Divine Property Rights
Regarding the consistency of libertarian thought (particularly of property and justice) and conservative Biblical Christianity.
This manifesto is intended to develop a theologically-consistent and exegetically rigorous foundation for Christian libertarianism. For those unfamiliar with the concepts of libertarianism in general, see HERE. A wide range of topics from theological concepts to practical elements will be examined.
Property Rights in Genesis
The three fundamental rights of all people are Life, Liberty, and Property. More specifically, these are the negative rights against having one’s life threatened, being imprisoned or enslaved, and theft.
Much can be said for one’s rights to life and liberty. However, this section will primarily focus on property rights. More specifically, it will be examining how a Christian should take a libertarian view of property rights in the world.
“The Lord owns the earth and all it contains, the world and all who live in it. For he set its foundation upon the seas, and established it upon the ocean currents.”
— Psalm 24:1–2 (NET)
First, in order to understand where to begin with any matter of property rights, we must know to whom the property belongs. Generally speaking, the one who makes use of any given area (i.e., the one who develops the land) in the absence of any competing claim is considered the owner of said area. With such ownership comes the right to that property, and the right to protect it. Biblically, this brings us back to the beginning. Genesis 1 starts out stating, “In the beginning God created the heavens and the earth. Now the earth was without shape and empty…” The two Hebrew words (תֹ֙הוּ֙ & בֹ֔הוּ, tohu & bohu) used to describe “without shape and empty” always denote a sense of chaos and disorder when used in conjunction. The rest of Genesis 1 is the account of God taking a useless state of chaos and creating something useful from it. While I will leave the theological considerations regarding time lines and ages (as they are many and heated), it will suffice to say that this chapter, politically speaking, is God establishing his property: the entire universe.
So what are we to make of this? Are we to shift our libertarian philosophy into a form of theocratic authoritarianism and simply use the excuse, “it is God’s property, He has the right to do on it as He pleases”? I don’t think that’s a helpful concession. Indeed, God holds the ultimate right to all that He has created, but He has also given us rights as stewards.
Stewardship Over God’s Property
Genesis 1 ends with a particularly interesting text (v. 27ff). God declares that human beings are to be created in His image. This is commonly referred to as the Imago Dei (Latin: The Image of God). He then follows up by saying that all of the previous creation (Read: property), including all the animal life and the entire earth, is to be put under the authority of human kind. As such, we human beings are given the right and responsibility of being a steward. So God is the owner of all property, and He delegates that authority over all things to the final creation: that which is created in His image, mankind.
Thus, when we settle a new land, we are doing so as a steward to the owner of the property, and we maintain all the rights to the property because of that status. This principle is anything but arbitrary. It is a well-attested idea throughout Scripture. Genesis lays the groundwork, as we saw above, but a number of texts are important For the sake of brevity, we’ll examine Genesis and the Psalms.
Genesis 2:15 states, “The Lord God took the man and placed him in the orchard in Eden to care for it and to maintain it.” This directly follows the Genesis 1 text where God creates mankind to have dominion (control) over the land. Now He establishes that mankind is to care for the land. The word translated here as “maintain” (שָׁמַר, somra) is translated as “keep” in numerous other translations and in this context almost always carries the weight of protection, and generally occurs within contractual bounds (or biblically, a “covenant”).
The opening 2 chapters of Genesis give a clear picture of God as creator, and thus “owner” as well as our relationship to Him as stewards:
- God has created the world (1:1,2:4)
- We are created in God’s image (1:27)
- We are blessed (1:28a)
- We are to take charge of everything on the earth (1:28b)
- We are commanded to maintain the land (2:15)
- We are given liberty with certain restrictions (2:16)
While the Genesis account in Eden is not a teaching that we can universally apply today — the fall drastically affected the way with which we can do so — these accounts demonstrate well that being stewards of God’s property is an integral part of why we are here, and the purpose for which we were created.
