I've written before on why I'm not a Libertarian, and SDB goes in a similar direction as he explains why property rights are not the panacea that Libertarians claim. He writes that Libertarians are misguided and narrow in thinking that the enforcement of strong private property rights would eliminate the need for government regulation, and he argues that such a system would merely transfer power from the Executive and Legislative branches to the civil courts, leading to paralysis.
I think that those who argue that "property rights" can solve the problem are deceived by the assumption that it is shared or public ownership of the commons which is the root of the problem. Based on that, they reason that if they can just eliminate shared or public ownership, by somehow converting it into direct private ownership, then the commons will eliminated and therefore can no longer be spoiled. But in fact a commons doesn't necessarily involve ownership at all. A commons is defined by effects. The question of who formally owns the commons may not matter, and there may not be anything involved for which "ownership" even makes sense. ...This is all true. If there were some sort of super-court with infinite capacity, objectivity, and speed, such a lawsuit-based system could conceivably work. Maybe someday in the future when we're all born with implanted microchips that track our every activity, computers will be able to instantly calculate the cost each one of our actions has on everyone around us, and will automatically transfer pennies back and forth between accounts. Nice, considerate people will make a profit, and rude, annoying people will have to pay the price for each person they inconvenience. Sounds like a Libertarian paradise, right? I'm sure they'll be first in line to get the chips inplanted.
But in all these cases, even if property rights somehow did solve the problem, it doesn't actually eliminate government involvement. It just means that instead of the Executive and Legislative branches participating about equally with the Judicial branch in dealing with it all, the Judicial branch would gain exclusive control. Instead of those things being handled through passage of laws and writing of regulations enforced by the courts (and sometimes nullified by them), it would only be decided by judges presiding over a vast swarm of civil suits.
SDB says that Libertarians are deceiving themselves, but deep down I bet many are thinking: "good, I wish society would grind to a halt!" It's wasteful and inefficient, true, but civilization actually turns out to be much more efficient than anarchy, which is the only alternative. What's more, anarchy isn't stable. All it takes is one guy with a gun and a bit of persuasive power, and all of a sudden you've got a chief. A little bit of fighting, and you've got a warlord, then a king, then an emperor. Anarchy is unsustainable, because there's always someone stronger than you who wants to tell you what to do.
So if we've got to have a society with imperfect, selfish, violent people (try to find some people who aren't), I think democracy is a pretty good way to go. Your town is unlikely to be plundered in a democracy, and it's unlikely that your wives and daughters will be enslaved. Sure, a bunch of leftists will try to take your money and use it to chase fantasies like universal health care, but they don't come with guns, and they're generally polite about it. [Polite lefties? -- Ed.]
Francis W. Porretto examines the topic with a larger economic perspective, and brings up some very interesting big-picture points. In a sense, I believe (as an engineer) that all forms of regulation will eventually lead to a "next problem" to be solved, but deregulation can lead to problems as well. We'll never have a perfect solution, but we can iteratively approach optimality through experimentation.