1. Private Law
Without question the legal system is the one facet of society that supposedly requires state provision.
Even such champions of laissez-faire as Milton Friedman and Ludwig von Mises
believed a government must exist to protect private property and define the rules of the game.
However, their arguments focused on the necessity of law itself.
By themselves, they simply assumed that the market is incapable of defining and protecting
property rights. They were wrong.
In this essay, I argue that the elimination of the state will not lead to lawless chaos.
Voluntary institutions will emerge to effectively and peacefully resolve the disputes arising
in everyday life. Not only will market law be more efficient, it will also be more equitable
and the Government Alternative.
Just as right-wing hacks embrace the Orwellian notion that war is peace, left-wing egalitarians
believe that slavery is freedom.
The hawks wage endless war to end war, while the social democrats engaged in massive theft
– or taxation, as they call it – to eliminate crime.
It is high time to abandon such monstrous paradoxes.
It took no king to produce language, money or science, and it takes no government to
produce a just legal system.
1.
Contract
First, we must abandon the idea of a mythical law of the land.
There doesn't need to be a single set of laws binding everyone.
In any event, such a system never existed.
The laws in each of the fifty states are different, and the difference in legal systems between
in countries is even more pronounced, yet we go about our daily lives and even visit
and do business with foreign nations without too much trouble. All actions in a purely
free society would be subject to contract. For example, it is currently a crime to steal
because the legislature says so. A prospective employer knows that if I steal from his firm,
He can notify the government and it will punish me.
But in a stateless society there wouldn't be a legislated body of laws, nor would there
be government courts or police.
Nonetheless, employers would still like some protection from theft by their employees.
So, before hiring an applicant, the employer would make him sign a document that had clauses
to the effect of, I promise not to steal from the Acme firm.
If I get court-stealing, as established by Arbitration Agency X, then I agree to pay
whatever restitution that Agency X deems appropriate.
We immediately see two things in this contract. First, it is completely voluntary. Any laws
binding the employee have been acknowledged by him beforehand. Second, the existence of
of Arbitration Agency X ensures fairness and objectivity in any disputes.
To see this, suppose that it didn't. Suppose that a big firm bribed the arbitrators at
Agency X so that lazy workers, who were going to be fired anyway, were, falsely, charged
by the employers with embezzlement, while Agency X always ruled guilty. With this scheme,
The big firm could bilk thousands of dollars from its blad employees before terminating
them, and since the hapless employees had agreed beforehand to abide by the arbitration
outcome, they could do nothing about it. But upon consideration, it's easy to see that
such behavior would be foolish. Just because an arbitration agency ruled a certain way
wouldn't make everyone agree with it, just as people complain about outrageous court
Rulings by Government Judges. The press would pick up on the unfair rulings and people would
lose faith in the objectivity of Agency X's decision. Potential employees would think
twice before working for the big firm as long as it required in its work contracts that
people submitted to the suspect Agency X. Other firms would patronize different, more
reputable arbitration agencies and workers would flock to them. Soon enough the corrupt
Big firm and Arbitration Agency X would suffer huge financial penalties for their behaviour.
Under market anarchy, all aspects of social intercourse would be regulated by voluntary
contracts. Specialised firms would probably provide standardised forms so that new contracts
wouldn't have to be drawn up every time people did business. For example, if a customer bought
something on installment, the store would probably have him sign a form that said something
Expertise Under this system, legal experts would draft
the laws of the land, not corrupt and inept politicians, and these experts would be chosen
in open competition with all rivals. Right now, one can buy definitive style manuals
Rules for writing term papers or dictionaries of the English language. The government doesn't
need to establish the experts in these fields. It would be the same way with private legal
contracts. Everybody knows the rules of grammar, just like everybody would know what's legal
and what isn't.
Murder Of course, one of the most basic stipulations
in any contractual relationship, whether entering a mall or living in a neighbourhood co-op,
would be strong prohibitions on murder. In other words, all contracts of this type would
have a clause saying, if I am found guilty of murder, I agree to pay Y million dollars
to the estate of the deceased. Naturally, no one would sign such a contract unless he
was sure that the trial procedures used to determine his guilt or innocence had a strong
presumption of innocence. Nobody would want to be found guilty of a murder he didn't commit.