“Of what importance is the human race, that you should notice them? Of what importance is mankind, that you should pay attention to them, and make them a little less than the heavenly beings? You grant mankind honor and majesty; you appoint them to rule over your creation”
— Psalm 8:4–6 (NET)
The Psalms also exemplify this principle. Psalm 24:1–2 provides a solid ground for the claim that God is the true owner of all the earth, “The Lord owns the earth and all it contains, the world and all who live in it. For he set its foundation upon the seas, and established it upon the ocean currents.” This validates God’s claim to rule over the world, at least according to the modern standard of libertarian property rights (though it should not be confused as the purpose of the text). It shows that God is the creator of the world. He established the land, so it belongs to Him. Psalm 8 echos the teaching that God is creator, and demonstrates the purpose of man as God’s steward.
We can see that the Psalms also teach what Genesis does:
- God created the world (24:1–2)
- We are created by God (24:1b)
- We are given honor and majesty (8:5b)
- We are given authority on Earth (8:6)
The question, then, naturally comes to mind: does God maintain any rights to His property?
“Give place to God’s wrath, for it is written, “Vengeance is mine, I will repay,” says the Lord. “
— Romans 12:19b (NET)
I would argue that He does. He has given a very simple list of rules for anyone to obey while on His property. We commonly call them the Decalogue, or the Ten Commandments. It’s from these laws that we can derive the Non-Aggression principle (and I would argue, the only way to do so without being arbitrary), which further serves to govern our interaction with one-another. This will lead discerning readers to then question how the Decalogue is enforced. The answer is simple: God serves as the enforcer, unless He has delegated that authority to another body. The general principle is this: “Vengeance is Mine,” says the Lord. Unless God commands otherwise, we are not to exercise force or coercion in dealing with such violations. This is where we see the distinction between “sin” and “crime”. While all crime is sinful, not all sin is criminal. For the sake of making a clear distinction, sin is defined as that which God forbids, and reserves the right to execute judgment, while a crime is that which God forbids, but delegates the right to execute judgment to another. Therefore, since the Decalogue defines sin, we must determine where the line is drawn for crime.
As His stewards, we are to obey His rules. Yet there is a distinction between earthly offenses upon which God reserves the right to enact justice, and those upon which He delegates authority to enact justice.
To understand which party is given authority to execute judgment, it is important to know the levels of authority described in Scripture. There are only four levels. In increasing order, we find the individual, the family, the Church, and God Himself (yes, there’s an intentional lack of “the government” in that list).
NOTE: Many objections are bound to be raised given the theocratic rule of the nation-state of ancient Israel. It should be sufficient to say — at least at this time — that such a system of law and order was for a specific nation at a specific time in history. In other words, I am not a theonomist; I do not affirm that the civil code of ancient Israel is a morally binding legal code to be applied universally today.
No Other Gods / No Idolatry / No Blasphemy (Commandments 1–3)
The worship or creation of false gods is not described as an act that must be punished by individuals. The same could be said for using slanderous words against, or placing something as greater importance over, God. As such, vengeance for such actions is reserved for God Himself. This means that we, individually or collectively as a family or the Church, are not to punish anyone for exercising their religion, slandering ours, or abstaining from either entirely.
Remember The Sabbath (Commandment 4)
The setting aside of a day each week for worship and the command to rest is not a commandment protected by the authority of any earthly institution. Given such silence, we should refrain from using force against our neighbors to ensure their compliance to this commandment. In fact, to do so would be both a violation of the next commandment, as well as a form of the sixth and eighth.
Honor Authority (Commandment 5)
This one is somewhat difficult to categorize, as authority is described in multiple ways in Scripture. Ultimately, all authority is God’s, and it is delegated as He chooses. In this sense, violating authority is an offense against God alone. However, as God delegates authority, He delegates certain provisions for such positions and those under the auspice of their authority. A child may disobey their parents; this is sinful, yet parents are told to exercise discipline over their children as God exercises discipline over His people (Pr. 3:11–12; 13:24). The Church is also given the “keys to the Kingdom” and told to exercise discipline by reprisal and disfellowship (Mt. 16:19; 18:15–20; 1 Cor. 5:13). However, punishment under these delegated authorities comes in the form of discipline (as correction), rather than judgment (as retribution). As such, the discipline of these sins (“corrective punishment”), while carried out by earthly authority structures, is not to be punished by the use of force. However, offenses that occur within either the family or the Church are instructed to be handled differently if the offense is something considered here as a crime (“retributive punishment”).
