OF ALL THE Beliefs I've held over the years, none has raised so many questions as the private defense agency (not even Mormonism). Here I will explain the idea, and how the private sector can do the job of the Police better than the Police.
To start, this idea is not my own, so I grant credit where it is due. David D. Friedman (daviddfriedman.blogspot.com) illustrated this concept in his book The Machinery of Freedom, which I highly recommend reading, and from where I have drawn many of my own opinions.
The link to the book itself in pdf form is here: http://www.daviddfriedman.com/The_Machinery_of_Freedom_.pdf
Simply put, a private defense agency is a private organization that is involved in the protection of the citizenry by force. Today, such organizations do not exist in the United States because the government has a monopoly on the industry with the police force-- one cannot compete with an organization that the entire country is forced to pay for.
What if instead there was no police force? Those without any faith in the market or its abilities are imagining a lawless society of complete and utter chaos. But those of us who understand how the market works a little better would think twice.
Consider: wherever there is money, there's a market. Without a police force, people across the nation would desire, and be willing to pay for, some sort of defense for themselves. Sure, they could always buy a gun, but that alone may not be enough. As a result, companies would naturally take on the business of providing defense for others. Contracts would be made that ensure protection from criminals for some sort of fee, and companies would have a strong incentive to uphold these contracts, lest they become distrusted by the consumers and left behind by their competitors.
Now the question becomes- by what rule of law do private defense agencies operate? One thing is certain- people will desire that their rights be protected. Whether or not you're a murderer or a thief, chances are that you don't want to *get murdered* or *get robbed*, so you want to hire a defense agency that will punish those who violate your rights.
However, suppose you also want a defense agency that protects you from other defense agencies- even when *you* violate the rights of others. If I'm a thief, and I steal your wallet, your private defense agency (let's say Sunnyside) might show up at my door. I would then have interest in hiring a defense agency (say Deep Green) that would show up at my door to protect me from whatever punishment is about to ensue- so what happens? Do our agencies duke it out and whoever has the most goons wins?
Look at it from the companies' perspective. Without a doubt, there are going to be a large number of companies wrapped up in the defense industry-- it's something that virtually everyone wants. Just like consumers have about a million options of where to buy food, so they will have a plethora of choices regarding who will defend them against "crime." If I run the private defense agency Sunnyside and you run Deep Green, what are the odds you and I will still be in business if we have a miniature war between the two of us while, in the meantime, the competing private defense agencies Mithril, Gunsmart, and GoonsRUs learn to get along? It's like a FFA game of Risk, where the surest way to win is to let your opponents kill each other and then swoop in for the victory.
It is for this reason that private defense agencies have an incentive *not* to fight each other.
Furthermore, as a customer, do I really want to hire a private defense agency that I know makes special exceptions for customers who pay extra? Do I want to hire an agency that might look the other way when another one of its own customers who's a little wealthier than I am decides to take something of mine? The market for such a risky agency is, without a doubt, very small.
Most people are going to be OK with a private defense agency that ensures protection for everyone, even if that means that a customer could be punished by his own defense agency if he sticks his nose in somebody else's business. It's more desirable, for most people, to have guaranteed safety from others at the expense of being punished for "criminal activity", then it is to have a defense agency that's a little lenient with your crimes at the expense of less-than-assured protection.
And so, in order to satisfy the interests of the protectors and those they protect, private defense agencies will couple with private arbitration agencies to form a desirable rule of law. The vast majority of the market will hire those defense agencies whose arbitration agencies have a double-edged 'don't tread on me' law system- where protection from others comes first and foremost above all else.
Note that "victimless crimes", such as using drugs or drinking 'under age' do not exist in a society with private arbitration agencies, because there is no market for the enforcing of such laws. This opens the doorway to increased social freedom, thereby making the society a more desirable place to live in (which is always a good thing).
