Overthrowingthe Anarchists 309An anarchistmightcounterthatin any disputebetweenclientswhoare respectively
underpro-DPandanti-DPagencies,theirdifferencescan be resolvedby bothagencies
compromisingwhenselectinga third-partyarbitrator.In the process,bothsideswould
eachacquiescea littlein its demands.Takeme as someonealignedwiththe anti-DP
agency.I wantit to prosecutesomeonewhois subscribedto a pro-DPagency.Here,my
anti-DPagencywouldhaveto acquiesceand allowfor my enemyto be treatedwithmore
DueProcessthanI prefer.If marketforcespressurethe anti-DPagencyto becomemore
like the pro-DPagencies,thenthatactuallymeansthatmarketforcespushthe maverick
agenciestowardthe directionof conformingto a standardizationof industrypractices.
But sucha market-drivenstandardizationof industrypracticesactuallyunderminesDa-
vid D. Friedman’s attemptto exploit,as a sellingpoint,the ideathatanarchyis attractive
for the reasonthat it wouldallowfor a varietyof differentagenciesto engagein radically
differentpractices.Thetruthis thatthe arbitrator’s verdictis meaninglessif eitherside
can rejectit. Thisevincesthatthe verdictcannotbe bindingunless(1) a centralgovern-
mentenforcesit, or (2) one of the defenseagenciesis capableof drivingthe otherinto
submission.In the caseof 2 , the dominantdefenseagencybecomesa monopolistic-hege-
mony-in-practicein this case,and suchade-factomonopolistichegemonyis exactlywhat
the anarchistwantsabolished.
I wishfor peopleto see throughthe fallacythatArbitrationSolvesEverything.Some-
one can pointout thata systemof competing,privatedefenseagencieswillstir up skir-
mishes.Therewillbe caseswherea legaldisputearisesbetweenthe clientsof twocom-
petingviolenceagencies.Theanarchistwillreply,“No,everythingcan be settledby
private Dispute Resolution Organizations—DROs.” Too many people believe that
governmentis supposedto be the solutionfor everythingtheyinterpretas a problem—
theywantthe governmentto be God,orGODvernment.Believingthemselvesto rejectthe
irrationalityof this view,anarchistspropoundthat privatearbitrationmustnecessarilybe
the solutionfor everythingandprivatearbitrationmustbe God(Allah-narchy?).Private
arbitrationis not any moreof a cure-allthanis governism.Thereare caseswhereprivate
arbitrationfailsand the disputingpartiesend up goingto courtanyway.An attorneytold
me of a casewheretwobrothersfoughtoverownershipoverthe two-storyhousethey
inherited.Theywentthroughmultiplelevelsof privatearbitration,onlyto end up sum-
moningtheirlawyersto appealthe previousarbitrator’s ruling.Eventually,the last arbi-
tratordecreedthatonebrothergainfull ownershipoverthe firststoryandthe other
brothergainfull ownershipoverthe secondstory.Naturally,thatfacilitatedadditional
vagaries;everytimethe brotheron the secondstorywalkeddownto the firststory,he
wastechnicallytrespassing.Thebrothershadto go to a “monopolygovernment” court
anyway.
Thereis a contradictionin a libertarianwhoproclaimsthe inherentgreatnessof both
alternative dispute resolution (ADR)—private mediation, private arbitration, and
DROs—and enactingtort reformthroughimplementationof aloser-paystort systemin the
USA.As we recallfromLife in the MarketEcosystem, I favorthe loser-payssystem.Under
the currentU.S.tort system,corporationstendto favorADRovergoingto court.They
figurethatno matterwhathappens,the plaintiff’s actionautomaticallyimposesa coston
them,and,statisticallyspeaking,payingtheirlawyersto settlethe caseis moreoften
cheaperthanwinningthe casein court.However,if the loser-payssystemis implemented
thatdynamicwillchange.Thecorporationwillnoticethatif it worksout a settlement
withthe plaintiff,it willnecessarilylosemoney,whereas,if the corporationlets the case
go to court,it mightnot lose any money.For that reason,whenthe loser-payssystemgoes
intoeffect,the corporationwillhavemoreof an incentiveto let the casego to a govern-
mentalcourt—whereit can winandtherebyrecoupits legalcosts—andlessof an incen-
tive to resortto alternativedisputeresolution.Thatwillreducedemandfor ADR.Many