Anarchy is absence of government. Government is a territorial monopolist of law. Anarchy is therefore a free market in the production of law.
The term anarchy literally means “no rulers”. The relationship between rulers and the people they rule over is a master-slave relationship. Anarchy, then, can also be interpreted as “no slavery”.
Absence of rulers does not mean absence of rules. Rules – laws specifying property ownership – are necessary for society to function, and they can be voluntarily agreed to. The usefulness of rules creates market demand for them, as with any other good. Entrepreneurs will therefore strive to meet that demand, by establishing courts and employing judges to resolve disputes.
Driven by the profit motive, the laws produced under a free market arrangement will reflect the customs of society and the views of consumers about justice. As always under a free market arrangement, the laws will be high quality, produced efficiently and for a low price. There will also be diversity of courts available for consumers to choose from, perhaps using different legal codes.
All legal systems specify rules for property ownership. They determine who the “rightful” owner of any given property is. In the event of a dispute, a court must determine if a violation of property boundaries has taken place, and then specify a resolution. If necessary, courts will employ law enforcement to see that justice is administered. Conflicts between courts will be resolved by using a voluntarily agreed-upon third court.
An anarchist, qua anarchist, is not concerned with the content of law; only with the arrangements under which law is provided. Under an anarchic arrangement, each individual can choose the set of laws he would like to live by. No one is bound to any set of rulers, based on his territorial location, nationality, or anything else. No one is a slave.