What should the role of government be in a free market economy?

[RonPaulGetsIt]

As we live through a truly historic period of time it is useful to reflect on the necessary requirements for a robust capitalist economy. The series of boom/bust cycles created by the Federal Reserve has been getting larger and more extreme with each repetition of the cycle. The last two busts of the dot-com and housing bubbles have been particularly dramatic. In each case, the malinvestments from the previous cycle are not allowed to be purged from the market, thus preventing the economy from having the solid foundation necessary for a real lasting period of prosperity. Instead the government steps in with fiscal stimulus and the Federal Reserve steps in with monetary stimulus. This rewards the politically connected and powerful at the expense of the rest of us. This is not free market capitalism.

It is doomed to end badly and when it does we need to be prepared to thrust ourselves into the intellectual debate about how to best structure a society and its economy.

So what is a free market economy? Simply put it is one where people voluntarily exchange goods and services without government coercion.
Continued here: (http://www.freemarketfan.com/2010/10/what-should-role-of-government-be-in.html)

[low preference guy]

protect life, liberty, and property.

[mport1]

If government exists, freedom does not. Governments and free markets are incompatible because government must infringe on property rights to exist.

[freshjiva]

protect life, liberty, and property.

+1

[heavenlyboy34]

If government exists, freedom does not. Governments and free markets are incompatible because government must infringe on property rights to exist.
You have given out too much Reputation in the last 24 hours, try again later.

Sorry, IOU a +rep

[CCTelander]

Government has no legitimate role in a free market economy. You can't have freedom and government together.

[harikaried]

Are people really saying there should be no government at all for a free market? No government to enforce private property rights? No judges to dispute contracts?

[goldencane]

I believe government does have a role in a free market economy, albeit very small. Government needs to be there to enforce "real" crimes such as murder, assault, or theft. If everyone just has there own private security or restitution firms, it just sets the stage up for slavery. If one person was the victim of a $1000 theft and his people feel the thief deserves a life locked up for that, who is to keep the two sides going into a mini-war? While the private sector could take care of somethings regarding life, liberty, and property, there are some things a government is needed for.

[Vessol]

Are people really saying there should be no government at all for a free market? No government to enforce private property rights? No judges to dispute contracts?

How does a government protect private property rights, when it has to forcefully take private property in order to exist in the first place? Sounds kinda like a contradiction to me.

Why can't the market provide services such as property protection and resolution services for disputed contracts? I'd imagine if you had competition in this market, instead of a monopoly as we have now, you'd have a much more effective and cheaper service.

Also I don't think OP was talking about the role of government in general, but rather in the market. I, and I hope others here(even the minarchists), are completely for a laizze faire market.


I believe government does have a role in a free market economy, albeit very small. Government needs to be there to enforce "real" crimes such as murder, assault, or theft. If everyone just has there own private security or restitution firms, it just sets the stage up for slavery. If one person was the victim of a $1000 theft and his people feel the thief deserves a life locked up for that, who is to keep the two sides going into a mini-war? While the private sector could take care of somethings regarding life, liberty, and property, there are some things a government is needed for.

What happens if a man doesn't pay his taxes? If the government doesn't go after him, then more and more people will not pay their taxes and the governments income goes away. Wouldn't they have to arrest the man for not paying taxes..

..isn't kind of setting the stage for slavery?

So you need to set up a system that prevents slavery.. by using slavery(through imprisoning those who don't pay taxes)...

[Conza88]

Are people really saying there should be no government at all for a free market? No government to enforce private property rights? No judges to dispute contracts?

Ron Paul and Private Courts (http://www.ronpaulforums.com/showthread.php?308268-Ron-Paul-and-Private-Courts). :) Call it self-government if you so please.


“Property does not exist because there are laws, but laws exist because there is property.” ~ Frédéric Bastiat, The Law

How do you define 'government'? Why not a freemarket in defence? Is it not a good like every other?


Daily Bell (http://www.thedailybell.com/1936/Anthony-Wile-with-Dr-Hans-Hermann-Hoppe-on-the-Impracticality-of-One-World-Government-and-Western-style-Democracy.html): How would law and order be provided in this society? How would your ideal justice system work?

