Last updated on May 30, 2021
The following article is excerpted from the book, Capitalism WIIFM, with permission from the publisher.
The government in a capitalist or free society is necessary but potentially dangerous.
It is necessary because a capitalist society needs a stable base of objective law to protect individual rights, lay the ground rules for behavior, and facilitate the free exchange of goods, services, and ideas.
Such objective law allows a capitalist system to thrive. It does this by protecting individual rights.
Yet, government is dangerous because the history of the world is strewn with victims of government abuse.
Government is like a powerful machine because it has the legal monopoly of force. It must not be left untended or allowed to get into unscrupulous hands.
When Jefferson wrote the Declaration of Independence, it was not meant to stand alone. To establish the ideals of that document, a Constitution was necessary. It created the machinery of freedom. Legitimate government is the machinery of freedom.
The basis of government is the protection of individual rights.
Rights are conditions necessary for pursuing the course of our lives, such as the freedom to think, to write, to act, and to associate.
As John Locke stated hundreds of years ago, the law’s purpose is not to limit our freedom but to increase it.
Everyone’s right to pursue his own life’s interest is sacred under a capitalist system. The initiation of force by any person, group, or government is illegal because it violates this right.
Under a capitalist society, the government is an umpire, not a general manager (as it has become in a mixed economy). In a collectivist society, government becomes a vampire.
The essential functions of government are the police, the courts, and the armed forces. They are tools to protect individual rights and not agents for violating rights.
To see what can happen without a functioning government or a weak government, look at the numerous examples throughout modern history.
A weak government is powerless to control the armed gangs that always are shooting at each other and killing innocent civilians. It is impossible under these circumstances to carry on everyday life.
A government has the legal monopoly on using force (to retaliate) to protect individual rights.
We as individuals have the right to protect ourselves, especially if the government is not doing the job. But the government has the sole authority over the retaliatory use of force.
If everyone could retaliate for every wrong done to them, there would be chaos everywhere. (Look at the criminal gangs of Chicago and other major cities as an example of what can happen.)
Yet when the government is not doing its job of protecting individual rights, law-abiding individuals are forced to defend themselves as best they can.
The government ensures that we can carry on the affairs of our lives in relative safety. It also settles civil disputes (Torts).
In recent times, the government has taken on new roles that take away its power to carry out its legitimate functions.
Some of the new roles it has taken on are the welfare state and regulating economic activity (the mixed economy).
The modern welfare state and the mixed economy would take volumes to describe. The harm it does daily is incalculable. It enters the economic life of individual action and starts interfering with exchanging goods, services, and ideas in myriad and subtle ways.
The welfare state is one of the sources of the economic pie syndrome. It makes the limited benefits a cause for petty squabbling and jealousy.
Look how people look with disdain upon legal immigrants as extra mouths to feed. This is economic pie thinking that overlooks individuals.
The government in a mixed economy and welfare state has combined politics and economics — a deadly and dangerous combination.
Separation of religion and politics is vital to individual freedom. So is the separation of economics and politics.
When economic decisions are a matter of political control or interference, our freedom of action, which is the basis of capitalism, is severely limited.
Most, if not all, of our economic crises and monopolies, were caused by government interference into the economy — granting special favors to the political in-group of the moment and penalizing those not politically connected.
Capitalism is, first and foremost, the separation of economics and politics. So-called “state capitalism” is a contradiction in terms.
Government interference into the economy at any and every level dilutes capitalism, so it becomes relatively unrecognizable.
The welfare state is a gradual process of decay. It was allegedly to help people but instead encourages dependence on government benefits — which are simply the funds confiscated from individuals through taxation and deficit spending.
The only cure for this trend is the full restoration of Laissez-faire capitalism, which is real capitalism.
If the government can control or severely prescribe your actions, then it can control your mind. Thoughts without the possibility of action are fruitless.
The modern advocates of welfare, the mixed-economy, and outright socialism, want to wrap us in a flannel straitjacket and treat us as children who cannot think or act for ourselves and must obey government masters.
To see the true nature of our enemies and why they hate capitalism, read all about it here…