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My headcanon is that human civilization in the Pokemon world developed much more peacefully than it did in our own. If people can command fire breathing dragons, leviathans that cause earthquakes and tsunamis, and psychic creatures that can kill with a thought, any all out warfare is guaranteed to end in utter ruin for both sides. It's the principle of Mutually Assured Destruction, but from the very beginning. People had to develop other ways to settle conflicts. Hence, Pokemon battles. Even criminals respect them. Sure, that rocket grunt could just pull a gun on you, but he'd be breaking the very rules that protect him, and your Pokemon would melt his face off.
