We often find ourselves in discussions about how government and markets work in theory. Sometimes people suggest the concept of an idealized or perfect government. So basically the question being asked is if government is perfect and outstrips the market, why should we even consider the market? The answer to that setup is that a government would obviously be superior, but it proves nothing since we’re suspending reality. Furthermore, if we can imagine a perfect government, why can’t we imagine a perfect market? Just remember that no one is claiming utopia with libertarianism, just that people would be better equipped to solve their problems without a government in existence.
Even still, if both the state and the market were perfect, it wouldn’t matter which one we chose since we would be arriving at the same result. Talking about a perfect government and defining what that is are fine, but there’s not much to talk about other than saying something like “if the government’s goal is to eliminate poverty, then it will eliminate poverty.” Does it matter how it does it if we’re agreeing that it is flawless?
Everyone who believes that a government is justified believes that the main function of government is to protect the rights of its citizens. So you cannot say that a perfect government would infringe on anyone’s rights. If it did, then it could not be a perfect government by definition.
The discussion of the merits of the market versus the merits of government does not have to be totally based on how they exist and function in practice. We can for the sake of discussion and analysis assume that the intentions of government are “perfect” (or at least good) since it is very agreeable that the vast majority of people do have good intentions. This will help us to see how a government functions without getting bogged down by accusations of evil motives. This is how we analyze any system: we hold certain variables constant and see how changes in a single variable affect the system. That way when we see the system functioning without our interruption, we can reasonably predict how the system will react to changes. This is pretty clean when we’re looking at a mathematical function or a physical system where we assume, for example, that friction does not exist.
A block sliding down a ramp has the laws of physics dictating its motion. What the block does is not up to our subjective preferences. If we were discussing the motion of this block and I said, “Well, we’re going to consider a system where the block vanishes into thin air,” you can imagine such an event happening, but that does not help us understand how ramps work. We changed the essence of what we were talking about.
If we change the essence to something that we agree does not exist, then the rules that govern the system don’t matter since the outcome has to be what we say it will be. So much like the block, to get any real value out of a discussion, we cannot forsake the essence of government. Government is individuals with their own subjective preferences and self-interests working to achieve some goal. People are neither robots nor pawns on a chessboard. So to deny that is to change what government is. Praxeology, the study of human action, needs to be one of the rules by which government operates just like Newton’s laws of motion need to be what governs our analysis of the ramp.
We cannot suspend reality. That sounds simple enough, but it can be difficult to agree on what reality actually is.