Second, Let me head off an argument before we even gets started: Somalia. Somalia is neither Libertopia, nor AnCapistan. Somalia is a land of tribal warlords, each trying to be the government. In AnCapistan, the enforcement agencies themselves would be bound by the NAP (the above law), and so, wouldn't attempt to become a government. Should one try, the others would be contractually obligated to stop them
And what happens when the others don't try because it'll cost them too much money? Ain't nobody there to force their hand, so why bother?
Ever heard the phrase 'Breach of contract'? MUCH more expensive than fulfilling the obligations.
Yes, because it's SO much more profitable to steal from people and get shot on the third try than to deal with people fairly and have millions of customers.
If I have a mercenary army, I don't have to worry about getting shot on the third try or any try. I hire people to take those bullets for me - it's just good business!
(Also apparently even a dude running around with a gun shooting people is a rational actor who always considers the ramifications of everything he does and would never do anything illogical.)
Mercenaries aren't stupid. As a merc, which job would you pick? The one that lets you work out all day, or the one where you get to fight the guy who got to work out all day?