Okay, I saw the Youtube explanation of ZAP and read the wikipedia article of the reasonable man. A few things come to mind:
If there is nothing else in place, I see no reason why this system wouldn't work for a while in relative isolation, then begin to break down along the same lines as almost any other system of government. The potential for corruption in Cererean society is as great, if not more so, than anything else.
First, this is not a "system of government" so there is no reason to assume it would "break down" (whatever that means in this context) like a government. On the issue of corruption, you are dead wrong. Only in systems where the system of dispute resolution has the power to initiate force to enforce its rulings is institutional corruption a serious problem.
Let me explain. It seems that the system of the "reasonable man" is being substituted for written law. As long as a society overwhelmingly consists of "reasonable men" and "reasonable women" who hold the same concept of what is reasonable, then all is well and good, but without something more than that, the same forces that transformed America into something the founding fathers would recoil in horror from, would, I believe, affect Cererean society in much the same way. Corrupt people would eventually figure out how to game the system.
Here's your problem. You think the concept of the "reasonable person" is some sort of popularity contest. The "reasonable person" is a word of art in the common law. Suffice it to say, it doesn't mean what you appear to think it means. It doesn't even require reasonable people to apply it (though it helps).
Even if your interpretation were true, I think most people adhere to beliefs are are in the main "reasonable." Edge cases may make resolution a bit more difficult, but as long as the guiding principles are self-ownership and the ZAP, the actions of the "reasonable person" are relatively easy to deduce. Even people who do not think the ZAP is a good idea, could probably apply it correctly, if asked to. (The EFT Peanut Gallery of Ignoramuses to the contrary, notwithstanding. You know who they are.)
To say that Cererean society has no government is, I believe, a fiction. The government consists of the arbiters, who have final control. In some ways they're similar to roving judges of the old West, except perhaps they are more powerful, with less oversight.
I don't think you have been paying attention in this regard. What "control" and "power" do you think arbiters have beyond moral suasion and the respect of the community? The loser in an arbitration always has the power to disregard the arbiter's ruling. Not a good idea, but an option. However the winning party who is thereby stiffed, still can use force against the loser. Said loser would clearly be estopped from seeking arbitration himself.
Once people figure out that they can create some dispute and then bribe the arbiter to take their side, corruption has taken over. The system fails.
Then by your own standards, the system of state-run dispute resolution has failed, because judges can also be bribed. The problem with your theory is that you do not seem to realize that (a) arbitration is a business that relies on the incorruptibility of the arbiter, and (b) unlike judges, the choice of an arbiter has to be mutually agreed to. Arbitration is not some crazy science fiction idea I thought up in a drug-induced reverie. It is a form of dispute resolution that has existed from time immemorial. It works; that is why people use it. If you would like to know
how it works, a good place to start learning would be here:
http://www.adr.org/Once a group of arbiters decide that society would be best served by obeying some higher set of rules to benefit the greatest number...
With no political power (i.e., force), nor bar to entry into the arbitration business, pray tell how this could possibly happen? You are on the slippery slope of the infinitely recursive, progressively sillier, "yeah, but what if...?" DO-loop. If nothing else, at least set a counter with an escape exit.
... Every decision an arbiter makes sets a precedent.
Nonsense. Not even lower court rulings set precedents in Anglo-American jurisprudence. (Only appellate court rulings set precedents.) To the extent that previous decisions might help decide current disputes, the could be persuasive, but not dispositive nor binding. Even if considered dispositive, they can always be distinguished. And if not that, the arbiters may always act in equity.
These problems you think exist in arbitration or the common law have all been solved decades, centuries or even millennia ago.
There is nothing to stop arbiters from compassionate rulings. A man is executed in the Belt. His offspring are too young to be adults, but no one wants to adopt them except a member of NAMBLA...
Who are the parties to this special pleading scenario? Who asked for arbitration? Did NAMBLA take the children? Did a relative, friend or neighbor? Your scenario makes no sense as postulated. It doesn't seem like an arbitration situation at all. Their might be ZAP aspects, but you apparently have not thought about them. Tell me why this post belongs in a ZAP thread. I just don't see it.
Like Thomas Paine and others have said, government is a necessary evil.
Well, they were half right and I applaud them for that. Such an insight was very radical thinking for that era. But GIGO. Yes, they tried to limit the powers of the federal government and started losing ground almost immediately after that. I has all been down hill since then. Nice try, but their assumption that a state was necessary corrupted all of their efforts a short couple of centuries. Their efforts, as noble as they were, failed.