On the first page I found myself agreeing with a lot of what Putin said, in the sense that I agree with him that patriotism and nationalism aren't war like and that there is irony in America rebelling from the worlds most liberal government on account
I'm not going to debate on Iceland because my knowledge of Icelandic history is rather limited.
However what bothered me the most about your comments in the last 2 pages was that you associated a countries worth with its military size. I couldn't disagree more.
City states are beneficial and good.
"City-states cannot possibly be self-sufficient, and an entity that isn't self-sufficient is not, in my view, 'effective' as a form of organization. "
This is my biggest problem with most people, since when is self-sufficiency a good thing? All self-sufficiency does is lead to stagnation, for scarcity breeds innovation, and a perfectly sustainable, self-sufficient country would have no desire to innovate, and as a result would see little to no innovation.
Edo Japan is the best example I can think of to demonstrate the dangers of self-sufficiency.
I like the city state model because, contrary to your belief, it gets rid of the need or a military.
Countries that in the past had no army haven't gone to war. Botswana for the first 20 years of its independence had a defence budget totalling $0. Being in the most unstable region of the world, many are surprised it never went to war. Liechtenstein had no army and in 1938 their leader married a Jew. Despite bordering Germany from the start of the war, having a jew married to the head of state, and having not a single person in their army, they were able to remain neutral throughout the war.
The point is history has shown that the phrase Si vis pacem, para bellum is false, and that countries with small armies are less likely to go to war, not more likely to be annexed despite popular belief.