For three centuries beginning in 930, the Norse settlers of Iceland enjoyed the literate world’s nearest thing to a stateless society; possibly the largest non-nomadic society ever to lack territorial monopolies in government. Competition between the goðar (customarily and poorly translated as ‘chieftains’) is often blamed for the feuds that led to annexation by Norway in 1262; so why did the evils of anarchy happen only when the system became less competitive?
Roderick Long (cited at Gene Expression) concisely explains what went wrong. As usual, the fatal flaw was a non-competitive element: a church tax, imposed on the households of a territory. Another flaw was a restriction on the number of goðar – analogous to taxi medallions. These two features concentrated wealth and power in a few families.
I think it was indirectly through a link from Long’s essay that I found Sean Gabb’s “How to Destroy the Enemy Class”, a manifesto for the first libertarian Parliament.