The Free Market and Punishment

[Vagos]

Recently was discussing the free market and specifically violent crimes with a friend of mine. He asked about my position on the death penalty.

The death penalty has always been a tricky one for me. Even when I was a minarchist libertarian, I was still fairly supportive of the death penalty. I have heard Ron Paul mention he supports the death penalty. For me, it was about proper punishment for taking another human life and sticking someone in jail just didn't cut it for me.

I basically told my friend that while I don't condone the state executing an individual, I find it hard to believe the same punishment would not be exercised in a society living in market anarchy. I am fairly sure prisons would not be desired in a free market, as the communities would be so decentralized, that people simply wouldn't want to stick violent offenders in a facility in their towns (that they had to pay for). On the other hand, I fail to see how murderers, serial killers and rapists would simply be exiled from the community. The people would just cry out for a more severe punishment I think. I think there might be a lot of vigilente justice, but keep in mind, I'm only referring to the very worst crimes.

Thoughts?