I want to direct your weekend reading to three excellent passages from my good friend Daniel Krawisz.
Part 1: Free Market Law
Libertarians sometimes try to derive solutions from the basic axiom of libertarian law requiring consent between both parties in every human interaction, but this cannot be the correct method. When there is a dispute over rights, there is automatically something non-consensual going on; to use the axiom of consent yet hypothesize a situation that already violates it is a contradiction and hence can lead nowhere. All we can say is that given some dispute, something must happen so that everybody agrees on who owns what; of what that something may be the axiom of consent says nothing other than to constrain it in the same way it constrains all human interactions. However, with a little imagination possibilities occur readily. First it is necessary to find an arbiter for the dispute and for both parties to agree to abide by its ruling. This arbiter would have to be some third party, because if it didn’t, then there would be no dispute in the first place. Unlike our government monopoly system, anybody may offer arbitration services simply by advertising such services. These services would likely charge by the ruling, and they would have a strong incentive to be seen as fair, unbiased, and efficient.
Part 2: The Foundations of Rights and the Capitalism of Law
Theories of the state assert that there can be no establishment of rights without the existence of such an organization, though rights may still exist in a purely theoretical sense. The libertarian theory of justice addresses the more general case where there is no state. There are certain rules for the justification of rights that distinguish themselves over all others in that they are neither arbitrary nor patently absurd, and such that if there is no agreement on these rules then there can be no agreement at all.
Part 3: The Violation of Rights
The axiom of law is often called the nonaggression axiom, and stated as, “it is wrong to initiate aggression.” I prefer to call it the axiom of consent and state it as, “everything should be consensual.” Neither of these statements says anything about the proper response to aggression. They neither permit, nor prohibit, any form of self-defense or punishment. From the way the axiom was derived before, we can also see that the proper response to aggression is an open question: the axiom is the absolute minimum required to have any system of law in the first place, and no theory of punishment is strictly necessary. Settlers who first make contact with one another must assent to the legitimacy of consensual exchange between any of them, but as long as they continue to interact peacefully with one another, they have no need to agree upon the proper responses to the violations of the law. Principles of self-defense and punishment, therefore, are not an a priori part of law, but must instead develop as needed within a system of free market law.