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Bryan Caplan: Non-State Legal Systems | WSB #35

April 10, 2018

Does the law need to be provided by the state?

Economist Bryan Caplan breaks down the law into three components: rule formation, arbitration, and enforcement. For all three, he provides examples of how these are already provided without the state in many contexts. He also explains the theoretical reasons we shouldn't be surprised to find law provided without the state, usually better than the state does. He goes on to speculate how the law could be provided if there were no state at all. Finally, he considers two common objections: that law without the state leads to chaos, and that providers of legal services in a world without the state will inevitably collude and come together to form a new state.

Next week: Peter Klein: Infinitism and Pyrrhonism

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Special thanks to Jackie Blum for the podcast art, and The Tin Box for the theme music.
Click here for the full list of episodes!


The Case against Education (Bryan Caplan)
Bryan Caplan (homepage)
"The Economics of Non-State Legal Systems" Part 1, Part 2, Part 3 (Bryan Caplan)
"Law as a Public Good: The Economics of Anarchy" (Tyler Cowen)
"Outline of a Critique of Tyler Cowen's 'Law as a Public Good'" (Bryan Caplan)
"Networks, Law, and the Paradox of Cooperation" (Bryan Caplan, Edward Stringham)
"Adjudication as a Private Good" (Richard Posner, William Landes)

Topics discussed:

1:14 - Non-state law that already exists
2:23 - Innovation in the creation of new rules (copyright)
5:11 - Private enforcement of law: private security, ostracism, bonds
7:32 - Private arbitration and private rule formation
9:13 - Benefits of competition
13:54 - Expanding role of contracts
19:03 - Private law without contracts
20:24 - Law without any government
27:34 - Collusion objection and economies of scale
29:27 - Tyler Cowen's collusion argument from network industries