cit., p. 112]

   In other words, Kropotkin's analysis of communal society is far closer
   to the reality of Medieval Iceland than "anarcho"-capitalist attempts
   to turn it into a some kind of capitalist utopia.

   However, the communal nature of Icelandic society also co-existed (as
   in most such cultures) with hierarchical institutions, including some
   with capitalistic elements, namely private property and "private
   states" around the local godar. The godar were local chiefs who also
   took the role of religious leaders. As the Encyclopaedia Britannica
   explains, "a kind of local government was evolved [in Iceland] by which
   the people of a district who had most dealings together formed groups
   under the leadership of the most important or influential man in the
   district" (the godi). The godi "acted as judge and mediator" and "took
   a lead in communal activities" such as building places of worship.
   These "local assemblies. . . are heard of before the establishment of
   the althing" (the national thing). This althing led to co-operation
   between the local assemblies.

   Thus Icelandic society had different elements, one based on the local
   chiefs and communal organisations. Society was marked by inequalities
   as "[a]mong the landed there were differences in wealth and prominence.
   Distinct cleavages existed between landowners and landless people and
   between free men and slaves." This meant it was "marked by aspects of
   statelessness and egalitarianism as well as elements of social
   hierarchy . . . Although Iceland was not a democratic system,
   proto-democratic tendencies existed." [Byock, Op. Cit., p. 64 and p.
   65] The Icelandic social system was designed to reduce the power of the
   wealthy by enhancing communal institutions:

     "The society . . . was based on a system of decentralised
     self-government . . . The Viking Age settlers began by establishing
     local things, or assemblies, which had been the major forum for
     meetings of freemen and aristocrats in the old Scandinavian and
     Germanic social order. . . They [the Icelanders] excluded overlords
     with coercive power and expended the mandate of the assembly to fill
     the full spectrum of the interests of the landed free farmers. The
     changes transformed a Scandinavian decision-making body that
     mediated between freemen and overlords into an Icelandic
     self-contained governmental system without overlords. At the core of
     Icelandic government was the Althing, a national assembly of
     freemen." [Byock, Op. Cit., p. 75]

   Therefore we see communal self-management in a basic form, plus
   co-operation between communities as well. These communistic, mutual-aid
   features exist in many non-capitalist cultures and are often essential
   for ensuring the people's continued freedom within those cultures (
   [1]section B.2.5 on why the wealthy undermine these popular
   "folk-motes" in favour of centralisation). Usually, the existence of
   private property (and so inequality) soon led to the destruction of
   communal forms of self-management (with participation by all male
   members of the community as in Iceland), which are replaced by the rule
   of the rich.

   While such developments are a commonplace in most "primitive" cultures,
   the Icelandic case has an unusual feature which explains the interest
   it provokes in "anarcho"-capitalist circles. This feature was that
   individuals could seek protection from any godi. As the Encyclopaedia
   Britannica puts it, "the extent of the godord [chieftancy] was not
   fixed by territorial boundaries. Those who were dissatisfied with their
   chief could attach themselves to another godi. . . As a result rivalry
   arose between the godar [chiefs]; as may be seen from the Icelandic
   Sagas." This was because, while there were "a central legislature and
   uniform, country-wide judicial and legal systems," people would seek
   the protection of any godi, providing payment in return. [Byock, Op.
   Cit., p. 2] These godi, in effect, would be subject to "market forces,"
   as dissatisfied individuals could affiliate themselves to other godi.
   This system, however, had an obvious (and fatal) flaw. As the
   Encyclopaedia Britannica points out:

     "The position of the godi could be bought and sold, as well as
     inherited; consequently, with the passing of time, the godord for
     large areas of the country became concentrated in the hands of one
     man or a few men. This was the principal weakness of the old form of
     government: it led to a struggle of power and was the chief reason
     for the ending of the commonwealth and for the country's submission
     to the King of Norway."

   It was the existence of these hierarchical elements in Icelandic
   society that explain its fall from anarchistic to statist society. As
   Kropotkin argued "from chieftainship sprang on the one hand the State
   and on the other private property." [Act for Yourselves, p. 85]
   Kropotkin's insight that chieftainship is a transitional system has
   been confirmed by anthropologists studying "primitive" societies. They
   have come to the conclusion that societies made up of chieftainships or
   chiefdoms are not states: "Chiefdoms are neither stateless nor state
   societies in the fullest sense of either term: they are on the
   borderline between the two. Having emerged out of stateless systems,
   they give the impression of being on their way to centralised states
   and exhibit characteristics of both." [Y. Cohen quoted by Birgit T.
   Runolfsson Solvason, Op. Cit.] Since the Commonwealth was made up of
   chiefdoms, this explains the contradictory nature of the society - it
   was in the process of transition, from anarchy to statism, from a
   communal economy to one based on private property.

