Nathan Myers 09/14/2011 Private Property Rights and the Private Provision of Local Defense Introduction Local Defense

is currently a public good in the United States, and is provided via taxation of residents and firms. This compulsory system provides for defense of private property and the delineation of private property rights. However, the systems dependence on taxation necessitates a violation of the very right it is intending to defend: in other words, the taxation required to defend private property necessarily reduces private property. Outside of a legal system, ownership (and maximization) of private property is not a right so much as the combination of a Schelling Point and a Utility-Maximizing condition. In this paper, I examine the Utility-Maximizing conditions and Schelling points underpinning the idea of the right to private property, redefining it as the right to maximize end-of-period private property over any period. Section 1 provides a cursory overview of economic theory regarding public goods and their provision, and establishes that local defense is, by definition, an Impure Public Good. Section 2 follows with an analysis of both the governmental monopoly on local defense and its intrinsic inefficiencies. Section 3 analyses historical instances of private defense in the United States, both in colonial times and during the so-called Wild West, in addition to defining a Schelling point in the context of legal rights. Section 4 introduces the concept of insurance and defense as substitute goods, and rejects the concept that Public Defense is utility maximizing due to the loss of price signals resulting from taxation. Section 5 concludes the Paper with an analysis of a special example of Wells Fargo, a firm which provided insurance and defense in the Wild West, and gradually moved towards insurance and banking as its defense product was crowded out by government provision. 1) Public Goods Public goods are both non-exclusive, as ownership of (or payment for) a public good is not required for its consumption, and non-rival, as increases in users does not decrease per-user utility. Since the stock of a pure public goods cannot be depleted through consumption, the marginal cost of providing any amount of a public good over the initial sunk costs must be zero. However, any initial sunk costs of providing a pure public good must be covered in order for it to be provided. As a result, most pure public goods are naturally occuring, as their long-run provision is rooted in phenomena extrinsic to economic behavior. One example of this is the pure public good of costal tides, as the natural fluctuations in costal tide levels in a given location are caused by that locations position relative to the impact of the moons gravitational pull in that area. There is no lunar government exacting taxes in order

to keep the moon in the air, it operates due to the presence of a large mass which existed well before the first cavemen traded pelts, and its impact on tides is determined by laws of physics. Therefore, the provision of costal tides is a pure public good; its provision is extrinsic from political, economic, or other human intervention, because its existence is independent from political, economic, or other human intervention. 2) National Defense as an Impure Public Good Impure Public goods are usually provisioned by factors intrinsic to economic activity. Public Defense is a common example: To the extent one person in a geographic area is defended from foreign attack or invasion, other people in that same area are likely defended also. This makes it hard to charge people for defense, which means that defense faces the classic freerider problem. Indeed, almost all economists are convinced that the only way to provide a sufficient level of defense is to have government do it and fund defense with taxes. (Cowen) But what is a sufficient level of defense? In other words, what is being defended, and for whom? In the case of national defense: a substantial part of the demand for national defense reasonably can be attributed to those U.S. residents owning assets threatened by foreign aggressors; lives (human capital) are foremost among them. Some kinds of assets are more vulnerable (or more threatened) than others: American-owned assets located overseas may be more vulnerable than identical ones in the United States, and ocean tankers that can be moved may be more vulnerable to confiscation but less vulnerable to destruction than office buildings. (Zycher) A sufficient level of defense is therefore the level of defense where the demand for defense clears the supply of defense at the equilibrium price. However, national defense in the United States is currently a public good, and is therefore subject to the classic free rider problem. Public provision via taxation serves to reduce free riding, but this presents another important problem. With the government as the only provider of national defense, it has no competition, and is therefore a monopoly. With its level of output (defense) decisions being made independently from the influences of competition, its decisions concerning resource utilitization cannot be efficient. Just like any other pure monopoly facing a vertical demand curve, the loss of price information will result in a non-optimal level of provision. 3) Local Defense as an Impure Public Good The Governments monopoly on local defense is seen as a corollary to the governments monopoly on national defense. For the sake of argument, I define

