Book Champions Market-Based Law and Justice
The provision of justice and security has long been linked in most people’s minds to the state. But are the state’s monopolies on lawmaking and law enforcement really necessary? Those who say “yes” typically assume that any alternative arrangement for law and order would favor the rich at the expense of the poor—or would unleash a war of all against all. Not all scholars agree, however. Independent Institute Senior Fellow Bruce L. Benson challenges the conventional wisdom in his 1990 book, The Enterprise of Law: Justice Without the State, a treatise that has just been reissued by the Independent Institute.
The Enterprise of Law represents a dazzling integration of historical and economic analysis. Non-state institutions have fought crime, resolved disputes, and administered justice more effectively than has the state, Benson argues, because in the absence of government obstacles they have had stronger incentives to provide those services. Skeptics would rightly wonder whether non-state institutions have in fact provided justice—properly construed—as opposed to mere law and order. Benson anticipates this challenge. He notes that private property and restitution for injured parties were characteristics shared by the customary legal traditions of the Kapauku Paupuans of Western New Guinea; the Anglo-Saxons before the Norman conquest; medieval Iceland and Ireland; the Law Merchant (a private institution that governed international trade since medieval times); and the western frontier of the United States during the 1800s.
Benson concludes with a look at the promises, pitfalls, and prospects of privatization today (or rather tomorrow, since vested interests would surely defeat political efforts to implement full privatization in the near-term). He notes, for example, that privatization must be designed and implemented in ways that would prevent special interests from winning undue “sweetheart” deals as a result of privatization. He also makes the case that a fully privatized system of law and justice would be strongly biased toward individual liberty and private property. Strong incentives, he argues, would make it likely that such a system would feature full restitution for injured parties; a variety of insurance-like arrangements and “treaties” between competing protection organizations; private courts and judges that would be rewarded for their impartiality and clarity; the use of social ostracism and economic boycotts to help incentivize convicted lawbreakers to pay their debts; and prisons that would treat inmates well in order to enhance prisoner productivity and hasten the rate of debt repayment. “Many questions might remain, of course,” Benson writes, “even for those who find the arguments for privatization to be compelling.”