But on the other hand, the procedures would have to be designed so that there was still
a good chance that guilty people would actually be convicted, since people don't want to shop
in malls where murder goes unpunished.
And because all contracts of this sort, except possibly in very eccentric areas frequented
by people who liked to live dangerously, would contain such causes, one could say that murder
is illegal in the whole anarchist society, even though the evidentiary rules and penalties
These might differ from area to area, but this is no different from our current system
and no one doubts that murder is illegal in the current United States.
Profitability the standard
The beauty of this system is that the competing desires of everyone are taken into account.
The market solves this problem every day in reference to other goods and services.
For example, it would be very convenient for customers if a deli were open 24 hours a day,
but on the other hand such long shifts would be very tedious for its workers. So the market
system of profit and loss determines the correct hours of operation.
In the same way, we saw above how evidentiary rules would be determined under a system of
private law. Because people would be submitting themselves contractually to the rulings of
For a certain arbitration agency, the agency would need a reputation for objectivity and
fairness to defendants. But on the other hand, the owners of stores, firms, rental cars,
etc. would want some means of restitution in the event of theft, and so the arbitration
agencies couldn't be too lenient. As with the hours of a stores operation, so too would
the legal procedures be decided by the profit and loss test. Maybe there would be juries,
Maybe there wouldn't. We can't predict this beforehand, just as we can't say a priori
how many tricycles should be made this year. We let the market take care of it automatically.
2. Insurance
The contractual system described above seems to work well except for one nagging problem.
How can people afford to pay these outrageous fines?
Granted, someone might sign a piece of paper pledging restitution to his employer if he is caught stealing. But suppose he steals anyway, and is found guilty by the arbitration agency but has no money. Then what?
Well, how does our present system of auto damages work? Right now, if I sideswipe someone, I must pay a stiff penalty, or rather, my insurance company does.
It would be the same way with all torts and crimes under the system I have described.
An insurance company would act as a guarantor or co-signer of a client's contracts with
various firms. Just as a bank uses experts to take depositor's money and efficiently
allocate it to borrowers, so too would the experts at the insurance company determine
the risk of a certain client, i.e. the likelihood he or she would violate contracts by stealing
Banking or Killing, and charge an appropriate premium. Thus other firms wouldn't have to
keep tabs on all of their customers and employees. The firm's only responsibility would be to
make sure everyone they dealt with carried a policy with a reputable insurance agency.
Under this system the victims of a crime are always paid, immediately. Contrast this to
the government system where victims usually get nothing except the satisfaction of seeing
There would also be incentives for people to behave responsibly. Just as reckless drivers pay higher premiums for car insurance, so too would repeat offenders be charged higher premiums for their contract insurance.
First, keep in mind that wherever someone is standing in a purely libertarian society, he would be on somebody's property.
This is the way in which force could be brought to bear on criminals without violating their natural rights.
For example, the contract of a movie theatre would have a clause to the effect,
if I am judged guilty of a crime by a reputable arbitration agency, perhaps listed in an appendix,
I release the theatre owner from any liability should armed men come to remove me from his property.
So, we see that it is not a contradiction to use force to capture fugitives in a completely
voluntary society. All such uses would have been authorized by the recipients themselves
beforehand. But where would these ne'er-do-wells be taken
once they were brought into custody? Specialised firms would develop offering high-security
are the analogues to the current jailhouse. However, the jails in market anarchy would compete with each other to attract criminals. Consider. No insurance company would vouch for a serial killer if he applied for a job at the local library, but they would deal with him if he agreed to live in a secure building under close scrutiny. The insurance company would make sure that the jail that held him was well run. After all, if the person escaped and killed again, the insurance company would be held liable.
is vulnerable since it pledges to make good on any damages its clients commit.
On the other hand, there would be no undue cruelty for the prisoners in such a system.
