Rightful Liberty: The Economic and Moral Superiority of Private Dispute Resolution

By: Adam Allpow

"Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add 'within the limits of the law', because law is often but the tyrant's will, and always so when it violates the rights of the individual."1 I. Introduction Philosophers in the Eighteenth Century introduced a motto which stated, That government is best which governs least. In response, Henry David Thoreau famously quipped, That government is best which governs not at all; and when men [sic] are prepared for it, that will be the kind of government which they will have.2 Thoreau was not referring to an abstract spiritual or moral awakening but an active engagement in replacing the functions of government.3 He argued that the state, underneath its many obfuscations and claimed purposes, has just one tool on its belt: physical coercion. It governs because it is strongest, not wisest. Coercion is the opposite of liberty and one cannot abide the other. It is the duty of all people to disobey that which is unjust and to instruct others by word and act how to achieve liberty. The practice of resolving disputes peacefully and voluntarily, without resorting the states coercive measures, is such an act. This paper argues that state courts are undesirable because they are economically inefficient and morally illegitimate. State courts lack both the incentive and the capacity for equitable dispute resolution because they rely on a monopoly of laws and force. This paper explains that these two monopolies taken together represent an insurmountable hurdle which necessarily produces inefficiency and violent aggression, which violates personal liberty and

1 2

Thomas Jefferson, Letter to Francis Gilmer, 1816 Henry David Thoreau, On the Duty of Civil Disobedience, 1 (1849). 3 See generally id (arguing that citizens, not government, produce human progress and that tyranny exists wherever the right of free association is threatened by government). 1

leads to unjust resolution. First, this paper shows that state courts are subject to the economic principles which hold that monopolies are economically inefficient compared to competitive markets. This inefficiency limits access to justice because it manifests as higher taxes, increased court fees, tendencies toward cartel (specifically in legal advocacy), and unnecessary procedural burdens. Conversely, a private dispute resolution organization (DRO) is subject to market competition, not sustained by government coercion. As a market actor, a DROs only incentive is to attract customers (litigants) by offering the highest quality of service at the lowest cost. Second, this paper contends that state courts are presumptively unjust because they are founded upon physical coercion. The Non-Aggression Principle (NAP), a moral conclusion, holds that the initiation of force is presumptively illegitimate. Force is defined as the threat or implementation of physical coercion against a non-aggressor. State courts rely exclusively on the threat of force against litigants to compel adherence to their rulings. On the other hand, DROs rely on continued voluntary association, the threat of economic retaliation, and social custom to encourage cooperation with their rulings. As a final note, within this paper the term state courts refers to courts operated by the State (i.e. the government), not particular U.S. states. These arguments do not distinguish between federal, state, or local courts since each operate with the same two monopolies: law and force. This will demonstrate that the flaws of state courts are not caused by a particularized set of laws or procedures but are the inevitable consequences of the illegitimate and immoral foundation of state run court systems, namely physical coercion. This paper is limited to civil disputes because, although the arguments put forth here apply to criminal matters as well, criminal justice requires further analysis which is outside the scope of this paper and course. II. Economic Efficiency: State Courts vs. Dispute Resolution Organizations

There are remarkable differences between state courts and DROs relating to the different economic forces driving the two. State courts hold a monopoly on dispute resolution (except for the small portion of privately adjudicated disputes) and act according to the distorted principles inherent in a monopolistic market, including artificially high prices and a lower quality of service. Conversely, DROs operate within a competitive market for private dispute resolution and act according to the principles inherent to a free market, including rational price discovery and a quality of service tailored to fit demand. Despite their short history, DROs already offer a wide range of different pricing options and services catering to different clienteles, from transnational corporate giants to Internet based small claims court.4 A. State courts are economically inefficient because they are monopolistic, causing prices to rise and service quality to fall. Economists have warned against the effects of monopoly on markets for centuries. They observe that wherever monopoly exists the quality of a service falls while the price of a service increases.5 The monopolist has incentive to supply less than it would supply in a free market because it is easier and more profitable to charge a higher price for less service. It is also has no incentive to provide better service since customers have no alternative and must accept the monopoly service, regardless of quality or price or else go without the service altogether. A monopoly exists in any market for which only one agent provides a good or service. When applying economic principles, there is no difference between a service provided by private enterprise to consumers versus a service provided by government to citizens. When analyzing state courts, the government is the service provider and citizens are customers. State courts are
4

