Legal System Entrepreneurship vs. State Budget Woes

Time for some legal system entrepreneurship - move the prototypes along the development pipeline so we can quickly bring 'product' to market when demand soars!


That was my first thought when I saw this post by John Robb:

JOURNAL: Legal Decay in a Soviet Style Collapse

Here's a question I got recently:  What happens to the legal system when the US suffers a Soviet style collapse?  Answer:  It will rapidly decay.  

Here's a simple formula for this (it works for both legal systems and government bureaucracies):

Low legitimacy + slashed operating budgets = rampant corruption

Regardless of any decay in the legal system, business will still be conducted.  Small disputes will be resolved through the existing system, with graft tipping the scales or speeding the outcome.  Large disputes involving substantial wealth transfer will be something else entirely.  These disputes will be resolved through the ability of one party or the other to apply the threat of (or actual) violence to the negotiation process.  

These pressures won't only be the result of counterparties that have access or control the large mafias/gangs/militias (or corporate militaries) that will spring up during economic collapse (far larger than we've seen the US to date).  Threats will also be mounted by government/defense/security officials that use their government sanctioned command of violence (police, SWAT, military units, etc.) as a means to personal enrichment.