[ShakeZula06]

OP,

Here's an old post of mine dealing with the nature of the black market and why illegitmate businesses survive-
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It's on a black market. They have to spend a lot of money defending themselves from police knocking down their doors. If they get caught dealing they're screwed by current laws. They also don't have access to legitimate arbitration and courts, which usually leads to more violence. They also can't operate in the same effecient manner legitimate businesses can (ie, you don't see sneaker dealers selling shoes on street corners do you). All of these not only drive up costs and in effect prices, but also the risk associated with dealing. Since there's more risk involved (a) On average more intelligent people move on to legitimate businesses, leaving less intelligent people with on average less efficient business models and (b) those that do participate want more money to make up for the added risk, passing those costs on to the consumer (Would you rather make $50,000 doing something legal or doing something illegal, how much more money would you have to be making to make up for the risk associated with doing something illegal?)


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You'll notice that among non-black markets there is very little violence in the market. However what has been chosen in non-black markets is something that must be much more effective (being that it's used much more often then violence) for unethical market actors-take a guess-government intervention in the market in the form of favorable regulation, tax loop holes, corporate welfare, no bid government contracts, you know, all the works.

Governments continue to exist because a large amount of people accept it's existence. It isn't difficult to see why, patriotism (basically religion of the state) has been indoctinated in our heads since we could comprehend such concepts. So, essentially the same reason why the majority of Americans are Christians.

edt:
Here's another post of mine over lack of concern for violence in the market-
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For starters, a state creates tons of violence. In the 20th century 10s of millions of people were killed either by their own state, or in state on state wars. It's not even a matter of which prevents more violence, the state has always been a leading factor in violence in it's history. The Iraq War simply wouldn't have been possible for a free market to do. From an investing standpoint the Iraq War has been a very -$EV decision. The people making money off the war (contractors and mercenary forces) differ from those that pay for it (taxpayers who really had no say in the matter at the time).

Simply put, on a free market the rewards of cooperation outweigh the "rewards" (quotations because it's rarely profitable) of conflict. Now, unfortunately some will make the -EV decision to turn to aggression rather then cooperation, and people should defend against that. We don't think planning ahead of time is particularly useful. No one could really predict ahead of time how the free market would solve various problems. When the internet was created, do you think anyone could accurately predict then how the internet would unfold? Of course I doubt you see anything wrong with the internet, but just wait, congress will begin soon enough to regulate the internet, making up reasons and fear mongering the whole way (just like the justifications for the internet gambling bill, the government wasn't getting their piece so they decided Americans need to spend their money in ways that they could). Government really is a mafia. They want a piece of everything. And of course one of a mafia's first objectives is forcing people to pay their protection money "for their own good".

In a free market people have various problems, and someone acts to meet those demands (usually for profit but often through charity too). I see no reason why hiring a police agency would cause any free riding problems at all. Delagating security to another company may not even be as effecient as simply using your own means of protection. Although it's 21 pages The not so wild, wild west may have some answers on how a decentralized area would work. There was very little government to be had at all and violence was much lower then it's eastern and southern couterparts at the time (not to mention a lot lower then violence seen today). In the years following state intervention, crime rates immediately began rising.


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