Friedman gets the last word (chapter 31): “People who want to control other people’s lives are rarely eager to pay for the privilege; they usually expect to be paid for the services they provide for their victims…. For that reason the laws of an anarcho-capitalist society should be heavily biased toward freedom.”
https://libertarianinstitute.org/articles/tgif-market-for-law/
Great part of that order which reigns among mankind is not the effect of government. It has its origin in the principles of society and the natural constitution of man. It existed prior to government, and would exist if the formality of government was abolished.
–Thomas Paine, Rights of Man, 1792
Sometimes an idea that at first sounds nuts isn’t really nuts at all. Case in point: the market-anarchist principle that people should be free to buy the law and protection they want in the market.
Even a subscriber to Murray Rothbard’s anarcho-capitalism might raise an eyebrow because Rothbard formulated a libertarian law code that he expected would be carried out in a market-anarchist society. In contrast, the market-for-law market anarchist doesn’t see things that way. How would a single code even be implemented? It’s not as if libertarians agree on everything. Think of intellectual property, abortion, defamation, and more.
David Friedman, a veteran anarcho-capitalist, explicitly favors a market in law, not just in police and arbitration (that is, court) services. Here’s how Friedman describes it in The Machinery of Freedom (chapter 29; free pdf here):
In such an anarchist society, who would make the laws? On what basis would the private arbitrator decide what acts were criminal and what their punishments should be? The answer is that systems of law would be produced for profit on the open market, just as books and bras are produced today. There could be competition among different brands of law just as there is competition among different brands of cars.
In such a society there might be many courts and even many legal systems. Each pair of rights enforcement agencies agree in advance on which court they will use in case of conflict. Thus the laws under which a particular case is decided are determined implicitly by advance agreement between the agencies whose customers are involved. In principle, there could be a different court and a different set of laws for every pair of agencies. In practice, many agencies would probably find it convenient to patronize the same courts, and many courts might find it convenient to adopt identical, or nearly identical, systems of law in order to simplify matters for their customers.
As Friedman sees things, individuals would not directly choose among the competing arbitration firms. They would choose defense firms according to the services offered. Those firms would typically have contracted with others about which arbitration firms they would use if their clients were in a conflict. (Insurance companies already do this.) Customers of course would know about this and would choose defensive firms partly on that basis. The defense firms and arbitrators want to attract customers. These are profit-seekers, remember. Also remember that individuals are customers here, not taxpayers or subjects — an important distinction.
The incentives to submit to and abide by binding arbitration without state-backing would be strong. A defense firm or a customer known for ignoring adverse rulings would have problems doing business in the future. This is the “discipline of constant dealings,” Friedman writes. Its powerful influence cannot be ignored. Even now, it plays out everywhere. It is not mainly due to the state that people generally keep their contracts and even less formal promises. The government did not make eBay or the credit card a success.
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