Public Reason: Vol. 3, No. 1, June 2011
David Friedman’s Model of Privatized Justice
Ionuț Sterpan

David Friedman employs mainstream economic tools to argue for a non-mainstream economic conclusion: the law and the legal system can and should be privatized. First we circumscribe Friedman’s model of privatized justice within the map of the anarchist schools of thought. Second, we present how the model would purportedly work in practice. Third, we describe the assumptions of the model. Since the normative force of the model depends on their limitations, when deemed suitable, we point out ways to support them. We sketch a normative defense that owes to Richard Posner, we show why a system of justice focused on efficiency peacefully corrects initial errors and suggest why a system of justice focused of revealed preferences only, gives an unbiased treatment to agents. Fourth, we call in Harold Berman and Stringham and Zywicki’s contribution to interpreting the early history of the Anglo-Saxon legal system and North, Wallis and Weingasts’ framework for understanding social order. An application of their framework is double-edged. One the one hand it adds weight to Tyler Cowen’s objection against the stability of the Friedman model. On the other, it makes a certain reading of history more plausible, namely, that according to which the dynamics of power between the Church and the state allowed for a system of privatized justice, albeit limited and non-transparent. If this reading is right, David Friedman’s model proves less utopian than we think. 

Key words: David Friedman, privatized justice, market anarchism, anarcho-capitalism.


Sterpan, Ionuț. 2011. David Friedman’s Model of Privatized Justice. Public Reason 3 (1): 79-97.