On Nov. 7, Youliy Ninov published an article called “A Free Market Alternative to Anarcho-Capitalism” in which he argues that paying for protection of private property contradicts the concept of private property, and thus an alternative system to the organization of the police, courts, and prisons proposed by anarcho-capitalists which functions according to free market principles is needed. In this rebuttal, I will show on a point-by-point basis that he has made a significantly faulty case. Some correct parts and some repetitive faults of Ninov’s work will be omitted for the sake of brevity.
1.1 Ethical Problems of Anarcho-Capitalism
In anarcho-capitalism private property owners are clients of a protection services market. In addition, in most cases they pay directly or indirectly for the services they obtain (Tannehill 1970), (Rothbard 1973).
They might be, or they might take up arms and provide security for themselves on an individual or cooperative basis, or someone might create a multitude of robots that indiscriminately enforce a libertarian code of ethics. If one of the latter two options occurs, then Ninov’s case becomes much harder (if not impossible) to make. I will grant for the sake of argument that private property owners are clients of a protection services market.
Firstly, people do not pay for the police, courts and army because they are eager to use their services, but because unless they do it, their quality of life would deteriorate. Basically, one is forced to pay for these services because the alternative is to suffer losses in the form of stolen property, physical damage (mugging, killing), etc.
People do not pay for food and drink because they are eager to consume them (although they may be eager to consume the particular foods and drinks they buy); they do so because their survival depends on it. Basically, one is forced to spend money on food and drink because the alternative is to suffer losses in the form of undernourishment-related ailments and eventually death.
Unless one takes preemptive action, it is guaranteed that physical aggression would be used on him.
It is not guaranteed, but human nature being what it is, it is likely.
The threat of initiated physical aggression is what makes people pay for protection services. However, the anarcho-capitalist solution for countering crime stipulates that private property owners generally pay for crime prevention. In that it proposes a solution in which people yield to the threat of initiated violence and pay to avoid it.
Again, they may not pay for protection services as there are other options. Rather than yield to the threat of initiated violence and pay to avoid it, people may take up arms and act to exterminate the perpetrators of the threat.
However, according to Ayn Rand, markets in which one party acts under initiated violence or the threat thereof are not free. From this point of view, anarcho-capitalism offers a non-free market solution.
By this definition, there is no such thing as a free market unless no one ever violates the non-aggression principle. This is possible in theory but is unlikely to ever be the case in practice.
Secondly, anarcho-capitalism accepts the supremacy of private property. So, according to this view, if one buys/obtains something by free market means (that is, without the initiation of physical force), then this item is his and his only. However, this leads to another problem. In anarcho-capitalism, people generally pay in order to ensure the continued possession of their property, since they are the clients. This raises the legitimate question: Is any item really yours if you need to pay in order to ensure that it remains in your possession? The latter suggests that the simple act of buying something does not guarantee full possession, which in turn leads to the conclusion that private property rights are contingent upon constantly and incessantly paying for what you possess. In short, if one stops paying for one’s possessions, one’s rights over them disappear. The latter contradicts the initial assumption that once one obtains something by using free market means, it becomes his. In fact, it is never entirely his.
Ninov shows confusion between theory and practice. In theory, if one obtains property without initiating the use of force, then one has a right to exclusive control over that property. But just as a communist society will contain some non-communists and a democratic society will contain some non-democrats, it is reasonable to assume that an anarcho-capitalist society will contain some non-anarcho-capitalists. In other words, there may exist in practice some people who disagree with libertarian property standards and act upon that disagreement. If these people are not deterred by the threat of or stopped by the use of defensive force, then they will violate private property rights. One’s rights over such property do not disappear in theory, but are interfered with in practice.
Thirdly, when freedom is obtained through the purchase of a service, as in anarcho-capitalism, the following problem occurs: one gets only as much freedom as one is able or willing to pay for. This is an inevitable consequence of the way the free market works. In a free market, one obtains from a service/goods just as much as one has paid for. Since freedom would be the result of a market transaction, then one would get exactly as much as one has given.
Freedom is not obtained through the purchase of a service; it is defended in this manner if the purchaser chooses to outsource this problem rather than handle it oneself.
The aftermath is that there would be no common standard for freedom, i.e. there would be ‘equal’ and ‘more equal’ people. In particular, those with more money would be ‘more equal’ than others.
If this is true, then it proves too much because the only way to have everyone be equal is to have idealized communism.
Taking the above into consideration, we can say that in anarcho-capitalism people will not be equal with respect to their fundamental rights.