Dr. Hans-Hermann Hoppe: In a private law society the production of law and order - of security - would be undertaken by freely financed individuals and agencies competing for a voluntarily paying (or not-paying) clientele - just as the production of all other goods and services. How this system would work can be best understood in contrast to the workings of the present, all-too-familiar statist system. If one wanted to summarize in one word the decisive difference - and advantage - of a competitive security industry as compared to the current statist practice, it would be: contract.

The state operates in a legal vacuum. There exists no contract between the state and its citizens. It is not contractually fixed, what is actually owned by whom, and what, accordingly, is to be protected. It is not fixed, what service the state is to provide, what is to happen if the state fails in its duty, nor what the price is that the "customer" of such "service" must pay. Rather, the state unilaterally fixes the rules of the game and can change them, per legislation, during the game. Obviously, such behavior is inconceivable for freely financed security providers. Just imagine a security provider, whether police, insurer or arbitrator, whose offer consisted in something like this: I will not contractually guarantee you anything. I will not tell you what I oblige myself to do if, according to your opinion, I do not fulfill my service to you - but in any case, I reserve the right to unilaterally determine the price that you must pay me for such undefined service. Any such security provider would immediately disappear from the market due to a complete lack of customers.

Each private, freely financed security producer must instead offer its prospective clients a contract. And these contracts must, in order to appear acceptable to voluntarily paying consumers, contain clear property descriptions as well as clearly defined mutual services and obligations. Each party to a contract, for the duration or until the fulfillment of the contract, would be bound by its terms and conditions; and every change of terms or conditions would require the unanimous consent of all parties concerned.

Specifically, in order to appear acceptable to security buyers, these contracts must contain provisions about what will be done in the case of a conflict or dispute between the protector or insurer and his own protected or insured clients as well as in the case of a conflict between different protectors or insurers and their respective clients. And in this regard only one mutually agreeable solution exists: in these cases the conflicting parties contractually agree to arbitration by a mutually trusted but independent third party. And as for this third party: it, too, is freely financed and stands in competition with other arbitrators or arbitration agencies. Its clients, i.e., the insurers and the insured, expect of it, that it come up with a verdict that is recognized as fair and just by all sides. Only arbitrators capable of forming such judgments will succeed in the arbitration market. Arbitrators incapable of this and viewed as biased or partial will disappear from the market.

^ Ron Paul recommends you read the above authors book.. called Democracy: The God that Failed.
He also recommends you read: Lysander Spooners, Let's Abolish Government.

Where? In the democracy section of his latest book; Liberty Defined. :cool:

[Acala]

If government exists, freedom does not. Governments and free markets are incompatible because government must infringe on property rights to exist.

Not true. People can consent to government. If each individual in a community agrees to be governed in a specific way, and at all times has the right to withdraw, then you have government that is compatible with freedom and does not infringe on property rights. Non-coercive government can exist where the right to universal individual secession is honored.

[fisharmor]

You have given out too much Reputation in the last 24 hours, try again later.

I got him for ya.


Are people really saying there should be no government at all for a free market?

No, I think there is a terminology barrier. See below.


Not true. People can consent to government. If each individual in a community agrees to be governed in a specific way, and at all times has the right to withdraw, then you have government that is compatible with freedom and does not infringe on property rights. Non-coercive government can exist where the right to universal individual secession is honored.

Yes, but when we say "government" we probably don't mean "the state". It's an unfortunate confusion that I think we need to work on.
Sure, the market absolutely does have "government". Examples abound.
Fair Isaac (http://en.wikipedia.org/wiki/Fair_Isaac), Experian (http://en.wikipedia.org/wiki/Experian), Equifax (http://en.wikipedia.org/wiki/Equifax), Transunion (http://en.wikipedia.org/wiki/Transunion). The Better Business Bureau (http://en.wikipedia.org/wiki/Better_business_bureau). ANSI (http://en.wikipedia.org/wiki/ANSI). National Fire Protection Association (http://en.wikipedia.org/wiki/National_Fire_Protection_Association). Free Software Foundation (http://en.wikipedia.org/wiki/Free_Software_Foundation). Public Citizen. (http://en.wikipedia.org/wiki/Public_Citizen) Underwriters Laboratories (http://en.wikipedia.org/wiki/Underwriters_Laboratories).