One such example of Internet based small claims court is www.judge.me, a site which advertises professional private dispute resolution of any conflict to 146 countries for $299. Featuring prominently on the website is the promise of No Legal Mumbo Jumbo, a not-too-subtle jab at the barriers inherent in the existing state court monopoly. 5 See generally Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book 1, Chapter VII (1776). 3

economically inefficient because the state has a monopoly on law. Citizens must accept whatever quality of service the government provides, regardless of price, or else go without access to courts. The inefficiency arises through a lack of incentives and a conflict of interest. There is a conflict of interest inherent in the state court paradigm which causes the quality of service in those courts to decrease. The conflict is that state courts are created to resolve disputes equitably but their economic incentive is to provide that service at the lowest cost possible. Absent competition, there is no countervailing interest in providing a high quality of service or offering low prices. As rational economic actors, the courts will always seek to minimize costs while charging the highest price possible for the lowest quality of service possible. In this context, quality of service refers to the quality of dispute resolution: a speedy and fair adjudication. Since the courts are funded through coercive taxation, a redundant term since all taxation is compulsory, its money supply is virtually guaranteed and there is no incentive to attract customers by providing quality service. State courts are also incapable of allocating resources rationally since, as a free service (at least notionally), it is required to take all cases in chronological order without bias. There is no incentive (aside from random individual integrity, where permitted) to allocate resources to the most important cases or the most eager parties. There is a rallying cry amongst conservatives to get government to act more like a business.6 But this is impossible because it ignores the fatal seed from which all government services spring: taxation. It is not possible to pretend to operate under different economic laws any more than it is possible to pretend to operate under different

See Murray N. Rothbard, Man, Economy, and State, with Power and Market, 1260-1262 (Von Nostrand, 1962) (arguing against the myth of efficient government subsidies, observing that since all government money comes from citizens, that the government is supposedly democratic, and therefore any popular government program would presumably be funded voluntarily even absent government). 4

physical laws. Like a man convinced he can fly by jumping from a cliff and flapping his arms, the faux-business government may implement business-like policies but will ultimately fail even worse than if it had accepted the reality of the situation. Note how recent attempts to lower government spending have been universally decried by the public as attacks on foundational institutions. This phenomenon is another property of the monopoly: the misplaced belief that the service would not be provided in the absence of the monopoly.7 But there is no evidence to suggest that DROs cannot fill the void in the absence of state courts, only a faith in the necessity of state courts. This inefficiency does not stop outside of the courthouse either. It infects every related service, particularly legal advocacy which currently operates as a cartel over the market. It is not monopolistic, but the government imposed barriers to entry into the legal profession cause all practitioners to charge artificially high rates to recover their cost of investment. Specifically, the barrier to entry is three years of mandatory legal education followed by a license to practice. Since all attorneys must obtain a license to practice in a state court, schools of legal education are poised to charge artificially high prices which are then passed onto that attorneys future clients in the form of high rates. This also decreases the supply of attorneys, further increasing costs. In addition, legislatures lack incentive to provide quality procedural rules or laws. Every unnecessary complexity, inconsistent procedural requirement, or unclear bit of wording results in increased training costs, higher salaries, and longer hours for legal assistants both for private firms and judicial clerks. Absent competition, there is no incentive to address these problems.

See Stefan Molyneux, Practical Anarchy, 78 (The Freedomain Library, 2008) (noting the high barrier of entering a courtroom and that, It is quite amazing that people still believe that the State somehow facilitates the resolution of disputes, given the fact that modern courts are out of the reach of all but the most wealthy and patient.) available at http://www.freedomainradio.com/free/books/FDR_5_PDF_Practical_Anarchy_Audiobook.pdf. 5

Private firms must simply charge more for legal services and courts must raise fees, lower service quality, or both. B. Dispute resolution organizations are economically efficient because they are competitive enterprises, causing prices to fall and service quality to rise. Unlike monopolies, competitive organizations are subject to market pressures which provide an entirely different set of incentives. DROs cannot compel funding from the general public (or anyone else) and must, therefore, attract customers to continue operations. In order to attract customers (litigants), a DRO must offer a competitive service at a competitive price. In a market entirely free of state intervention, this means that all DROs within that market are constantly striving to provide the highest quality of service at the lowest possible price. This competition would affect the surrounding fields in precisely the opposite way as the monopolistic effects of the state courts. The price for legal advocacy would likely fall in the absence of state mandated licensing requirements. Individual DROs might require licensing in an effort to ensure quality service, but even that licensing would be subject to market pressures based on customer demand. Simple, repetitive legal representation would likely not require much training or licensing at all, causing prices to drop for many litigants. Without mandatory education requirements, the price of legal education would likely fall, further reducing the costs of legal services because of the reduced financial barrier to entry and resulting increased supply of attorneys. DROs would be pressured to have clear and simple substantive and procedural rules, further lowering the education requirements, time commitment per case, and demand for attorneys and their assistants which would result in yet lower prices. In a free society, all substantive rules are designated by the contracting parties at the outset or by the DRO if the contract is unclear or silent. Unlike legislatures, which have numerous and often conflicting

