Surely Smith would say that government secures the life, liberty, and property of individuals; and without that security for individual rights, the system of natural liberty would be impossible. A free society could not exist in a condition of anarchy without government.
David Friedman has pointed to medieval Iceland during the period of the "Free Commonwealth" (930-1262) as one of the best examples of civilized anarchy (Friedman 2007). In the second half of the ninth century, King Harald Fairhair unified Norway under his rule. Some of his people fled his rule and found their way to Iceland, where they established a social system based on Norwegian traditions, but without a king or any centralized executive authority. The only centralized authority in Iceland was an assembly of local chieftains who represented their assemblymen. Every assemblyman was attached to a chieftain to whom he paid a fee. The chieftaincy was private property that could be bought and sold. The assemblymen could change their allegiance without changing their residence, so the chieftaincies were not based on territory. This freedom of assemblymen to move from one chieftaincy to another (along with their fees) created a free competition between chieftains so that chieftains had an incentive to serve their assemblymen. The legal system worked largely through private enforcement based on arbitration. Victims initiated prosecution of offenders. Victims (or their survivors) could agree to a settlement with offenders. Or cases could be settled by arbitration. If offenders were convicted in court, the judgment would be a fine to be paid by the defendant to the plaintiff. If a convicted defendant refused to pay the fine, he could be declared an outlaw, and anyone was free to kill him.
This system worked well for almost 300 years until 1230. By then, six large families had gained control of most of the original chieftaincies, and the competition between these led to civil wars. Once the rich farmers grew frustrated with the disorder of the civil wars, they accepted the invitation of the King of Norway to become part of his kingdom in 1262.
Another example of anarchic law cited by Benson and others is Anglo-Saxon England (from the end of Roman occupation in 410 to the Norman Conquest in 1066) (Benson 1990, 2007). People joined voluntary groups of one hundred men or households that settled disputes and enforced customary law. What in a modern legal system would be considered “crimes” against the state were treated in Anglo-Saxon law as private torts, and private parties settled disputes without government. Offenders were required to pay restitution to their victims. Offenders who refused to pay were treated as outlaws outside the protection of law. This system of voluntary and customary law was weakened when the Anglo-Saxon kings expanded their power through the concept of the “king’s peace.” Crimes were declared to be violations of the “king’s peace,” and criminals had to pay restitution to the king, which increased the king’s revenue. After the invasion of 1066, the Normans expanded the scope of the “king’s peace” even more.
A prime example of anarchic law in medieval Europe is the Law Merchant (lex mercatoria) (Milgram, North, and Weingast 2007; Benson 1990, 30-36). As commercial trade increased in Europe in the eleventh and twelfth centuries, merchants needed an international commercial law to regulate their commercial transactions. The merchants themselves set up private courts to settle disputes and develop customary laws for commerce. Merchants recognized the mutual gains from exchange facilitated by this voluntary law, and those merchants who refused to accept this law were excluded from trade. This Law Merchant provided the basis for modern international commercial law. This was all done by private groups without government.
A similar kind of anarchic voluntary law emerged in the American West in the 1800s (Anderson and Hill 2004, 2007). Contrary to the popular image of the early American West as lawless and violent, Terry Anderson and Peter Hill have shown that the wild West was not really so wild, because people formed voluntary organizations to enforce customary norms that protected private property and facilitated peaceful cooperation. From 1830 to 1900, although they were officially under the authority of government agencies, many areas of the American Western frontier were beyond the reach of government. In this anarchic situation, customary law was enforced by private protection agencies, vigilantes, cattlemen’s associations, mining camps, and wagon trains.
Today, in the United States and other modern nations, most people assume that the anarchy of past history has disappeared, and now law and order depend on the formal institutions of government exercising coercive authority—legislatures, executive officers, courts, bureaucrats, and police. Hasnas and other private property anarchists insist, however, that if we look around, we can see anarchic law in action as private individuals and organizations formulate and enforce voluntary law without any dependence on governmental authority (Hasnas 2008, Benson 1990).
We should notice that there are more private police in the United States than public police. In shopping malls, gated communities, business offices, schools, and churches, we see privately employed security guards and police agencies, because the public police are unreliable. There were no public police in the United States at all until the 1840s. The New York City police department was not created until 1845.
National and international commercial law depends mostly on private mediation and arbitration services. Business contracts usually contain provisions agreeing that disputes will be settled by some specified arbitration service or court. Businesses, universities, homeowner associations, and religious groups all have their own private regulations and judicial procedures for settling disputes.
Most of the Anglo-American common law that governs social life in Great Britain and the United States arose originally through an evolutionary process of spontaneous order in which customary law developed through the settlement of actual disputes. Tort law, property law, contract law, commercial law, and criminal law all arose in this way. Most people assume that government had to create these laws through statutory legislation. But what really happened is that much of the common law that arose originally as customary law was codified through legislation. Common law was not created by the deliberate design of those in governmental offices to serve some intended end. It was created by the interaction of innumerable individuals over centuries who were looking for ways to settle disputes that would reduce violence and increase cooperation. This was an anarchic system of law because it arose through the voluntary agreement of individuals rather than the coercive authority of government.
