When Microsoft and Apple have a dispute, they go to court, and let a judge resolve it for them. But, for, say, drug dealers, government justice is not an option, so instead they (often) resort to violence.
Therefore, concludes Bob Murphy, if we entirely eliminate the government justice system... all organizations will resolve their disputes peacefully!
This is the sort of deft, counter-intuitive logic that makes libertarians so very tricksy to debate.
I don't want to belabor the libertarian resolution to such a contention, but I'll go ahead and lay it out there before I get to my own criticism:
The reason why black markets are notoriously violent is precisely because they are shielded from dominant commercial institutions. By definition, such trade is relegated to the swaths of humanity who've generally resorted to a life of crime in the first place. It's not particularly a mystery that bootleggers during Prohibition had a quite violent way of settling disputes while alcoholic vendors today aren't exactly battling it out on the streets.
The larger question or contention, obviously, are which commercial institutions are necessary to promote peaceful but practically enforceable dispute resolution. Free-market anarchists believe monopolistic institutions of dispute resolution to be not only unnecessary but inadequate, while people like Gene believe they are quite necessary if not ideal. Those who believe in the functional primacy of market competition in the arena of arbitration and conflict resolution appeal to a broad array of economic arguments against oligarchical institutional models. Likewise, those who believe in the primacy of monopolistic models of justice make their own appeals.
My point is not to say who's right here. There's a long and complex debate to be had, and it's already been taking place for quite a while now - with lots of good points made on all sides, I believe. It might not ever be settled with devotees on both sides. My contention with Gene's little reductio ad absurdum is that it proves too little. Both of the regulating forces being lobbied for (trade in an open market and governmental provision of justice) are notably absent in the context of conflict resolution between drug dealers. It's not a simple slam-dunk to assume the full integration of one or the other will magically make all such violent forms of resolution disappear (and, to the extent that violent resolution is still prevalent today - with an institutional monopoly on justice already in place -, a little more humility in the supposed unraveling of opponents' arguments might be appropriate).
This brings me to the heart of the issue - Murphy has never treated it with assumption. He's written and talked extensively on the subject, as have others, pushing economic and political arguments for why such institutional competition would not only be workable, but preferable. Now, you don't have to agree with his arguments. But you can't treat it like these arguments have never been forwarded, and that the statements he makes concerning the subject are mere assertion or that they are somehow disconnected from those arguments.
And this is the problem. Gene used to be on the same proverbial side of the fence. He knows the arguments. Hell, he knows Murphy personally. But, as he does too often, he snipes at the most uncharitable and least fleshed out versions of the standard libertarian arguments. That is to say, if he were trying to make real headway on the subject (particularly with libertarians) he would engage the arguments in their most robust and extrapolated forms. The irony here is that he publicly detests the very thing here that I'm accusing him of doing as a disingenuous ploy - advancing arguments on rhetorical merit.
This isn't to say that he always does this. I actually find quite a few of his arguments pretty devastating. And the ones I find most devastating are the ones where he meets the radical libertarians out on the field, trying to get them to punt away their most advanced arguments; not shit-talking them in the locker room. And when he makes points like the above, I can't help but feel like he's doing something closer to the latter. Gene's a really smart guy. There's no doubt about it. But the chip on his shoulder regarding libertarians sometimes, I think, prevents him from forging his criticisms in the same honest but dispassionate form he'd like to see to see his own opponents employing.