Again, there is a difference between theory and practice. Everyone has the same fundamental rights of self-ownership, freedom from aggression, freedom of association, homesteading, etc. in theory. In practice, however, some people will prove to be more capable than others and will thusly acquire property rights over a greater amount of resources than others.
1.2. Ethical Solutions
The only way to avoid the above ethical issues is to offer a system in which one is not the client and does not pay for private property protection.
As shown above, there are no ethical issues to resolve, but let us examine Ninov’s proposal anyway.
However, if we release private property owners from the obligation to pay for the protection of their own property, who then would pay for the police, courts and prisons? The answer to this question is quite clear from an ethical point of view: the one who has caused the problem, the one who has initiated physical force, i.e. the criminals themselves.
Considering the above, an ethically clean solution for the police organization for instance would be that the criminals themselves pay for the operation of the police. In effect, we would have the police be funded from and by the very act of fighting crime. Thus, when a crime is committed, the police would have the right to catch the criminal and let him pay for its services, for the effort expended in the criminal’s apprehension. This would guarantee that private property owners would not pay for property protection. In such a way a new type of market is formed, one in which the police is on one side and the other side (the client) are the criminals themselves.
In theory, this should be done. In practice, however, this can be difficult. It is important to remember that criminals are irrational actors by definition. After all, initiatory force is the tool of a man without answers. Those who resort to committing acts of aggression generally do so out of desperation. In many cases, the criminals are unlikely to have the skills and work ethic necessary to make restitution. Providing them with said skills and work ethic can be more costly than the potential benefit in some cases. A criminal might also refuse to make restitution and simply go on committing more acts of aggression, in which case a criminal may need to be killed to protect civilization. If this is the case, then making the criminal pay cannot work. It is also quite strange to think of criminals as the clients of police, as a client relationship is generally non-hostile, whereas security personnel and criminals can be mortal enemies. Finally, if Ninov’s police were somehow financed completely through restitution fees, then non-criminals would have no direct means to financially influence them. Bad performance would have to be dealt with either through ostracism of the offending officers and/or companies or through defensive violence against the police force.
In the anarcho-capitalist civil law market of judiciary/arbitration services the private property owners are the clients who pay for these services directly or indirectly (to an insurance company) at first. They are either compensated for their expenses by the opposite side when it has lost the law-suit or the insurance company covers their court fees, respectively (Tannehill 1970), (Barnett 1998). In criminal proceedings, the clients of the court are the defense or insurance companies involved. When they win the case, they would also be compensated for their expenses (Tannehill 1970), (Friedman 1979). It is evident that the private property owners pay for the work of the court in all cases, be it directly or indirectly, through having paid the defense/insurance companies beforehand. The possibility that they may be compensated for their expenses does not change the fact that they pay for judiciary/arbitration services, even if for a limited amount of time. In contrast, in the suggested system the private property owners do not pay at all, i.e. no money leaves their pockets or bank accounts at any time. Those who pay for judicial services are the criminals/law-breakers.
An interesting consequence of the suggested system is that one gets his freedom ‘for free’, so to speak. In anarcho-capitalism, one obtains freedom through paying for a service, but in the suggested system the ones who use police and court services are the criminals themselves, not the private property owners. In effect, freedom is a byproduct of ‘servicing’ the criminals. It is the result of a market transaction to which private property owners are not a party. One gets his freedom even without asking for it, which is exactly what the definition of a basic human right is, a right which is yours just by virtue of your existence.
There is nothing wrong with making the criminals pay for judicial services, but as explained above, this will not always work. The anarcho-capitalist system would also try to do this, contrary to Ninov’s description.
2. Economic Considerations
Paying for private property protection makes perfect sense when there is no way to avoid it, because people would be worse off without it, but not so much when the alternative not to pay exists. The latter is what the suggested system offers.
From an economic standpoint, the suggested system would amount to a transfer of economic resources from counter-productive hands into productive ones. The system would punish the people who subvert society without burdening the productive part of the population by forcing it to pay for prisons, for instance.
This cannot be offered in all cases, and anarcho-capitalist proposals offer this as well.
A necessary and sufficient condition for the suggested system to function is the existence of a pre-established, monopolistic body of law governing a certain land area, whose sole intent is to ensure the protection of private property.
