Intro To AnCap: Private Law Pt. 2 - How Can It Work?

{Editor's Note: This is Part 2 of a series in which I will explore the concepts of Anarcho-Capitalism, which I introduced here two weeks ago.  The series will follow the general structure of a class on Anarcho-Capitalism I am currently taking at The Mises Academy taught by economist and author of Chaos Theory: Two Essays on Market Anarchy, Robert Murphy.  Each week I will examine a different aspect of how free market forces could take over areas currently run by government in a hypothetical Anarcho-Capitalist society. You can read read Part 1 - Private Law - The Case Against Monopoly here.}The most common criticism of the idea of a society with no government is something along the lines of "yeah, that's a great theory, but sounds like you think the world would be some Utopia, it would never work in real life.". I've always found the "Utopia" argument to be a bit odd.  Anarcho-capitalism does not envision a world without problems or without many of the same "necessary roles" currently provided by government.  It is simply the idea that there are better possible solutions that don't involve one monopolistic, coercive governing body.  Any service that government provides can be provided not only more efficiently by the market place, but also more honestly without a single coercive force being the sole arbiter of law.To understand some ways in which private law could work, we have to first understand what we mean by law.  Last week I described how the concept of law is distinct from legislation, morality, and enforcement.  So what is law?  We should think of law not as something that is created arbitrarily by men, but something that is discovered. Isaac Newton did not create the law of gravity, he merely discovered it and codified it.  This is similar to how law based on private property rights would work.  As judges make legal decisions and rulings, and textbooks are created describing the reasoning behind these rules, law is naturally discovered along the way.But couldn't anybody just write a book of bad legal theory? Couldn't some judge just decide that wearing socks is illegal? Well sure, but they wouldn't get very far in a free market.  If Merriam-Webster's dictionary suddenly started completely publishing ridiculous and incorrect definitions to words, they would quickly stop being considered a legitimate dictionary and other firms would move in to fill their spot as Top Dictionary In The Land! Similarly, if a judge were to rule that murder is legal as long as the murderer is wearing a clown hat, that judge will never work as a judge again.So what role does a judge serve in private law? A judge, simply put,  is someone who sells their opinion.  Private judicial firms would hire judges based on their perceived fairness and their ability to be consistent in relation to accepted principles of law in a society.  People would employ these firms, either by subscription services or perhaps on a case by case basis, based on the judgement of each individual.  Each case would involve two parties, an accuser and an accused, and both parties would have a vested interest in receiving a fair hearing.So how would this work?Let's say we have Tommy Libertarian, who owns a TV repair shop.  A customer, Anarchist Marc, comes into the shop to get his TV fixed.  An argument ensues.  Anarchist Marc leaves with a broken wrist.  Not only that, but Tommy took his TV! Of course, Marc wants damages for this crime against him, so he goes to the Lions of Liberty Judicial Firm where he is a paying subscriber.  As a subscriber, he essentially has "insurance" against any potential grievances against him.  His case is brought forth to Judge Andrew Napolitano, a very successful judge in this hypothetical society.  The Judge agrees to hear the case, and Tommy Libertarian receives a notice that he is being charged with damages for Marc's broken wrist and stolen TV.  Tommy, being the owner of his own business, also has a vested interest in clearing his name against these accusations, as his business will likely suffer if people think he just beats up customers and steals their televisions.  Tommy does not subscribe to Lions Of Liberty Judicial, but agrees that Judge Napolitano and Lions of Liberty Judicial are reputable and that they are fit to hear the case.  They both hire counsel or represent themselves.  They will likely have to agree beforehand to abide by the Judge's decision, or agree to an appeals process of some kind.  Marc will likely present x-rays of his broken wrist, proof that he owned the TV in question, etc.  Tommy may provide surveillance footage from the store or testimony of any eyewitnesses who were there.In a case like the one above, where both participants agree ahead of time to abide by the ruling, things shouldn't be difficult. If Judge Nap rules in favor of Marc and agrees Tommy owes him $100,000 in damages, Tommy would have to pay Marc that money.  If he didn't agree to the decision he could go through a predetermined appeals process.  But ultimately, if the ruling was in Marc's favor Tommy would have to abide by it for the sake of his own reputation and business.  Perhaps Lions of Liberty Judicial would have an enforcement branch that, after any appeals were exhausted, would have a legal, in the natural sense of the word, basis for seizing Tommy's property up to the damages awarded if he refused to comply.But can't someone appeal forever?Again, there would likely be a prior agreement to a certain number of appeals that would be allowed.  Under our current system there is an arbitrary final arbiter for appeals, the 9 appointed members of the Supreme Court.  Different judicial firms would likely employ the services of third party arbitrators to settle any appeals.What if the two sides can't agree on a court?If Tommy decided he didn't like Lions Of Liberty Judicial and wanted a hearing from Anarchist United Court, and Marc insisted on Lions Of Liberty, a couple things could happen. Eventually both wanting to have the case heard, they come to an agreement on a third court. Alternatively if they are both stubborn and will only stick with their preferred court, they can have separate hearings.  If both courts find the same verdict, no problem.  If one court find Tommy is liable for damages to Marc's wrist and lost TV while the other found Tommy innocent and awarded damages for his smeared name in the community, what then? Would they just send their own enforcement branches out to shoot it out in the streets? That wouldn't be very good for business. More likely the two courts would employ a third party arbitrator and agree to collectively enforce the decision.  