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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 Gr�g�s, 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.