Greetings, all. Here are my quick replies to the first nineteen of G. Stolyarov II's thirty-three challenges to my theory of market anarchy, i.e., those dealing with private law. Each challenge will be cited in italics, followed by my response.

1) What will happen to the application of the death penalty for murder, especially murder of a most gruesome sort? Could certain contracts include a clause, “If I am found guilty of murder, I agree to be executed by Execution Agency X.”? It is my conviction that fines alone would never suffice to either deter crime or punish the criminal, as the criminal, even after having paid the fine, is free to commit further acts of violence (especially large-scale theft, to regain the lost money).  Furthermore, this type of system presumes that the criminal is a rational being capable of recognizing a large financial disincentive and acting accordingly. However, the more egregious the criminal is, the less rational he is (as, by definition, the initiation of force is irrational, and the degree of initiation of force by a criminal correlates with the degree of his irrationality), and the less he will care about matters that might deter a prudent individual from crime. Often, the only way to deter a hardly sane, rampaging murderer is to cause him to cower in primordial fear for his very existence. If such a deterrent fails, then, again, to prevent further murders, there is no option but to take this criminal out of existence.

1)      Mr. Stolyarov ignores (at least in this argument) the section where I specifically say, “What about the tough cases?  What about the incorrigible bank robber, or crazed ax murderer?”  There would still be prisons in the scenario I described.

2) What if the criminal (or a foreign army) breaks onto another’s property without signing or agreeing to any contract stipulating what would occur to him/it in the event a crime of any magnitude is committed? What law would such an entity be subject to? Would there be some “universal law of the land” to default to in that case? If so, who would enforce it, or at least authorize its enforcement? And if so, would this agency (even if it merely granted permission for the property owner to retaliate) not need to be remarkably similar to a highly limited government?

2)      This is a good objection, and I don’t have a great answer.  I think there would initially be widespread “obvious” property rights that almost everyone unilaterally respected, and that with these as the basis, the more controversial rights could be codified through a private legal system.

3) An argument can be made that, by entering somebody’s property, one implicitly accepts the contracts that the property owner associates with it. However, in this case, how does one guarantee that the implied consent was made in an informed manner? What can prevent Owner Y from claiming, “Person X set a foot in my property while wearing a green shirt, which, under the terms I had established, makes him liable for a $1 million fine.”? (In the meantime, Owner Y had failed to display this clause in prominent public view on the borders of his property, so Person X entered it without knowledge of these terms.) Would not there need to, again, be some universal law of the land to determine which claims of contractual violations are reasonable and worthy of compensation, and which are plainly ludicrous?

3)      No, there wouldn’t need to be a “universal law of the land” for these types of things.  Refer to my discussion about contract law, where I explain that the agencies vouching for people would themselves specify the conditions necessary for obligation.  E.g. Ace company says, “We will make good on any debts that our clients fail to pay, but only if the debts are incurred according to the provisions in such-and-such a pamphlet.  E.g. we will not honor a contract that our client is forced to sign at gunpoint.”

4) Would higher fines matter to repeat criminals? Would it even matter to them if they had no insurance at all? After all, if monetary payment of premiums is the only thing that would be demanded of them under market anarchy, would they not be able to easily rid themselves of that burden by renouncing insurance altogether? What would then prevent them from finding like-minded souls and establishing large-scale criminal gangs that, instead of relying on conventional insurance, would offer mutual protection in exchange for a free hand at thievery and murder with respect to everybody else?

4)      Again, I don’t know why Mr. Stolyarov assumes monetary payments are the only thing that could be used against criminals.  I refer again to my section on prison.

5) What would happen to criminals too poor to pay the inflated insurance premiums resulting from their criminality? How would they be held responsible for their actions? One might suggest the scenario of the insurance company refusing to maintain them as its clients. Would, then, crimes by these criminals remain un-compensated on the free market, as no insurance company would offer victims payouts corresponding to their losses?

5)      I hate to sound redundant, but again, if criminals were too poor to pay insurance premiums necessary to remain “at large,” they would have to agree to live in detention centers in order to get lower premiums.  (Remember, the insurance company vouching for a criminal is pledging to pay off all of their incurred fines.  So if the criminal lives in an escape-proof compound with armed guards, then it’s much less likely the criminal will kill, steal, etc. and so lower premiums are possible.)

