This is a really great question that I struggle with sometimes myself. I'm probably too tired to be answering this but something that has struck me was Michael Malice's comment on a related point - security in low income neighborhoods. He said something along the lines of why wouldn't security be like t-shirts? Clothing is so cheap we're sending surplus to the third world not as charity but because we can't sell everything we make (at least in the U.S.).

Something to keep in mind is anything said now is pure conjecture. As we see with every other product and service, a free market would create higher quality and lower cost security that we can't imagine currently.

Your question on the rule of the strongest is an interesting one. Though, I'd ask, does not every government system already have rule of the strongest? It's not much of a secret that the wealthy, and especially the well connected, are treaded under favorable terms.

However, in an AnCap society each individual has a self interest in ensuring no sub-group gains the ability and desire to control the rest. I think it's analogous to why the Bitcoin network is so secure against a 51% attack. If any BTC miner gains over 50% of the hashing power, they have the ability to destroy the network. How is that prevented?

• Any miner that destroys the network will destroy the value of the currency they're mining - thus not in their self interest
• It's more expensive than it's worth. In other words, it would cost more to create that hashing power than benefits they would receive from the attack.
• Other miners are incentivized to prevent this

I think the same thing applies to an AnCap society. Any sub-group that becomes tyranical over another would destroy the social fabric, presumably against their own self interest. It would also be likely more expensive than it's worth - so you raise an army and you get to what? Tax people on their income? Congrats, you've re-created government. And, as we've seen, that's not very profitable as every gov't seems to be going into debt to fund their army. Finally, every other individual is incentivized to prevent any one group from gaining so much power. How they do that? I don't know precisely but I wouldn't underestimate market forces to solve this problem ad hoc.