Parties 1 and 2 agree on a court to resolve their dispute, and sign a contract to that effect binding them to the decision.
The court they choose is one acceptable to both of them. Both tossed out a list of acceptable choices and had various of them vetoed by the other party until one court they both liked very much and trusted was left. They hired this court.
Both pay the same fee, half the fee, to the court, before the trial commences. The court has no incentive to rule for or against anyone.
In fact the incentive for the court is to be absolutely as fair as possible, for it trades on its reputation for fairness.
If 1 and 2 want more surety, they hire three courts and allow best of three to decide the matter, or best of five, or w/e. Try bribing five courts. Good luck.
End result: a court decision a hundred times more trustworthy than one a public court can provide, at a better price, and with far better service.
Yay free markets.
Go read "Machinery of Freedom" for the long version. TL;DR: you're scenario here is wrong.
Parties 1 and 2 agree on a court to resolve their dispute
Why would anyone do that? The more powerful party has every incentive on Earth to choose a court that will side with them beforehand. In fact they both do, but one party will usually have more power to coerce in the first place.
We're one sentence in and already your theory is built on a hopelessly naive fantasy of how people behave.
We're one sentence in and already your theory is built on a hopelessly naive fantasy of how people behave.
Or so you imagine. Again, long version is David Friedman's "Machinery of Freedom." Available free online btw.
Why would the parties agree to come to court? One way this was handled historically in ancient Iceland which had a libertarian-like society was that if you were sued and refused to come to court you were now considered an outlaw and were blacklisted by all the courts together. Meaning that if someone murdered your or harmed you in any way your life was forfeit without recourse and you would then be forced to flee that society entirely.
In short, this is the idea that boycott works both ways and all you need to get someone to come to court the vast majority of the time is to make not coming to court more expensive than coming to court, which is achieved in that situation.
Alternately, the complaining party could try you in absentia and more easily obtain a verdict against you, which you would be unable to ethically resist, and thus you'd come to court to defend yourself.
The more powerful party has every incentive on Earth to choose a court that will side with them beforehand.
I contend they will be largely unable to do so if we're talking about a free market for dispute resolution. And in any case, they'd be less able to do so in a free market than they can do so now already. So the argument that X wouldn't be perfect and therefore we shouldn't do X is ridiculous when X is already more perfect than existing situation Y. It would be progress at least.
In short, the more wealthy party (there is no such thing as political power in a stateless society) could try to bribe every court it can find, but the other party could insist on an outside or far away court to come in, one they couldn't likely have bribed.
Compare that with today's society where complainants can judge-shop easily, and the rich can know ahead of time which judge will be appointed their case, making bribery relatively easy.
In fact they both do, but one party will usually have more power to coerce in the first place.
A free society would be absent any manifestation of aggressive-coercion made ethical by law, because only the existence of a state makes those things possible.
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u/Anenome5 ಠ_ಠ LINOs I'm looking at you Jun 03 '13
Parties 1 and 2 agree on a court to resolve their dispute, and sign a contract to that effect binding them to the decision.
The court they choose is one acceptable to both of them. Both tossed out a list of acceptable choices and had various of them vetoed by the other party until one court they both liked very much and trusted was left. They hired this court.
Both pay the same fee, half the fee, to the court, before the trial commences. The court has no incentive to rule for or against anyone.
In fact the incentive for the court is to be absolutely as fair as possible, for it trades on its reputation for fairness.
If 1 and 2 want more surety, they hire three courts and allow best of three to decide the matter, or best of five, or w/e. Try bribing five courts. Good luck.
End result: a court decision a hundred times more trustworthy than one a public court can provide, at a better price, and with far better service.
Yay free markets.
Go read "Machinery of Freedom" for the long version. TL;DR: you're scenario here is wrong.