6) By corollary to #4, is monetary compensation the only necessary way to reward crime victims and their families, especially in cases of rape, murder, and other irreversible crimes? Can a price tag be placed on human life? Some damages are permanent and irreparable and leave only the satisfaction of revenge against the criminal as a compensation approaching anywhere near the value of what was lost. Currently, the government provides such revenge in the form of criminal punishment such as imprisonment and execution. How would the free market handle revenge-based penalties for egregious criminals?

6)      No, in principle it’s possible for non-monetary damages to be specified in contracts.  But I do predict that in most cases punitive measures would be phased out because they would come to seem uncivilized.

7) Furthermore, what would happen if the insurance company were to violate the contract it had established and use force against one of its clients to procure his compliance with some arbitrary imposition? Since the insurance company possesses more resources than an individual (and agreements with large enforcement agencies), and would be his sole link to protection under “market law,” what recourse would the individual have against such violations? 

7)      I specifically deal with this objection in my book, so I’ll just repeat my answer:  If a company violates its contracts then, at the very least, this will be clear to everyone and other companies have a chance of stopping them.  There is no such check if the government violates the Constitution.  And if the minarchist responds that, “Well, the public must be vigilant and watch the government!” then that’s what is necessary under market anarchy.  The difference is that the public needs to be a lot less vigilant under my system.

8) Could not, then, this criminal merely choose to follow a life of crime altogether and refrain from any peaceful interactions, except for fellow criminals in his gang? Why would it matter for him if he would not be able to purchase anything or work for anybody? Would he and his fellow mobsters not be able to simply steal what they need? And, given that these criminals have renounced their insurance, how would their victims be protected? Furthermore, if the victims’ own insurance companies were to provide either monetary compensation or some concrete retaliatory capacity, would not the victims’ premiums typically increase? How is it justified for innocents imperiled by crime to nonetheless suffer additional loss of property in the form of raised insurance costs?

8)      Sure, someone could be a hermit and live off of mugging people on the street.  But I think most people would like the option of getting bank loans, getting a full-time job, buying things on credit, being allowed onto airplanes, getting electricity and water service, etc.  (I.e. these things would be denied in the society I envision to “outlaws.”)

9) Contractual guarantees for the protection of children in marriage are a step in the right direction; I have myself argued for such a solution previously. Nonetheless, these guarantees will only extend to children of married couples. What shall happen to children born out of wedlock? How, under market anarchy, would any entity concerned with the child’s well-being be able to mandate that the parents marry or, at least, sign some contract which guarantees proper treatment of the child? Moreover, who would be able to protect the rights of the child born out of wedlock, whose parents do not wish to marry or sign a contract of parental obligation to the child? Would those parents be able to inflict abuse and/or neglect upon the child with impunity?

9)      Great point, Mr. Stolyarov!  I can’t believe I hadn’t even considered children outside of wedlock.  I am too old-fashioned.

10) What would happen to a person living in such a community who committed an abortion and then tried to leave? Would market law provide for clauses that would make escape from such a community punishable? If such a person escaped successfully, would the market law provide for measures to catch and penalize her?

10)  I don’t know about this.  I guess the community would have to have contractual arrangements with neighboring property owners.  I don’t think there is a definitive a priori answer; it would depend on the preferences etc. of the people involved.

11) If it were possible to establish gated communities in which abortion would be illegal, would it be possible to also establish gated communities in which abortion would be not only legal but encouraged? Would market anarchy also tolerate the existence of communities which mandated abortions for their members (much like the government of China tries to do today)? How could such communities be resisted in the absence of a government?

11)  Well yes, I suppose in principle this is possible, but I don’t see who the heck would want to live in such a community.  It’s also possible that theater owners would require their customers to wear blindfolds, but I don’t think this is a likely outcome.

12) If market law were able to provide for clauses preventing an individual from leaving a community under certain circumstances, would it be possible for communities to spring up where individuals born there could be forced to stay against their own will? Let us presume, for example, a cult-like gated community based on the premise of self-sacrifice as the good. A child was born to parents who are willing members of this community, yet the child abhors the mentality of self-sacrifice. Would he be forcefully prevented from leaving or from resisting any attempts by community members to compel sacrifices on his part? If not, what agency would protect him? (This is assuming that members of the community are wary of outsiders and insist on policing themselves and signing contracts with no external parties.)

