ABSTRACT
Governments actually do exist because they are imposed on people by force. However, there are many arguments that rationalize the existence of government by concluding that citizens are better off with them. Thomas Hobbes argued that without being forced to abide by the state's rules, people would find themselves in a prisoners' dilemma in which the individually rational choice was to behave non-cooperatively even though everyone would be better off if they were forced to cooperate. As De Jasay notes, this same argument now applies to the modern theory of public goods. Citizens will act selfishly and free ride by not paying their taxes for national defense, so those in government act in the public interest to provide a public good and overcome a problem caused by the narrow self-interested behavior of citizens. As Ronald Coase demonstrated, externalities arise because property rights are poorly defined or enforced.