Local Defense as the defense of the private property rights of individuals and firms by firms or agencies. The provision of Local defense is characterized by significant economies of scale appearing, and eventually disappearing, with growth in the consumer base. As consumers of Local Defense are distributed geographically, firms or agencies which supply local defense must stay within a geographical boundary in order to benefit from the economies of scale. The existence of overlapping levels of current publicly provisioned Local defense in the United States follows this definition, with the geographic scope of the defense agency being a increasing function of the magnitude of the crime it is charged to prevent[1]. If a sufficient level of defense is a level of defense where the demand for defense clears the supply of defense at the equilibrium price, then that level of defense can be viewed as an optimal level of defense. Since defense is the protection of private property rights, and since the existence of private property rights implies the existence of individually owned, and therefore private property; then defense can also be defined as the protection of individuals respective assets. Individuals possess varying levels of assets , and given that private property rights are, if not absolute, at least equal between individuals[2]; property rights do not vary in accordance with the quantity of owned property. Therefore, an individual who is entitled to a level of private property rights equivalent to that of another individual must be entitled to level of protection equivalent to that of the other individual multiplied by the ratio of their respective asset value. Private property is right in the sense that defending the necessary conditions for its the existence will generally both maximize individual utility and minimize conflict between individuals. In other words, the defense of private property is justified in the social contract. However, the right to private property doesnt imply that its defense is free. This appears to be a paradox: if individual A has the right to his quantity of private property (QA), yet can only protect it by spending a percentage of his property on defense (QA*d), then individual A seems to only have private property rights equal to QA(1-d). As such, the cost of defending one's property is intrinsic to the calculation of one's property rights, and if the right to private ownership includes the right to make decisions concerning how that property is used, then the choice concerning how to defend one's property should be similerly sacrosanct. 3) A Brief History of the Private Provision of Law & Order The enforcement of private property rights by a non-governmental or for-profit interest is a common theme throughout the development of the world, and is especially prevalent in certain regions occupied by American settlers prior to the

regions recognition as a state by congress. Individuals moved to these areas to carve out a living: purchasing or acquiring land through a deed and then developing the land as they saw fit, an early version of the American dream. However, the federal government was usually preoccupied with the concerns of its states, resulting in several instances of relatively large scale private defense interests developing. In 1763, the treaty of Paris granted what is now the state of Vermont to Great Britain, and the land was granted to the provinces of New York and New Hampshire. Due to ambiguous and conflicting wording in the dictums delineating the boundary of the provincial division, the region was composed of New Hampshire residents who had been granted deeds by the Governor of New Hampshire. However, a royal order declared that the land belonged to the province of New York, and New York demanded that town charters be surrendered. In response, so-called Committees of Safety were formed in several of the larger townships. In January 1775, the committees of safety met in Manchester to discuss the need for independence from New York, creating a civil and political Body. (Allen, 1969) It is interesting to note that the Green Mountain Boys, the militia formed by the settlers in the Vermont area, came into existence before the Committees of Safety met in Manchester. They existed to protect the interests of its members, and were able to protect those interests even in the face of warrants issued for their arrest by the Provincial Government of New York. Numbering in the hundreds, they protected the property rights of the Vermont area by fighting off surveyors, government officials representing New York, and settlers who were granted deeds by New York. In effect, the Green Mountain Boys became the defenders of one system of property rights, the original one established by New Hampshire, against the agents of the competing system, the system backed by the decree of King George III. Naturally, the New Hampshire Boys joined the side of the Americans, evolving into the Vermont Militia. In 1777, the Republic of New Connecticut (its name was later changed to The Republic of Vermont), despite its citizens desire to join the American Confederacy. The Republic of Vermont drafted its constitution in 1777, one in which governmental power was derived solely from the people, slavery was outlawed, and voting rights were extended to all adult males, regardless of property ownership. Ira Allen, a leader of the Vermont determinists, described the people of the Grants (settlers in Vermont) as having Governed themselves by Committees of Safety eight years before the Revolutions start. On revolutionary principals, the current 20,000 settlers of [Vermont] deserved the credit as the oldest self-governing community in America [A]ll power, the Vermont Constitution noted, was inherent in, and consequently derived from, the people. The people had the sole, exclusive, and inherent right to create and govern their own state and the right to

