Iceland was colonized by a group of tax-evaders seeking to escape King Harald Fairhair’s attempt to impose property taxes on all of Norway. Initially there was no structure in Iceland. Living in Iceland was a life on the frontier. There were few natural resources, and the climate was not particularly conducive to farming or human survival. Despite these difficulties, the art, literature, and culture of medieval Iceland have been compared by many scholars to that of ancient Greece.
According to Ari Þorgilsson in the Icelandic historical account Íslendingabók, around 930 AD a local assembly called the Kjalarnesþing established a sort of parliament called the Alþing. The Alþing was not a parliament in the way we would understand, insofar as they did not legislate laws to apply to all those living in the geographic region called Iceland. Rather it was an assembly of respected leaders called godhar (singular godhi), whom I shall call chieftains for lack of a better word. According to the Íslendingabók, this assembly sent a man named Úlfljótur to learn of the Western Norwegian law of Gulaþing. This supposedly became the basis of Icelandic law, however many historians question this account, on the grounds that there are stark differences between medieval Icelandic law and medieval Norwegian law, differences so remarkable that it is almost impossible the former could have been derived from the latter.
Individual Icelanders did not project authority onto the Alþing in the way citizens project authority onto Kings or Congresses. Each individual subscribed to a chieftain, to whom they paid a fee. At any time individuals could withdraw their subscriptions to their chieftain for any reason and subscribe to another chieftain. One had the option of withdrawing from the chieftainship system altogether, but this meant complete lack of protection under the law. Individuals who did not subscribe to chieftains could be robbed, injured, or murdered, and would have no capacity for retribution. There's not much said about anyone who withdrew from the system, but I imagine for these reasons it was an uncommon occurrence.
Since all individuals living in Iceland could withdraw from their chieftainships as they pleased, competition between chieftains was significant. Each was required to charge prices low enough to appeal to their assemblymen. Since chieftains were not elected, but had to convince people to subscribe to them on an individual basis, they needed to achieve an exemplary understanding of Icelandic law, to the point that in the same way the Greeks recounted stories of great feats of warrior heroism, the medieval Icelanders recounted legends of great debaters of the law, particularly in Njal's Saga. The great respect Icelanders had for the law can be illustrated in the means through which Pagan religious leaders conducted exorcisms. Law courts were convened and a trial was held to determine whether the ghost had permission to reside in the plaintiff's house. It would be decided that the ghost was violating the homeowner's property rights and was thus required to leave or cede protection under the law. Apparently following such trials the hauntings were no longer an issue.
The court system was extraordinarily complex, but I will attempt to describe it here. Each year the chieftains would convene at the Alþing to negotiate law. At these meetings Iceland was divided into four quarters. Each of these quarters was divided into nine godard. Within each godard the chieftains were clustered into groups of three called "things." Every three years a lawspeaker was elected by one of the quarters. The quarter with the right to elect the lawspeaker was chosen by lot. The lawspeaker's job was to memorize the laws, recite them through once during his term in office, provide advice on difficult legal points, and to preside over the lögrétta, the "legislature." The lögrétta was composed of a representative from each godard plus one additional representative from each thing. Laws were agreed upon by majority vote, subject first to attempts at unanimity. If a chieftain did not agree with an amendment to the law, he was not required to enforce it, or could use another law, to the extent his most closely-related fellow chieftains were willing to accommodate him. By and large the laws passed by the lögrétta were implemented in the courts. The lowest level of courts were private courts, formed by the individuals in conflict. Half of the court was composed of members on the side of the plaintiff, and the other half on the side of the defendant. Above this was the "thing" court, which was presided over by 36 individuals, three sets of twelve chosen by each of the chieftains who were members of the relevant "thing." If this court could not resolve the dispute it was taken to the quarter court, composed of various members in the same quarter. Above this was only the Alþing, or the annual national assembly. If anyone was unhappy with the decisions or services of the particular legal body to which they subscribed, they could change, or even start their own. Becoming a chieftain only required a substantial number of supporters, as well as recognition from the other chieftains. Chieftainships could be sold, however if the assemblymen were not happy with the new chieftain, they could subscribe to another. Chieftainships were non-geographic, in that there were no lines between territories. Multiple people in the same village could belong to a variety of chieftainships.
