"The war against illegal plunder has been fought since the beginning of the world. But how is... legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish this law without delay ... If such a law is not abolished immediately it will spread, multiply and develop into a system." ~ Frederic Bastiat
Competition in Private Justice
Justice and the enforcement of individuals' rights is probably the most essential and important part of libertarian philosophy. As a matter of fact, many libertarians world-wide cling to the idea of the state as an evil 'need-to-be' monopoly source of justice and order in society. The state thus works as a 'guarantee' for these essential human values, fundamental to civilized society. Even such great minds as Rob ert Nozick and Ayn Rand were unable to work out how competing protection agencies or laws could work in a single society.
Nevertheless, many 'statist libertarians' can appreciate arguments for the private enforcement of rights, as laws and property rights today to some degree are protected by private protection companies and guards. It is not hard to foresee how competing police forces, from which one can buy protection directly or via insurance, could improve the protection services market, like competition in any other market. Even though many, like Ayn Rand, would prefer not to think too hard about this, statist libertarians usually see how this could work.
But this does not mean they go as far as to privatize the formulation of and responsibility to uphold laws and rights. The state is to these libertarians still a monopoly power in making laws and guaranteeing the safety and order of society, as well as justice in the community. Some even claim there should be a state (i.e. 'neutral') police force or military able to command the private police enterprises if they falter; private armed forces would otherwise likely go to war, they claim. Thus, the libertarian society would shortly sink into chaos, civil war, and 'anarchy.'
Anarchist libertarians might argue that statist libertarians seem hopelessly 'in the box' and cannot see past the doctrine of the 'neutral state' as a caring parent. The only result of such an approach cannot but convince statist libertarians there are no real arguments for anarchy. So how could competition between private organizations selling 'justice' work without degenerating into civil war?
Some claim such a society would exist in an orderly fashion since it is too expensive for protection agencies to go to war. Instead, they are likely to find a rational, cost-effective solution (as is always the case with the market) to protect the company's clients as effectively and efficiently as possible. David D. Friedman (The Machinery of Freedom) proposes a spontaneous structure where private courts would be established for each pair of private protection agencies, thereby guaranteeing neutral processes. Such a structure may, as Nozick claimed (even though this is not likely to happen), in time grow into a number of large agencies with more or less 'natural' monopolies; but every individual would have the right to exit (not buying the services or move to an area 'controlled' by another company) and entry (starting a competing firm or buying the services of some competitor).
Another solution is offered by Richard D. Fuerle (On the Steppes of Central Asia, by Matt Stone), where one may insure one's own morality (instead of, as with Friedman, buying a 'rights package' from a company). In such individualized protection contracts, every individual would be likely to sign for protection against whatever one does not agree with, while simultaneously agreeing on not doing to others what is specified in the contract. Every crime is then equal to a breach of contract (making you a 'safe target' for anybody else, or liable for compensation to your insurance agency), or at least entitles the victim to protection (and restitution from the aggressor).
These solutions to the enforcement of justice are, however, only theoretical. One cannot say exactly how a future libertarian anarchist society would be structured, since liberty means behavior is individually rational and spontaneous on the market. It is not controllable.
A more practical or pragmatic approach to how justice would be protected is through the ownership of property. As garbage collection, heating and air conditioning, surveillance and security is organized by the property owner in any department store or gated community, such services would be taken care of by the owner of the property in a stateless society as well. Laws, legislation and protection are in the interest of the owner in order to attract customers, and so it will be taken care of 'on the market.'
This may seem absurd, as there may be different laws in different places. But just as is the case with private roads, available in almost every Western country today, there are standards on how to build and use roads. The standards are today usually upheld by the state, but were in general established spontaneously on the market. Roads do not shift from being driven on the right side to the left side because the road is suddenly maintained by somebody else. Neither would they, if the owners were able to control their property fully.
Different sets of rules in different places may, however, seem very difficult for the individual traveler, since one would have to know all rules of all the places one would like to visit. But this is the case today, as every state (and sometimes, such as in Switzerland or the US , individual regions or municipalities) has its own set of laws, and requires 'full knowledge' of every law from every subject and visitor. Not knowing the law is not an argument in court.
The main difference between the rules of contemporary states and regions, and individual property owners is that the latter has no interest in regulating every part of your life. A property owner will make up rules only to protect the property and safety of people, while the state claims control of your income, consumer and social behavior, property, family structure, etc. The rules enforced on private property, as is the case today, are much less detailed and less comprehensive than the rules of a monopolistic state power.
Different rules and laws are used in different places as is within the modern monopoly state. The property of embassies is considered part their country's territory and falls under their legislation. For example, the United Nations' headquarters in New York City is considered non-American territory, where American law is not applicable. Also, property owners set their own explicit rules in malls and department stores, which are upheld through the use of private security.
Furthermore, in many sports arenas, where sports such as hockey, football or soccer are practiced, many state laws are not applicable or simply neglected. A hockey player beating another in the rink during a game gets his or her punishment directly from a hockey referee, but does not risk charges from state law even though it should be deemed as an illegal assault. If the same happens after the game or outside the rink, the state's rules apply and are enforced. Different ideas of justice, as well as differing justice systems, are thus used as we speak--in our own backyards, within the oppressive state.
It is not so hard to see how this could work in a society where there is no one claiming monopoly power, as it is the case to some extent today. And it is hard to neglect the fact that it is a much better solution morally as well as practically if the creation of rules and upholding of security of persons and rights were decentralized. As is the case with any other relation between individuals, rules are more effective and much easier to maintain when decentralized rather than centralized in a coercive power.
What is considered important should be left to each individual to deal with in the manner most suitable to him or her. To me, my security and my rights are fundamentally important--I would not like to leave them to somebody else, and out of my control. Do you let others claim control of what is most important in your life, or would you rather control that part yourself?