Libertarian Evolution

Tyler's opinion on water rights and law unfortunately confirms my opinion on The Libertarian Transition: it will have the same difficulty as Evolution Theorists: how do you get to a flying animal from one that does not? Wing stubs?*

How do you get to a free market with well-defined property rights and functional institutions from one with ill-defined property rights and dysfunctional institutions (or one big dysfunctional institution) without the legal equivalent of wing stubs? I don't think you can, so the question then becomes - what does a property law wing stub look like? And how do you prevent the little guy from getting screwed (worse than he already is right now, that is) in the process?

* I can hear Joe Pesci screaming at the guy about being a fast grit cook: "Are you kiddin' me? Is that all you got?"