David Friedman asserts that the
market for law in an anarcho-capitalist society will tend to produce economically efficient law for reasons related, but not identical, to the reasons that other markets tend to produce efficient outcomes. Libertarians believe that freedom works, that libertarian law is closely, if not perfectly, correlated with efficient law. If that belief is correct, there will be a strong tendency for the market for law to generate libertarian law.
So far as I know, no comparable argument exists for the minarchist side of the debate, no good reason, short of assuming that everyone has become a libertarian, to expect law produced by political mechanisms to be either efficient or libertarian.
Friedman’s argument in favor of anarcho-capitalism contains a fatal flaw: Markets are unlikely to work in the absence of a supervening rule of law if — as is likely — there are predators who are unwilling to participate in markets and powerful enough to dictate non-market outcomes.
There must, therefore, be an overarching, non-market institution which enables markets to operate efficiently, that is, to reach outcomes that are seen as beneficial by all those willingly operate within markets. The necessary supervening institution is the minimal state (a minarchy) that is vested with enough authority to protect market participants from force and fraud, but not so much authority so as to enable its interference with market outcomes.
Only a wise (and rare) élite can establish such a state. The existence of such an élite — and its success in establishing a lasting minarchy — depends on serendipity, determination, and (yes) even force. That we, in the United States, came close (for a time) to having such a minarchy was due to historical accident (luck). We had just about the right élite at just about the right time, and the élite’s wisdom managed to prevail for a while.
That we have moved on to something worse than minarchy is not proof of the superiority of anarcho-capitalism. It is, rather, proof that our luck ran out.