The concept of authority can be expounded upon further by reading through Hebrews 12.
No Adultery (Commandment 7)
Adultery, or sexual immorality more broadly, is widely condemned throughout Scripture. However, it is referred to as a particularly internal sin (Pr. 6:32; Heb. 13:4b; 1 Cor. 6:18). Thus, on an individual level, adultery is handled by God. On a familial level, adultery permits divorce (Mt. 5:32; 19:9; Lk. 16:18) as a form of separation, but not physical force. Even within the Church, we are instructed to disfellowship those in repeated sexual immorality, but not to punish with force (1 Cor. 5:11–13). Furthermore, we are directly told that judgment of adulterers is reserved for God (1 Cor 5:13; Heb. 13:4).
No Fraud (Commandment 9)
This commandment, read specifically, forbids perjury and does not necessarily serve as a blanket prohibition of lying or deception. The line is crossed when one perjures themselves. This means that if one lies under oath or knowingly engages in fraudulent behavior under contract, then they have sinned. As with each other commandment, it is appropriate to examine the biblical text to determine whether such behavior is a crime. Under the Mosaic law, perjury was only punished after examination by the priests, who acted as God’s spokesmen (Deuteronomy 19:17ff). The only clear execution of punishment for fraud outside land-bound ordinances is upon Ananias and Sapphira (Acts 5). This narrative is clear regarding the sin they committed and the punishment. They were accused of lying to God (Acts 5:4b), and their punishment was carried out by God (Acts 5:5,10). Nowhere else is perjury given a criminal sentence that would indicate the authority to punish it was delegated to any other authority.
This commandment, admittedly, is difficult to classify. My general standard has been that unless expressly told to exact judgment for sins, we recognize that God has reserved that right. While it is possible that one can covet something, but it not end up as a criminal offense (more on that below), it seems almost impossible to determine where perjury would not, of necessity, lead to a crime (as defined below). However, this would be handled by punishing those crimes, and not the precursor to the crime, namely, perjury which itself is not explicitly described as criminally actionable anywhere in Scripture (where, or course, it would apply today).
No Coveting (Commandment 10)
The sin of covetousness, like adultery, is also described as something internal. It is a precursor to almost any other sin, including those considered below as crimes. However, given its internal nature, God clearly demonstrates throughout Scripture that such sin is His to deal with. Once covetousness becomes action, however, action is to be taken by the appropriate authority, as described below.
No Murder (Commandment 6)
To kill another person is a grievous sin, but it is also a crime. We are given the delegation of authority to punish murderers directly in Genesis 9:6: “Whoever sheds human blood, by other humans must his blood be shed; for in God’s image God has made humankind.”
So those who commit murder merit a punishment of death, and this is to be carried out “by other humans.” This is wrapped up within the Noahic Covenant, which is an eternal covenant, marked by a sign — a rainbow — which will remain as long as mankind walks the Earth.
So murder is a crime, and the authority to enact judgment against this crime is delegated to the individual. This responsibility does not belong to the Church, but rather to those who are the offended party (the victim, or in their absence — as murder causes — their family).
The prohibition of murder serves as the foundation for all peoples’ right to life.
No Stealing (Commandment 8)
Theft is considered a crime that is well attested throughout Scripture. The judgment is to be enacted by those directly harmed by the theft on the individual level. While the method of justice in the case of theft is clear, there can be some debate over how exactly justice is brought to the thief. One who steals from another must pay restitution. The amount of restitution is the debate. Throughout the Mosaic Law, there’s a number of different circumstances that allow for varying payments, from 120% to 700% of the stolen amount. Outside the Mosaic Law (which is not universally binding, as stated briefly above), there are some examples of restitution being demanded. Proverbs 6:31 demands a seven-fold restitution for thievery, though one could argue that such influence was influenced by the Mosaic law. Luke 19 tells the story of Zacchaeus, where his repentance is accompanied by a four-fold restitution. Adding to the validity of this punishment (albeit self-imposed) is the fact that Jesus Christ himself approves of it, accepting Zacchaeus as making valid restitution. Had such restitution been a civil law for ancient Israel alone, Jesus would have corrected him, or at least illuminated the genuine purpose behind the law as He did all throughout His ministry recorded in the Gospels.
