The profit motive will then see to it that the most efficient providers of high-quality arbitration rise to the top and that inefficient and graft-oriented police lose their jobs. In short, the market is capable of providing justice at the cheapest price. According to Rothbard, to claim that these services are "public goods" and cannot be sold to individuals in varying amounts is to make a claim which actually has little basis in fact.4
Hence, the anarchocapitalists place faith in the profit-seeking entrepreneurs to find the optimal size and type of protective services and faith in competition to prevent the establishment of a monopoly in the provision of these services.
There are essentially two differences between the two schools discussed above. First, there is the empirical question of whether competition can actually provide the protection services. On the anarchocapitalist side, there is the belief that it can. On the constitutionalists or "minimal-state" side, there is the following argument.
Conflicts may occur, and one agency will win. Persons who have previously been clients of losing agencies will desert and commence purchasing their protection from winning agencies. In this manner a single protective agency or association will eventually come to dominate the market for policing services over a territory. Independent persons who refuse to purchase protection from anyone may remain outside the scope of the dominant agency, but such independents cannot be allowed to punish clients of the agency on their own. They must be coerced into not punishing. In order to legitimize their coercion, these persons must be compensated, but only to the extent that their deprivation warrants.5
The second issue is more conceptual than empirical, and hence cannot be entirely resolved through observation. This issue centers on the question of how rights are determined in the first place; how do we get a starting point with all its status quo characteristics from which the game can be played.
Buchanan, a leading constitutionalist, criticizes Friedman and Rothbard, two leading private-property anarchists, because "they simply 'jump over' the whole set of issues involved in defining the rights of persons in the first place."6 To theconstitutionalist, the Lockean concept of mixing labor with resources to arrive at "natural rights" is not sufficient. The contractarian approach suggests that the starting point is determined by the initial bargaining process which results in the constitutional contract.
Debate over this issue will undoubtedly continue, but even Buchanan agrees th
if the distribution or imputation of the rights of persons (rights to do things, both with respect to other persons and to physical things) is settled, then away we go. And aside from differences on certain specifics (which may be important but relatively amenable to analysis, e.g., the efficacy of market-like arrangements for internal and external peace-keeping), I should accept many of the detailed reforms that these passionate advocates propose
Our purpose in this paper is to discuss, in a historical context, some of the important issues that Buchanan says are amenable to analysis. We do not plan to debate the issue of the starting point, but will be looking at the "efficacy of market-like arrangements for internal … peacekeeping.
It does seem, for the time period and the geographical area which we are examining, that there was a distribution of rights which was accepted either because of general agreement to some basic precepts of natural law or because the inhabitants of the American West came out of a society in which certain rights were defined and enforce
Such a starting point is referred to as a Schelling point, a point of commonality that exists in the minds of the participants in some social situation9 Even in the absence of any enforcement mechanism, most members of Western society agreed that certain rights to use and control property existed. Thus when a miner argued that a placer claim was his because he "was there first," that claim carried more weight than if he claimed it simply because he was most powerfu
Tastes, culture, ethics, and numerous other influences give Schelling-point characteristics to some claims but not to others. The long period of conflicts between the Indians and the settlers can be attributed to a lack of any such Schelling points. We concentrate, however, on arrangements for peace-keeping and enforcement that existed among the nonindigenous, white populatio
In the following pages we describe the private enforcement of rights in the West between 1830 and 1900. This description does allow one to test, in a limited fashion, some of the hypotheses put forth about how anarchocapitalism might functio
We qualify the test with "limited" because a necessary feature of such a system is the absence of a monopoly on coercion.10 Various coercive agencies would exist but none would have a legitimized monopoly on the use of such coercion. The difficulty of dealing with this proposition in the American West is obvious. Although for much of the period, formal government agencies for the protection of rights were not present, such agencies were always lurking in the background.
