Small-Town Anarchy

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Rothbard
and many
others
have written about the potential benefits of a free market
in protection, law, and defense. These include lower cost, greater
efficiency, higher quality, more consumer choice, and protection
of individual liberty.

In our current
political climate, such a system can seem distant and utopian, an
idea to be quietly developed by economists and philosophers until
people's attitudes and beliefs drastically change.

However, activities
like the Free State Project
raise another possibility. What if a small, libertarian-minded town
or county, perhaps in New Hampshire or Montana, passed a law decreeing
that town police and judicial services would, beginning on a certain
date, be supplied entirely by the private market?

Naturally,
the state (or the federal state) might oppose such action, but we
shall suppose that the effort to pass the law has been successfully
carried out.

Entrepreneurs
would begin creating police firms, advertising their services, and
signing up customers. Existing local police could seek employment
among the new firms, or start their own firms (or even get going
on that fishing-guide business they've always secretly dreamed about).

Private mediation
and arbitration firms, if not already present, will spring up in
anticipation of the closing of the town court. They will begin talking
to the new police agencies, the agencies' customers, and each other,
to sort out some initial contracts and agreements about how they
will work together.

The people
of the town, knowing of the situation (having themselves pushed
heavily to establish it), would study their options and decide which
protectors they will choose for when the police go out of business.
The smart police agencies will include a "Fines and Penalties"
section in their contract stating that, if a customer commits crimes
against others, the customer will be subject to fines and other
specific penalties. Violent crime might lead to imprisonment. (We
may as well assume that the state police would claim jurisdiction
over major crimes like murder).

Other firms
might experiment with other kinds of agreements. However, in order
for the firm to provide full protection to all its customers, the
protection must be reversible — if you want protection against theft,
you must agree not to steal. If you want protection against violence,
you must agree not to initiate violence.

On the appointed
day, the town police, court and jail will close for business and
their assets will be sold off, possibly to the new police and arbitration
agencies. The town will no longer collect taxes to pay for these
services, either.

HOW IT MIGHT
WORK

From then on,
whenever a person in town was a victim of a crime, he would contact
his police service. They would be responsible for identifying the
criminal and filing an arbitration claim against him.

If the accused
criminal has a contract with a police company, then his police company
will respond to the claim. They will face the victim's police company
in arbitration. If the accused is found guilty, he will be contractually
obligated to suffer penalties.

If both parties
subscribe to the same police agency, the situation might be handled
by internal investigation and arbitration, or the agency might find
it preferable to submit such conflicts to the expert third-party
arbitrators.

In cases of
theft or destruction of property, the most likely arbitration finding
would be financial compensation paid by the criminal to the victim.
After studying numerous examples of voluntary legal systems, Bruce
L. Benson
finds that in such systems:

If the accused
offender is found guilty, the “punishment” tends to be economic
in nature: restitution in the form of a fine or indemnity to be
paid to the plaintiff. Liability, intent, the value of the damages,
and the status of the offended person all may be considered in
determining the indemnity. Every invasion of person or property
is generally valued in terms of property.

Imprisonment
would rarely benefit anyone in property crime situations, and imprisonment
would likely require interaction with the state (unless the town
jail is remade into a long-term prison, which we won't assume).

The state would
probably still claim jurisdiction over serious violent crime like
murder, rather than allow private companies to handle the outcome.
In local, minor cases of violence, the situation could be handled
according to police contract. In these minor cases, the victim might
prefer some restitution from the criminal, rather than the nothing
he would receive from the state.

A completely
free-market legal system could certainly handle cases of serious
violent crime like murder, if needed, but that is beyond the scope
of discussing a small free-market town inside a monopoly state.
Town police companies would likely capture such offenders, hold
them at the town jail, collect evidence, and turn it over to the
state.

PEACE OFFICERS

Because of
the costs of arbitration, police agencies would seek to avoid it
when possible. They would train security officers to diminish conflict
and keep the peace rather than escalate any conflict. These "peace
officers" could also be trained to adjudicate disputes and
propose solutions and restitution on the spot.

LOCAL ROADS

Any roads owned
by the town could be managed by a remnant of town government, by
the chamber of commerce or other voluntary association, or otherwise
sold off to private owners. (This could give new meaning to the
Adopt-A-Highway program.) Someone will own the roads. The road owners
will need to provide security, which can be purchased from the private
police companies, some of which might even specialize in managing
and securing roads.

THE TOWN
JAIL

We will consider
the "town jail" as a local, short-term holding facility.
Violent criminals would be held there until they were turned over
to the state. The police companies might fund the jail through joint
contributions, or the jail might be an independent business, selling
its services to the police agencies through fees or subscriptions.
Any nonprofit, "volunteer" neighborhood protection groups
might also subscribe to the jail, so they would have a place to
put violent offenders.