Thus theft is a punishable civil offense. While the amount of restitution may vary from community to community and from case to case, clear instructions are given as to how theft is to be dealt with. It is an offense which God delegates to the realm of the individual.
The prohibition of theft serves as the foundation for all peoples’ right to property
With this distinction made, one final question remains: how do we live this out practically?
God’s Law, Our Rights
While it is clear that the enforcement a number of God’s commandments is delegated to the Church, we can see that the prohibition against murder and stealing (sixth and eighth commandments, respectively) are matters over which authority has been delegated to the civil realm. This may seem an overly-narrow approach to building a civilized society, yet we can derive one’s right to life from the sixth commandment and one’s right to property from the eighth. Additionally, it can be rationally deduced that if one has the right to not be killed, and the right to not be stolen from that the freedom to maintain and protect those rights also exists; this is more commonly referred to as the right to liberty.
“O how I love your law! All day long I meditate on it.”
— Psalm 119:97 (NET)
So either explicitly stated, or rationally derived from that which is explicitly stated in Scripture are all three of the “libertarian” rights from which the political philosophy of anarchy arises: life, liberty, and property. So often Christians are accused of being legalistic with regards to how we live. Sadly, many of us are; however, for those of us who understand God’s Law properly, we understand that God’s Laws are the objective standard by which we can measure all human interaction, and from which we can establish proper boundaries in a civilized society. As such, we need not see God’s Law as oppressive, but rather the very way we can be free to live in a world without total chaos. No wonder the Psalmist proclaims, “O how I love your law! All day long I meditate on it” (Psalm 119:97).
Before I continue, I think it is necessary to reiterate a point that I have made before. The term anarchy does not mean “no law” (that’s antinomianism), it means “no ruler/authority”. An anarchist society is not one in which there are no laws, it is simply one in which no single individual has the right to aggressively control another. So the concept of laws that govern a society is not the same as a State which forcibly dictates its will upon those under its control. Ironically, the best way to save ourselves from the chaotic madness of the world that is mistakenly called “anarchy” is, in fact, anarchy.
So what laws would be present in a society built upon divine property laws?
The most obvious prohibition in the sixth commandment is murder itself, but it is not limited to just the taking of life. The case was made in the previous article that from the Noahic covenant (Genesis 9) we can derive a just punishment for murder: death. An obvious question to ask, then, is how will this be carried out? If there is no State which claims a monopoly on the use of force (an arbitrary concept to begin with), who is to be the executioner? Generally speaking, the victim of a crime is the one to whom the right of reprisal is granted, but in this case, the victim is dead. As with any other rights (such as property), this would be transferred to the next of kin by the will of the deceased. The next of kin, then, would either by themselves or the contractually-delegated power of a third-party carry out the sentence or mete out justice via contract with the perpetrator.
It should be noted that this doesn’t logically lead to a sort of Wild-Wild-West, where people are simply killing each other in the streets. If an individual were to kill my wife, I could choose to mete out justice by taking their life. However, in so doing, I could leave myself open for their next of kin to do the same to me. It would be in my best interest, then, to ensure that a objective party were involved as an arbitrator. Likely, in a stateless society, this would be a private court of some kind. If it could be proven that my case has merit, I could then proceed to mete out justice as I chose to without fear of reprisal because I would have the power of arbitration behind me, and a private court that would be willing to defend me against competing courts should the need arise (which is in their best interest to protect their reputation and ensure that they, as a private entity, can remain active). The other option would be that once I am protected by arbitration, I could then offer a contract with the perpetrator in which I surrender my claim to reprisal in exchange for something. In a free society, two individuals who choose to engage in a mutually beneficial exchange have the right to do so. While this may seem imperfect, the goal of a civilized society isn’t perfection, it is justice.