Although they would have no chance of escape, unlike government prisons, they wouldn't be
beaten by sadistic guards. If they were, they'd simply switch to a different jail, just as
travellers can switch hotels if they view the staff as discourteous. Again, the insurance
The health company which vouches for a violent person doesn't care which jail its client chooses,
so long as its inspectors have determined
that the jail will not let its client escape into the general population.
4. Doubts
Although superficially coherent and workable,
the proposed system of market law will certainly engender skepticism.
In the interest of brevity, I will deal with some common and valid concerns.
What about someone who has no insurance?
If an individual didn't carry insurance, other people would have no guaranteed recourse should
the individual damage or steal their property. Such an individual would therefore be viewed
with suspicion, and people would be reluctant to deal with them except for single transactions
So we see that those without insurance would have their options, including their freedom
of movement, greatly restricted. At the same time, the premiums for basic contract insurance,
At least for people without a criminal history would be quite low, so there wouldn't be
very many people walking around without this type of insurance. It's true, some people
would still commit crimes and would have no insurance company to pay damages, but such
cases are going to occur under any legal system. Furthermore, once someone without insurance
had committed a serious crime, he would still be chased by detectives just as he would be
Waring Agencies Critics often dismiss private law by alleging
that disputes between enforcement agencies would lead to combat, even though this happens
between governments all the time. In truth, the incentives for peaceful resolution
of Disputes would be far greater in market anarchy than the present system. Combat is
very expensive and private companies take much better care of their assets than government
officials take of their subjects' lives and property. In any event, those engaging in
warfare in a free society would be treated as any other murderers. Unlike government soldiers,
private mercenaries would receive no special privileges to engage in condoned violence.
Those agencies interpreting the law would not be the same as the firms enforcing it.
There is no intrinsic reason to worry about battles between private enforcement agencies
any more than battles between the government, army and navy.
Won't the Mafia take over?
It is paradoxical that the fear of rule by organized crime families causes people to
support the State, which is the most organized and criminal association in human history.
Even if it were true that under market anarchy people had to pay protection money and occasionally
get whacked, this would be a drop in the bucket compared to the taxation and wartime deaths
caused by governments.
But even this concedes too much, for the mob derives its strength from government, not
the free market.
All of the businesses traditionally associated with organized crime, gambling, prostitution,
loan-sharking, drug-dealing, are prohibited or heavily regulated by the state.
In market anarchy, true professionals would drive out such unscrupulous competitors.
Your insurance companies would become the state.
On the contrary, the private companies providing legal services would have far less power under
market anarchy than the government currently possesses.
Most obvious, there would be no power to tax or to monopolize service.
If a particular insurance company were reluctant to pay legitimate claims, this would quickly
become known and people would take this into account when dealing with clients of this
disreputable firm.
The fear that, under market anarchy, private individuals would replace politicians overlooks
the true causes of state mischief.
Unlike feudal monarchs, democratic rulers don't actually own the resources, including
human, that they control.
Furthermore, the duration of their rule and hence control of these resources is very uncertain.
For these reasons, politicians and other government employees do not exercise much care in maintaining
the market value of the property in their jurisdiction.
Shareholders of a private company, however, have every interest in choosing personnel
and policies to maximize the profitability of the firm.
All the horrors of the state, onerous taxation, police brutality, total war, are not only
monstrous, but they're also grossly inefficient. It would never be profitable for anarchist
insurance and legal firms to mimic the policies set by governments.
Children The question of children is one of the most
difficult. As a first pass, let us note that, obviously, concerned parents would only patronize
is those schools and live in those apartments or housing complexes where the protection
of their children was of paramount importance to the staff. Beyond this, the basic prohibitions
on parental child abuse and neglect could be stipulated in the marriage contract. In
addition to whatever romance may be entailed, a marriage is ultimately a partnership between
two people, and prudent couples will officially spell out this arrangement with all of its
Benefits and Obligations. For example, before abandoning her career to raise a man's children,
a woman may require a financial pledge in the case of divorce, i.e. dissolving the partnership.
