Classical (“Thing system”) Iceland is an example of society where police and justice were guaranteed through a free market. Author Jared Diamond has written “Medieval Iceland had no bureaucrats, no taxes, no police, and no army. …
“Of the normal functions of governments elsewhere, some did not exist in Iceland, and others were privatized, including fire-fighting, criminal prosecutions and executions, and care of the poor.”
Prominent anarcho-capitalist writer David D. Friedman featured classical Iceland in his book The Machinery of Freedom and has written other papers about it.
“Medieval Icelandic institutions have several peculiar and interesting characteristics; they might almost have been invented by a mad economist to test the lengths to which market systems could supplant government in its most fundamental functions.
“Killing was a civil offense resulting in a fine paid to the survivors of the victim. Laws were made by a “parliament,” seats in which were a marketable commodity. Enforcement of law was entirely a private affair.
“And yet these extraordinary institutions survived for over three hundred years, and the society in which they survived appears to have been in many ways an attractive one .
“Its citizens were, by medieval standards, free; differences in status based on rank or sex were relatively small; and its literary, output in relation to its size has been compared, with some justice, to that of Athens.”
This Icelandic “thing system” survived for several centuries. It was eventually destroyed by the Christian church, which bought up all the godards (defense agencies) creating a state monopoly.
For market anarchist scholar Roderick Long, this illustrates a flaw in the thing system which differentiates it from pure anarcho-capitalism – new “startup” mutual defense units were not allowed.