The standard anarcho-capitalist proposal with respect to the organization of the law system is the polycentric law, namely when several law systems exist in parallel in the same geographical area (Barnett 1998), (Friedman 1979). In order to prove that polycentric law is better than its monopolistic counterpart, authors typically draw a comparison with the existing, contemporary structure of the law, i.e. the monopolistic law imposed by the state through the initiation of force. From this comparison they derive the conclusion that the polycentric system would be superior to the existing one. What seems to have been neglected is the fact that monopolistic systems can exist even without the state or in general without force being initiated.
This has not been neglected. For example, the non-aggression principle is an example of a legal standard that libertarianism advocates as a monopolistic law.
However, private property owners may decide that they prefer monopolistic laws and there is nothing to be done about it if the initiation of force is banned. Similarly, there is nothing which can or should prevent private property owners from joining their lands with those of other owners who share their views with respect to what laws they wish implemented on their property. However, a common set of laws over a given land area forms a jurisdiction.
From an economic perspective, it is beneficial for private property owners who share the same views in regard to laws to join their lands, because the latter increases the size of the market they jointly control. Economies of scale could be achieved in this way. In other words, the market forces would stimulate private property owners with similar views to create jurisdictions of their own (societies/communities) with laws corresponding to their wishes.
Non-owners who wish to live in such a jurisdiction would have the option to either live there and accept the laws, whatever they are, or leave the jurisdiction. The latter would lead to the creation of homogeneous societies, because only the people who agree (or at least accept/tolerate) the imposed laws would remain in the particular jurisdiction.
This need not be the case. There could be multiple jurisdictions of this type that overlap, thereby creating a sort of polycentric legal system out of a patchwork of monopolistic legal systems.
3.2.1. Organization of the police and its consequences
The proposed system allows for the existence of many competing police forces, as in anarcho-capitalism. However, since in our case the police would have different clients (the criminals themselves), some differences in the way the police forces operate would emerge.
The criminals cannot always be the clients of the police, as shown above.
The most notable one would be the lack of conflict between private police organizations which is inherent in anarcho-capitalism. In anarcho-capitalism, two police forces could have opposing interests if the client of one of them commits a crime against the client of the other, and this could potentially lead to an aggressive confrontation between the two police forces, i.e. the well-known problem of the competing police agencies (Rand 1964, ch.14).
This is not much of a problem, as the rational self-interest of everyone involved is to avoid such a confrontation. If they fight and kill each other, then they raise their operating costs and lose market share to other police agencies. They also cause damage to innocent bystanders and their property, for which they must make restitution. Even if there is no such battle, simple non-cooperation between the two agencies can lead to lapses in insurance of transactions between other people protected by the two agencies. Such economic problems can also create an opening for other agencies to acquire their customers.
Moreover, the police under anarcho-capitalism would very frequently find itself cornered in a situation of conflict of interest. This would happen when one of its clients perpetrates a crime against another of its clients. The problem is that the police would have to arrest a person from whom it obtains money for protection (Nozick 1974).
This problem can be easily solved through contracts with other police agencies. For example, if both suspect and victim use Fabrikam Defense Solutions, the terms of their protection policy may stipulate that Woodgrove Security will be brought in to avoid a conflict of interest, and vice versa. In any event, the agency must be careful to avoid public perception of harming its own clients because this would encourage customers to go elsewhere.
Under the suggested system, such problems among the competing police forces would not exist, because the interests of their clients (the criminals) cannot clash the way they do under anarcho-capitalism. The reason is that the offenders do not have the right to choose who will serve them and how. They can be served by any police force which manages to capture them.
The structure of this branch of the economy would be the same as the ones in the rest of the economy. This would ensure that the conflicts between the different police forces and the way these conflicts are resolved would be the same as everywhere else. In particular, if conflicts arise, for instance if two police organizations argue with each other over who has captured a particular criminal first, then these conflicts would have to be resolved in court. If a police company refuses to go to court and to accept the court’s decision, then it itself becomes a law-breaker. The reason is that there are laws which specify explicitly what behaviors are allowed and what are not.
This can also be true in anarcho-capitalism, depending on the relationships between customers and police forces as well as relationships between police forces.
As a comparison: in the standard anarcho-capitalist system there are no compulsory laws valid for everybody; therefore, a defense company which does whatever it wishes is not necessarily a law-breaker.
This is false. A prohibition against aggression toward people and their property is a compulsory law valid for everyone in an anarcho-capitalist society.
