What happens in an anarchy? If there's no law, what do we do?
We can look at modern countries like Sierra Leone or Somalia to find out. It's pretty awful.
Everyone's poor, because there's no point in making things if they instantly get stolen. (Actually there may be some point in making weapons).
If we suppose that our anarchy is on an isolated island, or on a distant planet, then we might imagine that after a short while almost everything is broken and no one's farming, so almost everyone's dead of starvation and the rest are living by hunting and gathering. Diseases, uncontrolled, have scythed through the population until it's so thin that the diseases can't sustain themselves any more. Almost all the old are dead, any children are uneducated, even the memory of civilisation is gone, replaced by dreams of a golden age from which man is fallen. We're back in the stone age.
But is it stable?
No. Humans have built in loyalties to kin and we make friends. Groups of kin and friends will collaborate to defend what little they have and to take from others. Small pockets of stable wealth will form. By wealth I don't really mean much more than the ability to feed oneself.
These groups may then be able to expand, slowly by breeding, quickly by forming alliances with other groups or accepting strangers. Eventually you get a situation where there is a little pocket of peace capable of defending itself against all comers.
At this point I think we can call the leaders of these groups warlords. They may not do much fighting voluntarily, but they will definitely need to be able to defend themselves. And given what's normal in the society around them, they'll probably take any opportunity to take stuff from other groups if they can do it safely.
Both they and the surrounding other groups will probably find it convenient, rather than constant raiding and bloodshed, to arrange the payment of 'protection' fees.
This is protection in the sense of 'protection from me burning your house down', but it will become the other sort eventually. The warlord will not be pleased, once he has got used to the protection money, to see the people he extorts it from unable to pay, because they have been killed by a raid from another warlord. Eventually bonds of loyalty and trust will form, even between oppressor and oppressed. I believe this happens with criminal gangs and protection rackets even today. If you pay protection money to the mafia, they do at least protect you from other gangs.
Where is this protection money going? A little of it may even be being spent on luxuries, but mainly it will be supporting the military capability of the warlords. In order to extort money regularly and efficiently, a large number of non-productive thugs need to be supported. And their standard of living needs to be quite high, because their job is very dangerous, and if they only got the same things as a farmer gets, they would probably rather be farmers.
It may even come to the point where the warlord allows his clients to keep slightly more of what they make than they need. But I imagine this is unlikely. If a warlord 'went soft', then his military capability would reduce to the point where he would be vulnerable to a takeover bid.
Of course, when I say warlord, he's not just the village strongman anymore. There'll be a whole ruling group, probably a family, of which he's the strongest. There will be some constraints on his power, since he's held in position more by who his friends are than by personal strength. He can be replaced without disturbing the power structure.
The world is very hierarchical. No one can command the direct loyalty of more than a few other people. The direct friends of the strongman will be other, smaller strongmen. Each strongman will have his own associated group of retainers, henchmen, and thugs, whose fighting ability maintains his position. Wealth produced by the lowest levels of the society will flow up the tree, with each gangster taking a cut on the way. The peasants are no more than slaves or cattle.
What next? This situation looks fluid, in that there's constant fighting and takeover between the different warlords. But it may be stable in the sense that it could stay like this for hundreds of years. Different warlords, different villages might be on top from time to time, but the general situation will always be the same.
Are there countries like this? Have there ever been countries like this?
So have we stabilised yet?
I imagine that if two groups are of very different sizes, but interact, then one will oppress the other. The small group will either accept the oppression, find a different oppressor to 'protect' it from the first, or die resisting. Either way, the small group will end up joining the big group somehow. Even if it's just by leaving their land in the possession of their murderers.
As a result, groups will grow. There will soon be no small groups left.
Groups can also fission, but I imagine it's unlikely. It isn't really in anybody's interest to become smaller. You'd be inviting attack from a neighbour. It seems more likely that a piece of a group would split off and join another large grouping. But even then, the quarrel would have to be serious. Maybe a language or racial difference within the groups could do it, given our awesome abilities to hate people we don't see as individuals. But then these groups might not form in the first place.
So what stops the aggregation process? I think natural barriers will do it. It's appallingly difficult to send an army over mountains or seas, and then to keep it supplied. Probably difficult enough that most of the time, an uneasy peace prevails.
Two large groups may have a border where there is no barrier, but that would probably be a constantly unstable situation. I think only a racial or language barrier could keep the two groups from coalescing. In that case, you'd get regular genocides and centuries-long hatreds.
At any rate, what we now have is recognisably countries, and our warlords have become kings.
So what next? Well to some extent, the pressure of the war of all against all is now gone. The countries, safe behind whatever natural barriers they've found, persist for lifetimes. And at that point, the kings will notice that tiny internal fights keep breaking out.
Honour is very important in this world. The only thing that stops a man from being randomly murdered over trivia is the expectation that his kin will avenge him.
Pretty much any drunken argument, or any instance of female infidelity can lead to a death, which needs to be avenged by another death, which needs another death, and so on, and it never ends.
This is not a good situation to have amongst your slaves. The person you are yourself a slave to will want his money, and is unlikely to accept excuses along the lines of 'half my slaves have killed each other in a fight that started over an insult'.
Even the king himself needs money. He needs to keep his vassals and his private army on side. They can potentially replace him if they're not happy with him.
If a dispute breaks out horizontally across the social structure, it's up to the owner of the disputers to settle it before it gets out of hand.
There are several popular methods of settling disputes. The honourable duel is one, where both sides agree cheerfully to fight to the death. The winner is proved right. No one needs to take any revenge or anything because it was all perfectly fair.
There's trial by ordeal. In this case, the local lord decides which of the two disputing parties has annoyed him most, and has him tortured. If the torturee survives, then he is declared to have had right on his side all along. I am not making this up. Our ancestors did this a lot. I imagine that it tends to discourage disputes.
There is trial by oath, where the accuser and the accused swear publically to the innocence or guilt of the accused. Each is allowed to bring friends and supporters, people of higher rank count for more, and the man with the highest number of oaths wins. This has the virtue of settling the dispute in the way it would have been settled with a fight, but without any actual fighting.
At any rate, whatever method or combination of methods is used, a judicial system is being established. Sooner or later it will become standardised.