Government has three primary functions. It should provide for military defense of the nation. It should enforce contracts between individuals. It should protect citizens from crimes against themselves or their property. When government — in pursuit of good intentions tries to rearrange the economy, legislate morality, or help special interests, the cost come in inefficiency, lack of motivation, and loss of freedom. Government should be a referee, not an active player.

None of this means that government does not have a very real function. Indeed, the tragedy is that because government is doing so many things it ought not to be doing, it performs the functions it ought to be performing badly. The basic functions of government are to defend the nation against foreign enemies, to prevent coercion of some individuals by others within the country, to provide a means of deciding on our rules, and to adjudicate disputes.3

The only proper role of government, according to libertarians, is that of the protector of the citizen against aggression by other individuals. The government, of course, should never initiate aggression; its proper role is as the embodiment of the retaliatory use of force against anyone who initiates its use.

Although I wish the anarchists luck, since that’s the way we ought to be moving now. But I believe we need government to enforce the rules of the game. By prosecuting anti-trust violations, for instance. We need a government to maintain a system of courts that will uphold contracts and rule on compensation for damages. We need a government to ensure the safety of its citizens–to provide police protection. But government is failing at a lot of these things that it ought to be doing because it’s involved in so many things it shouldn’t be doing.

"Practically all government attempts to redistribute wealth and income tend to smother productive incentives and lead toward general impoverishment. It is the proper sphere of government to create and enforce a framework of law that prohibits force and fraud. But it must refrain from specific economic interventions. Government's main economic function is to encourage and preserve a free market. When Alexander the Great visited the philosopher Diogenes and asked whether he could do anything for him, Diogenes is said to have replied: "Yes, stand a little less between me and the sun." It is what every citizen is entitled to ask of his government."

The role of government just considered is to do something that the market cannot do for itself, namely, to determine, arbitrate, and enforce the rules of the game.

Let us be clear at the outset that the liberty of individuals to carry on their business should not be abrogated unless the larger interests of the many are concerned. It is the purpose of government to see that not only the legitimate interests of the few are protected but that the welfare and rights of the many are conserved. These are the principals which must be remembered in any consideration of this question. This, I take it, is sound government-not politics.

I believe government, organized authority, or the State is necessary only to maintain or protect property and monopoly. It has proven efficient in that function only. As a promoter of individual liberty, human well-being and social harmony, which alone constitute real order, government stands condemned by all the great men of the world...I believe — indeed, I know — that whatever is fine and beautiful in the human expresses and asserts itself in spite of government, and not because of it.

For modern philosophers, the government’s function is rather to contribute to the maximisation of individual interests and facilitate trade between nations. [...] Today, however, in a world of finite resources, where human activity threatens the ecological equilibrium, this conception is obsolete…

Government is the instrument for the exchange of one kind of benefit among persons and groups for others; the exchange of some freedoms for others. Government results from the demand for rights by persons and groups; they can be free of government as soon as they reduce their demand for rights and benefits. In the present state of science and technology, and given the tradition of a high standard of living, this cannot happen.

Government is, or ought to be instituted for the common benefit, protection, and security of the people, nation, or community; of all the various modes and forms of government, that is best which is capable of producing the greatest degree of happiness and safety, and is most effectually secured against the danger of maladministration and [...] when any government shall be found inadequate or contrary to these purposes, a majority of the community hath an indubitable, inalienable, and indefeasible right to reform, alter, or abolish it, in such manner as shall be judged most conducive to the public weal.

What matters at the end of the day is human dignity. A government's role is to build a system that ensures human dignity, stability, and prosperity for its people.

Good government is a prerequisite for a thriving market economy. At the same time, the coercive powers of government can be put to use in ways that serve narrow organized interests, including the government employees themselves. One of the most important tasks for policy analysts is determining when, where, and how government ought to involve itself (or not involve itself) in a modern economy.

The only proper, moral purpose of a government is to protect man's rights, which means: to protect him from physical violence—to protect his right to his own life, to his own liberty, to his own property and to the pursuit of his own happiness. Without property rights, no other rights are possible.