Also, note that firms cannot grow indefinitely, enormous corporations we see today are actually products of this governmental system, in which they bribe government for regulations and deny competitors opportunities.
A great example of a market force that prevented an entity from growing is a recent Bitcoin incident in which one hashing pool was close to 51% of hashing power, which would give it an ability to double spend or otherwise compromise the network. So people simply spread awareness and many withdrew from this pool, effectively lowering its market share. What makes you think this is impossible with other businesses?
I understand that they cannot grow indefinitely but being the sole survivor in a city is not far fetched. Ofcourse the higher income with less service in that city gives them additional funds to operate in other cities.
As to your second point nothing makes me think it's impossible when people are paying attention to the business. But I believe that apathy is a large factor. Not only that but in this unregulated world how would you even know that this business has enough of the market to be a threat. Why would you change to a worse service if you only suspect they're getting a bit big and it has real financial or service impacts for you. You in turn need to pass on to your customers these impacts making your business less appealing even though your competitor isn't.
If there's apathy it means people don't care. If they cared they would do something. For example, they would be paying a number of independent market research and consumer protection agencies to keep an eye on all other companies, so they wouldn't have to do it all by themselves. So, those companies would pretty much do the regulating/info function of a government, except that no one can force anybody else to use their service. That is, you DON'T HAVE to pay (as with taxes), but if you like, you CAN. That is the crucial difference.
Again, if people are apathetic about something, then what right on earth does a government have to extract money from them and teach them what's good and what's bad on this money, regardless of whether they agreed with that or not?
Why in the world would I pay these regulators? It's an extra cost and their service is provided even if I don't pay because somebody else will pay for it. Why should these protection firms cooperate. How do we know the regulators aren't influenced by whichever of the protection firms they buy from? Remember it's only illegal for these regulators to lie if your own protection company supports the particular laws that require this other company to be accurate.
If people are apathetic about the property rights of their neighbour what right does the government have to step in and stop them taking that property?
In fact how would that even work in this pay for protection system? The neighbour will buy into a protection firm that will take the property back and a fee? If they can't pay the fee they will be placed in a work camp to deter the same action from others? Unfortunately the cost for board is higher than what your paid in the work camp. Is this perfectly acceptable under your system? If not how is it prevented? Does that man buy protection from a second company that will go in and storm the workcamp? If you're too poor to buy protection from one of the companies how is it illegal for them to just be collected and put in work camps? I just can't see your system of pay for protection being less abusive than one with a government.
> Why in the world would I pay these regulators? It's an extra cost and their service is provided even if I don't pay because somebody else will pay for it.
You pay your taxes, don't you? Why wouldn't you pay private firms instead to do the same job more effectively? And then, of course, it's easy to imagine that such a regulator would only provide information to paying customers using a smartphone app, for example.
> How do we know the regulators aren't influenced by whichever of the protection firms they buy from?
How do you know your government regulator is not in bed with the company it regulates? In fact, you don't and in fact most of them are. You can only elect government officials (and not regulating agencies themselves) and then they stay in power for n years almost indefinitely.
On the free market, there's competition of regulators. If I suspect one regulator takes bribes, I switch to another. Or maybe I subscribe to both and compare their info. Or alternatively, if I saw they were all in bed with consumer businesses, I'd stop paying them completely, as would many people, and that means they'd go out of business.
> If people are apathetic about the property rights of their neighbour what right does the government have to step in and stop them taking that property?
This one I didn't understand. In fact your last paragraph looks very odd and I don't understand how you came to imagine such a scenario. One thing I can tell you is that the poor will be able to afford protection agencies, just like they can afford owning a car or a pair of jeans or a computer. A protection agency doesn't have to be expensive to be profitable and it doesn't mean having personal body guards. There are various segments on that market and each can be covered. The crucial difference is that the poor will now be customers of the protection agency, whereas in the current system, I guess you're not going to argue, it is the poor who most often become victims of police brutality and injustice - the reason is, they're not customers, the police and the judges will be paid indefinitely and they know it.
I'll provisionally agree that enough people could buy into regulatory information assuming it's useful enough. I'll even allow that it's not corrupted (though I have written a paragraph below on why I believe this wouldn't be the case). I'll allow that the regulators are able to discover who own the company above a protection firm all the way to the top. I'll allow that people will actively switch between companies to stop a local monopoly forming (though I've written another paragraph below saying why this might not be true). Is there any way you can stop an investor buying up all the competition in a small region at a price above market value for a competitive market and below market value if you had a monopoly and were willing to abuse it?
Ignore the next two paragraphs if you want as they're the ones referred to earlier:
I don't know that the regulators aren't in bed with the regulated in the public system. I do know that if people care about it enough they can effect the regulators. I believe it's easier for the regulators in a free market system to get in bed with the regulated because those most motivated in regulating a specific industry are those within the industry itself.
You may believe it's obvious that consumers will switch to the better option in the market but the vast majority don't because the majority of people can't pay attention to everything they spend money on all the time. If you look up the “What's my number” campaign in New Zealand you'll see that simply reminding people they could change electricity providers and giving them an easy way to compare them hugely increased switch overs. The point being in this protection market which would be a service you just pay every other month would be something to easily forget about until it's to late. Even given advertising by concerned parties how do I trust advertising anymore when there's no one regulating it, I could put out an advert saying I'm the official spokesperson for a company and what would be the consequence?
