For starters, I'm repeating my earlier definition of anarcho-capitalism so that the readers of this blog will know where I stand. I'm not your typical anarchist; in fact, some of you might prefer to call me a minarchist. Let's get this semantic issue out of the way. Do you agree with the following description of of anarcho-capitalism, or do you see it as minarchism? Even if you agree that the system I describe is indeed anarcho-capitalism, is there something in it that you disagree with on moral grounds, or on the basis of some economic arguments?

My vision of anarcho-capitalism is that people will typically belong to private legal systems that are attached to local communities based on private property arrangements such as condo associations or gated communities or what-have-you; some people, particularly owners of relatively large pieces of real estate, will refuse to join such covenant-based communities, but small homeowners will usually find it profitable to minimise their transaction costs by buying their water, sewage treatment, road maintainance, gardening services etc. in bulk through condo fees or similar payments to the local community. Police services will typically be provided by guards hired by the condo associations, covenant-based gated communities etc.

People do not have to join these local communities; if membership in them were compulsory, it wouldn't be a private property covenant anymore, it would be a state. You only pay condo fees or similar payments if you have voluntarily joined the community. If the payments were obligatory, they would be taxes.

The rules of these covenant-based communities are PRIVATE LAWS that you have to respect if you believe in private property rights. You can't come into the community, break the laws and say, "Screw you, I never signed your covenant!" My point is that by voluntarily entering the area governed by a private property covenant, you accept the laws that apply there. This is why there are WRITTEN LAWS in anarcho-capitalism. Any community that wishes to maintain its rules must make them explicit by writing them down in a document that is available to all those who are subject to those rules.

If disagreement about applying those rules arises, there will be COURTS OF LAW that will JUDGE the case on the basis of LAWBOOKS. If a defendant is found guilty, normally the most efficient verdict is making him pay compensation to repair the damage done, plus fines and costs of the trial. If the defendant is unable to pay compensation and fines etc., PRISON becomes necessary.

This is why a capitalist society necessarily has laws, courts of law, and prisons, QED.