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The Decline and Fall of Private Law in Iceland

Article by Roderick Long.
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The Decline and Fall of Private Law in Iceland

Many libertarians are familiar with the system of private law that prevailed in Iceland during the Free Commonwealth period (930-1262). Market mechanisms, rather than a governmental monopoly of power, provided the incentives to cooperate and maintain order.

In outline, the system’s main features were these: Legislative power was vested in the General Assembly (althingi); the legislators were Chieftains (godhar; singular, godhi) representing their Assemblymen (thingmenn; singular, thingmadhr). Every Icelander was attached to a Chieftain, either directly, by being an Assemblyman, or indirectly, by belonging to a household headed by an Assemblyman. A Chieftaincy (godhordh) was private property, which could be bought and sold. Representation was determined by choice rather than by place of residence; an Assemblyman could transfer his allegiance (and attendant fees) at will from one Chieftain to another without moving to a new district. Hence competition among Chieftains served to keep them in line.

The General Assembly passed laws, but had no executive authority; law enforcement was up to the individual, with the help of his friends, family, and Chieftain. Disputes were resolved either through private arbitration or through the court system administered by the General Assembly. Wrongdoers were required to pay financial restitution to their victims; those who refused were denied all legal protection in the future (and thus, e.g., could be killed with impunity). The claim to such compensation was itself a marketable commodity; a person too weak to enforce his claim could sell it to someone more powerful. This served to prevent the powerful from preying on the weak. Foreigners were scandalized by this “land without a king”; but Iceland’s system appears to have kept the peace at least as well as those of its monarchical neighbors.

The success of the Icelandic Free Commonwealth’s quasi-anarchistic legal institutions has been used by David Friedman, Bruce Benson, and others as evidence against the Hobbesian argument that cooperation is impossible in the absence of central authority.

But during the Sturlung Period (1230-1262), the Icelandic Free Commonwealth did eventually collapse into violent conflict and social chaos, and the King of Norway had to be called in to restore order. Doesn’t this show that Hobbes was right after all?

Not necessarily. There is another possible interpretation…more

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