incentives, contracting parties are incentivized to draft clear rules which leads to a speedier and more amicable resolution of conflict. Currently DROs only operate under quasi-market conditions because they are subject to government intervention. Specifically, wherever there is a risk of a party appealing or removing a DRO case to a state court, neither the DRO nor the contracting parties are able to function as rational market actors. This is two-step process which obfuscates the influence of state courts on private dispute resolution. First, the DRO adjudication becomes warped to reflect the expected outcomes of a state court because those courts adjudicate disputes based on government laws in addition to contract provisions. For example, one contracting party might have a losing case when only the contract is examined, but that party might still win in a modern DRO because there is an overriding government law which the party can appeal to in a state court. This undermines the voluntary and equitable resolution possible in the DRO. Second, contracting parties currently write their contracts to reflect the expected outcomes of state courts, even when the probable resolution is within a DRO, because the threat of appeal or removal to state court warps the outcome of DRO adjudication as just described. Thus even the presence of state courts distorts an otherwise equitable private dispute resolution process. Whenever a DRO decision is influenced by the presence of state courts, it is always a comparatively less efficient outcome than a purely private DRO decision because that outside influence includes many of the negative monopolistic effects of state courts. Specifically, litigants enjoy neither the lowest possible cost nor the speediest and most equitable possible resolution. When DRO decisions are influenced by the presence of state courts, contracting parties incur many of the same costs associated with litigating in state court. The parties must be aware of controlling case law and government regulations to prepare for the possibility of

removal to state court, which drives up the costs of legal advocacy and, therefore, the price of dispute resolution. Whenever DROs are influenced by state courts, the decisions are less comparatively less equitable because the laws and regulations were made a by a legislature with conflicting incentives. The most equitable solution between two parties can only be achieved by the mutual consent of those parties. The process is tainted whenever a third party imposes its will. As John Stuart Mill wrote about liberty, the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others.8 Mill was articulating the harm principle which holds that individuals are sovereign unto themselves and that intervention by others cannot be justified except to guarantee the personal sovereignty and to prevent physical harm to unrelated parties. No third party, be it a government, a mafia, or an individual, may rightly control the actions of another. The result of such control over dispute resolution is inequitable to the parties involved, per se. III. Moral legitimacy: State courts versus Dispute Resolution Organizations Universal morality is the only rational standard to measure human action because subjective morality is nothing more than opinion. The only universal moral principle is the NonAggression Principle, that it is immoral for a person to initiate force, or to threaten the initiation of force, in order to coerce another person, except in self-defense or in defense of others. To that end, it is immoral for government to interfere in the property interests of individuals attempting to resolve a dispute. Therefore, state courts are morally illegitimate because they are the result of involuntary institutions which use the initiation of force to coerce others into complying with their subjective values. DROs are morally legitimate because they are voluntary institutions which do not initiate force upon others.
8

John Stuart Mill, On Liberty, at 9 (1869). 8

A. Human action can only be measured through universal moral principles because subjective morality is mere opinion and the foundation of despotism of the irrational. Most people consider the moral justifications for individual actions and government policies to be foundational to the legitimacy of an action or policy. All political rhetoric is implicitly framed within ethics, from arguments over personal responsibility versus the welfare state, military aggression versus non-intervention, and, of course, taxation. In an attempt to avoid directly confronting (and possibly offending) the ethics of voters, politicians obfuscate issues by employing the following logical fallacies: emotional appeal, straw men, ad hominem, appeals to authority, and, perhaps most often, special pleading. In addition, many consider morality to be subjective, personal opinions on the way people ought to behave. Since Descartes and the Enlightenment, philosophers have repeatedly castigated subjective morality as unscientific sophistry.9 They understood that morality is, in fact, not subjective, but the result of reasoned inquiry into the realm of human action. Assume for a moment that morality is subjective, which is to say not objective. Since government justifies its policies through morality, this means that government laws, court rulings, and police actions are directed not by reason but by the passion and opinion of our rulers. But if we accept that morality is subjective, by what right do those rulers direct our actions? For example, if a law were made to say that wearing the color blue on a Tuesday is a felony, would we accept it as the rightful function of government? Or would we object that the law as arbitrary? And if we object that such a law is arbitrary, by what standard do we make that claim? That standard is universal morality.

