"Government, i.e, a social apparatus of coercion and compulsion, is a necessary requisite of peaceful cooperation. The market economy cannot do without a police power safeguarding its smooth functioning by the threat or the application of violence against peace-breakers” (Human Action, p. 324).
The key to understanding this in the context of the divine economy theory is to acknowledge that the difference between the State and the government is the perversion resulting from ego-driven intervention (using, or should I say abusing, the coercive powers of government) and subsequently (or precedently) justified by ego-driven interpretation.This difference between them can be best understood using new terminology. The divine economy theory introduces the terminology of 'ego-driven interventionism' and 'ego-driven interpretation' which is an advancement in economic science because it not only explains the deviation from the free market, but also since it identifies the disease, it suggests ways to remedy this malady through education and through acknowledging that inviolable property rights are human rights.
Government as a contractual agreement - using an assessment to pay for services rendered by the created administrative entity - is merely one of many different means that can be used to accomplish the ends chosen. This chosen means - government as described above by Mises - can still be voluntarily chosen as part of the consultative process in a society as long as there is no coercion preventing people from leaving that jurisdiction or no coercion to prevent other means from being tested in the effort to find the best means.
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