That’s the argument of the private property anarchists. Would Smith agree with them? We might think that he should agree with them insofar as they are extending his market model for the spontaneous evolution of order to explain the evolution of legal order without government. But as we have seen, Smith believed that even the system of natural liberty would need government to perform its three duties—military defense, administration of justice, and public goods. So, for Smith, the power of government should be limited but still essential. It seems that Smith is a limited government liberal, not a private property anarchist.
Smith might agree with the anarchists about primitive societies being anarchic, with customary law but no government. As we have seen, Smith sees the history of society as moving through four stages—the age of hunters, the age of shepherds, the age of agriculture, and the age of commerce. Government first arises in the second stage, when disputes over property make government necessary. But when human beings live by foraging—hunting wild animals and gathering wild plants--there is no need for government, since disputes can be settled by informal social authority (WN, 689-90, 708-15). But in at least one passage of The Wealth of Nations, Smith suggests that even hunting-gathering bands are governed by “chiefs” who act as judges in peace and leaders in war (783).
The reason for this confusion is that while primitive foragers can live in “stateless societies,” as anthropologists today would call them, because there is no formal institutional structure of centralized coercive authority that would constitute a “state,” there is, nonetheless, some informal and episodic social ranking in which some individuals act as leaders in arbitrating disputes or fighting in war. Whether this is anarchy depends on how one defines anarchy. If anarchy means a society without the centralized government of a state, then this is anarchy. But if anarchy means a society without any kind of governance, then this is not anarchy; and anarchy has never existed in any social order. Some of the private property anarchists have conceded that a society without governance is impossible, and that what they are identifying as anarchic societies are societies with self-governance, but without a centralized coercive state (Hasnas 2008, 112).
In all of the examples of anarchic legal systems presented by the private property anarchists, one can see some structure of governmental authority in which some people exercise leadership. Benson points to the Kapauku Papuans of West New Guinea as an example of a primitive society living in anarchy without government. And yet they do have a leader or headman that they call tonowi, which means “the rich one.” He is a person who has earned the respect of others who voluntarily choose to follow him because he is generous, honest, and has good judgment. His authority was based on persuasion rather than coercion. He could even change the customary laws through his own deliberate design, as long as his followers voluntarily accepted the change (Benson 2007, 629-30, 632-34). Although Benson claims that Kapauku society had no government at all, this leadership by a headman looks like government.
Similarly, while the “Free Commonwealth” of medieval Iceland was stateless—in the sense that it did not have a centralized bureaucratic state apparatus—it still have political rule. It was a chiefdom, but with multiple competing chieftains. So what we see here is not the absence of government, but rather the freedom from tyranny that can come from a system of decentralized, limited government. Jesse Byock, one of the leading scholars studying medieval Iceland, identifies the “Free Commonwealth” as a “decentralized government” (Byock 2001, 94).
Likewise, the making and enforcement of Anglo-Saxon law was highly decentralized, and yet there was government. Kings always existed, and they could be called upon to help victims of violence who were not strong enough to enforce restitution from a guilty offender. Kings were war leaders, and they expanded their power through centuries of warfare (Benson 1990, 26-27; Benson 2007, 542-43). Anarchists have a hard time explaining how military power can be organized without governmental authority.
While private property anarchists have pointed to the evolution of customary law on the American western frontier as an example of anarchy, Anderson and Hill concede that the early American West was “not completely anarchistic” because government agencies “were always lurking in the background” (Anderson and Hill 2007, 639, 642). The same could be said about all of the examples of private customary law that anarchists see in modern commercial societies: they all appear under the shadow of government, because people know they can appeal to governmental institutions if private law fails to satisfy their needs.
Anderson, Terry L., and P. J. Hill, The Not So Wild, Wild West: Property Rights on the Frontier (Stanford, CA: Stanford University Press, 2004).
Anderson, Terry L., and P. J. Hill, "An American Experiment in Anarcho-Capitalism: The Not So Wild, Wild West," in Stringham, Anarchy and the Law, 639-57.
Benson, Bruce, The Enterprise of Law: Justice Without the State (San Francisco: Pacific Research Institute for Public Policy, 1990).
Benson, Bruce, "Are Public Goods Really Common Pools? Considerations of the Evolution of Policing and Highways in England," in Stringham, Anarchy and the Law, 538-64.
Benson, Bruce, "Legal Evolution in Primitive Societies," in Stringham, Anarchy and the Law, 624-38.
Friedman, David, "Private Creation and Enforcement of Law--A Historical Case," in Stringham, Anarchy and the Law, 586-601.
Hasnas, John, "The Obviousness of Anarchy," in Roderick Long and Tibor Machan, eds., Anarchism/Minarchism: Is Government Part of a Free Country (Burlington, VT: Ashgate Publishing, 2008), 111-31.
Milgram, Paul, Douglass North, and Barry Weingast, "The Role of Institutions in the Revival of Trade: The Law Merchant, Private Judges, and the Champagne Fairs," in Stringham, Anarchy and the Law, 602-23.
Smith, Adam, The Wealth of Nations, 2 vols. (Indianapolis: Liberty Fund, 1981).