The customer's
contract will stipulate under what conditions he can be jailed by
his own police company (and other police companies with which his
company has mutuality). This might include acting violent, being
destructive to others' property, being publicly drunk and/or naked,
etc.

Police companies
would want to avoid unnecessarily jailing their customers, or any
potential customer, because of the fear of losing business (or potential
business), and because of the cost. They would need this option
as a last resort, however, to fully protect the rest of their customers
from violent criminals (unless the market devises a better means).

In the case
of unlawful imprisonment, the victim would be able to file a kidnapping
claim against those who imprisoned him. Arbitration would reveal
whether the police company's choice to jail was reasonable under
the circumstances. This would also deter police companies from excessive,
unnecessary jailing.

THE UNINSURED

Those who are
very poor and have trouble affording police services might join
mutual-defense groups and contribute their own labor, instead of
subscribing to a service, along with others who prefer this volunteer-organizing
approach for their own reasons.

If someone
does not subscribe to police protection, nor join a mutual-defense
group, and is the victim of a crime, he still has a claim against
the criminal. Thomas Whiston
writes about the stateless legal order of medieval Iceland:

The poor
were at no disadvantage. The poor could sell their right
to justice to someone, such as a chieftain or another respected
peer, who could collect or make right upon the victim.
In this respect, the right to transfer restitution acted as an
equalizer for the poor. In cases where the victim did not want
restitution, the guilty parties had no obligations imposed on
them.

The unprotected
victim can sell his claim to a police company, who can then profit
by pursuing restitution from the criminal party. The police companies
might also do this in the interest of stopping a criminal before
he aggresses against their own customers.

If someone
is a serial offender, and persists in committing crimes, it might
be that no police company wants to protect him at any price. Protecting
someone who repeatedly provokes conflict can become very expensive.
It would be in the interest of police companies to make the identity
of such criminals known to the community, so that everyone could
keep watch on the criminals and avoid putting any trust in them.
Such a criminal might find it hard to get a job or do business in
the community, and so would have economic incentives to move away.

He will also
not enjoy any police protection in this town. Every police company
could ban him from each of its protected properties, essentially
exiling him from anywhere in town but his own private property.
(And this might include those local roads!) If others commit crimes
against him, he will find the police companies and arbitrators unhelpful.

NON-SUBSCRIBERS

There may be
people who live in town and refuse to recognize the free market
system as legitimate. If charged with a crime, they may refuse to
arbitrate, and will not be contractually bound to do so. In this
case, the victim or his police company could pursue a civil suit
against the offender, or file charges with the state authorities.
In a state-controlled society, it will sometimes be necessary for
police companies and victims to interact with the state to obtain
justice.

(In a completely
free-market world, "refusal to arbitrate" would carry
much heavier implications, possibly turning the refuser into an
"outlaw." No police company will want to provide service
to an "outlaw," even if he is later the victim of a crime.
No arbitration company will recognize his claims. No one would suffer
any legal penalties for committing crimes against him.

In such a free
market world, refusal to arbitrate would be a dangerous choice,
potentially sacrificing all of one's present and future legal protections
and claims. It would be in the self-interest of every police company
to avoid taking on such a person as a customer, since it will only
lead to trouble and expense.

But we digress.)

OUT-OF-TOWNERS

Out-of-towners
accused of a crime might have the option of signing a contract to
work within the local arbitration system, or they might insist on
being handed over to the state for their crimes. In this case, the
local police company involved would be happy to assist with the
prosecution. Those who are victims while visiting might have the
same option: the local market system, or the state.

POLICE BRUTALITY

Private police
companies would have a strong incentive to treat everyone in town
with courtesy and respect, unless caught in the act of a crime.
Everyone is either a customer or potential customer. Abusing customers
(or even non-customers) would cause people to hate the company,
destroy its reputation, and lead to lost customers, lost revenue,
and ultimately bankruptcy. A police-abuse victim could switch police
companies and file a claim against the abusive company. The other
police companies would be eager to bankrupt a rough competitor with
claims, and would always be ready to use force in the defense of
their customers.

CONCLUSION

A town that
relinquished its police and court functions to the market would
benefit from efficient protection and conflict resolution. The greatest
share of costs would fall on offenders. Victims would be the center
of the legal process. The private institutions would still need
to interact with the larger state environment around them, but at
least town matters could be handled by the police and arbitration
companies. As long as consumers are free to choose their own protection,
and entrepreneurs are free to start protection agencies and arbitration
firms, an anarchist town would be a very free and safe place to
live.

Low taxes and
low crime rates would attract new residents and businesses, helping
the town prosper. If one community could successfully establish
a free protection and arbitration market, it would provide a model
that could be imitated in communities across the country and around
the world.

April
4, 2009

J.
L. Bryan
[send him mail] is a freelance
writer.

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