In the same way, a standard clause in marriage contracts could define and specify penalties
for the improper treatment of children. Another point to consider is the enhanced role of
adoption in a free society. Much as it shocks modern sensibilities, there would be a fully
The fully functioning baby market, in which parental privileges were sold to the highest bidder.
Although seemingly crass, such a market would surely reduce child abuse.
After all, abusive or negligent parents are probably the ones most likely to offer their children for adoption,
when loving couples are allowed to pay them handsomely for it.
The controversial issue of abortion, just as other conflicts in a private law system,
The law system would be handled by competing firms setting policies to best match the desires
of their customers. Those people sufficiently horrified by the practice could establish
a gated community in which all residents agreed to refrain from abortion and to report anyone
caught performing one.
Title Registry
In market anarchy, who would define property rights? If someone hands over the money to
This is a complex issue, and I won't be able to give specifics, since the actual market solution would depend on the circumstances of the case and would draw on the legal expertise far greater than mine of the entire community. I can, however, offer some general remarks.
Whatever, if any, the abstract or metaphysical nature of property law, the purpose of public titles is quite utilitarian.
They are necessary to allow individuals to effectively plan and coordinate their interactions
with each other. Specialized firms, perhaps distinct from arbitration agencies, would keep
records on the property titles, either for a specific area or group of individuals. Title
registry would probably be accomplished through a complex hierarchical web of such firms.
The fear of rogue agencies unilaterally declaring themselves owner of everything is completely
unfounded. In market anarchy, the companies publicizing property rights would not be the
same as the companies enforcing those rights. More important, competition between firms
would provide true checks and balances. If one firm began flouting the community norms
established and codified on the market, it would go out of business, just as surely as
as a manufacturer of dictionaries would go broke if its books contained improper definitions.
Infinite Regress
A sophisticated critic may charge that my proposal rests upon a circular argument. How
can people use contracts to define property rights when a system of property rights is
necessary to determine which contracts are valid? After all, Smith can't sell Jones
To see the solution, we must break the problem into two parts. First, we should ask, could
the free market provide a foundation for social interaction? I believe the previous sections
have demonstrated this. That is, I have shown above that if we had a system of property
Now, it is an entirely different question to ask, how are these titles initially defined
and allocated? This is a broad topic and will be addressed in the next section, but to deal
with the issue as it relates to the alleged infinite regress, let us consider contract
law.
is a broad topic and will be addressed in the next section, but to deal with the issue
as it relates to the alleged infinite regress, let us consider contract law.
Contract law is a specific branch of law, much as tort law or constitutional law. It
is used, for example, to determine whether a contract between two parties is legally
binding. Now, surely contract law can't be established in an anarchist system of contractual
Law, for wouldn't this beg the question? No. The contractual pledges made by individuals
would contain provisions for all of the contingencies handled by today's contract law. For example,
the insurance company backing up a customer would be promising, We will make good on any
debts that our client fails to pay, so long as the obligations have been spelled out in
a valid contract, according to the terms described in the standard contract law pamphlet published
by the Ace Legal Firm.
This pamphlet would perhaps require signatures in black ink, notarized oversight for large
sums and the signers to a contract were of sufficient age and sobriety and were not under
duress when the contract was made.
As with all elements of private law, the precise rules governing contract interpretation would
be determined by the, possibly conflicting, desires of everyone through the profit and
and Lost Test. Finally, keep in mind that the ultimate judge in a given case is the
judge. No matter how voluminous the law books or how obvious the precedents, every case
will ultimately depend on the subjective interpretation of an arbiter or judge who must deliver the
ruling. We must never forget that written statutes as such are powerless unless used
by Competent and Equitable Individuals. Only in a competitive, voluntary system is there
any hope for judicial excellence. How do we get there?
The route to a free society will vary according to the history of a region, and consequently
no single description will do. The path taken by North Korean market anarchists will no
No doubt differ from the course of similarly minded individuals in the United States. In
the former, violent overthrow of unjust regimes may occur, while in the latter a gradual and
orderly erosion of the state is a wonderful possibility. The one thing all such revolutions
would share is a commitment by the overwhelming majority to a total respect of property rights.
