Another question about the subject was asked in the comments, and I don’t really want to answer from purely theoretical positions, because for a little over three years now, I’ve had the opportunity to try to implement something. So, I want to reflect on the problems of law and legislation in the ancap community using Montelibero as an example.
I will outline the conceptual framework I am using. Law is the order for resolving conflicts accepted within the community. Statute is a legal norm that the community considers permissible to impose by force. Court is a procedure for resolving conflicts by a third party not involved in the conflict. Jurisdiction is the venue, that is, the circle of conflicts that the community customarily resolves through a specific court.
Montelibero, like any other ancap community in the era of state dominance, cannot claim full jurisdiction over its members. Yes, any issue can be resolved within Montelibero’s jurisdiction—but only if the state is unaware of it. Otherwise, the state may impose its own requirements on what the parties to the conflict are obliged to do.
The Montelibero community is small. It does not provide the opportunity for full market competition between many diverse courts. However, this is no reason to bow before the state. After all, we have implemented tokenomics and now have our own very cheap and efficient financial system. On a single blockchain, without competition between them (we tried adding others, but they didn’t take hold). Although, privately, nothing prevents the exchange of any values: whether commodities, fiat, or various types of crypto. The same applies to courts: by mutual agreement, disputes can be resolved by a coin toss, mediation by a pre-agreed authority, or a duel—but if there is no agreement, one must rely on some unified default judicial mechanism.
Every jurisdiction is subject to a strong positive scale effect: the more conflicts it resolves, the more potential conflicts will specify this particular jurisdiction in advance. This is understandable: people save mental effort and will not keep many different legal mechanisms in mind without particular need, eventually leaning toward a single option, even if it is not the most optimal for a specific case. There are also negative scale effects: even the most efficient judge is unlikely to be able to significantly increase their productivity and will more likely raise the price as demand increases. Therefore, to scale this type of service, it is convenient to use a franchising mechanism: judges may differ, but they will use a single procedure and uniform legal norms.
Where would these come from? The Schelling point here is the procedures adopted in the hosting jurisdiction, that is, in the Montenegrin courts. Why? At least because that is where those dissatisfied with a Montelibero court decision will theoretically turn. But since the local legislation is full of various statist rubbish, it must, of course, be discarded and replaced with our own home-grown concepts. There are few basic principles in libertarianism, but specific legal norms that do not contradict them can vary. And here, precedents will become the Schelling points. It will be easier for each subsequent court to apply a previously used norm than to invent a new one for every new case. Moreover, it will be easier for all members of the Montelibero community to proceed from established legal practice, as predictability in affairs is the foundation for trust.
But, as is known, it is not enough to understand if the laws are good; one must ask if they are enforced.
While judicial practice is limited, one must rely mainly on the conscientiousness of the parties and the informal authority of the judge. The potential ability to turn to the state for enforcement of court decisions is relevant only for the largest cases, where the amount at stake justifies the accompanying costs. In the smallest cases, the losing party will pay without question because the amount is trivial. The problem lies in medium-sized cases, where invoking state enforcement is still too expensive and disgraceful, but the losing party is reluctant to pay.
The most civilized way to achieve the enforcement of court decisions is the widespread use of collateral. I envision a gradual evolution here from one-time deposits to secure a specific claim, to permanent deposits confirming a willingness to comply with the decisions of a specific jurisdiction.
Initially, it might work roughly like this. A community member wishes to enter into a legal relationship with another member. For example, rent a car or an apartment, borrow money, or enter into an employment contract. In addition to the direct contract between the counterparties, they also notify the court and transfer collateral amounts to a court-controlled account, the size of which depends on the amount of liability imposed by the concluded contract. Then, from this collateral, a penalty can be recovered—for example, from an employee for damaging equipment, or from an employer for an industrial injury caused by their fault.
But gradually, as the court builds its own reputation, deposits will become permanent: you recognize the jurisdiction of the MTL court and place a certain deposit on its controlled account—a sort of “price of honor,” in ancient Irish terms. Now anyone can be sure that within the limits of the price of honor, you can be trusted unconditionally. Want to increase your reputation—simply increase the deposit. Leaving the country, or, say, the last court decision caused your distrust—decrease the deposit. Leaving the jurisdiction—withdraw the deposit entirely (with some lag to ensure you have no debts from old contracts).
Moreover, based on this solution, an institute of suretyship could develop, where a guarantor increases trust in the person they vouch for by risking their own judicial deposit.
It would be great if increasing the price of honor contributed to respect within the community, but such an attitude will not form on its own—first, a tradition of involving people with a high price of honor in responsible legal relationships must be grown, for example, as witnesses to large transactions or plaintiffs in socially important cases. Also, a mechanism for increasing another’s price of honor through the payment of judicial deposits into another’s account could certainly appear—if a person’s personal integrity far exceeds their financial capabilities. The result would be something like a Hoppean natural aristocracy.
And, of course, this entire mechanism will work much worse if it turns out that there are a large number of community members who completely ignore it, yet enter into legal relationships with each other in the same way. They may be too poor to freeze money for the sake of reputation. They may not trust a specific court. And finally, they may not trust the mechanism itself.
The poverty factor is handled to a certain extent through suretyship mechanisms. The factor of distrust in a specific court—through competing courts. The factor of distrust in the mechanism—simply a matter of habit. Trust is built; one just must not try to impose it.