He explained this pretty well. How come most ecommerce websites have "trust badges"? The government didn't need to create an agency to rate web site security, but yet such a thing exists.

If people wanted a health inspection organization to rate restaurants it'd exist. Since the govenrment already monopolized that field it doesnt. Okay, it sort of does, it's called Yelp.

Anyways, the point is pretty clear, we have all sorts of "trust" systems on the Internet to verify everything from privacy (Truste) to security (Verisign, etc.). People can create these types of organizations on their own without government and will if they actually do something useful.