reform, alter, or abolish government in such a manner as the felt most conducive to the public welfare. (Fritz, pp.44) The Vermont constitution seems to merely delineate and defend on paper the rights that the Green Mountain Boys had already fought to protect, and supported the rights on the same grounds: All power [is] derived from the people and was to be wielded to further the public welfare. Since the government is rooted in the constitution, and the constitution allows for the people to alter or replace the government as they saw fit, then the constitution is seemingly superfluous. The Watauga Association is another example of white settlers preferring natural law over British Mandate. In 1772 about seventy homesteads or farms had been established along the Watauga River in northeastern Tennessee (now Carter County). The area lay outside the boundaries of British colonial government and within the recognized boundaries of Cherokee territory. Disregarding the British mandate, the settlers negotiated a ten-year lease with the Indians for "all the country on the waters of the Watauga."In 1772 the settlers established the Watauga Association to organize the regionThe lease of Indian lands specified a ten-year term, and the Watauga constitution was written in conjunction with the lease. (Dickinson, 1998) British mandates were ignored by these two quasi-states for one reason: ignoring the crown led to a system deemed more proper; the new system maximized utility for the constituents. This is true even when including the disutility of reprisal against the settlers on the part of the British: the British simply were not present to enforce their system. If we consider the situation faced by the settlers from their point of view, the situation becomes even simpler. The land on which you reside, the boundaries of which are respected by all of your neighbors, has come under attack. The attack, however, is in the form of a surveyor or official from a government who claims that you must surrender your claim to the land, and so must all of your neighbors. To protect against this attack, the neighborhood forms a group, just like they would to hunt a wild mountain lion, kill a horse thief, put out a fire, or defend against any other threat to collective welfare. All contribute because each household has a father who represents the familys interests; and only the voices of those present at the tavern are heard. The extra-legal provision of defense of property also occurred in the so-called Wild West for a similar reason. For clarification, I will refer to the Wild West as the land west of the Mississippi river during the period of westward migration of American citizens and nationals into areas with little or no governmental presence, beginning in 1830 and ending in 1900. The Wild west was considered wild because several key institutions necessary for efficient economic growth (institutions which usually existence due to governmental provision of a public good) were lacking, and

as such were created and provided by individuals as they saw fit. These major institutions included: both the delineation of private property rights, third-party enforcement of contracts, criminal laws, and civil laws, and the defense against property loss and recovery of property value lost due to private property violations. The delineation of private property rights is necessitated by governmental intervention. It has some benefits: when rights are clearly outlined and violations are swiftly punished, a foreign source may view the area as a safer climate to invest compared to another area with an identical expected ROI but with a less transparent legal environment. While high levels of legal specificity face significant diseconomies of scale (and when provided by a government, these diseconomies of scale manifest quickly); extremely low, non-existent, or irrelevant levels of legal specificity are rarely stable. The optimal level of third-party involvement in matters of private property rights, contract enforcement, criminal law, and civil law seems to exist just above the level of law that would result from simply codifying the private property rights stemming from Schelling Point combination of rights. In order for a Schelling point to provide a peaceful resolution to a conflict of interest, both parties must conceptualize the alternatives in similar wayssimilar enough so that they can agree about which possible outcomes are unique, and thus attractive as potential Schelling points. So one interesting implication of the argument is that violent conflict is especially likely to occur on the boundary between cultures, where people with very different ways of viewing the world interact. (Friedman, 1994) While the Schelling point level may be the most economically efficient (which in this case is measured by expedience) in the short run, codification of laws results in legal inflexibility in response to changes to the economic environment. The optimal level of third party involvement will most likely increase with the number of transactions, and thus with economic growth and diversity of the market constituents beliefs concerning their own rights. As such, the level of third party involvement and specificity of laws with which minimizes transaction costs approximates a Parento equilibrium at the level which is marginally more complicated than the Schelling Point, the marginal complication being the lowest level necessitating codification.[1] Both defense of ones private property and justice for a victim of property loss in the Wild West only existed insofar as it was in the victims best interest to expend time and energy on their procurement. The level of expenditure on defense and recovery of property value chosen by any individual or firm over a period was designed to maximize the value of the property at the end of the period net of expenditures and losses. In an attempt to maximize the end-of-period value, the services of a professional stock detective were commonly employed by

