Are Anarcho-Capitalists Insane? Living Standards under Medieval Icelandic Conflict Institutions

Along with Peter Leeson, I have a new working paper. In this paper, we empirically revisit the 1979 seminal paper of David Friedman in the Journal of Legal Studies regarding the law and economics of Iceland between 900 and 1262. The case is important because Iceland constitutes the first example in the literature on the economics of anarchy of how governance is a good that can privately be produced and with competition between providers. For nearly three centuries, Iceland was without a formal state (with a monopoly on violence) even though it was home to nearly one hundred thousands individuals. However, sustained private provision does not mean that the outcomes are superior than under formal governance. We decided to see whether Icelanders enjoyed living standards above the rest of Medieval Europe. The paper is available here on my website and the abstract is below:

Medieval Iceland was governed privately. Other territories in medieval Europe were governed partly by government. We exploit that difference to test the conventional wisdom that living standards must be higher under government. Historical data on human height, wages, and population growth measure living standards in Iceland and other territories in medieval Europe. Living standards in those territories do not seem to have been higher than they were in medieval Iceland. Medieval Iceland may be a more impressive example of private governance than is usually believed, and anarcho-capitalists may not be insane to extol it.


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