In the suggested system if a police company commits a crime, it would be opposed by the whole of society, since this society is a homogeneous one. Moreover, it would represent a valuable asset to capture legally for all the competing police companies. Under such circumstances, an aberrant police company would not be able to withstand the pressure of all of its competitors and society as a whole, for the simple reason that in order to function it requires society’s approval/support.
This can also be true in anarcho-capitalism.
Such a situation cannot occur under anarcho-capitalism, because there a police company is not necessarily opposed by the whole society.
This is false. The whole society is not required to stop a rogue police company; in fact, a rather small minority could do so.
Even if a police company is a market monopoly or the dominant force, it would not be able to break the laws with impunity. Such a situation cannot happen in a homogeneous society.
If no one is willing to resist such a police company, then it will be able to break the laws with impunity.
The contemporary police force can be given as an example. It functions in a society where the vast majority of people supports its way of operation and organization. The police is an absolute monopoly but it dares not overtake the power of the state or oppose/reject the decisions of the courts.
This shows incredible naïveté and ignorance of history. In a stateless society, the police and the military are one and the same, as both functions are performed partly by private defense agencies and partly by their customers. There are many cases of a government’s enforcers performing a coup d’état in order to overtake the power of the state or oppose/reject the decisions of the courts.
Because of the suggested structure of this branch of the economy, it would be impracticable to try bribing the police. The reason is that firstly, the police is not a monopoly, and secondly, all police forces are interested in capturing all criminals. In effect, one would need to bribe all police forces and probably a large portion of the general population to avoid being arrested for a committed crime. This would make bribery impracticable.
This can also be true in anarcho-capitalism.
Since conflicts between the police forces would be resolved in court, the police companies would not be forced to cooperate with each other in order to resolve them. The latter shows that the suggested police organization is not a network industry. From this point of view, the criticism in (Cowen 1992) that the police in anarcho-capitalism is a network industry and this by itself may lead to collusion between the police forces does not apply to the suggested system.
Police forces in anarcho-capitalism are incentivized to handle matters in the same way, so if Cowen’s criticism applies to anarcho-capitalism, then it applies to Ninov’s proposal as well.
3.2.2. Motivation of police
In anarcho-capitalism, the police is motivated to do its job well, but its motivation is determined not by the level of criminal activity but by the subjective perceptions of its clients about it. So, the police would be more concerned with ensuring that the subjective needs of its clients are satisfied than with objectively persecuting criminals. It would be more important how its actions are perceived by the society than how much work it has actually done. In other words, because the police serves private property owners, it would try to satisfy their interests and this would make it efficient from a market point of view, yet this not the same as being efficient in fighting crime.
This is a self-correcting disparity. The subjective perceptions of private property owners about crime will align with objectively persecuting criminals if there are no factors to prevent this, such as a statist lapdog media that spreads fear to propagandize for government police and military forces.
The problem is that the general population would be able to influence how the police does its job, which is wrong because the general population is not an expert in capturing criminals. It just lacks the necessary skills and experience.
Private property owners are the people who are ultimately served by the police even if Ninov’s idea of the police serving criminals is taken seriously, so they should have some say in how they do their jobs. Ninov also assumes that the goal is to capture rather than kill criminals, which is not always the case.
An apt analogy would be for the general population to try instructing a surgeon on how to perform a brain surgery. Let us illustrate this general problem with an example. Since how much money the police would get would be dependent on the number of private property owners who subscribe to its services and on their willingness to pay more or less, the police would make sure to persecute more vigorously those criminals/cases that have achieved a wider social response in the media. The case of the capture of a notorious criminal, for instance, would bring much more money to their coffers than that of an unknown gangster who has committed similar crimes. Objectively, however, the two cases are identical and should be treated in the same way, which would not happen, unfortunately. Again: in anarcho-capitalism, the motivation of the police forces would be extremely subjective, which would mean: not as effective as we would wish.
This is impossible to know because one would have to know how the media would report on crimes in the absence of the state.
Let us now try to evaluate the motivation of the police in the suggested system. The motivation of the police would derive directly from the crime itself, without any intermediary. No preference would be given to conspicuous/important cases unless the general population is willing to pay for them additionally. The only parameter which would be of importance would be the type of crime, big or small, because this would have a direct impact on the money to be obtained from it.
This is also true of anarcho-capitalism.
The police would try to be as efficient as possible and would not let the rest of the population dictate how it does its job, just as any free-market company would do.
Free market companies are dictated to by the rest of the population by means of which businesses people choose to support and what feedback they give about the goods and services they receive.
