What is the nature of each of these two tools? Markets allow multiple people to choose individually and end up with multiple answers. Democracies allow multiple people to choose individually and end up with a single solution.

Markets offer the fewest infringements of natural rights. I can choose based on my values, another can choose based on his. No conflict of values occurs as long as the values are considered personally (I choose for me, not you).

Democracies offer the advantage of a single result. When a single result is required (e.g.: What individual will hold the post of President for this term?), a democratic election offers the fewest infringements of natural rights. Having every participant vote infringes fewer rights than having a single person make the appointment. Better than a single appointer would be a committee. Better still, would be a vote of the entire membership.

Because I value natural rights, I prefer to see them abrogated as little as possible. Where the market tool will address a need (the vast majority of human interaction), I support its use. Where a single answer is proven to be required, I will choose a democracy tool over other tools which violate natural rights more.

The trick is defining classes of interaction where a single answer is required.

It can be, but in practice this is rare. Democracy usually encompasses a lot more than just simple majoritarianism, as a quick survey of democratic countries will show.

The difference is the state. Campaign contributions look to influence the already-existing, already-recognized-as-legitimate entity of government. A small contribution can have a massive effect.

For example, presidential candidates raised more than a billion dollars to run for President in 2008. That sounds like a lot, but that’s less than one-tenth of one-percent of one year’s economy, roughly akin to what we spent on potato chips last year. And that’s to hold the most powerful political office in the most powerful nation on Earth. That sort of power and influence should command much more of a price, no?

Without the state, no institution enjoys the reputation of legitimate ultimate authority. For all the folks who voted for Obama, and all of the excitement surrounding him, the amount of money freely given to him was far, far less than the power of the office. Take away that office, that aura of legitimacy, and it becomes a lot harder to get people to spend to enforce their legal views, because there is less likelihood of success.

The second problem is the fact that (in the absence of any rules against it) private organizations could very easily use coercion and force to extort money from others or to force people to behave a certain way – for example mafia protection rackets.

This is true. Of course, the mafia have often been ignored, encouraged, or actively recruited by the government, as well. Creating a legal authority of last resort doesn’t always solve the problem. A society that has the will and ability to fight the mafia probably doesn’t a need a state for protection anyway.

The consitution itself and the views of our founding fathers framed therein is a direct contradiction of the notion that human tendencies to impose one’s will on others will always prevail. It certainly didn’t work that way along this seaboard, on this continent, late in the 18th century when the Constitution was adopted with bold protections of individual rights and infused with carefully crafted anti-majoritarian mechanisms that protect individual libery and personal choice.

As Brad said, the free market isn’t Democratic at all. It may seem that way sometimes if you count dollars as votes, but there isn’t any force involved. Democracy is about 51% forcing their will on the other 49%. Democracy can be downright oppressive if you are in the minority.

As far as “busybodies” go, I would love to see competitive government as a part of a free market. If a group of people want to go off and form a commune or whatever, that’s fine with me as long as they don’t force me to go along. Yes, there will always be someone who wants to tell other people what to do or how to live, but it’s not until they start imposing their opinions and morals at gunpoint that I have a problem.

Just as free market ideas succeed by acknowledging the selfishness of human nature, any idea must acknowledge the tendency of many (most?) human beings to be (for lack of a better word) busybodies.

So, if what I state is true (and you are free to dispute this), then I’m asking the question “why would a free market do a better job of protecting you from the busybody tendencies of others than democracy?”

So back to your example. Where does the authority of the private police force end? Well in reality it ends wherever their customers tell them it ends. So if their customers believe that their authority encompasses your place, then what is to stop them from enforcing mandates from their customers on you? Now of course if they do so you can attempt to defend your rights as you see fit, and even form your own group to do so. However now we have a situation where disputes over values are handled by violent conflict rather than by civil discourse. I understand that democracy doesn’t do a particularly great job of defending rights, but if I have to choose between using democratic processes to defend my rights rather than a state of constant warfare, I’ll chose the former.

The comment about “cleaning up the streets” wasn’t necessary literal. The point being that a private security force could very well be employed by its customers to enforce rules on non-customers.

As far as the rules of the free market being only supply and demand – what if there is a demand for additional rules?

You mentioned cleaning up the streets, but whose streets are they if there is no government? I would guess that the people who use them would pay to build, maintain, and enforce any rules they thought necessary via tolls or a monthly payment or somesuch. If they want to prohibit something and I don’t want to comply, I won’t use their street.

Brad countered by saying: “It’s easy to state “I want marijuana off the streets and to be impossible to obtain.”…What’s harder is to say “I’m willing to spend $100 out of my own pocket every month to pay for the forces that will stop other people from using marijuana.” … A lot of people want to impose their values on others, but how many of those people will pay big money to do so?

I found this convincing at first, but there’s a big counter example – campaign contributions. There are clearly a large number of people who are willing to pay large sums of their own money to politicians to impose their values on other people (see the large amount of money that is being poured into ads both for and against California’s legalization effort). In the absence of politicians, why would these same people not use private institutions for the same purpose?

So the first problem that I see is that simply because you not forced to pay for a given “service”, it doesn’t mean that you won’t be negatively affected by it.

The second problem is the fact that (in the absence of any rules against it) private organizations could very easily use coercion and force to extort money from others or to force people to behave a certain way – for example mafia protection rackets. Coercion and force is often attributed to governments, but I don’t see anything metaphysically special about the institution of government that makes it unique in this regard. It could be argued that the only reason that more private organizations aren’t using force and coercion to extort money or affect behavior is because it is illegal. Of course that brings us to the dilemma that the only way to prevent corrupt institutions is to put in place corrupt institutions to stop the other corrupt institutions. Of course that will never solve anything, but perhaps this cannot be solved.