The more one side appeals and stalls while another side is ruled in favor of by reputable judges and arbitrators, the more the guilty one will become apparent.What's with this "subscription" thing? Is it like insurance? What if people don't have it?It's important to keep in mind that these ideas about how private law would work in a free society are merely possibilities.  The greater point is that the free market would come up with ways to meet the needs of the people, just as it does with food, cell phones, etc.  Some, like Murray Rothbard, hold the view (as discussed in For a New Liberty: The Libertarian Manifesto) that people would subscribe to judicial and police firms in the form of insurance, and when a crime is committed against an individual, the firm would cover the claim and investigate the crime, cover legal proceedings, legal representation, etc. The idea is similar to that of fire insurance, where individuals pay to insure in the unlikely event of a fire.  This would essentially be "crime" insurance.In the course I am taking at Mises Academy, Professor Murphy envisions insurance as firms vouching for the integrity of individuals.  A person with a history of abiding by contracts and no history of violating the property rights of others will likely have lower premiums, while people with less scrupulous histories would pay a higher premium or in some cases be unable to get insurance at all. This is more like medical malpractice insurance, where the doctor himself is insured against any damages he might inflict upon a patient. A company has assessed him and essentially says "we feel this guy is safe, so much so that we'll cover any damages he causes".  Most companies, communities, private housing developments, etc would only want to deal with people who they know are covered by a reputable company.  To deal with someone without insurance would be much riskier.   People would of course have the right to deal with anyone they please, but they would do so at their own risk.What about the worst of the worst? How will prisons work?Many people will see the solutions described above as good ideas that will work for many reasonable people, but what about the "unreasonable" people? What about the worst people in society such as the rapists, murderers, etc? What about people who don't care about the law, courts, property rights, etc? Firstly, we must not act as if our current system of government does not have rapists and murderers.  The argument is not that anarcho-capitalism will create a Utopia where these things no longer exist; the argument is merely that living with no government will create better systems to deal with them than the government monopoly we currently have.The prisons under our current system are atrocious.  Someone with a minor drug offense will get put away with a bunch of other criminals many of whom are often violent.  The result is that most of these minor offenders are hardened, professional criminals by the time they get out.  A prison in an anarcho-capitalist society would likely have a much different role.  Rather than existing for the purpose of punishment, prisons in an anarcho-capitalist society would more likely be viewed as rehabilitation centers.  In a system with private property rights, nobody would have to allow a "criminal" or "violent" person on their property, so truly violent criminals of that nature would quickly become pariahs.  They might have to stay on their own property, or if they don't have property and nobody will allow them to live on theirs due to their crimes, or they may have to find an alternative.A prison would essentially be a hotel for outlaws to seek refuge and make good for their violations of the property rights of others. It would be a place where an outlaw who could not get insurance due to his transgressions and could not function in society would go in order to live and rehabilitate his reputation. A "sentence" wouldn't be something arbitrarily mandated by a State judge.  A prisoner would stay as long as it took to compensate the victim(s) of his crimes and/or a reputable firm decides that he is rehabilitated and agrees to vouch for him.Prisons would likely work with insurance and guarantor agencies who would have to have their own parameters for deciding if they could guarantee that person.  Unlike state run prisons, prison guards would not be able to be abusive without recourse as prisoners could leave and enter another prison.  These prisoners could work to pay off debts to their victims and would not receive insurance until they had done so and until a reputable company would again make the market choice that they were rehabilitated and worth backing.What about different legal systems?People would often choose different legal systems to operate in. So what? We currently have 235 countries with different legal systems. More so we have 50 different legal systems even within this country. These systems are based on arbitrary geographic borders and arbitrary legislation.  At least in an anarcho-capitalist society, the market would be able to decide which legal systems were best. If two Orthodox Jews want a Rabbi to decide their dispute, who's to stop them? Competing systems would also allow specialization in courts, with some specializing in contracts, some in theft, some in violence related cases, etc.I hope I've at least presented some interesting ways private law in an anarcho-capitalist society could work.  In fact, there is tremendous amount of precedent for private legal systems, including the fact that they already exist, in the form of the rapidly growing private arbitration industry.Even those that feel the theories of private law are somewhat sound may say "But this is all after the fact.  How will we stay safe from criminals? How will we keep our private property safe? Won't mob rule just take over?"Well, Imaginary Contrarian Readers, I'd like to thank you for setting up my next post, where I will discuss private defense.In the meantime, please leave comments below or start a thread in the forums to discuss the ideas presented here.  I hope to see this series as a discussion more than a lecture. Ciao!Click here to continue to Private Defense - Police ProtectionReceive access to ALL of our EXCLUSIVE bonus audio content – including “Conspiracy Corner”, “Degenerate Gamblers” and the “League of Liberty Podcast” by joining the Lions of Liberty Pride and supporting us on Patreon!