Sources of Risk, Institutions for Survival, and a Game against Nature in Premodern Iceland

The essay examines institutions of risk management in agrarian societies and uses primitive subarctic farming in premodern Iceland as an example. After identifying major sources of general and specific risk in Iceland, the paper analyzes the effects, including possible undesirable side effects, of various laws, regulations, contractual arrangements, and informal social practices. Particular attention is given to social security provisions in the country's old law books. The paper identifies as a perplexing puzzle the propensity of farmers to gamble with their supply of fodder (hay) and not keep sufficient reserves to feed the animals in the event of a hard year. The conclusion offers thoughts about the storage puzzle and the overall effectiveness of the country's social insurance system. Contents.I.Introduction.II.General and Specific Risk in Traditional Societies.(a) Theory of general and specific risks. (b) Sources of risks in premodern Iceland. III.Institutions for Survival.(a) Social security provisions of the old law books. (b) Preoccupation with opportunism. (i) Population control. (ii) Restricting specialization. (c) Private contracts and risks. (i) Theory. (ii) Tenancy contracts. (iii) Livestock contracts. (iv) Linked labor contracts. IV.A Game Against Nature: Provision of Fodder.(a) Background. (b) The debate and reform attempts. (c) The logic of the game. V.Conclusion.(a) The storage puzzle. (b) The system as a whole.