As an example: If there is a public gathering, the police in the suggested system would do its best to assess the number of policemen necessary to guarantee the safety of the crowd and deploy just the number needed. In anarcho-capitalism, the number of policemen sent to safeguard the same gathering would likely be much higher than necessary since it would be of an extreme importance that the police presence be noticed by the public and appreciated. In effect, the suggested police organization would adjust objectively to the actual crime protection needs of the society, not to its perceived crime protection needs, as in anarcho-capitalism. This would guarantee efficiency, which is what every market-based company strives to achieve.
These numbers are going to be equal over time, as perceptions naturally align to reality if nothing gets in the way of this process. In both cases, police face public pressure to provide security without wasting resources and would like to be noticed and appreciated.
Since the police would be motivated by the income it obtains from the criminals, it would be constantly on the lookout for new crimes. It would try to anticipate them, predict them and be where it is necessary in order to capture the criminal.
People who are motivated by income are likely to seek more income. Without the constraint of having to please property owners in order to maintain funding, this police force is likely to become abusive and have to be stopped by other police forces.
For instance, if there are parts of the city where more crimes happen, then there would be more police presence there. The simple reason is that there would be more work for the police to do there and consequently more money to be earned. Thus, the preventive function of the police would be preserved in the suggested system. What is more, the motivation to prevent would be stronger than the one in anarcho-capitalism. In anarcho-capitalism, the police forces are mainly interested that their own clients are not hurt by criminals, not that non-clients are not hurt. Therefore, criminals who commit crimes outside the region of control of the particular police force would not be of immediate interest to the defense company. In the suggested system, all police forces are interested in capturing all criminals independent of where or against whom they commit crimes. In this sense the interests of all police forces are the same. In anarcho-capitalism this is not the case.
By this reasoning, a fire department that serves only a certain group of customers should not care if there is a massive wildfire burning just over the horizon. In reality, an anarcho-capitalist police force is more efficient if it is proactive, stopping known criminals before they are able to endanger its customers rather than waiting until said criminals enter the immediate area.
Laws based on retribution as a form of punishment and as a right to which the victim is entitled (Rothbard 1998) are not compatible with the principle of non-initiation of violence, because retribution on a personal level cannot be applied according to some objective criterion.
This is thoroughly false. The non-aggression principle is a logical principle, and is therefore subject to logic in the form of rationality and consistency. A person who commits a crime cannot legitimately object to a taste of one’s own medicine, as moral hypocrisy cannot be rationally and consistently advanced in argument. (Such an argument may still be valid and may still be made by a person who is not a hypocrite, however.) Retribution on a personal level may be applied by the objective criterion of lex talionis.
Such kind of retribution means, in effect, that people would take justice in their own hands and would be sued and punished afterwards if they have not performed it properly. The real problem, however, is that if one makes a mistake, for instance uses retribution excessively or even punishes the wrong person, this would mean that society approves of violence initiation. In effect, no attempt to stop the initiation of violence would be made, but responsibility would be taken afterwards. Being wrongly punished, however, is of little consolation to the injured party after the fact.
The society only approves of violence initiation if it does nothing to punish the people who use vigilante methods wrongly or stop those who would. Ninov constructs a false dichotomy between individual vigilantism and law courts; there could be a system of law courts which allows retributive justice.
As an example: The wife of a particular man has been murdered. Believing to know who the perpetrator is, her husband kills the suspect (performs retribution), who later turns out to have been innocent. The husband was not able to objectively assess the situation because he was grieving at the time and looking for somebody to punish in order to alleviate his suffering. However, an innocent man has been killed, and this has been allowed, since it has not been discouraged beforehand.
This is another false dichotomy. Just because one has not discouraged an action does not mean that one has allowed it; one may not have been involved in the situation at all.
Another problem with retribution as a victim’s right is that it cannot guarantee an end to the circle of violence.
No system can guarantee an end to violence.
Laws based on retribution as a right vested in the particular community seem to be compatible with the principle of non-initiation of violence. Since they are applied by the community, it would also be possible to put an end to the initiated violence. It can be argued, however, that such laws would be ineffective from an economic point of view. Retribution in general represents a destruction of the resources available to the particular economy which could otherwise have been used to productive ends. As an example: killing a convicted murderer does not help the economic development in general, because he will not be able to contribute to the division of labor with his work. Letting him work in jail while serving his sentence there would, however, achieve that end. In addition, it should be noted that killing someone as a punishment for murder could prevent him from paying restitution to his victim’s family/relatives.