These are all "government" of the market. In short, the market governs itself.
And it does it pretty well. I'm fond of pointing out that in the overwhelming majority of localities in this country, the "official" electrical code for building is verbatim what the National Fire Protection Association produces voluntarily. The state isn't even doing its homework there: it's just slapping a law on what the market is producing.

The state is what we're discussing, not "government". It's important for us to point out every time, until it sinks in, that none of us is really in favor of ungoverned pandemonium.


To answer the question as I believe it was intended, none. No state interference.
""One who is faithful in a very little is also faithful in much, and one who is dishonest in a very little is also dishonest in much." -Jesus

Whether or not you believe in the rest of what he said, this makes a lot of sense. And the state has already been dishonest in much, so I have little reason to believe it will be faithful.
The market is generally faithful with what little it has anymore. There were bad apples a century ago, sure. And a lot of the organizations I listed spawned at that time to deal with those bad apples.

We've got an entity which is dishonest as a rule, who has total control over everything, and people want to give it more. And we have an entity which is honest with what it has, and makes attempts to prune the dishonest.
I'm really not sure why more people don't see this. It's blatant.

[Conza88]

Not true. People can consent to government. If each individual in a community agrees to be governed in a specific way, and at all times has the right to withdraw, then you have government that is compatible with freedom and does not infringe on property rights. Non-coercive government can exist where the right to universal individual secession is honored.

"Acquiescence (http://economics.org.au/2010/07/acquiescence/) is the most consequentially neglected word in political science. Alone it establishes that tax is theft and government criminal by giving a name for something that is between consent and confrontation.

The concept of acquiescence, and even the word, is often lumped incorrectly with consent, thereby confusing submission in the face of overwhelming force with consent chosen freely. For example, if people evade tax, they face imprisonment and further extortion. So the payment of tax no more proves consent than the payment of a ransom transforms kidnapping into mere babysitting.

This is not to say that everyone who lives under government would rise up against it if they could. Rather, it is to point out that acquiescing to government is no evidence of consent. So defenders of government cannot point to widespread acquiescence as evidence of consent. They must get written, signed and witnessed contracts if they want to say they are legitimate. And such an institution, with written, signed and witnessed contracts, would resemble a free market entity, not government."

[mczerone]

Are people really saying there should be no government at all for a free market? No government to enforce private property rights? No judges to dispute contracts?

No Farm Bureau to dole out Food?!? Won't we all starve, comrade?!?

No one suggests that there should be no one enforcing private property rights, only that voluntary associations can do it better than monopoly govts. Similarly for courts/Judges. Wouldn't you rather have "bills" than "taxes" for service in all areas?

[Wesker1982]

Not true. People can consent to government. If each individual in a community agrees to be governed in a specific way, and at all times has the right to withdraw, then you have government that is compatible with freedom and does not infringe on property rights. Non-coercive government can exist where the right to universal individual secession is honored.

The distinction is important: http://www.ronpaulforums.com/entry.php?352-Anarchy-Government-and-the-State

[TruckinMike]

//

[Conza88]

How about letting those who use the courts, pay for the courts(and parks, roads, schools, etc). - And still have a government.

TMike

Do you mean let them contract with a service that is voluntary, where there is no monopoly and a myriad of competitors on the free market? That kind of "government"? Which is the exact opposite of what we call government/state today...

[Acala]

"Acquiescence (http://economics.org.au/2010/07/acquiescence/) is the most consequentially neglected word in political science. Alone it establishes that tax is theft and government criminal by giving a name for something that is between consent and confrontation.

The concept of acquiescence, and even the word, is often lumped incorrectly with consent, thereby confusing submission in the face of overwhelming force with consent chosen freely. For example, if people evade tax, they face imprisonment and further extortion. So the payment of tax no more proves consent than the payment of a ransom transforms kidnapping into mere babysitting.

