What I wanna discuss is power. Now, because the absolutely most common objection I receive to any argument about ancap societies is that they could not sustain a legal system for longer than it takes a well-armed militia to occupy them, after which we're doomed to eternal slave-labour under some maffia-like organisation with guns. Good job, ancapers, you replaced Big Government with Big Gunverment.
There are a whole bunch well-written material on this that I could scarcely hope to improve upon (see Friedman or Caplan here or here or a shorter version of Caplan), and instead I'll bring a short reflection based on the movie.
Shere Khan is the strongest, mightiest creature in the jungle, and all the animals fear him accordingly. Not even the Alpha Wolf Akela was a match for him, as he easily showed when the Wolf Pack leader refused to hand over Mowgli. Whoosh, and Akela was no more.
The only time Shere Khan was pushed back and controlled was when Mowgli held the Red Flower (fire). Shere Khan fears this intimidating power of mankind to summon the red flower, like all the animals do, and before the final battle of the movie Mowgli has the advantage by holding a flaming torch. All the animals watch in fear as part of the forest is consumed by the raging flames.
Now, we intuitively detest Shere Khan, mostly because he's evil and his goal is to kill the cute jungle boy we quickly came to love. We're afraid of his power - not because of the power itself but because we don't trust his morals. His judgement. His ruthless and capricious behaviour. When Mowgli takes command by holding the red flower, we are much less scared or deterred, even though the power of the red flower in itself is stronger and more intimidating than the "mere" physical strength and sharpness of Shere Khan's teeth. Why is this? Again, morals. We think we know something about Mowgli's morals, convictions and potential actions. We know he would never harm anyone unless in self-defense; he's the perfect libertarian, and would always adhere to the Non-Aggression Principle (except perhaps when he steals honey from the bees..)
That is, as long as people or institutions are sufficiently virtuous, absolute power, may they be states with monopoly of violence or nuclear-equipped insurance companies, is much less daunting - or perhaps doesn't even matter. The Problem with a state, as opposed to the insurance company, is that state-institutions are systems where the worst gets on top - where the Shere Khans of the world strife through political processes to ultimately wield basically unlimited powers to abuse, torture, exploit or indoctrinate their victims. Whereas competitive insurance companies are much more likely to be run by comparatively virtuous people; violence is expensive, and so conflicts solved peacefully have an advantage. Markets are plus-sum games, whereas politics are zero-sum games (if not negative sum-games).
Unfortunately I think most people see the market as Shere Khan; ruthless, sinister, selfish and completely uncontrollable unless there's something more dangerous around to put him in check (hey, Big Government!). It's essentially the old Hobbesian story about why we need a state powerful enough to intimidate the rest of us.
They should, however, think about markets more like Mowgli; virtuous, determined, beautiful, caring for others. Not at all far away from how McCloskey views the Bourgeois. The Anti-market bias most people carry around with them serves them very badly. Accepting that markets overall produce pretty great outcomes would be a much improved outcome.
A simplistic and exaggerated analogy, of course, and I'm sure people can come up with opposite stories. But what would you expect from a 600 word late-night reflection of a movie?
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