Reddit mentions of The Myth of National Defense: Essays on the Theory and History of Security Production

1. Outsourcing jobs has led to tremendous amounts of growth in emerging markets and drastically reduced prices for consumers in the West. But in a libertarian society, not would there be mobility of capital, there would also be mobility of labor (i.e. open borders). One of the most promsing reforms I've seen are charter cities. Paul Romer goes into more detail is his TED talk.
   
   
2. Since there would be no tariffs, no subsidies, no patents, no copyrights (more and more libertarian are against intellectual "property", no occupational licensing, no eminent domain und so weiter, in a truly freed market, corporations wouldn't be able to rent-seek. So businesses that are truly entrepreneurial and productive would flourish. I'd also predict there would be more experimentation with business structures (e.g. more co-operatives, like Mondragon).
   
   
3. There are a variety of different options to privatize defense: people could hire private defense agencies, use guerrilla warfare to resist aggressive states, or just go DIY and get a ton of guns and ammo. In addition, wars are very costly so there would be a strong incentive for parties to seek other options than invasion to mediate disputes. The Myth of National Defense goes into much more detail, in both the theory and history of alternatives to the state providing defense.

Actually, I've done some looking into this... It's the banking order more than any private military junket which contributes to this.

In fact up until Napoleon most armies were private.

In a post Napoleonic world the privatization of the military is a much needed reform IF it is paired with an abolition of legal tender laws and the monopolization of the money supply. It is central banking which allows for endless war.

http://www.amazon.com/The-Myth-National-Defense-Production/dp/0945466374