cattlemen, with smaller groups of owners forming Cattlemens Associations. As the size of the Cattlemens Associations, grew so did the duties of a stock detective, and the pay he was entitled to. Soon, Private Protection Agencies were developing, in what was quite clearly a market response to existing demands for enforcement of rights. (Anderson and Hill) The case of Ohios statehood is provides interesting insight into the role of the federal government as an actor which forces a society farther away from its Schelling point. In 1803, the Act of Congress recognizing the state of Ohio was enacted, and the act was surprisingly straightforward in its objective. Its description reads: An act to provide for the due execution of the laws of the United States within the State of Ohio. The act begins by listing the requirements for statehood that Ohio had already fulfilled: the people of the territory met and formed both a constitution and a State government. The 5 sections of the Act delineate what the federal government was to do: Section 1 applied the laws of the United States to Ohio, Section 2 created the Ohio District Court, Section 3 provided for the compensation of the Ohio district court Judge, Section 4 delineated the duties and compensation of the Federal Attorney for the Ohio District, and Section 5 delineated the duties and compensation of the Marshall for the Ohio district court (Ohio Act, 1803). Indeed, it appears that the bill which recognized Ohio as a state seemed to have only complicated the states legal system!

4) Law & Order (& Insurance?) Today Today, individuals do have some financially-feasable options to exercise in defence their property in addition to the defense provided by the government through taxes. Insurance is a common method for individuals to protect their level of property against crime, as well as a multitude of other forms of property losses. An interesting aspect shared by all forms of insurance is the company providing the insurance is always exempt from payment in cases of insurance fraud. An exemption from payment Insurance fraud may be loosely defined as an instance in which the actions causing an event which results in loss to the policyholder which would otherwise be covered by insurance was intentionally caused by the policyholder proper, and is not covered by the insurance company. In other words, no insurance policy covers actions on the part of a policyholder which would be against the policyholders best interest were the policyholder not insured. Life insurance policies usually feature a suicide clause where a policy will be null if the policyholder commits suicide within a specified timeframe after the activation of the policy (usually two years). Professional Liability Insurance and Medical Malpractice insurance protects policyholders against potential claims of negligence made by clients or patients, for although the claims resulted from the actions of the policyholders, those actions are assumed to be unintentional, as the

policyholders would still suffer, albeit to a lesser degree, had they not purchased the policy. One very effective way to ensure that a policyholder acts in his or her own self interest in to have insurance rates vary in accordance with the risk intrinsic to the policyholders actions. For example, a smoker will pay a more than a non-smoker for an equivalent level of health insurance coverage due to the increased risk of health problems faced by the smoker. This smokers premium is reduced if the smoker decides to quit smoking. Similarly, the installation of a home security system will decrease a policyholders yearly home insurance premium. The idea of insurance companies providing incentives to policyholders taking a more active approach to preventing property losses will be important in a later portion of this paper. It would seem remiss to not consider the idea that private firms could not provide a more optimal defense product. In the United States, the current system's optimization problem is for each agency to be minimizing crimes committed under their respective jurisdictions (both geographical and magnitude-of-crime jurisdictions) subject to their short-run levels of capital. An optimal defenseprovisioning firm or agency is one which minimizes their consumer's total expenditures on defense of private property. If an individual (i) can pick a level of crime prevention that fits his/her budget, then he/she would pick the most efficient one given the individuals level of property. However, when one compares the marginal costs of prevention to the marginal reduction in crime from resulting from that additional level of prevention, there exists an optimality point whereby any additional increase in expenditure on crime prevention above that point is greater than the dollar value of the requisite reduction in crime at the level of prevention beyond the optimality point. This is due to the fact that the reduction in private property resulting from a criminal behavior is directly related to the level of criminal behavior, and a linear relationship intersecting with a exponential expression where all variables are either shared or exogenous can, in this case, result in an optimal value. (Becker) Since this optimal level of crime is at a non-zero level of crime, a rational individual would be expected to use insurance, if available and cost-minimizing. This insurance plan would be priced as a function of the loss resulting from a given level of crime occurring multiplied by the probability of such loss occurring for all potential levels of criminal behavior. Since the probability and amount of these potential losses occurring is directly related to the level of crime prevention, the pricing of a given fairly priced insurance plan for individual i is inversely related to the amount individual i pays for a fairly priced defense level, holding all else constant. As such, the Utility derived from individual property, or wealth, can be maximized subject to both the optimal level of defense and the optimal level of