   The political transition within Icelandic society went hand in hand
   with an economic transition (both tendencies being mutually
   reinforcing). Initially, when Iceland was settled, large-scale farming
   based on extended households with kinsmen was the dominant economic
   mode. This semi-communal mode of production changed as the land was
   divided up (mostly through inheritance claims) between the 10th and
   11th centuries. This new economic system based upon individual
   possession and artisan production was then slowly displaced by tenant
   farming, in which the farmer worked for a landlord, starting in the
   late 11th century. This economic system (based on tenant farming, i.e.
   capitalistic production) ensured that "great variants of property and
   power emerged." [Kirsten Hastrup, Culture and History in Medieval
   Iceland, pp. 172-173]

   So significant changes in society started to occur in the eleventh
   century, as "slavery all but ceased. Tenant farming . . . took [its]
   place." Iceland was moving from an economy based on possession to one
   based on private property and so "the renting of land was a widely
   established practice by the late eleventh century . . . the status of
   the godar must have been connected with landownership and rents." This
   lead to increasing oligarchy and so the mid- to late-twelfth century
   was "characterised by the appearance of a new elite, the big chieftains
   who are called storgodar . . . [who] struggled from the 1220s to the
   1260s to win what had earlier been unobtainable for Icelandic leaders,
   the prize of overlordship or centralised executive authority." [Byock,
   Op. Cit., p. 269 and pp. 3-4]

   During this evolution in ownership patterns and the concentration of
   wealth and power into the hands of a few, we should note that the
   godi's and wealthy landowners' attitude to profit making also changed,
   with market values starting to replace those associated with honour,
   kin, and so on. Social relations became replaced by economic relations
   and the nexus of household, kin and Thing was replaced by the nexus of
   cash and profit. The rise of capitalistic social relationships in
   production and values within society was also reflected in exchange,
   with the local marketplace, with its pricing "subject to popular
   judgement" being "subsumed under central markets." [Hastrup, Op. Cit.,
   p. 225]

   With a form of wage labour (tenant farming) being dominant within
   society, it is not surprising that great differences in wealth started
   to appear. Also, as protection did not come free, it is not surprising
   that a godi tended to become rich also (in Kropotkin's words, "the
   individual accumulation of wealth and power"). Powerful godi would be
   useful for wealthy landowners when disputes over land and rent
   appeared, and wealthy landowners would be useful for a godi looking for
   income. Concentrations of wealth, in other words, produce
   concentrations of social and political power (and vice versa) -- "power
   always follows wealth." [Kropotkin, Mutual Aid, p. 131]

   The transformation of possession into property and the resulting rise
   of hired labour was a key element in the accumulation of wealth and
   power, and the corresponding decline in liberty among the farmers.
   Moreover, with hired labour springs dependency -- the worker is now
   dependent on good relations with their landlord in order to have access
   to the land they need. With such reductions in the independence of part
   of Icelandic society, the undermining of self-management in the various
   Things was also likely as labourers could not vote freely as they could
   be subject to sanctions from their landlord for voting the "wrong" way
   ("The courts were less likely to base judgements on the evidence than
   to adjust decisions to satisfy the honour and resources of powerful
   individuals." [Byock, Op. Cit., p. 185]).. Thus hierarchy within the
   economy would spread into the rest of society, and in particular its
   social institutions, reinforcing the effects of the accumulation of
   wealth and power.

   The resulting classification of Icelandic society played a key role in
   its move from relative equality and anarchy to a class society and
   statism. As Millar points out:

     "as long as the social organisation of the economy did not allow for
     people to maintain retinues, the basic egalitarian assumptions of
     the honour system. . . were reflected reasonably well in reality. .
     . the mentality of hierarchy never fully extricated itself from the
     egalitarian ethos of a frontier society created and recreated by
     juridically equal farmers. Much of the egalitarian ethic maintained
     itself even though it accorded less and less with economic
     realities. . . by the end of the commonwealth period certain
     assumptions about class privilege and expectations of deference were
     already well enough established to have become part of the lexicon
     of self-congratulation and self-justification." [Op. Cit., pp. 33-4]

