| Mr Khan said: The difference, i would suspect, is that disputes over personal property tend to directly involve the owner, and so can be hashed out in small-scale arbitration on an individual level, e.g. "my neighbor's new pool runs 20 feet onto my property." As opposed to private property disputes which cannot possibly involve the owner "Dan Jones in Anytown, Maryland pirated Generic Hollywood Blockbuster." How could we guarantee that complex private property issues are being dealt with fairly without a state aparatus to oversee them? Clearly, for instance, we cannot trust the big banks to foreclose on the right home (mistakes have been made), but do you think the wronged homeowner is really going to be able to individually deal with the bank in any enforceable way? |
Firstly, a free-market economy will not be based on fiat currency and debt. Consequently, banks would have far less power in terms of loans and mortgages. The power of banks would be far less because there will be : 1. decentralized competing currencies and 2. competition among banks in a market-system (not as it is now with a centralized national bank.) Look at Hong Kong to see how big-banks while numerous, are limited in power because of heavy competition and a developed fiscal system. Also notice that Hong Kong's total debt is 3% of its GDP. The banks are more accountable to the market rules.
Secondly, any dispute wouldn't be solely that of an individual and a corporation (which don't have special priveleges in a free-market) but between two legal-firms chosen by both individuals/corporations. Possibly both the bank and individuals choose the same legal-firm (out of common interest to both of them) for an easy dispute-resolution (do note that the legal-firms are also subjected to market laws - if they do bad business nobody will trust them.) If not, then it is the responsibility of these legal-firms to meet a common resolution.
Now a bank might get away with harming one person (just as it does today with the state, even moreso because of bailouts and protections), but if it is a common occurence the market and polycentric law will shut it down. Therefore, an incentive exists for the bank to not infringe on the property rights of its customers, and to get things right. That is more than exists today with government bailouts of banks.
