A finds property missing and reports it to the insurance company IA. IA either
through another division or through another division or through a separate detective
agency (D) investigates. IA promptly replaces the object to A so that loss of use of
good is minimized.  D Now may fail to discover the missing property. In that case,
the loss to IA is covered by the premiums paid for the insurance. Note well that in
order to keep premiums low and competitive, IA has a strong incentive to maximize
retrieval of stolen or lost goods. (One could wax eloquent for volumes on the lack of
such incentive for monopoly detection systems such as State police forces, and their
horrendous social cost.)
IF D does discover the goods, say in B's possession, and B freely returns them
(perhaps induced by reward), the case is closed. Only if B claims property right in the
object also claimed by A does conflict arise.
B has insurance company IB which may perform its own independent investigation
and convince IA that D erred. Failing that, IA and IB are now in conflict. At this point,
the standard objections to market anarchy have been brought up that the "war"
between A and B has been enlarged to include large insurance companies which may
have sizeable protection divisions or contracts with protection companies (PA and
PB). But wherein lies the incentive for IA and IB to use violence and destroy not only
its competitor's assets but surely at least some of its own? They have even less
incentive in a market society long established; the companies have specialists and
capital tied up in defense. Any company investigating in offense would become highly
suspect and surely lose customers in a predominantly Libertarian society (which is
what is under discussion).
Very cheaply and profitably, IA and IB can simply pay and arbitration company to
settle the dispute, presenting their respective claims and evidence. If B has rightful
claim, IA drops the case, taking its small lose (compared to war!) and has excellent
incentive to improve its investigation. If A has rightful claim, the reverse is now true
Only at this point, when the matter has been fully contested, investigated and judged,
and still B refuses to relinquish the stolen property, would violence occur. (B may
have only been bothered so far as being notified of IB's defense on B's behalf, and B
may have chosen to ignore it; no subpoena could be issued until after conviction.) But
PB and IB step aside and B must now face a competent, efficient team of specialists in
recovery of stolen property. Even if B is near-mad in his resistance at this point, he
would probably be neutralized with minimum fuss by a market agency eager for a
good public image and more customers - including B himself some day. Above all, PA
must act so as not to invoke anyone else or harm other's property.
B or IB is now liable for restoration. This can be divided into three parts: restitution,
time preference, and apprehension.
Restitution is the return of the original good or its market equivalent. This could be
applied even to parts of the human body or the value set on one's life.
Time preference is the restitution of the time-use lose and is easily determined by the
market rate of interest which IA had to pay to immediately restore A's property.
Apprehension is the sum of the cost of investigation, detection, arbitration and
enforcement. Note how well the market works to give B a high incentive to restore
the loot quickly to minimize apprehension cost (exactly the opposite to most statist
systems) and to minimize interest accrued.