insurance, both of which are subject to and individuals budget constraints and the existing environmental variables (such as the prevailent crime rates the individual faces), the latter of which can be selected by moving to the area deemed utility maximizing. Many have expressed objections to the idea of a private defense firm on the grounds that competition between defense agencies would be bloody, and a lack of competition between defense agencies (a monopoly on defense) would be tyrannical. I propose that localized monopoly on defense held by a defense firm would be prevented from tyrannical actions (anything between under-providing defense and wholesale theft of property from customers) by the insurance agency(ies) used by both customers and the defense firm. I also propose that such a system of defense will result in a more optimal level of crime, thus maximizing the amount of private property each individual retains at the end of a period. Today, a local government provides collects taxes from citizens to provide local defense for its citizens. However, the level of defense provided is not dependent upon the needs of its citizens, but rather on the level of tax revenue. In other words, the taxation rate of the population, and thus the level of funding available for defense, is exogenously determined. Such a system cannot preserve price information sufficiently enough to provide an optimal level of prevention. If we assume a relatively fixed rate of taxation of property, and if we assume that increases in tax revenues (due to an increased level of taxable property) result in increases in defense expenditures, then increases in taxable property do result in increases in the level of defense. If the increases in defense are proportional to the increases in property, then defense could be considered a public good, from which we could infer that defense would be underprovided without government intervention, and that such intervention is necessitated by it. I have two objections to this line of reasoning: it assumes efficiency and constant returns to scale from increased tax revenues will be experienced by the governmental defense agent despite the loss of price information, and causation is backwards, as government intervention actually created public defense.

5) The Case of Wells Fargo If private defense and private insurance are truly substitute goods, then one should be able to see evidence of this fact in society. However, since private defense in the form delineated in this paper is currently only legal insofar as its provision does not conflict with governmental law. While extralegal conflicts are regularly settled by a pre-determined arbitrational body, such a body is usually limited in its ability to exact non-pecuniary punishments, though exceptions do exist in certain industries (Bernstein), and existed to a greater extent in the past (Benson). The fact that providing private insurance is legal, but that its substitute

good, private defense, is currently legal; is what makes the case of Wells Fargo so interesting. Begun in San Francisco in July 1952, the company provided banking and express services to its clients, services which were found to be mutually supportive. It is important to note that in San Francisco, neither of these industries was regulated by the government. It is also important to note that during this period of rapid growth and requisite danger, in California, express services were essentially defense services: the speed of travel was a byproduct of attempts to minimize the time spent between cities, where the chance of theft was dramatically higher. Wells Fargo is a perfect example of an anarcho-capitalist defense agency. An advertisement of their services from 1852 states Having Made advantageous arrangements with the United States and Pacific Mail Steamship Companies, for transportation, we are now prepared to forward Gold Dust, Bullion, Specie, Packages, Parcels & Freight, of all kinds, to and from New York and San FranciscoTreasure Insured Under open Policies in some of the best New York Companies, or at Lloyds, in London, at the option of the Shipperscareful and trusty MessengersOur Messangers (sic) are supplied with Iron Safes for the security of treasure entrusted to [them](Beebe, 33) [2] From this we can determine that the necessary conditions existed for Wells Fargo to be considered an Anarcho-Capitalist defense agency: 1. 2. 3. 4. 5. Demand for local defense by a sufficiently large market, Underprovision of local defense by the government (market failure), A defined, consistent, and excludable level of protection (commodification), A competitive insurance market (as a complementary and substitute good), and Long-term profitability of the firm.

The Existence of an insurance market for their services is evidenced by the fact that several policies existed from numerous companies operating on an international scale. This implies that both the risk of ensuring the product was low enough for an insurance market to exist[3] and that the insurance companies believed that Wells Fargo provided a consistent product, implying low variability in the level of risk incurred with repeated trips. The product consistency assertion is also maintained by the fact that they maintain low variability in the level of risk on repeated trips despite advertising their routes, advertising the value of their goods (Gold Dust, Bullion, Specie) and the assertion that they Follow well known lines. While they could conceivably maintain low risk for a short period of time by operating in the dark and employing other methods of avoiding criminal elements, the fact that they operate with full disclosure to potential criminals implies that they have mitigated a