The sixth commandment also has a broader application than only that of murder. While the civil code of Ancient Israel in the Torah may not be binding upon us today, it is — at least in part — a way of describing in greater detail the application of the Decalogue. From this we can also learn that the prohibition on murder includes those sins that threaten life in addition to those that take it.
In the case of assault or battery, the victim would be entitled to compensation from the assailant for any medical treatments received as a result of the crime. This may also include additional percentage to cover lost time, travel to medical centers, salary compensation in the event the victim cannot return to their regular employment. This punishment, then, scales with the severity of the crime, and is not subject to an arbitrary code of law to determine the punishment, but rather is derived from objective data, namely cost to the victim. This also allows the crime to be punished and the victim to be made whole without the unjust taking of property from innocent individuals who have nothing to do with the act. Private arbitration and courts can easily make accurate judgments in these matters, and in the event of a conviction, they can also collect the fees from the guilty party. This is an added deterrent for committing crime, the false reporting of it, and also the dragging out of the arbitration process.
The eighth commandment is most explicitly a prohibition against theft. The way in which theft is handled is very similar to acts of violence (excluding murder). The reason for this is simple: both are matters of property rights. A person owns themselves, their body is their own property, and thus making the victim — and their property — whole again is how a criminal act is brought to justice. As such, when a person’s property is stolen from them, they are entitled to restitution. While the amount of restitution may vary based upon the property value, type, and the company investigating/arbitrating the case, the principle remains as the most just way in bringing about restoration to the victim.
The prohibition against theft applies in other areas as well, namely, contracts. When individuals enter into a mutual and consensual contract for the exchange of goods and/or services, they are obligated to fulfill their end of the contract according to the stipulations made therein. Along with the binding of a contract comes the expectation of each party to provide their goods and services. Violating the terms of a contract in this manner is implicit theft. There should be a distinction between lying and theft made here. In the previous section, we examined the prohibition on lying and found it to be a crime insofar as it is accompanied by another sin that is a crime. This is grounds for the distinction between deception and fraud. The former being sinful, the latter being both sinful and criminal as it involves the unjust taking of property. As such, contract violation, while often involving elements of deception, should only be actionable based upon objective property or personal damage. Once such an action occurs, the same methods for settling theft as mentioned above should be employed to bring about justice.
A few instances remain that can be qualified differently, as they do not fit exclusively as a violation of either the sixth or eighth commandment, but both. While their solutions tend to be the same as the crimes above (except murder) with regards to their method of justice, more can be said given the specifics of their nature.
One such case is rape. Rape is a crime in which both the victims’ right to life and right to property is violated. Since rape is an inherently violent form of assault, its disregard of the sixth commandment is clear. However, rape also violates one’s property. As stated above, we are the owners of our bodies, and to assault another’s body is to damage or destroy their property and violate the eighth commandment. Therefore, if someone commits rape, they are justly held liable to both the damages paid in restitution of the violent act, as well as the property damage of the victim’s body.
A number of special considerations must be made for the case of rape, and this article is by no means to be an exhaustive treatment — but rather an introduction of — these principles. The rape victim, I suspect, would be entitled to the highest amount of restitution relative to other crimes. In addition to medical bills and work absence (as mentioned in the section on assault), one would expect that therapy and other treatments to allow the victim to cope would also be covered by restitution payments. Given the nature of what rape is, ensuring that the victim be made whole again is likely to be a much longer, and for the assailant, a much more expensive process.
The final consideration for this article is the matter of kidnapping. Kidnapping is often violent, although some examples exist of kidnapping based off of non-violent methods (trickery being a prime example). It also disregards a person’s right to do with their body as they choose. Kidnapping is essentially slavery, which makes it a combination of violence and property damage (to use strictly legal terminology). The victim of kidnapping would likely be entitled to similar restitution as a rape victim, though to a different degree. This restitution would include making the victim whole by way of medical treatment, counseling, paying for services to the family (reimbursement of security service fees or private investigators, etc).
While none of these solutions are perfect, we must remember that justice is seeking the best resolution possible, not a perfect one. The solutions mentioned in this article reflect a societal order that is not governed by a State which holds a monopoly on justice services, is free of coercive taxation to fund the services that exist to mete out justice, does not overreach, punishing only that which is a legitimate violation of one’s rights, and principally, is based upon God’s revealed will for His people.