Letting a murderer live may not help economic development or bring a weregild sort of restitution to the victim’s family, as the murderer may simply refuse to work or even refuse to be taken into custody alive.
3.4. Court and Legal Services
In the suggested system, the private property owners are not the clients and do not pay for court and legal services at all.
The private property owners will end up paying in any case where the criminals are unable or unwilling to pay.
3.4.1. Legal services
Not paying for legal services can be accomplished by organizing the market for legal services in such a way that each crime has a market price.
Crime always has a market price.
In particular, the suggested system could function in the following way: the criminal/alleged law-breaker is one of the parties to the lawsuit. If he loses the case, he is required to pay a market-driven price to the other party. The latter makes profiting from crime possible.
A system in which profiting from crime is possible is a bad system.
But when crime is a profitable option, private property owners need not pay for the capture/prosecution of the criminal. When the potential for profit is available, there would always be companies/people willing to take part. So, the opposing party in the lawsuit would be the police or law companies or even simply private individuals seeking profit. They would strive to win the particular case in order to obtain the associated market-driven price. The latter guarantees that the victim of a crime or simply a private individual seeking justice need not pay for the lawsuit personally. This would be done by the police/attorney at their own expense. In case they win the lawsuit, they would expect a monetary compensation which would exceed their expenses.
This can also be true of anarcho-capitalism.
As can be seen, in the proposed case the victim/private individual seeking justice is not a client at all and in general is not a part of the market transaction.
The transaction would not occur in the first place without a victim in need of being compensated, so this is false.
That is why he would never pay for getting justice.
How does Ninov know?
The defendant (a suspected criminal or simply a private property owner) would also be able to get a lawyer to defend himself in court free of charge. The latter would happen because the incentive of profit would serve the defendant as well. In case of an acquittal, the claimant would have to compensate the attorney of the defendant for his expenses. In case the defendant loses the lawsuit, he would have to pay his attorney for the effort expended in defending him. In addition, the convicted person would have to pay the claimant the market price for the particular crime. As can be seen, the defendant would pay only if proven guilty.
Ninov says that the defendant can get a lawyer free of charge, and then that the lawyer must be paid. Which is it?
Since the prosecuting lawyers would pay for court services and possibly for the expenses of the other party if they lose the case, this would guarantee a responsible handling of all cases. Lawyers would try to estimate if the case they are about to undertake has enough supportive evidence to be won in court.
The number and specialization of lawyers would be determined by the demand of the market itself. When there is more money to be made by suing potential criminals/law-breakers, more lawyers would tend to enter the profession. Similarly, if the level of crime/law-breaking was low, there would be relatively fewer lawyers on the market, because the amount of money to be made would be lower.
This is also true of anarcho-capitalism.
3.4.2. Court services
In the context of the suggested system, if both parties cannot agree upon a judge or if the defending side flatly refuses to choose one, then the laws governing the particular jurisdiction would have to offer a solution. There may be multiple solutions to this problem and any one of them may be chosen, as long as the case reaches the court, so that justice can be served. For instance, the judge to hear this case may be chosen at random from a list of prospective judges. The qualifications, number, etc. of these judges may be regulated by the laws or left open. Or a single, well-known judge may be chosen. The number of possible correct solutions is unlimited.
The laws could simply allow a dispute to go unresolved. Admittedly, there are some disputes which must be resolved, but others may be able to be put aside and forgotten.
In the proposed system, the manner in which judges are paid would be irrelevant. They may be paid by both sides (attorneys) equally or just by the losing party (‘the loser pays’ rule). It is up to the market to decide on this. In any case, the judge would be equally dependent on both parties, which would guarantee impartiality.
The manner in which judges are paid is of the utmost importance, as money is known to be quite effective in tipping the scales of justice. If only the loser pays, then the judge is not equally dependent on both parties.
In anarcho-capitalism, the private property owners are the clients of the court services. The latter may be a problem in a murder case, when the murdered person has not left instructions in his will on how to handle this particular situation and has no relatives to demand justice or his relatives are simply not interested in prosecuting. Such a problem could never arise in the suggested system of organization, since the right to pursue justice belongs to the society/community, as is in fact the situation nowadays. There would always be companies/individuals willing to pursue justice for a profit.
This is not a problem for anarcho-capitalism. The non-aggression principle is tempered by logical and moral consistency, such that a murder cannot claim a right to life because the murderer has demonstrated by deed a rejection of the right to life. A proven murderer may therefore be killed without violating the non-aggression principle, and the members of a society/community would be wise to do this, as past behavior is a strong predictor of future behavior. We need not worry much about mistakes in this sort of vigilantism, as killing someone other than a proven murderer in such a pursuit makes the vigilante a proven murderer.