large portion of the risk of loss due to theft by employing careful and trusty messengersIron Safes and other methods of loss prevention which are both profit-maximizing and maintainable in the long run.[4] [5] 6) A Localized Defense Agency Having established that Public defense is an inefficient institution, due to the lack of price information, and that the condition necessitating its existence, governmentmandated taxation, is suboptimal and therefore a violation of individual property rights; the remaining solution would be the elimination of the governmental provision of defense, as well as the elimination of all taxation which supports it. Without public defense, however, the legal system it supports would become unenforceable, and therefore moot. If local defense was eliminated overnight, the unmet demand for defense would be enormous, and defense agencies would rise to meet this demand relatively quickly. These defense agencies would likely arise out of localized committees of safety, as they had in Vermont, and would provide a level of defense equal to the highest common denominator of need that committees constituents required. These initial defense agencies would be initially concerned with the defense of residential areas, as the employees of the agency would usually work part-time in exchange for others providing home defense during off hours. The committee of safety would evolve into a full-fledged defense agency once concerned local business-owners, who would be unable or unwilling to work in the agency in exchange for protection, would instead offer goods or money to the agency. Once firm-initiated monetary compensation for defense became involved, the resulting price information will result in changes cascading into other aspects of defense provision. Some members of the agency may find it more efficient to work elseware and pay for defense (substitution effect), while others might see the introduction of wages from employment by the agency as their utility-maximizing choice (income effect). These defense agencies would soon meet each other within localized geographic areas such as cities, and many have expressed the view that they would be in conflict. The source of this conflict is intrinsic to the product that each defense agency provides to its consumers; defense of private property. The level and complexity of conflict is dependent upon the differences between the two major aspects of the product: the level of defense, and to a greater extent, the specific delineation of rights to be defended. Conclusion Although it may be difficult to determine the extent of the economic loss resulting from the governmental provision of defense, the fact that this form of defense is an impure public good and is detached from price information implies that its

provision does not approach an optimal equilibrium. Historically, when defense has been provided by individuals or firms, rather than the government; the costs of crime prevention were lower and the legal system was less complex, as this constrained economic activity, and utility maximization, the least. The Schelling point of property rights recognition, arrived at through human interaction in the absence of an effective government-backed legal system, allows for an anarchocapitalist legal system to be light, flexible, easily enforceable, and intrinsically fair. The remaining objection to privatizing defense is the fear of a Monopoly-with-allthe-guns is rendered moot when to defense and insurance are substitute goods. The example of Wells Fargo provides insight into how a firm could provide defense in the absence of government provision which is utility-maximizing for both itself and its customers, while maintaining insurability. Much work remains in the analysis of the current applicability of a system of private defense provision, but the argument that it cannot possibly be utility-maximizing is disproven by several instances of its existence. Complement commonality hijfnds

Bibliography and Works Cited Allen, I. (1969). Natural and political history of the State of Vermont. Rutland, Vt: C.E. Tuttle Publishing.

Anderson, Terry L and P J Hill. "An American Experiment in Anarcho-Capitalism: The Not so Wild, Wild West." Journal of Libertarian Studies (1978): 17. Beadle, J.H. Western Wilds and the Men Who Redeem Them. Cincinatti: Jones Brothers, 1882. Beebe, L. and Clegg, C. The Saga of Wells Fargo. New York: E.P.Dutton and Co, 1949 Bernstein, Lisa. "Opting out of the legal system: extralegal contractual relations in the diamond industry." The Journal of Legal Studies 21.1 (1992): 115-57.

