FROM FREE RIDING TO RENT SEEKING TO ANARCHY
People form governments to suppress the high transaction costs of criminal, unethical, and immoral behavior. The consequence is that all that suppressed free riding is simply converted into rent seeking by the bureaucracy. By forming governments, we trade high transaction costs that are pervasive (rampant criminal, unethical and immoral behavior) for low transaction costs that are increasingly expensive (conspiratorial, corrupt and exploitative behavior).
The question we face in advancing political theory, is how to prevent rent seeking as well as free riding.
The answer is to allow insurance companies, the common law, the courts, and a fully articulated set of property rights to do their jobs for us.
Yes, there are certain luxuries we may wish to produce as a commons. There is no reason that we cannot produce luxuries as a commons.
But we cannot produce laws. We can only allow the courts to discover them.