See generally, Rene Descartes, Principles of Philosophy (1644) (arguing that truth is only discovered through doubt and reasoned inquiry). 9

Most people are familiar with universal morality because it is taught under many different names, in many different institutions. In 300 BC, Epicurus wrote, "Natural justice is a symbol or expression of usefulness, to prevent one person from harming or being harmed by another." And in 1689, John Locke argued that, Being all equal and independent, no one ought to harm another in his life, health, liberty, or possessions.10 This maxim has been incorporated into nearly every religion, school, and other social institution in Western civilization.11 Indeed, it is found at the opening of the United States Declaration of Independence which reads, in part, We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. . . That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it . . .12 These philosophers were concerned with universal ethics because, as with the natural sciences, conclusions which are not subject to scientific rigor are nothing more than opinions. They concluded that the most fundamental (and, perhaps, the only) universal ethic is the proposition that all people have an individual responsibility and sovereignty over themselves, their actions, and the results of their actions. This is both the foundation for Lockes theory of natural rights and his labor theory of property. These propositions hold that no person (or government) has the right to interfere with another persons sovereignty of body or property, except in self-defense of defense of others. Murray Rothbard titled this universal ethical position the Non-Aggression Principle (NAP). The NAP is a moral assertion that the initiation of force,
10 11

John Locke, Second Treatise on Government, Chapter II 5. See, e.g., Towards a Global Ethic: An Initial Declaration, Parliament of the Worlds Religions (Chicago, 1993) (endorsing the golden rule common to 40 of the worlds most prominent religions that We must treat others as we wish others to treat us as well as stating We take individual responsibility for all we do, reaffirming the universal principle that each person is entitled to individual sovereignty). 12 The Declaration of Independence para. 1 (U.S. 1776). 10

physical coercion to impose ones will on another, is presumptively illegitimate because it violates the personal sovereignty of others. Further proof of the NAP is imbedded with the proposition itself because the act of arguing against the NAP is a performative contradiction. In other words, if Person A rejects the NAP and asserts that it is acceptable to initiate force upon another to impose her will, Person As assertion is in contradiction with her actions. To be consistent with her argument, Person A would use force to compel acceptance of her assertion and would dispense with debate altogether. Thus to argue for the initiation of force is irrational because to argue is presumptively to value dialogue over violence. B. State courts are immoral because they settle disputes through the initiation of force, or the threat of the initiation of a force, to coerce others. The 1993 meeting of the Parliament of the Worlds Religions, a group of leaders among the worlds prominent faiths, addressed by the Dalai Lama and Cardinal Joseph Bernadin, wrote that, We shall not oppress, injure, torture, or kill other human beings, forsaking violence as a means of settling differences.13 (emphasis added). These eminent figures were speaking of all violence, including state violence; and observers have noted that state violence is greater than the cumulative violence of individuals by orders of magnitude.14 The fundamental reality of state courts is that they enforce their decisions by violating the NAP, through the initiation of force or the threat of the initiation of force.15 Litigants who do not

13 14

Towards a Global Ethic: An Initial Declaration, Parliament of the Worlds Religions (Chicago, 1993) See, e.g., Murray Rothbard, Society Without a State, The Libertarian Forum (Volume VII, No.1, January, 1975) available at http://mises.org/journals/lf/1975/1975_01.pdf (noting that, . . . no combination of private marauders can possibly begin to match the State's unremitting record of theft, confiscation, oppression, and mass murder. No collection of Mafia or private bank robbers can begin to compare with all the Hiroshimas, Dresdens, and Lidices and their analogs through the history of mankind). 15 See Stefan Molyneux, Practical Anarchy, 47 (The Freedomain Library, 2008) (remarking that, the premise that conflicts within human society are currently being resolved by governments [] is pure nonsense. Governments are agencies of force governments do not persuade, governments do not reason, governments do not motivate, 11

