The Free Market Economy, that holy grail of the capitalist philosophy, does not exist. Two factors preclude its existence: Crime and Politics. This may well be the root of the "small government" maxim: "The government that governs least governs best." One of the great misinterpretations of this statement arises from a fundamental confusion between civic administration and governance. Civic administration is the execution of various functions designed to insure the continued security of the rights of individual citizens and to lubricate social friction. This is accomplished through the use of civic and social services, a legal system, and usually some sort of militia. These organizations are the "tools" of civic administration. Governance is the manipulation of these tools to control the populace.
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It is a corruption of governmental powers to make into a crime any transaction in which no ones rights are violated and which takes place entirely between informed, consenting adults, particularly when the rights of an individual must be violated in order to bring the perpetrators of said act to justice. When a government not only allows such laws to exist and be enforced, but willfully, steadfastly insists that such laws remain in existence, releases false propaganda and funds other groups to spread and reinforce this propaganda in order to mis-educate the people and reinforce the obeying of these laws which are inherently harmful to society in general, it has failed the people it is supposed to serve.
There is a causal link between legislating morality (i.e. creating victimless crime) and societal deterioration. These laws are the seeds from which organized crime grows. They CREATE gateway crimes and turn the free market into the black market.
Imagine kind of educational initiatives, alternative safety measures, and recovery programs that could be funded from the taxes we might reasonably collect by regulating these transactions. Would the repeal of victimless crime laws so dramatically increase the number of people involved that are not currently illegally involved in those acts that the potential harm they might cause is greater than the good that could be done by taxing and regulating these acts? And if we add into that equation the cost to the people of keeping these acts criminal in terms of funding for law enforcement initiatives, trials and public counsel, and incarceration (approximately $500,000 per incarcerated individual each year) that is saved in repealing these moronic laws, money which could go to funding schools, for instance, then what seems like the wisest option?