All societies, no matter how despotic their rulers, must possess a basic degree of respect for property rights, even if such respect is given due to custom rather than intellectual appreciation.
All people know that it is a crime to rape or murder. Even rapists and murderers know this.
Such universal intuitive notions of justice would constitute the foundation for a system of private law.
This widespread agreement would allow for more specific, contractually defined rights to evolve.
The process would be continuous, with one stage of codified property titles and legal rules forming the basis for the next generation of judges and scholars to systematize and extend.
Regular people understand the waste and senselessness of conflict.
They will go to great lengths and make great compromises to achieve consensus.
For example, despite the lack of a formal government, newly arriving miners during the California gold rushes respected the claims of earlier settlers.
To take a more modern example, even inner-city tufts unthinkingly obey the rules in a pick-up game of basketball, despite the lack of a referee.
In market anarchy, free individuals, through their patronage of competing judicial and
insurance firms, would foster a humane and just legal system. Those antisocial individuals
who disrupted the process by blatantly violating obvious property rights would be dealt with
in the ways described earlier.
Legal Positivism
Some readers may wonder how I can propose a replacement for the state's justice system
when I haven't first offered a rational theory of the source and nature of legitimate property
rights. The answer is simple, I don't have such a theory. Nonetheless, I can still say
that a market system of private law would work far more effectively than the state alternative
and that the standard objections to anarchy are unfounded. There is widespread distrust
Most of allowing the market to determine something as crucial as, say, prohibitions on murder.
But the market is just shorthand for the totality of economic interactions or freely acting
individuals. To allow the market to set legal rules really means that no one uses violence
to impose his own vision on anyone else. Murder isn't wrong merely because it fails the market
test, of course not, but its intrinsic immorality will find expression through market forces.
We can all agree contractually to refrain from murder and to abide by the decisions
made by an arbiter should we be tried for such a crime. In this way, we know we are
not violating anyone's rights. Now, after we have reached such agreement and are secure
However in our lives we can let the philosophers and theologians argue about why murder is
wrong. Legal scholars offering a priori constructions of just law would certainly have a place in
market anarchy. After all, their tracts might influence the judge's decisions. However,
in this essay I focus on the market forces that will shape private law, not on the content
of such law.
5. Applications
So far I have concentrated on the critical issues in a theoretical discussion of private
law. Now I would like to illustrate the versatility of such a system in a wide variety of areas
and contrast its performance with the monopolized government alternative.
Product Safety
One of the most common charges against pure laissez-faire is that a completely unregulated
market would leave consumers at the mercy of ruthless businessmen. We are told that
without benevolent government oversight, food would be poisonous, television sets would
explode and apartment buildings would collapse. It's true such critics might concede that
in the long run shady companies would eventually go out of business. But surely someone who
who sells a deadly hamburger should be immediately punished for this, on top of forfeiting future
customers. As with other areas of law, I believe the market would deal with these sort of cases
through contractual pledges. When a consumer bought something, part of the package would
be a guarantee such as, if this product causes injury, as determined by a reputable arbitration
Agency, the customer is entitled to the standard damages. And, just as individuals would likely
need to be backed by a large insurance company before anyone would do business with them,
so too would businesses need to be insured against possible customer lawsuits if they
wanted to attract customers. We immediately see that this system avoids the nightmare
scenarios cooked up by proponents of government regulation. Let's take the case of air travel.
The Federal Aviation Administration guarantees that airplanes have had proper maintenance,
pilots are rested, etc. So customers don't need to worry about their planes crashing.
