Today I am going to discuss the Anarcho-Capitalist claim that legal and defense services can be provided without a state. This is obviously a complicated issue. Many disputes fall under the giant category of "legal services." This ambiguity allows "gotcha" examples from both sides. I will try to address the issue fairly, but will admit from the beginning that I am biased against the Anarcho-Capitalist position, simply because there are few real world examples of such a system working.
First, I will acknowledge that many legal services can be provided privately. If two parties agree to a divorce settlement, then no intermediary is necessary. Both may agree as well to have the dispute settled in front of a judge. The judge would charge a fee for his service, and both sides would secure legal representation for themselves to argue their case. The judge would then render a verdict.
This much can be provided by a private system. The issue I have, is enforcement. Lets say both members signed a contract to agree to the settlement made by the judge. The losing party may still agree to the settlement, or the losing party may refuse to cooperate. Lets assume the contract both signed, also provides provisions for enforcement. So the judge secures enforcers to force the losing party to cooperate. The problem immediately becomes obvious. The losing party can then secure security forces to defend him/herself from the enforcing party. What happens next? That is the question.
Here in lies the obvious issue with the private provision of legal services in a society with no government. A monopoly on violence is necessary for this reason. If there isn't, then people can easily obstruct justice by hiring their own defense force. I suppose its possible in this case, that the enforcing party could purchase insurance in case such a situation arrises. Then the insurance would kick in, and the insurance company would provide more armed enforcers to enforce the judges verdict. However, the problem still does not go away if the losing party signed with a different insurance company. Then they could utilize their insurance to arm up as well. An armed standoff would occur.
Its possible the insurance companies could form an agreement to solve the dispute. Its possible they would form an agreement to go with the decision of the judge. But then there is still another issue. What if there is a wealth disparity between the two parties? What if the losing party can afford to hire his/her own private militia? The problems become onerous quite quickly. The points where this problem can escalate into violence are many. All it takes is one of these bad scenarios to happen out of many.
This is where people would compare the private system to a public one, and say that even though a private one isn't perfect, a public one is worse. I am not so sure. I am not so sure because it depends on the form of the public system. If there are sufficient checks on public power given division of powers, elections, and a constitution, and a tradition of the rule of law, then I believe a public system is actually better. Yes, I said it, a public system, at times, can be better than a private one. Its rare, but without a monopoly on violence provided by a government, people won't just compete in economic terms, but in violent terms as well. A monopoly on violence is necessary so individuals in societies don't waste their energy and resources in an arms race with fellow citizens, but instead spend them on productive endeavors.
If private provision of legal services and defense was possible, it would have happened by now. Let me be clear, plenty of legal services can be provided privately, but their enforcement needs to be, ultimately, handled publicly. This is not to say there can be no role for private forces utilized for enforcement and defense, but they will inevitably play a limited role, because without a monopoly on violence, there will be a competition for violence, which is ultimately a zero sum game. Also unlike competition in other markets, a competition in the violence market can too easily turn into a competition of might, rather than a competition in quality and price, which would become violent.