From: Jim Choate <ravage@einstein.ssz.com>
Date: Wed, 11 Nov 1998 11:34:06 +0800
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F.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]
   
   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. The Hreppar may have also have organised
   and controlled summer grazing lands (which in turn suggests "commons"
   -- i.e. common land -- of some kind).
   
   Thus Icelandic society had a network of solidarity, based upon
   communal life. 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] However,
   unlike an anarchist society, the Icelandic Commonwealth did not allow
   farmers not to join its communes.
   
   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 David Friedman's attempt in
   The Machinery of Freedom to turn it into a 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.
   
   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 (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." It is these Sagas on which David
   Friedman (in The Machinery of Freedom) bases his claim that Medieval
   Iceland is a working example of "anarcho" capitalism.
   
   Hence we can see that artisans and farmers would seek the "protection"
   of a godi, providing their labour in return. These godi 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 a form of wage
   labour, i.e. capitalistic production) ensured that "great variants of
   property and power emerged." [Kirsten Hastrup, Culture and History in
   Medieval Iceland, pp. 172-173] During the 12th century wealth
   concentrated into fewer and fewer hands and by its end an elite of
   around 6 wealthy and powerful families had emerged.
   
   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." [Ibid., p. 225]
   
   With a form of wage labour 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. This would enable him to enlist more
   warriors, which gave him even more social power (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 when
   feeding his warriors. Production became the means of enriching the
   already wealthy, with concentrations of wealth producing
   concentrations of social and political power (and vice versa).
   Kropotkin's general summary of the collapse of "barbarian" society
   into statism seems applicable here - "after a hard fight with bad
   crops, inundations and pestilences, [farmers]. . . began to repay
   their debts, they fell into servile obligations towards the protector
   of the territory. Wealth undoubtedly did accumulate in this way, and
   power always follows wealth." [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. 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 and "the old
   form of government became modified in the course of time." This change
   from a communalistic, anarchistic society to a statist, propertarian
   one can also be seen from this quote from an article on Iceland by
   Hallberg Hallmundsson in the Encyclopaedia Americana, which identifies
   wealth concentration in fewer and fewer hands as having been
   responsible for undermining Icelandic society:
   
   "During the 12th century, wealth and power began to accumulate in the
   hands of a few chiefs, and by 1220, six prominent families ruled the
   entire country. It was the internecine power struggle among these
   families, shrewdly exploited by King Haakon IV of Norway, that finally
   brought the old republic to an end."
   
   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
   section F.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]
   
   David 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.
   
   The settlers of Iceland were well aware of the "ideology" of kingship
   for the 300 years during which the Republic existed. However, 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 section F.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.