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On Government Prison and Free Market Financing

September 25, 2011

If you read some of my blogs, you’d know that the answer to your question is definitely YES. The only proper functions of a government are: the police, to protect you from criminals; the army, to protect you from foreign invaders; and the courts, to protect your property and contracts from breach or fraud by others, to settle disputes by rational rules, according to objective law. But there are other derivative institutions that make these functions possible. So penal institutions are necessary to jail criminals. As for the construction and maintenance of these institutions, for the initial stage, the money must necessarily come from the government. But to generate income, the government must allow businesses and companies to provide jobs to the prisoners. This is to make them productive. These businesses/pay pay the government registration fees and concession fees in return.

What are the possible financing systems in a free market society wherein taxes are voluntary? So technically, taxation would be abolished and one of the sources of government financing is voluntary contribution. You might say, “I don’t think that’d be enough to finance all government expenditures.”

Well, in a free market society everything should be private or privatized like schools, hospitals, gambling institutions, home for the insane, etc. The only proper role the of the government is to protect rights. It has no power to give grants and to extort due to the fact that its duties and responsibilities are purely delimited and defined by law. This means that government spending would be highly minimal.

But what are the possible financing schemes of the government. They are as follows:

  1. Registration fees for businesses, companies, corporations, partnerships, professional ventures, etc. Registration is a requisite for contracts and agreements. So if you business is not registered, your contracts with other parties will have no legal effect.
  2. Registration fees of patents, trademarks, business names, discoveries, etc. This is for the protection of your intellectual property rights.
  3. If you want to obtain important documents from the government like birth certificate, an additional copy of your business registration certificate, among other important papers and effects, you have to pay a minimal amount.
  4. Registration of cars, vehicles, lands, condominiums, other movable and immovable properties require minimal fees. This is to register and protect your property rights.

The service functions of these may be leased to private businesses. For instance, registration of cars and lands may be carried out by private companies after proper bidding. These companies would be bound by contract agreements they entered into with the government. So if they violated any terms of the contract, they may be liable under the law.

So, I think penal institutions should also be privatized.


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