3.4.3. Formation of market prices for different types of offenses
The court would be responsible for ruling on the remuneration of the claimant for its services if the defendant is convicted. For this reason, the judges would have to balance between the interest of the police/lawyers and those of the convicted. If a judge does not pay the police/lawyers enough to compensate for their expenses and generate some profit, he would never be chosen by them. At the same time, if the judge makes the criminal pay too much, he would never be chosen by the particular criminal.
Ninov says earlier, “The…offenders do not have the right to choose who will serve them and how. They can be served by any police force which manages to capture them,” and describes the relationship between police and criminals as a client relationship. Now he says that criminals are in a position to choose which judge to use, and that the police’s interests are to be weighed against the interests of criminals. Which is it?
In effect, the judges would be an active party to the price formation process. They would have a vested interest (a monetary one) that all types of offenses defined in the criminal code are prosecuted and therefore, they would strive to raise the specific prices of the offenses so that the police/lawyers are motivated to catch and sue the perpetrators against the particular rule of law.
This may not be true if there is an offense which cannot be prosecuted in such a way as to be profitable.
3.5. Prison System
A typical anarcho-capitalist proposal on how the prison system could be organized is the following: When and if a person is convicted of a crime, he is sent to a private jail by the defense/insurance company which has successfully prosecuted him in court. In jail, he would have the opportunity to work, in particular to choose between different types of jobs offered at the particular place. By working, the prisoner would be able to pay for his prison expenses and pay restitution to the private property owners affected by the crimes he has committed. It should be noted that the prisoner would support himself, i.e. he would pay for his stay in jail and thus he would not be a burden on society. In this arrangement, however, the prisoner is definitely not a client, because it is not he who chooses which jail to serve his sentence in. In comparison, in the suggested system the prisoner is both the client and the one who pays for his stay in jail.
3.5.1. Problems and solutions
The anarcho-capitalist proposal leads to several problems. They stem from the fact that since the prisoner is not the client, a prison is chosen for him, i.e. the prisoner has no way to influence the behavior of the prison system.
There is no reason why an anarcho-capitalist system could not give a convict a choice of where to serve a prison term. Even so, the loss of liberty involved with being in prison is a deterrent against the commission of crimes. The prisoner is estopped from complaining about this loss of control because the prisoner became such by taking control away from an innocent person. Even without a choice of prisons, the prisoner may still be able to influence the behavior of the prison system by means of striking, organizing fellow prisoners, and/or rioting.
The first consequence of the above is that prisoners would typically be treated as dependents, not as clients, similarly to the present situation, and therefore they would sometimes be mistreated.
This can happen in any type of prison. If the prisoners are working to support themselves and are not a drain on the prison system, then there is no reason to treat them as dependents.
It is suggested that, since in anarcho-capitalism prison guards would be kept more stringently responsible for the brutalities that may occur, this would solve the problem. If the latter actually occurs, it might improve the situation as compared to the current prison conditions, but it could not by itself generate a sustained interest in the prisoner’s well-being, as is usual for the clients of all other branches of the economy. Even if the prisoner works in jail and his particular employer is interested in his well-being, this would have no significant effect on the prison system. The reason is that the interests of the prison system and those of the employers allowed to function there may not coincide. The prison system would try to satisfy the interests of its clients, namely the defense/insurance companies, not those of the inmates. In short, since the prisoners are not clients, the prison institutions would have no vested interest in resolving the above problem by themselves.
The interests of the prison system and those of the inmates may not coincide. The prison system could be trying to rehabilitate criminals, while the inmates could be trying to escape and commit more crimes. The ultimate clients of the prison system are the private property owners who hire the defense/insurance companies.
From another point of view, the primary purpose of imprisonment is to punish the criminal for his wrongdoings by limiting his access to/separating him from society. Punishing the criminal by subjecting him to bad living conditions has never been the original intent of the law, but this is what happens in reality because the prison system nowadays has no motivation to offer adequate and acceptable living conditions. Again, there are no market-induced incentives for this to happen because the prisoner cannot choose the prison and thus influence the conditions offered there. He is not the client. Similarly, in anarcho-capitalism, the choice of what the conditions in a prison would be is left to the organizations that have sent the prisoner to jail. The problem again is that the interests of these organizations and those of the prisoners do not coincide. The defense/insurance companies would be mainly interested in minimizing their expenses, whereas the prisoners would clamor for improvements in their living conditions.