 Becker, G.S. (1968), Crime and punishment: An economic approach. Journal of Political Economy, 76, 169--217. Benson, Bruce L. "The Spontaneous Evolution of Commercial Law." Southern Economic Journal 55.3 (1989): 644-61. Cowen, Tyler "Public Goods." The Concise Encyclopedia of Economics. 2008. Library of Economics and Liberty. 8 November 2009. <http://www.econlib.org/library/Enc/PublicGoods.html>. Cowen, Tyler. 1992. "Law as a Public Good: The Economics of Anarchy." Economics and Philosophy 8:249-6 Cowen, Tyler. "REJOINDER TO DAVID FRIEDMAN ON THE ECONOMICS OF ANARCHY" George Mason University. Web. 11 Oct. 2009. <http://www2.gmu.edu/centers/publicchoice/faculty%20pages/Tyler/index.html>. Dickinson, W. Calvin. TN Eencyclopedia: Watauga Association. 1998. 29 11 2009 <http://tennesseeencyclopedia.net/imagegallery.php?EntryID=W028>. Friedman, David D. "A Positive Account of Property Rights." Social Philosophy and Policy 11.2 (1994): 1-16. Friedman, David D. "Law as a Private Good," Economics and Philosophy 10 (1994), 319- 327. David, Friedman D. The Machinery of Freedom [ch29: Police, Courts, and Laws On the Market.] LaSalle, Illinois: Open Court, 1989. Gruber, Jonathan. Public finance and public policy. New York, NY: Worth, 2005. Print. Hungerford, Edward Wells Fargo: Advancing the American frontier. New York: Random House, 1949. Hunsley, Terrance. Opportunities for Crime Prevention & Community Safety in Integrated Urban Regeneration Programs. Rep. Pretoria: ICPC International Colloquium on Crime Prevention, 2003. Opportunities for Crime Prevention & Community Safety in Integrated Urban Regeneration Programs. International Centre

for the Prevention of Crime, Dec. 2003. Web. 5 Dec. 2009. <http://www.crimeprevention-intl.org/publications/pub_97_1.pdf>. Moody, Ralph. Stagecoach West. New York: Thomas Y. Crowell Company, 1967

Act of Congress Recognizing the State of Ohio - 1803 (Transcript)", Ohio History Central, May 21, 2008, http://www.ohiohistorycentral.org/entry.php? rec=3215 Zycher, Benjamin. "Defense." The Concise Encyclopedia of Economics. 2008. Library of Economics and Liberty. 8 November 2009. <http://www.econlib.org/library/Enc/Defense.html>.

[1] It is interesting to note that under such a system, lawyers would be considered rent-seeking, as their employment entailed a cost which did not result in increased welfare for the society. In fact, Lawyers were forbidden from practicing law in the Union Mining District, with violations punished by both lashings and banishment. (Beadle) [2] emphasis reflects capitalization in original document [3] if the risk was too high, the price of insurance would be too high to be feasible, and a market for insurance would not exist as it would never be purchased by a utility-maximizing individual. [4] Other sources describe the methods of loss prevention employed by Wells Fargo in greater detail. According to a quote from a messenger working for wells Fargo: In those days, the companys standing reward (for recovering stolen property) was a certain percentage of the amount recovered, and Blackburns share of what was recovered in this hold up amounted to $1,800. It is important to note that Blackburn did not work for Wells Fargo, but was aware of the reward for helping recover stolen goods to Wells Fargo as Blackburn was quoted as saying it pays better to kill a man for Wells Fargo than it ever did to kill a man for Brigham Young. [5] Advertising was also a tool of dissuasion. In 1877, Wyatt Earp was anxious to be quit of Deadwood and when he went to apply for passage via coach to Cheyenne. A Wells Fargo agent who was tired of the distressing regularity of the theft of parcels, said Ill give you free passage and fifty dollars to boot if youll ride shotgun for me on the stage tomorrow. An hour later, a sign was put outside the Wells Fargo Office, saying Wyatt Earp of Dodge City, Kansas, riding shotgun. Needless to say, the $200,000 of gold was transported unmolested to Cheyenne. (Beebe 194)

[6] An increase in transportation costs around Tysons Corner would at least both reduce the number of customers (reducing effective demand for the retail areas products, decreasing profit margins and property values) and decrease the real salaries (salary less transportation costs, in this case) of commuting employees [1] Or punish. The Deterrance Hypothesis has not been emperically established, likely due to a principal-agent problem in the incentive structure faced by police agencies. See Benson, Kim, and Rasmussen Estimating deterrence Effects: A Public Choice Perspective on the Economics of Crime Literature [2] This is not saying that private property rights are equally protected under current law, nor does it imply that rights of ownership are equal between different types of property. Consider the case of two individuals, one who owns a loud speaker system and another who does not, in a world where the right to not be bothered by noise originating from neighbors is dominant to the right to use a loud speaker system. The equality of rights implies that the rights do not change if the situation is reversed.