John, there has been plenty written in the academic
journals over the past decade debating your questions.
  For theoretical arguements look up Tyler Cowen "The
Economics of Anarchy" in Economics and philosophy and
David Friedman's response.  Dan Sutter's paper
"Asymetric Power relations in Anarchy" in the Southern
Economic Journal (1995).  Caplan and Stringham have
responses to the above in a forthcoming Article in the
Review of Austrian Economics (Bryan is this available
on your website?).  All of these articles address the
problems you mention much more seriously than the
naive Hobbesian vision.
  Perhaps more interesting than just the theoretical
literature are the historical accounts of interaction
without the state.  Fred Foldvary has mentioned David
Friedman's research on Iceland, also there is the
classic by Terry Anderson and PJ Hill "America's
Experiment with Anarcho Capitalism: The NOT so Wild
Wild West" in the Journal of Libertarian studies,
availible online at www.mises.org .  Also not to be
missed is much of Bruce Benson's work including his
book "The Enterprise of Law, Justice without the
State".  
  Hope you find these references helpful in answering
your questions.

Ben Powell


--- john hull <[EMAIL PROTECTED]> wrote:
> What prevents a particular private law enforcement
> agency from engaging in mob-style "protection"?  For
> example, in Friedman's "Anarchy and Efficient Law",
> he
> states that, "The most obvious and least likely is
> direct violence-a mini-war between my agency,
> attempting to arrest the burglar, and his agency
> attempting to defend him from arrest. A somewhat
> more
> plausible scenario is negotiation. Since warfare is
> expensive, agencies might include in the contracts
> they offer their customers a provision under which
> they are not obliged to defend customers against
> legitimate punishment for their actual crimes." 
>
(http://www.daviddfriedman.com/Academic/Anarchy_and_Eff_Law/Anarchy_and_Eff_Law.html)
>  First, if war were so expensive relative to peace
> why
> does it exist?  Maybe peace is more expensive, in
> terms of risk for example, than open warfare. 
> Second,
> I might say that going to war isn't expensive, going
> to war against ME is expensive, because I'm going to
> recruit the demons who walk the earth.  I won't put
> Charles Manson in jail, I'll put him on the payroll.
> 
> This is an honest question, one that has been vexing
> me.
> 
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