   This process in turn accelerated the destruction of communal life and
   the emergence of statism, focused around the godord. In effect, the
   godi and wealthy farmers became rulers of the country. Political
   changes simply reflected economic changes from a communalistic,
   anarchistic society to a statist, propertarian one. Ironically, this
   process was a natural aspect of the system of competing chiefs
   recommended by "anarcho"-capitalists:

     "In the twelfth and thirteenth centuries Icelandic society
     experienced changes in the balance of power. As part of the
     evolution to a more stratified social order, the number of
     chieftains diminished and the power of the remaining leaders grew.
     By the thirteenth century six large families had come to monopolise
     the control and ownership of many of the original chieftaincies."
     [Byock, Op. Cit., p. 341]

   These families were called storgodar and they "gained control over
   whole regions." This process was not imposed, as "the rise in social
   complexity was evolutionary rather than revolutionary . . . they simply
   moved up the ladder." This political change reflected economic
   processes, for "[a]t the same time other social transformations were at
   work. In conjunction with the development of the storgadar elite, the
   most successful among the baendr [farmers] also moved up a rung on the
   social ladder, being 'big farmers' or Storbaendr" [Op. Cit., p. 342]
   Unsurprisingly, it was the rich farmers who initiated the final step
   towards normal statism and by the 1250s the storbaendr and their
   followers had grown weary of the storgodar and their quarrels. In the
   end they accepted the King of Norway's offer to become part if his
   kingdom.

   The obvious conclusion is that as long as Iceland was not capitalistic,
   it was anarchic and as it became more capitalistic, it became more
   statist.

   This process, wherein the concentration of wealth leads to the
   destruction of communal life and so the anarchistic aspects of a given
   society, can be seen elsewhere, for example, in the history of the
   United States after the Revolution or in the degeneration of the free
   cities of Medieval Europe. Peter Kropotkin, in his classic work Mutual
   Aid, documents this process in some detail, in many cultures and time
   periods. However, that this process occurred in a society which is used
   by "anarcho"-capitalists as an example of their system in action
   reinforces the anarchist analysis of the statist nature of
   "anarcho"-capitalism and the deep flaws in its theory, as discussed in
   [2]section 6.

   As Miller argues, "[i]t is not the have-nots, after all, who invented
   the state. The first steps toward state formation in Iceland were made
   by churchmen. . . and by the big men content with imitating Norwegian
   royal style. Early state formation, I would guess, tended to involve
   redistributions, not from rich to poor, but from poor to rich, from
   weak to strong." [Op. Cit., p. 306]

   The "anarcho"-capitalist argument that Iceland was an example of their
   ideology working in practice is derived from the work of David
   Friedman. Friedman is less gun-ho than many of his followers, arguing
   in The Machinery of Freedom, that Iceland only had some features of an
   "anarcho"-capitalist society and these provide some evidence in support
   of his ideology. How a pre-capitalist society can provide any evidence
   to support an ideology aimed at an advanced industrial and urban
   economy is hard to say as the institutions of that society cannot be
   artificially separated from its social base. Ironically, though, it
   does present some evidence against "anarcho"-capitalism precisely
   because of the rise of capitalistic elements within it.

   Friedman is aware of how the Icelandic Republic degenerated and its
   causes. He states in a footnote in his 1979 essay "Private Creation and
   Enforcement of Law: A Historical Case" that the "question of why the
   system eventually broke down is both interesting and difficult. I
   believe that two of the proximate causes were increased concentration
   of wealth, and hence power, and the introduction into Iceland of a
   foreign ideology -- kingship. The former meant that in many areas all
   or most of the godord were held by one family and the latter that by
   the end of the Sturlung period the chieftains were no longer fighting
   over the traditional quarrels of who owed what to whom, but over who
   should eventually rule Iceland. The ultimate reasons for those changes
   are beyond the scope of this paper."

   However, from an anarchist point of view, the "foreign" ideology of
   kingship would be the product of changing socio-economic conditions
   that were expressed in the increasing concentration of wealth and not
   its cause. After all, the settlers of Iceland were well aware of the
   "ideology" of kingship for the 300 years during which the Republic
   existed. As Byock notes, Iceland "inherited the tradition and the
   vocabulary of statehood from its European origins . . . On the
   mainland, kings were enlarging their authority at the expense of the
   traditional rights of free farmers. The emigrants to Iceland were well
   aware of this process . . . available evidence does suggest that the
   early Icelanders knew quite well what they did not want. In particular
   they were collectively opposed to the centralising aspects of a state."
   [Op. Cit., p. 64-6] Unless some kind of collective and cultural amnesia
   occurred, the notion of a "foreign ideology" causing the degeneration
   is hard to accept. Moreover, only the concentration of wealth allowed
   would-be Kings the opportunity to develop and act and the creation of
   boss-worker social relationships on the land made the poor subject to,
   and familiar with, the concept of authority. Such familiarity would
   spread into all aspects of life and, combined with the existence of
   "prosperous" (and so powerful) godi to enforce the appropriate servile
   responses, ensured the end of the relative equality that fostered
   Iceland's anarchistic tendencies in the first place.

