There is some truth in the statement that in Somalia the periods and regions least affected by struggles about the state have provided better living conditions than the ones more affected by statehood. It is also true that the state, especially in the final stage of its existence leading up to its collapse in 1991, was of a predatory nature and, rather than contributing to development, affected it adversely. There is no doubt that no state at all is better than some of the experience the Somali have made with actually existing statehood (but not in comparison with many alternative courses history could have taken). In some recent writings about Somalia, however, the advantages of statelessness have been grossly overstated, and the disadvantages of not having a functioning nation-state in a world of nation-states have grossly been neglected. Especially the Somali customary law (xeer) has been romanticized and praised as a cost-efficient mechanism for the provision of 'justice' in the absence of statehood. This paper examines the actual working of customary law and finds it to be based on negotiation, often between unequals with a number of structural advantages for the demographically, economically and militarily stronger side. Xeer does regulate the use of violence to a degree, but it does not produce 'justice' in the universal or Western sense of the term, as some of its advocates seem to assume.