12)  This is a good objection that I hadn’t thought of, and I don’t have a good answer.  But let me just play the “neither do you” card.  If enough people in society had such preferences that this would be the outcome under market anarchy, then it would also be the outcome under limited government.  I.e., Mr. Stolyarov doesn’t get to dictate what the ideal world would be and then object if my proposal might not yield it, since his proposal wouldn’t either under the same parameters.

13) By extension from #12, what would distinguish such a coercive sacrifice-based gated community from a “mini-state?” What would prevent the emergence of such entities, which would wholly defeat the very purpose of abolishing the State and instituting market anarchy?

13)  The “private State” is an unfounded fear because most government abuse is inefficient economically.  E.g. private slaveowners in the South didn’t mass murder their slaves, whereas Stalin did.  And I would argue that slavery itself was only propped up because of government measures (restricting manumission, education of slaves, etc.).  So even if the initial distribution of property titles were grossly unfair, nonetheless as long as—from that point on—everything were voluntary, things would get better and better for everyone.  There is no such necessary trend with government.

14) The notion of “community norms” defining property, or anything, for that matter, seems inherently prone to injustice for multiple reasons. There is, first of all, no guarantee that community norms will be in accord with objective justice or objective reason, and this discord is most often the case. Any approach that attempts to set the two as equivalent borders on a variant of “direct democracy,” which, as scholars like Hans-Hermann Hoppe have shown, would only lead to majorities voting themselves the money and property of minorities while resulting in a high rate of time-preference among politicians. Furthermore, let us presume, for example, that a registry firm decides to, under this system, be fully diligent and honest in recording property titles in accordance with what individuals actually inhabit, own, and develop their corresponding properties. This implies that such a company has decided to record the rightful property of Person X, who happens to be an extremely unpopular outcast within the community. Approximately a hundred “squatters” would like to evict Person X from his land so that they might parcel it out amongst themselves, and most people in the community are socialists who agree with them. Would this registry firm lose a substantial clientele and thus be placed at a disadvantage with respect to those registry firms that do not record Person X’s rightful property and are thus more in accord with “community norms”? How, then, is it justified for a firm respecting property and individual rights to be disadvantaged by a system of market anarchy over a firm complicit in the injustice of violating such rights?

14)  Again, while it is certainly true that my system will lead to bad results if 99% of the people are evil and/or stupid, so will any system.  My claim is a relative one:  For a given population, market anarchy is better than a government.

15) The principles behind this statement are essentially correct; laws are scraps of paper without proper enforcement and an intellectual spirit conducive to their efficacy. However, under market anarchy, there is no single definite system of courts nor is there a hierarchy of appeals courts. Let us presume that two disputing individuals, A and B, have agreed to settle their case via Arbiter C. Arbiter C settles the dispute in favor of A, but B is not content. He appeals the case to Arbiter D, who rules in favor of B. Both C and D are of about equal reputation and stature; they just disagree over a complex matter. Furthermore, A and B, seeking to resolve this dispute, appeal to a multiplicity of high-profile private arbiters who are sharply divided on the issue. If none of these arbiters has positional superiority over any other, whose ruling should be carried out? Furthermore, what would prevent appeals ad infinitum by every dissatisfied party (especially an extremely wealthy dissatisfied party with the capacity to file such prolonged appeals)? Arbitration on a free market is often an effective means of conflict resolution; private businesses have had elaborate systems of market arbitration for centuries. However, in the event of an irreconcilable dispute, I am inclined to believe that there should always be a final court of appeal, i.e., the Supreme Court, which would have the power to issue an ultimate ruling and close an extremely volatile and contentious case.

15)  The various arbitration agencies could have agreements with each other specifying the appeals process.  So for any given lawsuit, there would be a finite number of appeals.  It doesn’t follow that the system as a whole requires one judge to be on top.  E.g. when arbiters A and B disagree, then C can break the tie.  When B and C disagree, A can break the tie.  When A and C disagree, B can break the tie.

16) Furthermore, it does not necessarily follow that a single hierarchy of judges or an ultimate court of appeal will emerge on the free market. People will always disagree about who is the most skilled, competent, and authoritative judge, if recent opinion divisions in the United States on such matters are any indicator. It is even likely that multiple competing hierarchies would emerge, each sharply differing from the other in terms of fundamental legal principles and practices, in which case the potential of individuals dissatisfied with one hierarchy pushing a favorable appeal through the other is immense. How would those cases be resolved without a massive “judicial power struggle”?