In contrast, many people allege under a free market, customers would have to keep statistics
on how many crashes each airline had, and they'd have to be experts in airline maintenance
to see which companies were best. But this is nonsense. All a flyer needs to do is make
Make sure that when he buys a plane ticket, part of what he buys is a pledge, backed by
an insurance company, saying, If you are killed in a plane crash, our airline will pay your
estate $1,000,000. Now, since the insurance companies stand to lose millions if the planes
of this airline crash, it is they who will hire trained inspectors, keep meticulous maintenance
logs, etc. They would say to the airlines, Yes, we will underwrite your contractual
All pledges to customers, but only if you follow our safety procedures, allow our inspectors
to look at your planes, work out an adequate pilot screening process, etc., and if we catch
you violating your agreement, we will fine you accordingly.
Since they are out to maximize the profits, the insurance company will gladly pay for
preventative efforts if this will lead to a greater savings in expected payments of
claims to those killed in a crash.
This stands in sharp contrast to the present system. The FAA too sets up guidelines, but
what are its incentives? If there is a plane crash, the FAA itself will get more funding,
since everyone will say the crash shows how awful the free market in airplanes is. Bloated
government agencies always mismanage their resources so that there will be too many mid-leveled
managers and not enough inspectors. Most important, since there is no competition, there is no
benchmark against which to compare the FAA's oversight. Some lowly mechanic might have
a great idea to improve airline safety, but the bureaucratic FAA would take years to
implement it.
Professional Licensing
Closely related to the area of product safety is professional licensing. Let's use the
the example of medicine. Without government regulation, many believe patients would be
at the mercy of quacks. Ignorant consumers would go to whatever brain surgeon charged
the lowest price and would be butchered on the operating table. To prevent this, the
benevolent government must establish guidelines, backed up by guns, to limit those who enter
the medical profession. This, of course, is nonsense. Voluntary organizations would probably
and in malpractice suits, the insurance companies would be very careful when setting their standards.
Such a system would be far preferable to the present one. As it is, the American Medical
Association is little more than a glorified union, which requires immense schooling and
training to artificially restrict the number of doctors in order to drive up their salaries
and healthcare costs in general. Without its monopoly, the AMA would be unable
People to check the growth in alternative therapies such as herbal that sidestep the
current cosy alliance of big pharmaceutical companies, hospitals and the government.
One must also realize that the incentives of the Food and Drug Administration render
it far too conservative. If people die because of a new drug that the FDA has approved, the
The FDA will be blamed, but if people die because the FDA has not approved a new drug, it won't be held accountable. The sickness itself will be blamed. Consequently, many potentially life-saving drugs are currently being withheld from dying patients. In a purely free market, patients would be allowed to take whatever drugs they wanted.
Gun Control
I realize that many libertarians find certain aspects of my system a bit unnerving. Without
unconditional guarantees of abstract rights, it seems there would always be a danger of
smuggling the State in through the back door. Rather than dance around such issues, I'll
give the best example I can think of to demonstrate the difference between the conventional libertarian
Gun Control
As we'll see, I don't think my approach is inconsistent with the libertarian creed, but
I do think it will, at least initially, make many libertarians uncomfortable.
The standard arguments over gun control go like this.
Opponents say gun control will render people defenseless against criminals and leave citizens
at the mercy of their government rulers.
Only when someone has actually used his gun against innocence can the law rightfully step
in. Proponents of gun control, however, argue that this position is too dogmatic. Surely
some preventative measures are justified in the public interest.
As with most debates held within the context of a government legal system, I think both
sides have legitimate points. Certainly we cannot trust the government to protect us
once it has disarmed us. But on the other hand, I feel a bit silly arguing people should
be able to stockpile atomic weapons in their basement. A strict interpretation of many
libertarian arguments would mean just that. Fortunately, the system of private law that
I have described allows us to sidestep this apparent trade-off. Recall that the penalties
Insurance companies for injury and murder would be established by contractual pledges
underwritten by insurance companies. People allow Joe Smith onto their property because
they know if he hurts someone, either he will directly pay the damages or his insurance
company will. The insurance company makes its money by charging appropriate premiums
tailored to the individual client. If Joe Smith has been deemed guilty in the past of
of Violent Behaviour, his insurance premiums will be accordingly higher.