   In addition, as private property is a monopoly of rulership over a
   given area, the conflict between chieftains for power was, at its most
   basic, a conflict of who would own Iceland, and so rule it. The attempt
   to ignore the facts that private property creates rulership (i.e. a
   monopoly of government over a given area) and that monarchies are
   privately owned states does Friedman's case no good. In other words,
   the system of private property has a built in tendency to produce both
   the ideology and fact of Kingship - the power structures implied by
   Kingship are reflected in the social relations which are produced by
   private property.

   Friedman is also aware that an "objection [to his system] is that the
   rich (or powerful) could commit crimes with impunity, since nobody
   would be able to enforce judgement against them. Where power is
   sufficiently concentrated this might be true; this was one of the
   problems which led to the eventual breakdown of the Icelandic legal
   system in the thirteenth century. But so long as power was reasonably
   dispersed, as it seem to have been for the first two centuries after
   the system was established, this was a less serious problem." [Op.
   Cit.]

   Which is quite ironic. Firstly, because the first two centuries of
   Icelandic society was marked by non-capitalist economic relations
   (communal pricing and family/individual possession of land). Only when
   capitalistic social relationships developed (hired labour and property
   replacing possession and market values replacing social ones) in the
   12th century did power become concentrated, leading to the breakdown of
   the system in the 13th century. Secondly, because Friedman is claiming
   that "anarcho"-capitalism will only work if there is an approximate
   equality within society! But this state of affairs is one most
   "anarcho"-capitalists claim is impossible and undesirable!

   They claim there will always be rich and poor. But inequality in wealth
   will also become inequality of power. When "actually existing"
   capitalism has become more free market the rich have got richer and the
   poor poorer. Apparently, according to the "anarcho"-capitalists, in an
   even "purer" capitalism this process will be reversed! It is ironic
   that an ideology that denounces egalitarianism as a revolt against
   nature implicitly requires an egalitarian society in order to work.

   In reality, wealth concentration is a fact of life in any system based
   upon hierarchy and private property. Friedman is aware of the reasons
   why "anarcho"-capitalism will become rule by the rich but prefers to
   believe that "pure" capitalism will produce an egalitarian society! In
   the case of the commonwealth of Iceland this did not happen - the rise
   in private property was accompanied by a rise in inequality and this
   lead to the breakdown of the Republic into statism.

   In short, Medieval Iceland nicely illustrates David Weick's comments
   (as quoted in [3]section 6.3) that "when private wealth is
   uncontrolled, then a police-judicial complex enjoying a clientele of
   wealthy corporations whose motto is self-interest is hardly an
   innocuous social force controllable by the possibility of forming or
   affiliating with competing 'companies.'" This is to say that "free
   market" justice soon results in rule by the rich, and being able to
   affiliate with "competing" "defence companies" is insufficient to stop
   or change that process.

   This is simply because any defence-judicial system does not exist in a
   social vacuum. The concentration of wealth -- a natural process under
   the "free market" (particularly one marked by private property and wage
   labour) -- has an impact on the surrounding society. Private property,
   i.e. monopolisation of the means of production, allows the monopolists
   to become a ruling elite by exploiting, and so accumulating vastly more
   wealth than, the workers. This elite then uses its wealth to control
   the coercive mechanisms of society (military, police, "private security
   forces," etc.), which it employs to protect its monopoly and thus its
   ability to accumulate ever more wealth and power. Thus, private
   property, far from increasing the freedom of the individual, has always
   been the necessary precondition for the rise of the state and rule by
   the rich. Medieval Iceland is a classic example of this process at
   work.

References

   1. file://localhost/home/mauro/baku/debianize/maint/anarchy/secB2.html#secb25
   2. file://localhost/home/mauro/baku/debianize/maint/anarchy/append136.html
   3. file://localhost/home/mauro/baku/debianize/maint/anarchy/append136.html#secf63
