Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
But in that case the laws and contracts are useless, because the dispute will be decided by the expected costs and benefits of each action (e.g., the party with the machine guns gets his way), and not by any laws or contracts.
as opposed to being decided by who has the best political connections or the most expensive lawyers?
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Today I learned a new name for "government": "Dispute Resolution Organization". 
I suppose that the difference is that there will be several DROs that the parties can choose from. But suppose that they both agree on DRO A when they sign te contract, but when the dispute arises one party asks his buddies from DRO B to persuade the other party, while the latter brings his nuke-launching Abrams tank out of the cellar...
Those multiple DROs sound very much like big city gangs...
I suppose that the difference is that there will be several DROs that the parties can choose from. But suppose that they both agree on DRO A when they sign te contract, but when the dispute arises one party asks his buddies from DRO B to persuade the other party, while the latter brings his nuke-launching Abrams tank out of the cellar...
Those multiple DROs sound very much like big city gangs...
And the police aren't a gang? I'm not proposing a utopia. Only a system that is less violent than one centered on a violence monopoly funded by theft.
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War is expensive. Throughout history, you will find that it is mostly engaged in by parties that do not bear the full cost. We propose that any parties engaging in physical conflict bear the full cost of doing so, thereby discouraging the practice.
That would be wonderful! But does anyone have any idea on how we can get that rule to apply?
repealing or nullifying the laws that oblige us to pay for wars we don't support would be a good start.
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Reputation also has an economic and social value. Credit scores are one example. Other members of the community can enforce laws and contracts even if they are not a direct party by imposing opportunity costs on violators. An example: you defaulted on a loan, so most others will refuse to lend to you in the future, and if they do it will be at a much higher interest rate. or another: You punch somebody in the nose and word gets out so you are no longer welcome at certain social events.
Well, I think that bitcoin will in the future be a textbook example of (among other things) why loss of reputation is hardly an effective deterrent. See Josh Garza, Patrick Strateman, Zhou Tong, ... While a scammer or defaulter may lose a fraction of his market, there will always be whose who take his side. Why, even Danny "Neo&Bee" Brewster seems to still have friends in the community...
People have gotten lazy by allowing the state to do the due diligence for them and to protect them from bad actors. I'm sure you know of many many cases where the State has failed to do just that, but it does give us a false sense of security. Look, I can't tell you how a Stateless society will solve all social problems, because it's not a centrally planned community. If I could give you all the answers you seek, then I would make a good central planner, but in truth NOBODY can be a good central planner because central planning doesn't work. It's F.A. Hayek's economic calculation problem.
I just know that an institution that is financially dependent on initiating or threatening violence to aquire revenue is in no position to enforce the laws that govern a just society.