I think I get Bloom’s point here (correct me if I’m wrong). It seems like he’s saying that since we have a monopoly security system now, that must be what works. In other words, since the market hasn’t evolved to provide security–against states, at least–maybe the market isn’t the best provider of security. If it were, why isn’t it providing security now–why didn’t market competition prevent a monopolist from arising? Or anyway this is a question that seems related.
I think the market is evolving to provide more and more security. There’s a multibillion-dollar private security industry, a multi-trillion-dollar insurance industry. I read somewhere around Mises or LRC that there are more private security guards than government police now.
The market does, in many places, provide most or all of the day-to-day security people actually need. If you live in a condo or apartment, security can be (often is) bundled in with your rent (or condo fees). The same if you operate a business in an office park, shopping center, airport, etc.–security comes bundled with your lease. Obviously it must be cost effective to pay for security in these places, or we wouldn’t see businesses doing it everywhere.
So imagine the government police disappear, and all the existing security guards instead have the weapons, training and compensation to act as the primary enforcers of security, protecting people and property. Since all these property owners will no longer pay taxes, it’ll be even easier for them to afford security services to make their properties more attractive to tenants.
So who would that leave unprotected right now? There are suburban homeowners. Some of these already hire security through homeowner’s associations, and they may have gates and other security measures. That leaves suburbanites who don’t have HOAs (and many prefer this). In their case, if they want security services, they’ll have to buy them individually. But this would just be one more bill, along with water and electricity. Nobody’s forced to buy water or power (or TV or internet), but just about everyone does. The security could just be a number to call for security officers in case of emergency, or could include monitored burglar alarms, regular patrols, etc. depending on what you’re willing to pay for.
Now who does that leave without security? I guess rural people. But first, they aren’t subject to much crime or conflict, since there aren’t many people around them. Second, such people usually have a tradition of self-reliance and solving conflicts directly. Finally, if they feel that they need additional security, they can subscribe to a service (or start one, if none exists yet).
So there are really only a few minor changes on the market side. Those facilities and HOAs that don’t currently provide much security would need to contract for more, in the absence of police. Entrepreneurs would need to provide a variety of new subscriber-based security for suburban homeowners and standalone businesses–the closest analogy in our current market is probably those 24/7 burglar alarm monitoring companies. However, the lack of taxes would make up for these costs. Also, private security would have to be ready to use violence to protect persons and property against aggression. Some of them just carry a flashlight and cell phone right now, like mall security. Bank security guards, though, are usually armed.
And of course you can already buy insurance for your property and your life. And insurance companies already handle disputes among each other through private arbitration. So I think a lot of the free-market order has been quietly forming over the last century or two while nobody was watching, just in the cracks where the state provided insufficient or inefficient security and arbitration. The entire institutional infrastructure of a pure market society is all around us and thriving.
If the state continues on its way to fiscal collapse, people might turn more and more to private alternatives to meet their security needs. It may not even take a conscious ideological shift–we could end up in market anarchy by default. It makes me think of how people lived with monarchy and slavery for thousands of years, and then in the last couple centuries, at least in the West, everybody just kind of changed their minds and didn’t believe in those institutions anymore. Today, most people consider monarchy, Communism, fascism and dictatorship to be bad forms of government. What will the statists do when people don’t have any enthusiasm left for the democratic/republican form of government? All the other options besides free markets are being winnowed away by their demonstrated failure over time.