The Specific Mechanism of Anarcho-Capitalist Conflict Resolution

We often discuss anarcho-capitalist society using generalities and aggregated speech. This is often not a convincing or clear way to communicate. This article lays out the specific mechanism used to resolve conflict in an anarcho-capitalist society as concisely as possible and within the context of a specific dispute example.

When asked how law would be provided in an anarcho-capitalist society (“ACS”), a typical proponent might say, “The market will select the efficient outcome based on the preferences of society.” While this is true, it’s awfully big picture and not specific. It’s so abstract that a very similar statement could be made by a proponent of Democracy or even the current U.S. system.

Below is a specific example of how an ACS would resolve a law suit from a religious group against an abortion provider.

In this ACS the person opening an abortion clinic would have a legal firm and the religious group would have a legal firm. They might even use the same legal firm, making resolution even easier. What are these legal firms and why should we assume that each actor will consume the kind of legal coverage which is supplied by these firms? That question is answered in this article.

Let’s say the religious group feels offended by the abortion clinic and decides to take action. In a free market, or an ACS, would select the efficient outcome for the transaction, where this transaction is a legal case.

To find the efficient outcome we need 4 things from Econ 101:

  1. Supply curve
  2. Demand curve
  3. Budget constrains
  4. Preference function

Actually we kind of need 8 things, because those 4 will be unique for each party in the case, but there are only 4 kinds of things.

Supply curve and demand curve for pro-abortion legal services allows us to determine the price of a unit of pro-abortion legal power. I know that sounds weird but it will make sense in a minute.

Supply and demand for anti-abortion legal services determine price of a unit of anti-abortion legal power.

The budget curve is built using prices previously determined in combination with the available spending money of each party. After considering the preference curve of the abortion provider, we know the number of units of pro-abortion legal power the abortion provider purchases. Same for the religious group.

The Outcome

The winner of the case is simply the organization with more units of legal power. We would also expect the degree of penalties to be equal in value to the value of the difference in legal power.

If the abortion provider has 2 more units of pro-abortion power:

  1. The suit from the religious group against the abortion provider will fail, or
  2. The suit might even result in penalties to the party filing suit, such as a frivolous suit penalty to the religious group, or
  3. Something else.

If the religious group has 2 more units than the provider:

  1. Some non-financial penalty such as regulation or forced closing of services will occur, or
  2. Some financial transaction will occur either in the form of a penalty that the provider pays the arbiter or a transfer the provider compensates the religious group, or
  3. Something else.

The point is that the resolution can actually occur in limitless ways, but the value of that resolution action is predictable.

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