Even if one were to accept the principles discussed in this article, then further pragmatic concerns remain. If people are completely free of rulers, and if the State doesn’t exist, how exactly can these laws — regardless of how just they are — be enforced at a satisfactory level?
Before examining this question, allow us to dispose of a common accusation that arises at this point in the discussion.
Is Anarchy A Fantasy?
Many claim that an anarchist society simply would not work because of human nature. Anarchy, they say, would work well if people were perfectly moral on their own, but we’re not. It’s a fantasy to assume that we can live without government. It is remarkable how many people will apply this logic to systems of government they do not like, but gleefully pass by this objection when it faces their favorite golden calf. The simple problem any form of centralized government has is people (the same problem anarchy supposedly cannot overcome). If people are evil, then what assumes that they should become more benevolent when given massive power of the rights of others? Socialism and Communism are the most susceptible to the problem of human nature. In a society where “to each according to his ability to each according to their needs” is the governing mantra, those who have great ability will eventually find a more beneficial place to live. With such a vacuum of genuine producers, such societies collapse. We see it over and over (cold war USSR, Cuba, Venezuela). However, even the minarchist has this problem. For those who believe that a government should exist only to protect its people’s right to life, liberty, and property, they still must form a government under a system of rules designed to protect the people from the government (like the Constitution in the United States). If the government exists to protect our rights from one another, why does anything need to exist to protect us from the government? The answer is simple: people. More specifically, people with power.
Far from fantasy, Anarchism has been practiced for most of human history. Here are some historical examples of successful societies existing without government. northernkingdom.net
The only form of government that doesn’t expect people to be better than they really are is anarchy (and more specifically, market anarchism). The principles of self-ownership are basic to all people. Children understand non-aggression. Even the concepts of free markets rely on people’s self-interest instead of altruism. This doesn’t speak ill of the system, it just means that it is realistic and more congruent with reality. If people are selfish and cruel, the best system of governing is obviously one that uses those character traits rather than assumes that people will act against their nature. It should also be noted that it can be difficult to think of concepts that do not involve violence. The reason an anarchist society seems like a fantasy or other-worldly is because it is other-worldly. Our current world exists in such a saturation of statism that in order to escape it, one must travel into the past, or far into a hypothetical future to even begin to think about ordering a society in such a way.
In short, a government can only be as good and righteous as those who made it. Given that government positions naturally come with a measure of power — and since power nearly always corrupts people — it is easy to see why corruption follows a system of people given usurped power, who arbitrarily declare themselves as the only legitimate use of force, and use that force to extort their people to fund their agenda.
In a world without the State, people behave differently. This isn’t a hypothesis, it’s a fact. History shows us over and over that when people have less government, and more control over their lives, crime decreases and the economy improves. Such circumstances make crime less necessary. Though, even in a completely free society, some crimes are bound to happen (we are human, after all). Here is how those crimes would be resolved.
In general, most individuals will want to be free of the obligations of their debts to others. Since restitution is the foundation of a justice system in a free society, it is important to have an efficient way to collect restitution from offenders. This can be done in a number of ways.
For petty crimes, or if the offender has enough wealth, a simple payment to the victim is the easiest way to ensure restitution is paid. This may appeal to someone who doesn’t want to deal with the hassle of legal arbitration or insurance companies, and would rather make one bulk payment and move on with their life. Obviously, for certain crimes (such as rape), this cost is nearly impossible to gauge in a time frame that would make this method possible, but it does remain an option should both parties agree.
In such cases where a simple transaction cannot occur, a legal arbiter will establish a payment plan agreed upon by both parties. Such arbiters will collect their fees in a manner in which the free market dictates; some will likely offer various incentives combined with payments coming either out of the restitution payment to the victim or on top of it coming from the offender. Regardless, only those to whom the service is rendered will pay for arbitration. No innocent third party will be charged, no “tax” money is needed, and a contract is reached by the decision of those involved, rather than a bureaucrat.
