It does not take much imagination to figure out whose interests "prosperous" arbitrators, judges and defence companies would defend: their own, as well as those who pay their wages — which is to say, other members of the rich elite. As the law exists to defend property, then it (by definition) exists to defend the power of capitalists against their workers.
Rothbard argues that the "judges" would "not [be] making the law but finding it on the basis of agreed-upon principles derived either from custom or reason" [Rothbard, Op. Cit., p. 206]. However, this begs the question: whose reason? whose customs? Do individuals in different classes share the same customs? The same ideas of right and wrong? Would rich and poor desire the same from a "basic law code"? Obviously not. The rich would only support a code which defended their power over the poor.
Although only "finding" the law, the arbitrators and judges still exert an influence in the "justice" process, an influence not impartial or neutral. As the arbitrators themselves would be part of a profession, with specific companies developing within the market, it does not take a genius to realise that when "interpreting" the "basic law code," such companies would hardly act against their own interests as companies. In addition, if the "justice" system was based on "one dollar, one vote," the "law" would best defend those with the most "votes" (the question of market forces will be discussed in section F.6.3). Moreover, even if "market forces" would ensure that "impartial" judges were dominant, all judges would be enforcing a very partial law code (namely one that defended capitalist property rights). Impartiality when enforcing partial laws hardly makes judgements less unfair.
Thus, due to these three pressures — the interests of arbitrators/judges, the influence of money and the nature of the law — the terms of "free agreements" under such a law system would be tilted in favour of lenders over debtors, landlords over tenants, employers over employees, and in general, the rich over the poor, just as we have today. This is what one would expect in a system based on "unrestricted" property rights and a (capitalist) free market. A similar tendency towards the standardisation of output in an industry in response to influences of wealth can be seen from the current media system (see section D.3 — How does wealth influence the mass media?)
Some "anarcho"-capitalists, however, claim that just as cheaper cars were developed to meet demand, so cheaper defence associations and "people's arbitrators" would develop on the market for the working class. In this way impartiality will be ensured. This argument overlooks a few key points:
Firstly, the general "libertarian" law code would be applicable to all associations, so they would have to operate within a system determined by the power of money and of capital. The law code would reflect, therefore, property not labour and so "socialistic" law codes would be classed as "outlaw" ones. The options then facing working people is to select a firm which best enforced the capitalist law in their favour. And as noted above, the impartial enforcement of a biased law code will hardly ensure freedom or justice for all.
Secondly, in a race between a Jaguar and a Volkswagen Beetle, who is more likely to win? The rich would have "the best justice money can buy," as they do now. Members of the capitalist class would be able to select the firms with the best lawyers, best private cops and most resources. Those without the financial clout to purchase quality "justice" would simply be out of luck - such is the "magic" of the marketplace.
Thirdly, because of the tendency toward concentration, centralisation, and oligopoly under capitalism (due to increasing capital costs for new firms entering the market, as discussed in section C.4), a few companies would soon dominate the market — with obvious implications for "justice." Different firms will have different resources. In other words, in a conflict between a small firm and a larger one, the smaller one is at a disadvantage in terms of resources. They may not be in a position to fight the larger company if it rejects arbitration and so may give in simply because, as the "anarcho"-capitalists so rightly point out, conflict and violence will push up a company's costs and so they would have to be avoided by smaller companies. It is ironic that the "anarcho"-capitalist implicitly assumes that every "defence company" is approximately of the same size, with the same resources behind it. In real life, this would clearly not the case.
Fourthly, it is very likely that many companies would make subscription to a specific "defence" firm or court a requirement of employment. Just as today many (most?) workers have to sign no-union contracts (and face being fired if they change their minds), it does not take much imagination to see that the same could apply to "defence" firms and courts. This was/is the case in company towns (indeed, you can consider unions as a form of "defence" firm and these companies refused to recognise them). As the labour market is almost always a buyer's market, it is not enough to argue that workers can find a new job without this condition. They may not and so have to put up with this situation. And if (as seems likely) the laws and rules of the property-owner will take precedence in any conflict, then workers and tenants will be at a disadvantage no matter how "impartial" the judges.
Ironically, some "anarcho"-capitalists point to current day company/union negotiations as an example of how different defence firms would work out their differences peacefully. Sadly for this argument, union rights under "actually existing capitalism" were created and enforced by the state in direct opposition to capitalist "freedom of contract." Before the law was changed, unions were often crushed by force — the companies were better armed, had more resources and had the law on their side. Today, with the "downsizing" of companies we can see what happens to "peaceful negotiation" and "co-operation" between unions and companies when it is no longer required (i.e. when the resources of both sides are unequal). The market power of companies far exceeds those of the unions and the law, by definition, favours the companies. As an example of how competing "protection agencies" will work in an "anarcho"-capitalist society, it is far more insightful than originally intended!
Now let us consider the "basic law code" itself. How the laws in the "general libertarian law code" would actually be selected is aanyone's guess, although many "anarcho"-capitalists support the myth of "natural law," and this would suggest an unchangeable law code selected by those considered as "the voice of nature" (with obvious authoritarian implications). David Friedman argues that as well as a market in defence companies, there will also be a market in laws and rights. However, there will be extensive market pressure to unify these differing law codes into one standard one (imagine what would happen if ever CD manufacturer created a unique CD player, or every computer manufacturer different sized floppy-disk drivers — little wonder, then, that over time companies standardise their products). Friedman himself acknowledges that this process is likely (and uses the example of standard paper sizes to indicate such a process).
In any event, the laws would not be decided on the basis of "one person, one vote"; hence, as market forces worked their magic, the "general" law code would reflect vested interests and so be very hard to change. As rights and laws would be a commodity like everything else in capitalism, they would soon reflect the interests of the rich — particularly if those interpreting the law are wealthy professionals and companies with vested interests of their own. Little wonder that the individualist anarchists proposed "trial by jury" as the only basis for real justice in a free society. For, unlike professional "arbitrators," juries are ad hoc, made up of ordinary people and do not reflect power, authority, or the influence of wealth. And by being able to judge the law as well as a conflict, they can ensure a populist revision of laws as society progresses.
Thus a system of "defence" on the market will continue to reflect the influence and power of property owners and wealth and not be subject to popular control beyond choosing between companies to enforce the capitalist laws.