This is not to say that everyone who lives under government would rise up against it if they could. Rather, it is to point out that acquiescing to government is no evidence of consent. So defenders of government cannot point to widespread acquiescence as evidence of consent. They must get written, signed and witnessed contracts if they want to say they are legitimate. And such an institution, with written, signed and witnessed contracts, would resemble a free market entity, not government."

I don't believe I said anything about acquiescence in the face of threatened force to be consent. It isn't.

I am not talking about some watered down ersatz excuse for "consent" - like our majority-rules thugocracy. I'm talking about each individual deciding whether or not they wish to subject themselves to the benefits and burdens of being under the jurisdiction of a particular government and having their choice to not be part of it honored.

[Conza88]

I don't believe I said anything about acquiescence in the face of threatened force to be consent. It isn't.

I am not talking about some watered down ersatz excuse for "consent" - like our majority-rules thugocracy. I'm talking about each individual deciding whether or not they wish to subject themselves to the benefits and burdens of being under the jurisdiction of a particular government and having their choice to not be part of it honored.

Do you not see the part that is underlined? :confused:

[TheBlackPeterSchiff]

Protect private property, enforce contracts.

[Acala]

Do you not see the part that is underlined? :confused:

I didn't understand what you meant to say with that quote. But it seems that most of us are in agreement except for definitions. I think government TRULY by consent of the governed will look like free people arranging their affairs peacefully. Call it what you want.

[Conza88]

I didn't understand what you meant to say with that quote. But it seems that most of us are in agreement except for definitions. I think government TRULY by consent of the governed will look like free people arranging their affairs peacefully. Call it what you want.

"They must get written, signed and witnessed contracts if they want to say they are legitimate. And such an institution, with written, signed and witnessed contracts, would resemble a free market entity, not government."

Yes, call it what you want. But understand that what you are calling 'government' resembles nothing like what currently exists and is referred to as "government". It is not a difference of degree, but of kind!

So call it 'self-government'... or voluntarism / anarcho-capitalism / private law society etc.. because that is what you are advocating, just like Ron Paul.

Think of it like this... he often frames things like this - when journalists accuse him of being against all regulation... he denies it; because he is in favour of regulation by the market. Which it does! :)

[Acala]

"They must get written, signed and witnessed contracts if they want to say they are legitimate. And such an institution, with written, signed and witnessed contracts, would resemble a free market entity, not government."

Yes, call it what you want. But understand that what you are calling 'government' resembles nothing like what currently exists and is referred to as "government". It is not a difference of degree, but of kind!

So call it 'self-government'... or voluntarism / anarcho-capitalism / private law society etc.. because that is what you are advocating, just like Ron Paul.

Think of it like this... he often frames things like this - when journalists accuse him of being against all regulation... he denies it; because he is in favour of regulation by the market. Which it does! :)

Government is a big word. I govern myself. I govern my property. I sit on a private Board of directors that governs the assets of a non-profit corporation. None of that government involves coercion. Why not accept that the word government INCLUDES voluntary community structure and action? Why not simply say "government is fine so long as everyone expressly agrees to it." When you state your position that way, it puts critics on the defensive because they must justify why it is okay to force people INTO a community at gunpoint. "Ummmm . . . because our society needs a slave class to function? Like Sparta!"

[Conza88]

Government is a big word. I govern myself. I govern my property. I sit on a private Board of directors that governs the assets of a non-profit corporation. None of that government involves coercion. Why not accept that the word government INCLUDES voluntary community structure and action? Why not simply say "government is fine so long as everyone expressly agrees to it." When you state your position that way, it puts critics on the defensive because they must justify why it is okay to force people INTO a community at gunpoint. "Ummmm . . . because our society needs a slave class to function? Like Sparta!"

Government is a big word; outside the realm of political philosophy, inside it - not so much.

How about 'the state' then? Taking exactly what you said and replacing it with the state...

"Why not accept that the word state INCLUDES voluntary community structure and action?"

Yeaaaaah, why not?!


"Further, of the state, defined as "the ultimate authority to which in a given territory no recourse to a higher authority exists," Radnitzky states, "that coercion is not a characteristic that is implied in its definition. If (per impossibile) the contract theory were a tenable theory, then the institution would not be coercive and yet qualify as a state." Certainly, one is free in one's definitions, but not all definitions are fruitful.

