Black how do you suggest people settle disputes, How do people defend against other united groups with out a organized leadership, how does society function with out laws?
This is where the real difference between anarcho-"capitalists" and "socialists" exists; what does society in an anarchy look like? "Capitalists" say people can settle disputes through private and voluntary (but binding) arbitration courts or, much preferably, by simply working it out among themselves. "Socialists" prefer to rely on direct, non-binding democracy, in which individuals discuss what should be done but are not necessarily bound by the decisions made if they don't agree with them.
"Capitalists" and "Socialists" both agree that defense against outside States would exist in the form of voluntary militias. (Would
you want to invade an area full of heavily-armed, freedom-loving anarchists?) These would likely be more effective than hierarchical armies because they would be decentralized and thus couldn't be destroyed along with their leaders, because they would have a natural advantage as the defending force, and because actions by private individuals inevitably cost half or less as much as actions by governments (as explained in David Friedman's book
The Machinery of Freedom). The effectiveness of militias has been demonstrated throughout history. The best example is probably the Vietnam War, in which a small militia force in a small territory was able to turn back the massive US Military. Anarchist militias would be even more effective because of their voluntary nature (i.e., no deserters, traitors, etc.) Furthermore, anarchist militias would be a purely defensive force, and would not invade other countries because they would only be mobilized in the event of an invasion. One last advantage--militias, unlike militaries, could not be wiped out in a single nuclear blast.
As to how society functions without laws, I believe I addressed that in the first paragraph; victims of crimes would appeal to anarchist courts for restitution (not retribution or rehabilitation). If this is not enough of an explanation, I can elaborate, but now my fingers are getting tired from all this typing
.
One final note; in an anarchy, a group of individuals could decide to have anarcho-socialist or anarcho-capitalist courts, or both. People who disagreed with this decision could join a group that had decided on something else (or, for that matter, live off on their own, apart from society entirely). Thus, individual liberty would be upheld.
"That government is best, which governs not at all; and when men are prepared for it, that will be the kind of government they will have." --Henry David Thoreau