So I’ve been concerned with monetary policy by trying to see how to make it less harmful than it is likely to be. I don’t want to say that government — it’s necessary — there are certain things that it is essential for government to do. I’m not an anarchist. I believe in a government, but a limited government. And the government should be limited, in my opinion, to very simple functions. Number one, to be defending the country against foreign enemies.
I have tried for a long time to see how to make national defense a private enterprise, and I’ve never succeeded. It’s easy to see how to privatize schooling, but I don’t know how to privatize national defense. So I’m reconciled to the fact that we’re going to have to pay twice as much as we should have to pay in order to get them to fight the national defense. Because anything government does, on the average — there are some things that are more, some less — on the average anything government does costs twice as much as if it were being done by private enterprise.
So one function of government is protect the country against foreign enemies, national defense. The second function of government, and one which it performs very, very badly is to protect the individual citizen against abuse and coercion by other citizens, to keep you from being hit over the head and mugged on the street, your house broken into and so on. And I believe that the government performs that function very ineffectively because it’s doing so many things it has no business doing.