According to Radnitzky's definition, for instance, the founder-proprietor of a settlement - a gated community - would have to be considered a state, because he decides about membership (inclusion and exclusion) and is the ultimate authority in all settler-conflicts. However, the founder of a community does not exact taxes, but he collects fees, contributions or rents from his follow-settlers. And he does not pass laws (legislates) regarding the property of other, but all settler-property is from the outset subject to his ultimate jurisdiction.

Similarly, it is conceivable that all private land owners in a given territory transfer their land to one and the same person, for instance, in order to so establish the ultimate authority which according to Hobbes is necessary for peace. Thereby, they sink from the rank of an owner to that of a renter. Radnitzky would also term such a proprietor, established in this way, a state. But why? It is contrary to common terminology and hence confusing.

And which purpose would be served, to label something entirely different with the same name: namely an institution, which derives its status as ultimate authority neither from an act of original appropriation nor from a real estate transfer on the part of original appropriators? It is this difference in the genesis of the institution, that lets us speak of (coercive) taxes and tribute and of laws and legislation instead of voluntarily paid rents and accepted community standards and house rules. Why not, in accordance with conventional speech, reserve the term state exclusively for the former (compulsory) institution?" ~ Hoppe (http://mises.org/daily/2075)

[Travlyr]

As we live through a truly historic period of time it is useful to reflect on the necessary requirements for a robust capitalist economy. The series of boom/bust cycles created by the Federal Reserve has been getting larger and more extreme with each repetition of the cycle. The last two busts of the dot-com and housing bubbles have been particularly dramatic. In each case, the malinvestments from the previous cycle are not allowed to be purged from the market, thus preventing the economy from having the solid foundation necessary for a real lasting period of prosperity. Instead the government steps in with fiscal stimulus and the Federal Reserve steps in with monetary stimulus. This rewards the politically connected and powerful at the expense of the rest of us. This is not free market capitalism.

It is doomed to end badly and when it does we need to be prepared to thrust ourselves into the intellectual debate about how to best structure a society and its economy.

So what is a free market economy? Simply put it is one where people voluntarily exchange goods and services without government coercion.
Continued here: (http://www.freemarketfan.com/2010/10/what-should-role-of-government-be-in.html)
Nice Article.


Congressman Ron Paul, the true champion of limited government, understands these ideas more than any other politician. In his own words:

"In a free society, government is restrained – and therefore political power is less important. I believe the proper role for government in America is to provide national defense, a court system for civil disputes, a criminal justice system for acts of force and fraud, and little else."

“I respect the Constitution not because of a nostalgic attachment to an anachronistic document, but because the Founders knew the danger in allowing government to overstep its legitimate functions.”

“A free society can only work when its members agree that there are certain things left to the discretion of individuals — no matter what a temporary majority might think. In practice this means the government must respect private property and the rule of law, or what is also called free-market capitalism.”

[Gray Seal]

Government has a role to protect the market and keep the market towards being free and efficient. This role is filled by monitoring for three things.

The first is fraud. Whenever there is a transaction both parties need to be held to being honest and fulfilling the transaction agreement.
The second is pollution. A party (or parties) may not perform actions which damage a passive party or its property.
The third is coercion. Physical coercion is fairly easy to define...threats of harm, actual harm, death. Monopolistic coercion is not as easy to define. However, some law in this area would hasten the ability of a market to correct from this damage.

[ClayTrainor]

"The great non sequitur committed by defenders of the State,... is to leap from the necessity of society to the necessity of the State." - Murray Rothbard

[noneedtoaggress]

In a free market economy, the proper role of the state is to be cast into the history books as an obstacle that the civilized world has overcome, and willingly rejected as an institution.

and a tool for people to use rhetorically in verbal disputes as an archetypal concept of evil ( the same way people use Hitler/NAZIs/slavery ).

and the butt of a lot of vulgar jokes.

[Diurdi]

The good thing about free markets is that you do not need an "absolute" free market for it to work.

[QueenB4Liberty]

If government exists, freedom does not. Governments and free markets are incompatible because government must infringe on property rights to exist.

this!! I +repped you!