In terms of executing the law it should be noted that there were no criminal cases. All cases were civil, and upon reaching a verdict the execution of the verdict was left up to the victim of the crime. Rather than imprisonment or execution, nearly all cases were resolved through some sort of monetary compensation. Theft was recompensed through restitution of property to the victim. Rape and murder were also compensated through a debt to the victim. If the criminal was too poor to compensate the victim, they were required to contribute a portion of their labor to the victim until the debt was paid off. In some cases the criminal was temporarily enslaved to pay off the debt. This capacity for the victim to benefit more from the criminal alive than dead was noted to have prevented many revenge killings, and the law was thus seen as something beneficial for both potential murderers and potential victims. If the criminal and victim reached a consensual agreement outside of the chieftain court system, the case was considered moot. If the criminal refused to compensate the victim, he was denied protection by all chieftains, and the relevant chieftains informed their assemblymen that the criminal should be boycotted. On occasion the criminal was banished from the town. If he refused to leave within three months and continued to ignore the sentence, the victim was considered in his lawful right to execute the criminal. Those who were too weak or poor to engage in legal activities or carry out the sentencing were permitted to sell their right to someone more able. This guaranteed protection and restitution for everyone under the law, including the poor, and prevented the rich from achieving any great advantage. In this way Icelanders overcame the obstacle of discouraging crime without an ever-present police force.
It should be noted that except for the final civil war which resulted in the emergence of the state (which I will discuss shortly), there was not a single war in these 300 years of Icelandic civilization. Not a single one. There were occasional feuds, however these conflicts never escalated beyond a couple dozen participants. This stands in stark contrast to the bloodthirsty ravaging wars of Europe throughout the entirety of the Middle Ages.
In terms of money Iceland traded in silver, measured in marks (approximately 8 oz) and a woolen cloth called wadmal. The wadmal had a standard width of approximately one meter and was measured in the Icelandic unit of ells, which were equal to about 56 centimeters. The value of one ounce (eyrir) of silver varied between 6 and 7.5 ells of wadmal. Geagas, the earliest book of Icelandic law, apparently attempted to set a maximum wage in Iceland. This was part of an attempt by a particular "thing" to initiate a cartel against their assemblymen. We can't say with certainty, but based on this information historians have estimated that the typical Icelandic farmer made approximately one mark of silver per year.
Here is a chart of estimated various expenses in medieval Iceland. A wergeld is the price for murdering a man. A thrall was a slave. Yeah, I know, not cool. It was medieval times. Slavery wouldn't be abolished for 700 years. This is the big reason why I would not personally advocate a system like Iceland's. Some questions have risen as to whether Iceland can be considered a stateless society because of the presence of slavery, and I would say yes. Not that I don't abhor slavery - I abhor it for the same reasons I abhor the state. However a state is a group of people who claim a universal land monopoly and the right to use violence against everyone living on that land. Slavery is, I think, more individual ownership (obviously there's not an absolute line, like with serfdom, but I think this is the basic distinction). Since Iceland (and Ireland actually) are both examples of how slavery can exist in a stateless society (and that states can exist in a society free of slavery, as we've seen) it is important that as a movement we do not stop at anarchy. Anarchy is one conclusion resulting from the application of the non-aggression principle, which is a conclusion arrived at through a greater philosophical system of reason and evidence. Opposition to slavery is just another necessary conclusion resulting from the application of the non-aggression principle, and it is vital we oppose it. I have run into some anarcho-capitalists who do not oppose slavery so long as it's "voluntary." If you ever encounter such a person, know that I disagree PASSIONATELY with them, and think they are being disgustingly inconsistent with their values.
COLLAPSE
So what caused the collapse into statism? Icelanders worshiped the Norse gods inherited from their ancestry. In the 990s AD King Olaf I of Norway sent two teams of Christian militants to convert the Icelandic population through harassment and intimidation techniques. Those who refused to convert to Christianity were frequently beaten or killed. On many occasions the King captured and held captive the loved ones of prominent members of Icelandic society, particularly chieftains. King Olaf threatened to maim or kill the families unless Christianity was declared the official religion of Iceland.