comply with a state courts decision are usually told to pay fines at first. But the ultimate sanction, the true enforcement mechanism of the state, is physical coercion the gun and the cage. Compliance with the will of the state is not voluntary. And so with perfect ease the government discounts the foundational principles of the Enlightenment, universal ethics, the worlds major religions, and its own Declaration of Independence, ignoring both the sovereignty of the individual and the immorality of initiating force against the peaceful. Through special pleading, the logical fallacy that an exception to a universal rule should be made, the government has successfully convinced large swaths of the population that it, alone, is morally justified in attacking the peaceful. This conclusion cannot be sustained in the face of reason. State courts operate under a performative contradictions because they assert that reason and debate should prevail in a conflict between two parties but they resort to physical coercion to compel the unwilling when a party refuses to comply with the courts ruling. This is a logical contradiction of statement versus action which casts doubt on the validity of the courts altogether. The logically consistent approach is to convince the unwilling party through reason and other non-coercive means. The last resort argument on behalf of the state courts is the so-called social contract theory, a proposition which holds that individuals have ceded their sovereignty to the state in exchange for protection of body and property. This theory is illegitimate for at least three reasons. First, the U.S. social contract is neither social nor a contract. The father of social contract theory, Jean-Jacques Rousseau, wrote, Every law the people have not ratified in person is null and void is, in fact, not a law.16 In other words, if a social contract is to be representative of society (social), the government would need the full, knowing consent of the
governments do not encourage, governments do not resolve disputes.) available at http://www.freedomainradio.com/free/books/FDR_5_PDF_Practical_Anarchy_Audiobook.pdf. 16 The Social Contract, Book III, Chapter 15: Deputies or Representatives. 12

governed. But that was never the case because the Constitution was drafted in secret, closeddoor, meetings without the consent of women, blacks, or other racial minorities, to say nothing of the Native Americans or the unborn.17 Additionally, the social contract is not even a contract by the rules set forth by the government, itself. A contract requires voluntary consent, offer and consideration. Even ignoring the secret ratification issues (offer and consideration) with the Constitution, no theory of contract law can bind unborn generations to a contract because that is not voluntary consent. A minor cannot agree to a contract, let alone an unborn child. Imagine an individual signing a contract binding in specific terms his children, his childrens children, and so on in perpetuity, then the other party attempts to enforce the terms of the contract centuries later against the heirs of the original signer. A state court would likely sanction an attorney who argued such a frivolous claim. Second, social contract theory is illegitimate because it claims that individuals have ceded power to the government; but that is impossible because personal sovereignty cannot be divested from the individual.18 A person cannot relinquish responsibility over himself or his actions by agreeing to a contract any more than a person can gain the power of flight by contract. It is a legal fiction which obscures the moral responsibility of citizens and individuals within the government. Imagine if two people signed a contract which stated that, Person A agrees to take sole responsibility for all the acts of Person B in exchange for $10,000. If Person B kills a man will a court honor that contract and punish Person A only? No. Again the state courts are engaged in the logical fallacy of special pleading because they assert that no contract can assign

17

Details of the Constitutional Convention were not made public until 1840 when Madisons notes were posthumously published. (Notes available at http://avalon.law.yale.edu/subject_menus/debcont.asp). 18 See generally, Lysander Spooner, No Treason (1867) (arguing that the government has a burden of proof to justify its existence which it does not meet because it is a logical contradiction for a free person to willingly contract not to be free (governed)). 13

personal responsibility for a violent act, but use the social contract theory to shield themselves for responsibility for their violent acts. Lastly, and briefly, it is illogical for a people to protect their persons and property by imbuing an institution with the exclusive privilege to violate persons and property. The solution to violence and theft cannot be more violence and theft. State courts, unlike DROs, are not bound by non-violent principles, concern for the personal dignity of litigants, or any other ideals which private dispute resolution must strive to meet. A DRO will fail as a business if it attacks its customers. But, whether they fulfill their promises to adjudicate speedily and fairly or not, state courts will endure because, at the end of the day, they have the guns. C. Dispute resolution organizations are morally legitimate because they do not engage in the initiation of force or the threat of the initiation of force to impose their will on others. Contrary to state courts, DROs are founded upon voluntary association of individuals. Conflicts are resolved through peaceful negotiation (or arbitration/mediation) without resorting to physical coercion or the threat of physical coercion. This distinction has profound moral significance because peaceful resolution is in accord with the NAP and Enlightenment philosophy in general. A DRO will never initiate force against a party which refuses to obey its rulings. Absent violent government interference (a redundant term as this paper has demonstrated), the DRO will use the economic measures available to it within the market. Although it is impossible to imagine how, exactly, a free society would operate, there are current examples of market-based solutions to noncompliance. For example, today a consumer who refuses to pay her credit card debt will have her credit score lowered, thereby making it more

