Many Cops, Not None
Arnold Kling makes the classic misjudgement of libertarian "anarchy" in this post about looting:
Lee Harris writes,
To me, the looting came as no surprise: it was a completely natural phenomenon. It was exactly what my own theory of the social order would have predicted. What else should you expect when a civilized order collapses?
Thomas Hobbes probably would not have been surprised, either. I agree with Hobbes and Harris, which is why I am a libertarian believer in limited government and not a libertarian anarchist.
The mistake is to assume that libertarian anarchists want no policemen, rather than many competing police companies - an enormous difference. As Jonathan likes to remind us, the fault is partly due to the misleading term "anarchy", which naturally implies an absence of order.
I don't know any libertarians who are anarchists in this sense - but I do know many libertarian polyarchists, or polycentrists - I am one myself. We don't believe that the world would be safer without law, we simply believe that the service of policing is not immune from the fundamental libertarian concept that competing private companies kick total ass compared to govt. monopolies. Situations like the current tragedy in New Orleans support this thesis, they don't oppose it, as this bit from Marginal Revolution shows:
Government could have commandeered a fleet of buses to help the carless leave town altogether. (Was it enough to offer to take them to unappealing shelters?) Some people foresaw the potential problem in advance, but only Wednesday did buses start taking people out of the city. Neither FEMA nor the state of Louisiana nor the mayor appears to have done a good job.
The news stories about looting by police make this even more clear. As I've argued before, the most basic arithmetic shows you that N goes to 0 most easily when N = 1, and less easily as N increases. In other words, when only New Orleans' finest are protecting the city, once they start looting, there is no one left. If they misestimate the storm, or make bad decisions, everyone suffers. But if there were many competing private police agencies, if one went rogue, you'd still have the others to protect you. You'd have a diversity of opinions about disaster management, a diversity of strategies, you'd be able to see what worked and learn from it, you'd be able to pick the protection firm whose strategy you liked the best.
But the gains are even higher than that, because it's not just about diversity, but incentives. The police departments of New Orleans have a completely captured customer base. They cannot lose their business. Hence they have far less incentive to do a good job - not no incentive, but less incentive. They have less reason to innovate, since they have no competitors to outshine - they need merely do a decent job, not a great one. The same is true of govt. disaster agencies - their reputation depends on having appeared to do what they could, rather than being judged on actual performance. This is the natural consequence of being managed and funded by the govt., rather than by the people you are there to help (or your donors, in the case of agencies like the Red Cross or MSF).
(P.S. Note that this is an argument only for competing enforcement agencies, not for the more radical polycentric notion of competing sets of laws. Please restrict discussion to the former)
Update: Don Boudreaux has more.