The prisoner can still influence the prison conditions without being able to choose the prison, as discussed above. The result of prisoners clamoring for improvements in their living conditions can be an additional cost to the defense/insurance companies in the form of damage from prison riots. Exposes on horrific prison conditions can hurt a company’s reputation, and prisoners who are subjected to overly harsh conditions could sue the prison system or commit crimes against it, both of which could raise expenses more than improving the conditions would.
In particular, as clients the prisoners would be able to choose in which prison to go and pay for their stay there in any way they can, i .e. they can pay for their stay in jail with personal funds and/or work while in jail. This option would significantly change the relationship between prisons and inmates. In effect, the prisoners would become cherished clients to be taken good care of, because they would be the ones to pay for their stay.
This can also be true of anarcho-capitalism. However, one might think that a competent court would stipulate that any personal funds which are available to cushion one’s stay in jail should instead be used for the payment of restitution.
Prison brutality would be virtually non-existent since prisons would be highly motivated not to allow them. In addition, since the system would be market-based, the quality and quantity of its services would be defined by the market, which by itself guarantees constant improvement and updating of the living conditions and, in general, continuous development.
This is also true of anarcho-capitalism.
3.5.2. Functioning of the prison system
Working while in jail would be common and ordinary. Still, if a criminal has the funds to support himself in jail by paying for his stay there without working, then this would be allowed. The prisoner would enjoy as much luxury/goods/services as he is able or willing to buy, as long as these are not forbidden under the conditions of his sentence. Working in jail would usually be necessary for the prisoners to support themselves.
What is the point of keeping someone in jail if there is no need for the person to be forced to work in order to make restitution and the person is not a danger to others?
Prisoners would be able to choose prisons matching their financial situation or earning power. Still, it is very likely that some of the prisoners would refuse to work despite being unable/unwilling to support themselves while in jail. Those would most likely be transferred to minimum-amenities jails. Hopefully, when they see the big difference between the lifestyle the working inmates would be able to afford and their personal situation, they would be incentivized to start working. Such minimum-amenities jails would have to be supported by either the prison system itself or by charity organizations, private companies, etc., i.e. without burdening society. It would be in the prison system’s best interest to support minimum-amenities jails for which prisoners do not pay and consequently receive the bare minimum of services necessary for their survival. Experiencing the difference between what one gets without working and the privileges extended to the productive inmates would be a very good, market-based incentive to start working and be transferred to a better-quality jail. Criminals too dangerous to be allowed to work and people unable to work will have to rely on the public for support while in jail.
There is no need to have such a safety net. If a criminal chooses not to work to make restitution for a wrong and support oneself while in jail despite being able to do so, then there is nothing immoral about withholding even the basic necessities of life. At some point, the criminal will either choose to survive and make restitution or die of hunger and thirst. Both outcomes are acceptable by libertarian standards.
A new system of social organization has been offered. This system conforms fully to Ayn Rand’s idea of non-initiation of violence. However, the proposed system differs significantly from the anarcho-capitalist social organization. Here the people who always pay for crime protection are the ones who have caused the problem in the first place, i.e. the criminals themselves. In this way society would be able to achieve a quicker economic development, since the productive part of the population would not be burdened with expenses for the police, courts and prisons and the convicted criminals themselves would be converted from counterproductive to productive ones. The proposed system ensures the freedom of its citizens for free, since they never pay for law-enforcement. Freedom in this case corresponds exactly to the definition of a basic human right, namely a right which is yours just by virtue of your existence.
Not always, as the criminals may be unable or unwilling to do so.
New, market-based structures of the police, courts and prisons have been offered. The police/law-companies would be allowed to finance themselves directly from the criminals. The courts would be able to finance themselves directly from the police/law companies, thus avoiding the necessity of state or private property owner support.
This is also true of anarcho-capitalism.
The prisons would be funded and chosen by their customers, i.e. the prisoners themselves. The latter would ensure that the prisons function in full compliance with the principles of the free market.
This can also be true of anarcho-capitalism.
To conclude, Ninov’s proposal is not nearly as different from anarcho-capitalist proposals as he claims, his description of anarcho-capitalism is faulty, and the differences between his proposal and anarcho-capitalism mostly result in needless confusion and difficulty. Anarcho-capitalist theories for the organization of the police, courts, and prisons still stand strong.