QUORA: ‘Does the government become poor in a capitalist society?’

 QUORA *: ‘Does the government become poor in a capitalist society?’

I posted this answer:

Let’s first identify the basics of capitalist society.

Economically, “capitalism” means laissez-faire—i.e., the separation of economics and state à la separation of church and state. The Government’s job is to police the markets against force, fraud, breach of contract, etc, but otherwise not interfere in people’s voluntary economic decisions and associations. More broadly, a laissez-faire capitalist society is not just economically free, but intellectually and politically free as well. Every individual’s rights to live their lives and pursue their goals and values--inalienable rights to life, liberty, contract, to earn and keep property, speak his mind, equal protection of the laws, etc.--is protected so long as one’s actions don’t violate the same rights of others.**

To secure their rights, the people establish a government as their agent. Basic functions of a capitalist government include the police, the military, the court system, and related public institutions essential to carrying out those basic tasks. The government is constitutionally limited only to powers necessary and proper to carrying out these rights-protecting functions. 

A government therefore cannot be “poor” or “rich.” The question is, is the government adequately funded?  Presumably, the government of a laissez-faire capitalist society would be adequately funded, as it is in the self-interest of the citizens that the government be able to do its job. So, the government in a laissez-faire capitalist society would (or should) never be “poor” in the sense of being inadequately funded.

There’s a mountain of confusion surrounding the function of government under laissez-faire capitalism. For clarity, I recommend The Nature of Government by philosopher Ayn Rand, available on the website of The Foundation for Economic Education.

** [The true nature of capitalism is buried under mountains of misconceptions and misrepresentations, even though capitalism in practice is evident all around us in virtually any decision we make that doesn’t involve government coercion. To balance the intellectual scales, I recommend Andrew Bernstein's books, The Capitalist Manifesto: The Historic, Economic and Philosophic Case for Laissez-Faire and Capitalism Unbound: The Incontestable Moral Case for Individual Rights.]

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QUORA: ‘Why has modern capitalism risen in the West?’

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