Regalian powers have always been the object of discussion of economists…
But, unlike what Friedman says, everything can in fact be privatized very easily.
A man acting in private as judge, would be, according to exterior eyes, the most sensible to corruption. Yet he is a plain economic agent in a market with the intent to keep his reputation high ; a market with competition and risk that corruption becomes public and taints hims forever… The cost can be levied on the loser proportionally to the work needed, which is of course an incentive for friendly arrangement. Of course the reputation of a judge in terms of costs plays and is an incentive for the judge to be more cost-efficient. Competition discourages judge attempts at over-billing and public media pressure obviously ensures a minimal level of service (a professional judge has a reputation to care for). In addition, for when an agreement on a judge is not possible, the choice of the plaintiff should prevail.
Policing can be ensured by private companies. You can just pay for a protection service and use a magnetic & satellite badge the police service you contract with uses to recognize you. People without a contract don’t get protected. Local services can get into networks to allow you to travel while getting into the umbrella of another company part of the same network, allowing for scale economies. (Of course gun rights also contribute to reducing costs here)
The same goes for lighthouses regarding boats : just have a remote control… some boats may attempt to use the light of other boats but someday they’ll arrive alone and might be at risk of sinking – also, which insurance policy would agree to insure a boat that has no remote controls for the lighthouses on its path ?
For jails it is simple to imagine a charity system as all citizens have an incentive at having good prisons. Same for nuclear defense.
The notion of “discrimination” does not make sense. Discrimination is perfectly legitimate. You will lose money and sanction yourself if you discriminate, that’s enough. (I am thinking of shops that would like to put a sign “people of **** origin forbidden”)
It may lead to boycott from other groups of people – they are right to do it if they want. Nobody compels them to buy stuff in that shop. If all shops in a village are owned by people not willing to have 90% of the population of that village shopping there, outsiders will have all incentive to come there and open a tolerant shop. But the right of shop owners to discriminate should not be treaded on. We have Internet networks : if people feel there is too much discrimination the information will circulate and competitors may come quite quickly.
For currency I suggest to use stocks, like bonds, shares, sliced into little pieces, as a tool for trading better than any current currency, even crypto, for it has intrinsic value based on the value of the company (and so fits with Mises’ regression theorem… of course). For this to happen the assets used should retain the rights associated, in proportion with the size of the slice. For a share for instance this would again obviously mean that no company has any interest in overflooding the markets. Gold can be used as a complement for trading, and to value stocks in the market place as a common denominator (without the need for gold to be actually present for transactions to happen, just as a guarantee that anybody coming with the amount of gold is legitimate in buying a share or bond at that price). With blockchain, smartphones, anybody can trade any amount and really exchange slices of assets from phone to phone, paying for instance a piece of bread with 1/1000th of a Google stock. No more bubbles.