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<html>
<head>
<title>
9 Is Medieval Iceland an example of "anarcho"-capitalism working in practice?
</title>
</head>
<h1>9 Is Medieval Iceland an example of "anarcho"-capitalism working in practice?</h1>
Ironically, medieval Iceland is a good example of why "anarcho"-capitalism
will <b>not</b> 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 <b>thing</b> -- both local and Iceland-wide -- which can be considered a
"primitive" form of the anarchist communal assembly.
<p>
As William Ian Miller points out <i>"[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."</i> [<b>Bloodtaking and
Peacemaking: Feud, Law and Society in Saga Iceland</b>, p. 306]
<p>
At this time Iceland <i>"remained entirely rural. There were no towns, not
even villages, and early Iceland participated only marginally in the active
trade of Viking Age Scandinavia."</i> There was a <i>"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."</i> [Jesse Byock, <b>Viking Age
Iceland</b>, p. 2] That such a society could be classed as "capitalist" or
even considered a model for an advanced industrial society is staggering.
<p>
Kropotkin in <b>Mutual Aid</b> 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 <i>"village community"</i>)
and the <b>thing</b> (see also Kropotkin's <b>The State: Its Historic Role</b> 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 <b>Hreppar</b>, 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.
<p>
In addition, as in most pre-capitalist societies, there were "commons",
common land available for use by all. During the summer, <i>"common lands
and pastures in the highlands, often called <b>almenning</b>, were used by
the region's farmers for grazing."</i> This increased the independence of
the population from the wealthy as these <i>"public lands offered opportunities
for enterprising individuals to increase their store of provisions and to
find saleable merchandise."</i> [Jesse Byock, <b>Op. Cit.</b>, p. 47 and p. 48]
<p>
Thus Icelandic society had a network of solidarity, based upon communal
life:
<p><blockquote><i>
"The status of farmers as free agents was reinforced by the presence of
communal units called <b>hreppar</b> (sing. <b>hreppr</b>) . . . these [were]
geographically defined associations of landowners. . . the <b>hreppr</b>
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 <b>hreppar</b> . . . <b>Hreppar</b> provided a blanket of
local security, allowing the landowning farmers a measure of
independence to participate in the choices of political life . . .
<p>
"Through copoperation among their members, <b>hreppar</b> 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."</i>
[Byock, <b>Op. Cit.</b>, pp. 137-8]
<p></blockquote>
In practice this meant that <i>"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."</i> [Gissurarson quoted by Birgit T. Runolfsson Solvason, <b>Ordered
Anarchy, State and Rent-Seeking: The Icelandic Commonwealth, 930-1262</b>]
The Icelandic Commonwealth did not allow farmers <b>not</b> to join its
communes and <i>"[o]nce attached to the local <b>hreppr</b>, a
farm's affliation could not be changed."</i> However, they did play a key role in keeping the
society free as the <b>hreppr</b> <i>"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."</i> [Byock, <b>Op. Cit.</b>, p. 138]
<p>
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 <b>skuldaping</b> (<i>"payment-thing"</i>) <b>not</b> supply and demand.
[Kirsten Hastrup, <b>Culture and History in Medieval Iceland</b>, 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:
<p><blockquote>
<i>"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."</i> [<b>Op. Cit.</b>, p. 112]
</blockquote><p>
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.
<p>
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 <b>godar.</b> The godar were local chiefs who also took the role of
religious leaders. As the <b>Encyclopaedia Britannica</b> explains, <i>"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"</i> (the godi).
The godi <i>"acted as judge and mediator"</i> and <i>"took a lead in communal
activities"</i> such as building places of worship. These <i>"local assemblies.
. . are heard of before the establishment of the althing"</i> (the national
thing). This althing led to co-operation between the local assemblies.
<p>
Thus Icelandic society had different elements, one based on the local
chiefs and communal organisations. Society was marked by inequalities
as <i>"[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."</i> This meant it was <i>"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."</i> [Byock, <b>Op. Cit.</b>, p. 64 and p. 65] The
Icelandic social system was designed to reduce the power of the wealthy by
enhancing communal institutions:
<p><blockquote>
<i>"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."</i> [Byock, <b>Op. Cit.</b>, p. 75]
</blockquote><p>
Therefore we see communal self-management in a basic form, <b>plus</b>
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 (
<a href="secB2.html#secb25">section B.2.5</a> on why the wealthy undermine
these popular <i>"folk-motes"</i> 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.
