A nice illustration of how David Friedman envisions private law and private law enforcement, through arbitration and a contractual network.

It's about decentralization and there are parallels with how Bitcoin's consensus works. The relationship between courts and enforcement agencies reminds me of the relationship between core devs and node runners, who choose which code to run.

A big difference, however, is that while money converges on a Shelling point, legal systems can be many and co-exist, because disputes are between pairs of entities and therefore their scope is local. However, the part about criminals shows that law regarding crime would indeed converge on not allowing things like murder or theft, because there is more money behind that.