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Where's the wienie? Show me where such a thing even remotely works as described? For examples of where it fails, pick any of the failed states throughout history.
Worked pretty good in medieval Iceland, for about 600 years, until an outside power bought up the judges. 1000 years in Ireland, before Cromwell finally beat 'em.
I looked into both a bit last night. The look to me like they were distinctly Feudal societies at their core albeit which some tribalism mixed in which is more common then not. Sure, they had some mild variations about how law was enforced, but it seems nothing like what Friedman fantasizing about.