<p>
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 <b>Encyclopaedia
Britannica</b> puts it, <i>"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."</i> This was because, while there were <i>"a central legislature and
uniform, country-wide judicial and legal systems,"</i> people would seek the
protection of any godi, providing payment in return. [Byock, <b>Op. Cit.</b>,
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
<b>Encyclopaedia Britannica</b> points out:
<p><blockquote>
<i>"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."</i>
</blockquote><p>
It was the existence of these hierarchical elements in Icelandic society
that explain its fall from anarchistic to statist society. As Kropotkin
argued <i>"from chieftainship sprang on the one hand the State and on the
other <b>private</b> property."</i> [<b>Act for Yourselves</b>, 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: <i>"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."</i>
[Y. Cohen quoted by Birgit T. Runolfsson Solvason, <b>Op. Cit.</b>] 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.
<p>
The <b>political</b> transition within Icelandic society went hand in hand with
an <b>economic</b> 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 <b>possession</b> 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
<i>"great variants of property and power emerged."</i> [Kirsten Hastrup, <b>Culture
and History in Medieval Iceland</b>, pp. 172-173]
<p>
So significant changes in society started to occur in the eleventh century,
as <i>"slavery all but ceased. Tenant farming . . . took [its] place."</i> Iceland
was moving from an economy based on <b>possession</b> to one based on <b>private
property</b> and so <i>"the renting of land was a widely established practice by
the late eleventh century . . . the status of the <b>godar</b> must have been
connected with landownership and rents."</i> This lead to increasing oligarchy
and so the mid- to late-twelfth century was <i>"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."</i> [Byock, <b>Op. Cit.</b>, p. 269 and pp. 3-4]
<p>
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 <i>"subject to popular judgement"</i> being <i>"subsumed under central
markets."</i> [Hastrup, <b>Op. Cit.</b>, p. 225]
<p>
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, <i>"the individual
accumulation of wealth and power"</i>). 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) -- <i>"power always follows wealth."</i> [Kropotkin,
<b>Mutual Aid</b>, p. 131]
<p>
The transformation of <b>possession</b> into <b>property</b> and the resulting
rise of hired labour was a <b>key</b> 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 (<i>"The courts were less likely to
base judgements on the evidence than to adjust decisions to satisfy the
honour and resources of powerful individuals."</i> [Byock, <b>Op. Cit.</b>, 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.
<p>
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:
<p><blockquote>
<i>"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."</i>
[<b>Op. Cit.</b>, pp. 33-4]
</blockquote><p>
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:
<p><blockquote><i>
"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."</i> [Byock, <b>Op. Cit.</b>, p. 341]
</blockquote><p>
These families were called <b>storgodar</b> and they <i>"gained control over whole
regions."</i> This process was not imposed, as <i>"the rise in social complexity was
evolutionary rather than revolutionary . . . they simply moved up the
ladder."</i> This political change reflected economic processes, for <i>"[a]t
the same time other social transformations were at work. In conjunction
with the development of the <b>storgadar</b> elite, the most successful among
the <b>baendr</b> [farmers] also moved up a rung on the social ladder, being
'big farmers' or <b>Storbaendr</b>"</i> [<b>Op. Cit.</b>, p. 342] Unsurprisingly, it was
the rich farmers who initiated the final step towards normal statism
and by the 1250s the <b>storbaendr</b> and their followers had grown weary
of the <b>storgodar</b> and their quarrels. In the end they accepted the
King of Norway's offer to become part if his kingdom.
<p>
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.
<p>
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 <b>Mutual Aid</b>, 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 <a href="append136.html">section 6</a>.
<p>
As Miller argues, <i>"[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."</i> [<b>Op. Cit.</b>, p. 306]
<p>
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 <b>The Machinery of Freedom</b>, 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.
<p>
Friedman is aware of how the Icelandic Republic degenerated and its
causes. He states in a footnote in his 1979 essay <i>"Private Creation and
Enforcement of Law: A Historical Case"</i> that the <i>"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."</i>
<p>
However, from an anarchist point of view, the "foreign" ideology of kingship
would be the <b>product</b> 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 <i>"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."</i> [<b>Op. Cit.</b>, 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.
<p>
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 <b>own</b> 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.
<p>
Friedman is also aware that an <i>"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."</i> [<b>Op. Cit.</b>]
<p>
Which is quite ironic. Firstly, because the first two centuries of Icelandic
society was marked by <b>non-capitalist</b> 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!
<p>
They claim there will <b>always</b> 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.
<p>
In reality, wealth concentration is a fact of life in <b>any</b> 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.
<p>
In short, Medieval Iceland nicely illustrates David Weick's comments (as
quoted in <a href="append136.html#secf63">section 6.3</a>) that <i>"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.'"</i>
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.
<p>
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.
<p>
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