Hyehudi.org

In a modern nation-state like the US, the legal system is an arm of the government and integrated with the government’s monopoly on force. Police forcibly arrest criminal suspects; convicted criminals or losers in civil cases are forced to go to prison or pay fines and damages. Ultimately, all the penalties in the legal system are enforced by armed agents of the government.

But legal systems don’t inherently require a state.

David Friedman, in Legal Systems Very Different From Ours, has explained how non-state societies (like Somaliland and medieval Iceland) and self-governing communities within states (like the Romani, the Amish, and pre-emancipation Jews) were able to use courts for dispute resolution without a monopoly on violence.

Implementations differ, of course. But the basic shared model is that a non-state court system is not a dispute-resolution agency administered by the state, but a protocol for dispute resolution administered by anyone who wants to.

Here’s how it works, in broad strokes.

When two parties have a conflict, they take their dispute to a court. Key elements of a court include a judge or panel of judges, an opportunity for both sides to state their case, a formal method for establishing the facts of the case and how the law applies, and a verdict or judgment.

If the judgment comes with penalties (“Alice shall pay $50,000 to Bob”), there are no police to threaten Alice with violence if she doesn’t pay the penalty. Instead, people who don’t abide by court judgments become outlaws. They are expelled from the community and the protection of the law.

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From Rough Diamonds, here.