The following is an excerpt from the 1978 essay An American Experiment in Anarcho-Capitalism: The Not So Wild, Wild West by Terry L. Anderson and P. J. Hill.
Perhaps an even more revealing example of anarcho-capitalism at work is found in the dissolution of the Boone County Company. When the eight members of the company fell into rival factions of 3 and 5, dissolution became imminent. Negotiations continued for some time until all the company property (note that none of the private property was divided) was divided between the two groups. When negotiations appeared at an impasse because of the indivisibility of units and differences in quality, prices were assigned to units and the groups resolved the issue by trade. However, a $75 claim of the majority group proved even harder to resolve. The claim resulted from the fact that a passenger who owned two mules and a horse and who had been traveling with the company chose to take his property and go with the minority. The disadvantaged majority demanded compensation. Unable to settle the dispute, arbitration came from a “private court” consisting of “3 disinterested men,” one chosen by each side and a third chosen by the two. Their decision follows.
“[W]e can see no just cause why the mess of 3men should pay anything to the mess of 5 men. It being… a mutual and simultaneous agreement to dissolve the original contract. The fact that Abbott joins in with the 3men does not alter in our opinion the matter of the case—for the dissolution being mutually agreed upon, all the parties stand in the same relation to each other which they did, before any contract was entered into. And Abbott might or not just as he chose unite with either party. If he chose to unite with neither party, then clearly neither could claim of the other. If he united with a foreign party then who could think of claiming anything of such a party.”61
The important point of this example is that when the Boone County Company could not renegotiate its initial contract the members did not resort to force, but chose private arbitration instead. The many companies which crossed the plains “were experiments in democracy and while some proved inadequate to meet all emergencies, the very ease with which the members could dissolve their bonds and form new associations without lawlessness and disorder proves the true democratic spirit among the American frontiersmen rather than the opposite.”62 Competition rather than coercion insured justice.
While the above evidence suggests that the wagon trains were guided by anarcho-capitalism, it should be noted that their unique characteristics may have contributed to the efficacy of the system. First, the demand for public goods was probably not as great as found in more permanent communities. If nothing else, the transient nature of these moving communities meant that schools, roads, and other goods which are publicly provided in our society were not needed, hence there was no demand for a government to form for this purpose. Secondly, the short term nature of the organization meant that there was not a very long time for groups to organize to use coercion. These were “governments” of necessity rather than ambition. Nonetheless, the wagon trains on the overland trails did provide protection and justice without a monopoly on coercion, did allow competition to produce rules, and did not result in the lawless, disorder generally associated with anarchy.
The entire essay is 19 pages. It provides historical examples of private law and private dispute resolution, among other things, in the American West from 1830 to 1900. It concludes:
“1) The West, although often dependent upon market peace keeping agencies, was, for the most part, orderly.”
“2) Different standards of justice did prevail and various preferences for rules were expressed through the market place.”
“3) Competition in defending and adjudicating rights does have beneficial effects.”
I found the essay thought-provoking and educational. I recommend it in its entirety to anyone interested in the possible workings of a free society.