There will, however, be differences in what sorts of law people choose to apply to others (and themselves). On the subject of how people are punished, for example, there can be differences in opinion, and thereby law structure, even if both variants of law are double-edged 'don't tread on me' systems.
Let's say, for example, that I'm a customer who favors the death penalty for any man who attempts to murder, or successfully does murder, another man. I have my reasons (maybe I believe this will serve as a strong crime deterrent), and so I hire an agency who advertises pro-capital punishment arbitration.
You, on the other hand, would rather not have capital punishment for any reason. Perhaps the risk of being wrongly (or rightly) convicted and executed outweighs any minor gain in deterrence that execution has over a standard imprisonment.
On one afternoon, an attempt is made at my life by a masked gunman, and though I was successful in fleeing, you are accused of being the man in the mask.
By my system of law, you could be killed if found guilty. However, by your system of law, you would only be sentenced to prison. So what happens?
Our private defense agencies would have a talk.
Rather than whipping out all as many guns as possible, it makes far more sense economically, for both of our agencies, to work out the court case peacefully.
Your anti-capital punishment agency determines that a guarantee for all crimes related to murder to be sent to an anti-capital punishment court has a value of $100,000 per year to its customers.
My pro-capital punishment agency, on the other hand, determines that a guarantee of its own for all crimes related to murder to be sent to a pro-capital punishment court has a value of only $60,000 per year to its customers.
Your private defense agency offers my private defense agency $80,000 per year in exchange for accepting an anti-capital punishment court. My defense agency accepts, since this is more money than it could make by holding to a pro-capital punishment guarantee. Your private defense agency could then raise its rates to bring in an extra revenue of $90,000 per year- which is OK with the agency's customers, since this is of less value to them then the guarantee for anti-capital punishment courts, and it's OK with your defense agency, since they are making an additional $90,000 per year at the cost of $80,000 per year. My defense agency then lowers its rates by $70,000 per year, which is OK by its customers, who would prefer this amount to a guarantee of a pro-capital punishment court (which they value at only $60,000 per year). This is something my defense agency can afford to do, since they are losing $70,000 per year at the price of gaining $80,000 per year from your defense agency.
Just as happens in any good trade, everyone wins (and our case would go to an anti-captial punishment court).
In this way, laws that are desired for most strongly by the population will overrule those which are less favored. Note that even if more money tends to back an anti-capital punishment law system, capital punishment would still be used when the private defense agencies of both customers in question are coupled with a pro-capital punishment arbitration agency. Because that's what both of you want.
This is true democracy.
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So what are the advantages of private defense agencies over a Police force? There are many.
First of all, as in any industry, competition brings about higher quality at a lower cost. Defense agencies would be forced to push the limits in protection capabilities, as their ability to arrive quickly at the scene of a crime and quickly apprehend criminals would be pivotal to their success over their competitors. Funds would be allocated reasonably and efficiently to reduce costs and make their hire as attractive as possible.
As I've stated before, it would result in the elimination of "victimless crimes", which have no place in civilized society.
Perhaps most importantly, laws wouldn't have to go through the painful, expensive, lengthy and obscure process laid on by politics. Wherever people are willing to attribute the most money (in other words, where society as a whole feels the most strongly), there is where the law structure will be formed. Defense agencies will have to be transparent (and there would be no incentive to hide anything) regarding exactly what laws their arbitration agencies support. The law would be in the hands of the people, rather than whichever politicians can best break the system.
Furthermore, since people would be charged, at least in part, based on how much they make use of their defense agency, people would be incentivized not to waste protection resources. With a police force being "free" and readily available, people will make a call to 911 and demand the presence of officers without a moment's hesitation at even the slightest sign of trouble. As a result, the police force has become riddled with inefficiency, and increases have been made where perhaps they weren't necessary. If demanding the presence of private defense agency operatives is attached to a price, even a minor one, those resources will be allocated to where they are best served, as people make calls for help only when the cost of doing so is outweighed by the benefit they receive.
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