> If, by hypothesis, the vast majority of people—although they have different conceptions of justice—can all agree that it is wrong to use violence to settle their honest disputes, then market forces would lead to peace among the private police agencies.
This is pretty much even sillier hypothesis than "if people agree to work together towards common good, through the forces of cooperation, they would achieve prosperity greater than it's possible in any competitive capitalist system" and that one was tried and proven false.
People agreeing that the violence is not the right way to resolve disputes? Author must somehow missed all of history right untill yesterday and have no friends or at least only friends without neighbours.