The video may or may not, but the classic answer is that if private protection services and private court systems exist, they will likely fall into competition, and the competition itself is not refereed. The worst case of this will be a state of war.
Er…demonstrated to your satisfaction, perhaps, but I persist in exercising my right to disagree.
Our current system of hierarchical government (nation, province/state, county, city, community) allows for consistency of laws at appropriate levels of influence. The national government handles national defense and such things as regulating the radio frequencies. States handle big water projects. Cities handle slum clean-up. etc.
A system that operates entirely at a local level will likely have problems that overlap boundaries. If Delaware limits radio broadcasts to 20KW and New Jersey permits 100KW transmissions, there is a problem. Same with water pollution. Kansas might have strict clean-water laws, but Indiana, upstream, might not, leaving Kansas to drink Indiana’s filth.
By being able to hire their own protective forces (militias or whatever) they can take the place of governments. It is the opinion of many that a stateless society will decay into the control of warlords and ganglords.
You certainly may disagree, but it is a view held by no few, and is not going to be easily rebutted.
I will certainly admit that the democratic system is no guarantee against corruption and criminality. The hell of it all is that there is no such thing as a perfect system of human self-governance.
The standard answer is to point to regions in the world where governments have broken down – parts of Sudan, parts of Afghanistan, parts of Pakistan, various areas on the Arabian peninsula, various areas in Central America – and suggest that the problems there – local warlords, violence, criminality, tribalism are the natural outcome of too little government.
I know I’m just playing P-K4, but, well, it’s an argument I happen to believe is true.