Within an interdependent trading community, in which there are some number of tool manufacturers who make and trade tools, disputes may arise.

For example, if several expanding workshops are in close vicinity, they may begin to interfere with each other. One workshop may encroach upon land used by another. Or it may restrict access to other workshops. Or it may produce waste products which have adverse effects upon production in adjacent workshops.

Such disputes may often be amicably resolved. Encroachments may be withdrawn, access routes widened, waste products stored. But where the cost of removing encroachments or widening access ways is high, the dispute may not be easily resolved. It may even degenerate into some kind of feud.

Such disputes always entail some kind of disruption or slowing of production, or some sort of decrease in idleness. A manufacturer whose land has been encroached upon may lose a place where he stores raw materials, or finished products. If access ways are blocked or narrowed, then it becomes difficult to bring materials in and out. If choking smoke from some other workshop periodically halts production in another workshop, that product is produced slowly.

In such disputes, there may be two or more immediate parties, but the rest of society may also be an interested party. After all, although the rest of society is not suffering from the encroachment or nuisance, it will very likely feel the effects indirectly in the form of shortages of useful tools, or higher prices. Thus the rest of society, of the interdependent trading system, will often have an interest in resolving such disputes. And if those in immediate dispute prove unable to resolve their differences, the rest of society may impose some resolution, by main force.

The Magistrate.

In the simplest case, a mob might descend on these workshops, and remove obstructions or encroachments, acting in favour of one party or the other, imposing a rough justice.

But if such disputes regularly arise, the rest of society cannot be expected to act en masse to impose a solution. They may not have the time on their hands to do so. Instead, where such disputes arise, society may delegate some individual to investigate the dispute, and propose a solution, which they will back by force if necessary. Thus rather than the whole society wasting time on the matter, only one individual becomes the representative of society in these disputes. If this individual comes to some judgment on the matter, and those in immediate dispute refuse to accept his decision, then the delegate can call upon the rest of society to enforce his decision.

Since disputes which harm society reduce social idleness, and the resolution of disputes increases social idleness, a delegate who can successfully resolve disputes, preferably without recourse to force, is as valuable to a society as any trader. He may be justly rewarded by society for his efforts.

If such a judge or magistrate simply comes down in favour of one side or other, without considering the details of the dispute, then the likelihood is that the party whose case is dismissed will refuse to accept the judgement, and it will be necessary for society to impose it by force. But if such a judge conducts inquiries into the nature and history of the dispute, and proposes a resolution which recognizes the case of both disputants, there is a greater likelihood that his judgment will be accepted, and that society will not be required to impose it upon them. The latter, at least as far as society is concerned, is preferable, because society does not want to be continually enforcing judgements.

In a growing society, what starts as a single individual delegated to resolve occasional disputes gradually becomes a full-time paying job. And at the same time, those delegated to enforce his judgments may also become professional bailiffs or police officers.

In this manner, civil government makes its appearance, in the form of individuals who do not make or sell any product, but who are solely concerned with the smooth operation of the trading system, and fixing anomalies that arise within it. Government officers are officials who are paid to resolve disputes, to keep the peace, and to maintain social idleness. Since they act on behalf of the whole of society, they are paid by the whole of society. If an official fails to discharge his duties, or is seen to perform them badly, then society can dismiss them and appoint others in their place, or take the matter fully into its own hands.

In this approach to government, government officials are persons delegated to perform, on behalf of society, what society would otherwise have to do itself. A effective judge or magistrate saves society the time and trouble of resolving disputes, and increases social idleness by resolving such disputes. A good judge dispenses justice speedily - he resolves disputes quickly -, and his judgements endure the test of time.

In this respect, although the magistrate produces no tangible product, he performs work in examining the case before him, and the judgement he makes increases social idleness. The cost of the magistrate is the work he does, and the value is the increased social idle time that is consequent upon his work. In this manner, a magistrate is not different from any other productive member of society, except that rather than raising social idleness he prevents it from falling. The magistrate is a kind of tradesman.

Of course, if a magistrate takes longer to resolve a dispute than the saving made through its resolution, the use of a magistrate is a net loss to society. Magistrates ought only to be used when the disturbance to society is of sufficient gravity to merit his care and attention. But if the cost of justice is too high, then disputes will not be resolved, and society will suffer.

In this discussion, the magistrate is an official delegated by society, and paid by society, to resolve disputes which damage society. The elected magistrate is explicitly enabled to call upon society to enforce his decisions. The magistrate is thus in some senses a one-man mob, in that he can call upon the people - or those who are delegated by the people to act as enforcers - to arrive en masse to force the outcome if his judgements are not complied with.