But there are other factors that an insurance company would take into account when setting
premiums besides past behaviour, and one of these factors would undoubtedly be, what sort
of weapons does this client keep around the house? After all, if the insurance company
is going to agree to pay, say, ten million dollars to the estate of anyone Joe Smith
If Joe Smith kills, the company will be very interested to know whether Joe Smith keeps
sword-off shotguns, let alone atomic weapons, in his basement. Someone who keeps such weapons
is much more likely to harm others as far as the insurance agency is concerned, and
so his premiums will be that much higher. In fact, the risk of a client who kept nuclear
or chemical, biological, etc. weapons would be so great that probably no policy would
be offered.
This approach is superior to the government one. Truly dangerous weapons would be restricted
to individuals willing to pay the high premiums associated with their ownership. Kids couldn't
buy bazookas at the local Kmart. On the other hand, there wouldn't be a slippery slope
that there is now with all government gun control. We would never fear that all handguns
would be banned, since the insurance companies would be out strictly to make profit, and
it would be far more profitable to allow people to keep handguns and pay slightly higher premiums.
As with all contracts under my system, those regulating guns would be completely voluntary,
involving no violation of libertarian rights. The insurance company is not forcing people
to give up their bazookas. All it is saying is this, if you want us to guarantee your
or contracts with others, you can't own a bazooka. The insurance companies are the just
owners of their money and it is thus perfectly within their rights to make such a request.
This is far preferable to the government system which has no accountability. If politicians
ban guns and cause thousands of people to be victimized by a crime, nothing happens
to them. But if an insurance company makes unreasonable demands of its clients, they
They will switch to a different company and it will quickly go out of business.
Dangerous Criminals
The supposed trade-off between individual liberty and public safety is also exemplified
in the debates over legal technicalities.
Conservatives like to complain about cases where a known murderer is set free by a bleeding-heart
judge simply because the police coerced a confession or forgot to read the suspect's
Rights. Liberals, such as Alan Dershowitz, respond that although such cases are unfortunate,
they are necessary to keep the police in line. As with gun control, I am sympathetic to both
sides in this debate, and again I think my system can avoid both sorts of absurdities.
To see this, let's suppose that through some quirk a clearly guilty murderer has technically
have really not violated any contractual provisions.
Or suppose an arbiter who would only be hearing murder cases because of past excellence in
his rulings, for some reason makes an outrageous ruling and finds someone innocent of murder
despite overwhelming evidence to the contrary.
Because he was technically acquitted, the murderer would not have to pay damages to the
estate of his victim.
However, the rules governing this episode would be quickly revised to prevent its recurrence.
There is another difference. Under a government system, someone acquitted on a technicality gets off scot-free. But under the private law system I've described, the killer's insurance company could still increase the payments they charge. It wouldn't matter whether their clients have been actually convicted of a crime, their only complaint is that they have been convicted of a crime.
The only concern would be the likelihood that he would be convicted of a different crime in the future, because then they'd have to pay the damages.
This analysis also resolves the issue of parole.
Although most crimes would involve financial restitution rather than imprisonment, there would still be individuals who were too dangerous to be allowed loose.
Insurance companies would determine this threshold. As long as a company were willing to pay for
any damages a criminal might commit in the future, people would offer him work, let him
rent a room, etc. Rehabilitation would thus be in the great financial interest of the
companies in order to increase their pool of paying customers.
On the other hand, truly dangerous individuals would not be paroled. Right now the government
has psychologists and other experts decide when sex offenders and murderers
should be let back on the streets.
Since they have no accountability, these ivory tower intellectuals often test out
their theories on the hapless victims of recidivist criminals.
6. Conclusion
This essay has outlined the mechanics of purely voluntary market law.
The main theme running throughout is that competition and accountability would force
true experts to handle the important decisions that must be made in any legal system. It
is a statist myth that justice must be produced by a monopoly institution of organized violence.
The arguments of this essay are admittedly incomplete. Surely more thought is needed
before a move to market anarchy becomes feasible. However, I ask that the reader resist the
temptation to dismiss my ideas as unworkable without first specifying in what sense the
government legal system works.