My last paragraph was admittedly a quick example without explaining the reasoning behind it. I'll explain my reasoning now. You say that protection and laws will be decided by what protection company you subscribe to. You obviously don't have a system outside these providers to enforce other laws except market forces.
These providers can decide what services they offer. One of these services will obviously be protection from theft. i.e. If I stole from you your protection service will take action against me in some form.
What is the incentive for your provider to not offer varying plans that we find socially objectionable but say 5% of society is ok with. i.e. Plan A we imprison the perpetrator for these crimes. Plan B we cut off their hands for these crimes. Plan C (our platnium package) we shoot the guy for any crime against you. Plan D (our cheapest) we take the perpetrator to a work camp were he works off his debt to you. (Plan D is at a work camp were room and board costs more than what we pay the perpetrator). These providers also offer lower penalties i.e. no work camp penalty to those who are customers.
So obviously the next step is your provider comes up with a set of rules that limit what other providers can do to you without some form of retribution. What form of retribution is this? Is it a financial penalty? If so how do I stop a rich man from saying I'll double the cost of the penalty just get rid of this man. If it's physical retribution does that mean we accept people being beaten up in the street by the protection providers as part of our daily lives?
Let's say one provider has imprisonment as a penalty, why would I pay more for a provider that offers the same service but there prison is nicer that the alternative provider. Unless say the providers have a reciprocal agreement were they place their own customers in their own prison, which of course means the rich get to live in a country club for the duration of their sentence and the poor get whatever they can afford.
Finally the fact that everyone can afford a provider. While I do not agree that everyone will be able to afford a provider and there won't be any homeless who can't be preyed on with impunity, or that there are no poor that can't afford health insurance (sorry I meant protection) we'll ignore that. Instead consider what happens if for the sake of argument I forget my payment one month or I'm outside of my protection services city/village. Am I suddenly no longer protected and subject to others whims? Are there roaming fees for protection? If it's a sunday night and I need to drive to the other side of the country to get to my dieing mum am I able to be beaten up at any gas station along the way with no penalties for the offender, and possibly penalties for me if I fight back?
Assuming we surmount these regional justice issues and we also get a system were the providers effectively offer an equivalent and fair level of 'justice' no matter who you subscribe with how do you stop one growing on the basis of being the most efficient and then leveraging economies of scale to get into a monopoly position. When the monopoly is established how do you expect a new upstart in the region to be able to get a reciprocal 'justice' agreement with the monopoly when from a business point of view it is better to not have the competition.
Alright, you have a lot of good questions here. I won't be able to answer them all, since this would expand the discussion enormously, but I'll get through some of the points.
> I believe it's easier for the regulators in a free market system to get in bed with the regulated because those most motivated in regulating a specific industry are those within the industry itself.
You do know that ex-regulators and those closest to the political elite are usually hired by companies to serve as lobbyists (usually called something like "consultants" or "advisors")?
> You may believe it's obvious that consumers will switch to the better option in the market but the vast majority don't because the majority of people can't pay attention to everything they spend money on all the time.
Absence of a government doesn't mean people would need to waste more time tracking things. It means they would have a choice of who would track all these things for them. So, for instance, I subscribe to consumer protection agency A and it then simply drives my choices based on its research. People wouldn't need to choose everything by themselves.
Also, you can't excuse forcing people to do certain choices because they, allegedly, are not willing to make them on their own. It smells nanny state and unless you give people choice of experiencing why is it important to make choices and giving them time to make them, they will never learn. When slavery was abolished, many slave owners used to say that black people cannot survive on their own, they don't know how to work for money and how to spend it properly, so they would be much better off with their master. Indeed, in some cases that was true, because it's very difficult to learn to do things you never tried doing before. Eventually, they did learn.
> Instead consider what happens if for the sake of argument I forget my payment one month or I'm outside of my protection services city/village. Am I suddenly no longer protected and subject to others whims? Are there roaming fees for protection?
The way the market would work nobody can predict. What I can say is that it would find a way to provide you with what you need. One can imagine that when you go to a different territory you are protected by another company with which your company has a contract. If your company doesn't have a contract with another company or you are a poor person who can't afford protection, my guess is that you would still be able to count on some minimal level of protection: if people in my neighborhood are getting robbed, I as a paying customer of my protection agency would want them to prevent this happening regardless of whether the victim is their client or not, because next time it could be me.
Again, I think you have interesting questions, but I believe this discussion can go endlessly. At this point, I'd like to recommend you one book, it is called "The Machinery Of Freedom", written by David D. Friedman, who is an economist and a lawyer. In it, he thoroughly describes how a society without government would work. One of the most interesting chapters is about competing protection agencies and why they in fact wouldn't turn into de-facto government-like mafia. He also has some very interesting talks on YouTube which I recommend. I think this book would definitely be of interest to you. You may not be convinced by it, but it presents some great mental exercises and it would at least provoke you to look at the world from a different point of view. If it happens so that it does change your mind, please email me, I'd be very pleased to know that happened :)
Cheers, I've enjoyed the discussion. I'll have a look at that book, though I will admit that I would be surprised if he can surmount the issue of abuse of force with out setting up an external construct that is some form of compulsory governance on it's use.
A great example of a market force that prevented an entity from growing is a recent Bitcoin incident in which one hashing pool was close to 51% of hashing power, which would give it an ability to double spend or otherwise compromise the network. So people simply spread awareness and many withdrew from this pool, effectively lowering its market share. What makes you think this is impossible with other businesses?