16)  Why doesn’t this judicial power struggle happen in international courts?  There is no world court that is respected by every single nation.  And this relative peace in international commerce, etc. is achieved with unjust monopoly governments.  When the participants in the system are instead private judicial agencies, the outcome would be even more orderly.

17) Are not market forces themselves contingent on valid law, public or private, and its stringent enforcement, for survival? Countries where prosperous free markets emerged have almost always been based either on a firmly entrenched centuries-old British legal tradition (which proved successful even in East Asian territories like Singapore and Hong Kong) or on policies inspired by the Austrian School of Economics (as in pre-World War I Austria-Hungary, Ludwig Erhard’s West Germany of the 1950s, and Eastern European countries today). In the absence of principled, theoretically-based law, will not a society more resemble the tribal chaos of Somalia (or most of the rest of Africa, for that matter) and simply revert to a Hobbesian state of nature? If theoretically based law is indeed necessary for functional markets, who will introduce this law into a society and who will make certain that it is adhered to?

17)  Again, I tried to specifically answer this in my section on legal positivism.

18) This poses an immense privacy concern and a loophole that could be expanded into areas beyond who owns what weapons (revealing which information might not, in itself, be of interest to a given individual). But the weapons example might suffice here. It seems that the following chain of reasoning could be derived from the above passage. Insurance company protection is required for survival under market anarchy (we will grant this premise for the time being). But the insurance company demands information about what types of weapons one owns. Giving away this information might intrude on one’s privacy. Then, by implication, is a disregard for one’s privacy necessary for survival under market anarchy? Furthermore, the disregard for privacy might extend to areas other than weapons ownership. Perhaps a given insurance company might come to be interested in whether Person X stockpiles hundreds of radical political flyers in his basement, since political radicals are more likely to be assaulted or even assassinated by angry fanatics.  If Person X used to engage in fights in elementary school, would the insurance company want to know his childhood school record to monitor for “violent tendencies” which might lead to higher payouts by said company? What about the most dangerous privacy violation of them all: required psychological testing for said “violent tendencies”? How would market anarchy contain mechanisms to safeguard against the ubiquitous emergence of such demands as prerequisites for individuals receiving that all-important insurance policy?

18)  Yes, in principle the insurance companies could make unreasonable demands, but this would be unprofitable.  Right now insurance companies ask if you have a smoke alarm, fire extinguisher, and dead bolts when giving you a homeowners’ policy.  But they don’t ask how often you look at pornography.  Why?  Because it has nothing to do with their likely payments, and so another, less invasive firm would outcompete a nosy insurer.

19) I have a far more pessimistic interpretation of this tendency: it is a potential for people genuinely innocent of crime to be maligned and mistreated if public opinion is opposed to them. Consider, for example, an individual like O.J. Simpson, hated by the majority and presumed guilty of murder, even though the courts failed to find evidence to convict him. Why should Simpson and those in similar positions continue to be placed at an inherent legal disadvantage despite their probable innocence when objective criteria of judgment (as opposed to majoritarian ones) are employed? Furthermore, the case of the simply unpopular individual can be brought up. Let us return to the example of Person X, who is ostracized by a community of socialists. These socialists keep filing unjustified lawsuits against Person X, although Person X is acquitted every time. Would Person X’s premiums increase simply because he is forced to be a defendant such a high number of times, thus increasing his probability of being convicted on any given occasion? How can it be considered justice for those objectively innocent of breaking the law to receive potentially the same treatment as those convicted of violations?

19)  Here I was addressing the possibility of genuine loopholes in the existing contracts.  E.g. maybe someone gives his wife a dose of poison at dinner, but before it kicks in she walks outside and is hit by a bus.  This is all caught on video camera (somehow), so everyone knows exactly what happened.  But based on the actual wording of the contracts, the husband’s defense lawyer gets him off, because technically he didn’t kill his wife (the bus did).  What I’m saying is that the insurance companies could still charge the husband a premium, etc., as if he had been convicted, because their reason for doing so has nothing to do with abstract justice, but rather their guess that they might have to pay in the future.  Now you’re worried about innocent people getting railroaded, and all I can say is that my approach penalizes error far better than the government system.  If the government convicts an innocent or acquits the guilty, nothing really happens.  Not true under my system.

Robert P. Murphy is a professor of Economics at Hillsdale College, and author of the book, Chaos Theory: Two Essays on Market Anarchy. He can be contacted at Robert.Murphy@hillsdale.edu.