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difficult to obtain credit in the future. In order to protect themselves, credit agencies provide those with low credit scores high interest rates and low credit limits. There is no economic or moral justification to initiate force against the debtor. The same is true of a DRO. Unlike state courts, a DRO would never think of imprisoning parties for noncompliance because: a) jailing the person effectively guarantees noncompliance since a person probably cannot comply while in jail; and, more importantly, b) the resources required to jail the person would be better spent engaging in profitable enterprise, namely dispute resolution not jailing. The extravagance of jailing the non-violent is something which only the state can endure because the costs are socialized. IV. Conclusion: The abolition of state courts and the preference of alternative dispute resolution. Economic freedom and the Non-Aggression Principle are intimately related because the former cannot exist fully without the latter, and the latter is reinforced by the former. In other words, voluntary exchange of goods and services is not possible where physical coercion is used. Similarly, physical coercion prevents the relatively more efficient and economically desirable outcomes of voluntary exchange because economic actors are unable to make decisions rationally. Thus individuals have the moral and economic incentive to engage in voluntary exchange, not physical coercion. The variety of alternative dispute resolution techniques (arbitration, meditation, negotiation, and their various hybrid forms) demonstrate the innovative ways that free people can peaceably settle their disputes. These methods are almost universally faster, less costly, and result in more equitable outcomes. Since it is faster and less costly, it expands access to justice to the less wealthy and the less patient. Critics of DROs often point unfavorably to statistics

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about the outcomes corporation versus consumer arbitration.19 There are three reasons for this apparent bias within the DROs. First, as this paper has explained, where government law is present, it will taint the results of private dispute resolution in unpredictable, irrational ways. Second, those critics do not account for the possibility that, due to costs, those complaints likely would have never seen the inside of a courtroom and, thus, even a small success rate for consumers is higher than would be possible without private resolution a net gain for consumers.20 And finally, the critics discount the probability that the increased access to justice attracts less sophisticated complaints from consumers who may, in fact, be more likely to make a claim for relief when the other party has not actually violated the contract.21 The most important aspect of private dispute resolution is that it is purely voluntary. Sometimes called mandatory arbitration for consumer contracts, this belies the voluntary nature of the contract entirely. To the authors knowledge, Verizon Wireless has never held a person hostage at gunpoint and forced her to sign a two-year service plan. Customers are expected to know the monthly price, contract length, service area, phone offerings, data limits, network compatibility, and other details of their service plan contract. Is it so impossible that we inform ourselves of our dispute resolution agreements? Is the risk of the incompetent consumer so great as to justify the coercive measures of the state? In other words, are we so helpless, even in procuring a cell phone plan, that we need government to protect us from ourselves?

19

See Amalia D. Kessler, Stuck in Arbitration, The New York Times, editorial (March 6, 2012) (citing a University of Michigan study which found that 93 percent of employment related arbitration clauses resulted in favorable outcomes for the employer and lamenting that, Congress has repeatedly failed to step in and fix this system.). 20 See Id (mentioning that For some, arbitration proves too costly to pursue, disregarding the much higher cost of pursuing legal remedies through state courts). 21 See Id (reminiscing that, Until the early 20th century, American courts often refused to enforce agreements to arbitrate, insisting that parties ought to have their day in court, implying that the 1800s was a hay day of access to justice for the poor, except of course for women, enslaved Africans, free Africans, Native Americans, non-citizens, and, in fact, the poor). 16

It may be true that some contracts contain undesirable arbitration clauses but, as with any good or service in a market, those clauses must eventually conform to consumer demand or the businesses will lose customers. Quibble as one might about the effectiveness of that incentive, the fact is that there exists no such incentive in government-based solutions. Federal courts have exactly zero incentives to encourage equitable resolutions. Without any personal incentives built into the judicial system, it is only a collective irrational faith in the competency or willingness of the courts to fulfill that promise. A society which values reason over passion, liberty over coercion, and efficiency over incompetence will ultimately abandon state courts altogether to embrace private alternative dispute resolution.

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