Iceland was a resource-poor civilization with little military, and Norway was an indispensable trading partner. They had to take Olaf's threats seriously, however a significant percentage of the population was unwilling to abandon their pagan beliefs. Civil war seemed inevitable, yet as was Icelandic tradition, the decision was left to arbitration. Throgeirr Thorkelsson, a prominent pagan chieftain with ties to the Christian camps, was chosen to make the decision. Such was the respect the population held for Thorkelsson and the law that his decision, to reluctantly embrace Christianity, was adopted voluntarily by the Icelandic population. In 1000 AD Christianity became the official religion of Iceland.
Icelandic anarchy continued unabated until in 1097 a compulsory land tithe was instituted on all Christians. The fee was divided into four parts - bishop, local priests, welfare relief, and the churchstead fee. The churchstead fee was the most significant, as in Iceland the church property was privately owned. When a priest died, rather than having the property return to the church as a whole, it was inherited by the children of the priest. Through the institution of this tithe, a landed aristocratic class had formed which could flourish without having to labor. This stood in stark contrast to the chieftains, who could lose their funding if viewed by their assemblymen as ineffective at upholding the law. Payment to the churchstead was mandatory. Furthermore, these land tithes were based on evaluations of the value of one's home, which allowed the church to create a graduated tax to soak the rich (that is, the rich not associated with the church). This aristocratic religious class is what ultimately led to the demise of Iceland's anarchic society.
Over time wealth and power became concentrated in the hands of a few. In the Sturlung period (1230-1262) emerged Christian religious chieftains called storgodhar ("Big" Chieftains). Since the total number of chieftains at this point was fixed by law, but this group of chieftains were able to enforce their payments through the church, competition between chieftains was slowly eliminated. The reduction in competition allowed some chieftains to charge higher rates, making several assemblymen propertyless dependents on church welfare.
Towards the end of the Sturlung period the storgodhar were so powerful they were able to directly impose transfers of wealth from the population to the elite without the guise of religious justification. Conflicts over the inheritance of churchsteads became among the most important matters in Iceland, and rather than being resolved through arbitration, competitors tended to resort to violent feuds. Iceland entered its first and only war, however I must say this with a caveat. This period of extreme conflict and violence, for which there was great unrest and horror in the Icelandic community, is estimated to have had a per-capita murder rate equal to that of the United States today. Iceland's worst period in its entire anarchic history, during which a state was emerging, and during the Middle Ages, when war, murder, and infanticide were commonplace in Europe, had a murder rate equal to that of the modern United States. This should give you an idea of how infinitely superior it was prior to this period, particularly when compared to European states at that time.
Throughout these final conflicts King Haakon of Norway lurked in the background. He constantly encouraged the competing chieftains to enlist him for support in the conflict, and in true political fashion, frequently helped both sides. Iceland grew less stable each year. Finally, in 1262, King Haakon offered to quell the conflicts he helped to create. The desperate Icelanders, exhausted by civil war, accepted his offer. The Icelandic commonwealth, formed 332 years earlier to avoid the taxes of King Fairhair, fell to the power of King Haakon.
Iceland's collapse into statism was not a result of anarchy - it was a consequence of not being anarchic enough. If they had resisted the initial imposition of religious intolerance when it arose, the final civil war would not have taken place. A landed aristocracy could not have formed, and the Christians would have coexisted with the pagans. If there is anything we can learn from the story of Iceland it is the danger of religion and of the influence of foreign states on the emergent leaders of the society. If anarchy is ever achieved, these seem to be the only ways in which a state could re-emerge, and anarchic peoples must be vigilant to recognize these threats when they arise.
That's the story of anarchic Iceland. Thanks for reading!
References:
Ordered Anarchy: Evolution of the Decentralized Legal Order in the Icelandic Commonwealth by Birgir T. Runolfsson Solvason:
http://www3.hi.is/~bthru/iep.htm
The Decline and Fall of Private Law in Iceland by Roderick T. Long:
http://www.libertariannation.org/a/f13l1.html
Privatization, Viking Style: Model or Misfortune? by Roderick T. Long:
http://www.lewrockwell.com/orig3/long1.html
Private Creation and Enforcement of Law: A Historical Case by David Friedman
http://www.daviddfriedman.com/Academic/Iceland/Iceland.html
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