Should the offender not be capable of paying off their debt, the option of a work camp would be available. These would be prison-like systems that would offer room-and-board for criminals and offer them various tasks and jobs that would allow them to pay off their restitution. These types of camps would work much differently from our current prison system, however. As privately-funded organizations, work camps would be accountable to investors and shareholders. They would have to compete for business, so the living conditions would need to remain adequate to attract people to work for them. Job offerings within these camps would also need to remain competitive, as those who utilize the service of work camps would do so only under mutual contract. The free market would determine the appropriate wages, and other incentives to bring in customers (or in this case, criminals). Also, these enterprises would be entirely funded by the offenders, just like legal arbiters.
These and many other systems of payment could be implemented in a stateless society as the free market dictates. Yet even with these measures, some people will simply refuse to pay. How can they be encouraged to make restitution without an agent of aggression like the State?
The backbone of enforcing restitution contracts in a free society would be reputation. This may seem strange to us, as we live in a society where reputation has been replaced by regulation, and shame has been replaced by fines. The one vestige of shame in modern culture is utilized heavily by the left of the political spectrum. If the Social Justice Warriors have discovered anything, it is that people response extremely well to shame. In the absence of government, it is reasonable to conclude that it would be even more effective.
If someone were to not pay their debts, the victim could petition the offenders neighbors. With enough outcry from the community, the offender may very well be compelled to pay. In the case of a company not paying their debts, the lost revenue from boycotts, customers avoiding business due to protest, and bad publicity are likely to be enough to keep businesses from avoiding restitution where it is due.
Also, when someone is outed as being either a criminal, or one who does not honor their contracts, it becomes increasingly difficult for them to seek out business or contracts with others. If someone is considered a high-risk party, they would be liable to having their contracts insured by a third party or would have less bargaining power in the first place due to their poor reputation. In a free society, people would be able to freely choose those with whom they associate, and thus a person of terrible reputation would not have a government agency or slavery-creating regulation to force others to engage in trade with them.
Along with shame, those who avoid paying restitution may find themselves under scrutiny from the arbiters through whom their restitution is being paid. Arbiters would have a vested interest in maintaining payments from offenders, as they receive a piece of the money coming in from the offender. Having the weight of business behind them, arbiters could approach the offender’s employer and encourage them to either sign a contract of wage garnishing with the employee, or fire the employee should the situation merit it. Businesses are just as liable to shame if they keep in their employ criminals who do not pay their debts. And again, without government regulation in place, the company’s freedom of association would allow them to easily fire an employee who would otherwise bring bad press to the company. If the offender continues to refuse at that point, they could either resort to a work camp as described above, or they could face an even more extreme form of shame.
While it would be immoral to force someone into a work camp (that’s kidnapping), it is perfectly within their right to refuse association or business with them. Therefore, if an individual were seen as so shameful for avoiding their debts, the companies with which the offender associates could cease doing business with them. Utility companies could shut off water, sewage, electricity, heating, gas, trash removal, etc. In a free society, all property would be privately owned, which means if it came down to it, the owners of the property surrounding the offender could protect their property rights by preventing the offender from traveling outside their own property. This would be an extreme case, as doing so would leave the offenders neighbors open to shame themselves, but if necessary could be done completely within their rights.
This would leave the offender without the capability of leaving their home without incurring more debt for property violations to their neighbors. Should they remain in their home, they could theoretically have food and water to last them for a set amount of time. But even if they were to have 5 years of food and water saved up, this essentially makes them a prisoner for 5 years under house arrest. This can be done for egregious crimes and belligerent offenders all without tax money or state-funded prison systems.
Finally, should an individual not be capable of staying in their own home, they could flee, leaving behind their possessions, or they could arrange safe passage off their property under the condition of never returning. Either way, those who would refuse to pay their debts would be removed from society in a moral manner.
One could easily argue that this doesn’t ensure perfect justice. Indeed, they would be correct. No system does. If we allow for a State to do violence against people who do not pay debts, then we have already lost the battle for a moral way to operate a civilized society. An anarchist society, at least, does not have at its very core the immoral use of violence centered in one entity. However, as time passes, and as one sees the severity of what crime can lead to, it is reasonable to see that a society would become organically less violent, and less criminal.