I think we can agree that this is a clear example of the frequent need of a third-party adjudicator in order to enforce honesty and reliability in transactions.
In a society, if one person or one business frequently takes advantage of others, is it not true that this person will eventually not be able to find people to transact with? There can exist third party adjudicators in a libertarian society, can't there? I would think that starting a business as an "adjudicator" would be fine if the need exists. It's when govt forces adjudication that their panties get in a bunch. -Perhaps justly in many cases.
There's a lot of social detritus from this type of behavior though. Berwick lost a lot of money, but he's a rich, established investor engaging in out of country deals. Imagine if Madoff existed within this libertarian structure--all those savings would have been withheld from the scammees for the express reason "you should have known better." There are a lot of really exploitative business practices in this world that's populated with not too many business savvy individuals. When was the last time a friend tried to sell you on a pyramid scheme? There needs to be mandated adjudication/protection because not everyone can be an expert all the time. This adjudication needs to be impartial as well, and it's my belief (not fact) that a private third party adjudication system is too open to corruption and collusion because they, and no one else, would be the party determining guilt in business transactions.In a society, if one person or one business frequently takes advantage of others, is it not true that this person will eventually not be able to find people to transact with?