Stateless societies in history

“It has never worked anywhere” is a common objection to a society without a state. History is more interesting than that. For most of human existence there were no states at all, and even in the last thousand years many communities kept order, enforced contracts and settled disputes with little or no central government.

None of these examples is a perfect anarcho-capitalist society, and none should be romanticized. But together they show that law and order do not require a monopoly.

Before the state

States are young. Humans lived for hundreds of thousands of years in bands and tribes without kings, tax collectors or police. The first states appeared only around five thousand years ago in Mesopotamia and Egypt, and for most of history large parts of the world remained outside their reach.

The political scientist James C. Scott describes in The Art of Not Being Governed (2009) how hill peoples in the highlands of Southeast Asia, a region he calls Zomia, deliberately lived beyond the reach of lowland states for centuries, choosing crops, settlement patterns and even oral rather than written cultures that made them hard to tax and conscript.

Stateless does not mean lawless. Customary law, kinship obligations, elders and mediators kept the peace. The idea that order must be imposed from above is itself a product of the state.

Medieval Iceland (930–1262)

The most famous example is the Icelandic Commonwealth. Norse settlers who left Norway, partly to escape the centralizing king Harald Fairhair, created a society with a common legal system but no king, no army, no police and no taxes for public purposes.

• The Althing. Once a year, free men gathered at the Althing, an open-air assembly, where a lawspeaker recited the law from memory and courts heard cases.
• Chieftains (goðar). Each free man attached himself to a chieftain of his choice, and could change chieftains. Chieftaincies (goðorð) could be bought, sold, inherited and shared. They were closer to competing legal service providers than to rulers.
• Private enforcement. Courts issued judgments, but it was up to the winning party, with the help of kin and allies, to enforce them. Claims could be sold to someone stronger.
• Compensation, not prison. Almost every crime, including killing, was punished by a fine paid to the victim or the family (wergild). Those who refused to pay could be declared outlaws, outside the protection of the law.

The economist David Friedman analyzed this system in his paper Private Creation and Enforcement of Law: A Historical Case (1979). The Commonwealth lasted more than three centuries and produced the Icelandic sagas, one of the great literatures of medieval Europe.

It ended badly. In the 13th century, wealth and chieftaincies became concentrated in a few families, violence escalated in the Age of the Sturlungs, and in 1262–1264 the Icelanders submitted to the Norwegian king. Defenders of the system note that the violence grew as the competitive structure decayed into a handful of quasi-states; critics see it as proof that such systems are unstable. Either way, three hundred years is longer than most modern constitutions have lasted.

Irish Brehon law

For more than a thousand years, until the English conquest in the 17th century, Ireland was governed by Brehon law, named after its professional jurists, the brehons.

• Ireland was divided into around 150 small kingdoms (túatha), but the kings did not make law. Law was the custom of the people, preserved and interpreted by the brehons, who were trained in law schools and competed for clients on reputation.
• Like Iceland, the system relied on compensation to victims rather than state punishment, and on sureties: people who guaranteed others’ obligations and could be called on if they defaulted.
• The historian Joseph Peden described it in Property Rights in Celtic Irish Law (1977) as a system with remarkably little state involvement.

The law merchant

When long-distance trade revived in medieval Europe, merchants faced a problem: no king’s law covered deals between a Flemish cloth trader and an Italian banker. So merchants built their own.

The lex mercatoria (law merchant) developed from the 11th century onward. Disputes at fairs and ports were settled by merchant courts, sometimes called “pie powder courts” in England from the French pieds poudreux, “dusty feet”, because they judged traveling traders on the spot, often within a day.

• The law was based on commercial custom, good faith and fast decisions, not on the will of any ruler.
• Enforcement relied mostly on reputation: a merchant who ignored a ruling would find that nobody would trade with him.
• Much of modern commercial law, from bills of exchange to insurance, grew out of this system. Kings later absorbed it into their own courts.

The economist Bruce Benson tells this story in detail in The Enterprise of Law (1990). Today, international commercial arbitration continues the tradition: firms from different countries routinely choose private arbitrators rather than any national court. See private law and defense.

The “not so wild” American West

Westerns show the American frontier as a place of constant gunfights. The economists Terry Anderson and P. J. Hill argue in The Not So Wild, Wild West (2004) that the reality was much more orderly, and that it was orderly largely because of private institutions that appeared before the government did.

• Land clubs and claim associations registered settlers’ claims and resolved disputes over boundaries.
• Cattlemen’s associations defined grazing rights, organized round-ups and dealt with rustlers.
• Mining camps wrote their own codes for staking claims. When California’s gold rush began in 1848, thousands of miners arrived in territory with almost no functioning government, and the camps created rules that later became the basis of official mining law.
• Wagon trains crossing to Oregon and California drew up written constitutions before setting off.

The authors note that violence rose when the US Army and government agencies arrived, especially in conflicts with Native Americans, which had been more often settled by trade before.

Pirate constitutions

Even outlaws need rules. The economist Peter Leeson shows in The Invisible Hook (2009) that 18th-century pirate crews governed themselves through written articles, signed by every crew member before a voyage.

• Captains were elected and could be voted out. Quartermasters checked the captain’s power.
• Loot was divided by fixed shares, with compensation for injuries: an early form of insurance.
• Rules against fighting on board, gambling and theft from crewmates were strictly enforced.

Pirates were violent towards outsiders, so they are no model society. Leeson’s point is narrower: even people with every reason to cheat each other built working institutions by agreement, because cooperation paid.

Smaller and stranger cases

• The Republic of Cospaia (1440–1826). A strip of land in central Italy was left out of a border treaty between the Pope and Florence by a surveying mistake. Its few hundred inhabitants declared themselves independent and lived for almost four centuries without taxes or a standing government. Their motto: Perpetua et firma libertas, perpetual and firm liberty.
• Somalia after 1991. After the central government collapsed, many areas relied on customary law (xeer), clan elders and private businesses for telecoms, money transfer and security. Peter Leeson argued in Better Off Stateless (2007) that on many measures Somalia did better than under its previous predatory government. This case is heavily debated and Somalia faced war and famine; it shows that statelessness after a collapse is very different from a free society built voluntarily.
• Private cities. In Gurgaon (Gurugram), India, a modern city grew in a few decades with private developers providing roads, water, security and power that the government could not. The result was messy but fast-growing, as Shruti Rajagopalan and Alex Tabarrok describe in Lessons from Gurgaon (2014).

What history teaches

Several patterns recur across these very different places.

1. Law grows from below. Custom, contracts and arbitration come first; legislation by rulers comes later and often just copies or replaces them.
2. Compensation beats punishment. Systems without states usually focus on making victims whole rather than on prisons.
3. Reputation enforces. Where people deal with each other repeatedly, the threat of exclusion is a powerful sanction.
4. Exit keeps power in check. Icelanders could switch chieftains; merchants could choose other fairs; miners could move to another camp.
5. Concentration is the danger. When competition between legal providers disappears, as in late medieval Iceland, a stateless system can slide into a state.

Where to go next

• How these lessons could work today: private law and defense.
• Infrastructure and public services: public goods without a state.
• The opposite case: what is the state?