No, we don't. A great talk and an illustration about how law and protection could work in a stateless society: http://www.youtube.com/watch?v=jTYkdEU_B4o by David D. Friedman (an economist AND a lawyer).
Interesting talk, thanks. Basically, rule of law under market conditions/forces. The main benefit is more individual power over law due to market choice by that individual, instead of political choice and the lack of power that offers due to dilution.
That is of course assuming we do not end up with the same M&A activity that leaves only a handful of law market/arbitration agencies (similar to what has happened in many arenas, such as media).
I am going to have to think about that one for awhile...
