What do you mean no government but having courts. Courts are a type of government. For them to work you need legislation, you need a procedure to put magistrates in office and you need to fund them. That's not no government. That is government by every definition I'm aware of.
a vigorous market for watchdogs profiting from finding criminals abusing markets.
And why do you imagine this could happen. Who would have the market incentive to buy that service to make it more profitable than the abuse it's supposed to fight? Could fighting abuse be more profitable than profiting from abuse in any free market scenario? Thinking that this could work seem like nothing more than wishful thinking. Of course, I would love to be proven wrong with an explanation of how this could ever work in practice. If there is a practical way to do it, so the free market could fight abuse by just being free, I'm sure the steem blockchain could easily be the first place to put that mechanism to practice. If you can point me to such mechanism, I would gladly start promoting it with all my energy.
Crime exists without government too. Government is just the best way to commit crimes.
To me those are kind of empty platitudes... Any data to back those assertions up?