I think the logical conclusion of the FoL system is a dictatorship unless the system exists like a socialist enclave of the 70's. Without an external arbiter and guarantor of property rights PUBLICLY provided by a monopoly, it cannot be sustained. Its a pretty experiment within an established state, but as a worldwide system it is not stable. IMO, it is similar to how agrarian cultures could not be sustained once people began to organize and form states. As a closed system, they worked, but in an open environment, external forces make them obsolete.
For example, FoL quoted some community in Somolia that hired a warlord as an example of privately procured security. Two failings - the public grouped together to hire the security (a lot like a democracy, no?), and what happens when they want to terminate the contract. Does the warlord walk away peacefully b/c his contract has expired?? Not unless they can afford a bigger warlord.
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