Government and the Marketplace
In our discussion of markets so far, we have assumed that all participants refrained from the use of force. Crusoe simply decided not to aggress against Friday's life or property, and Friday similarly chose not to aggress against Crusoe. For reasons discussed in the last subsection, however, people are sometimes motivated (e. g., by envy) to seek power over others. When human beings, either acting singly or cooperating in a group, bring force against others, the latter will often respond with force in self-defense. In the ensuing struggle, one side or the other often acquires control, at least within a limited geographical region.

A government is an organization that is the ultimate arbiter of the use of force within a geographical territory. (In this course, the terms "government" and "state" are treated as synonyms.) This definition will be justified more fully in Section 5, which will also deal with the possible purposes and organizational details of governments. Here we are not concerned with the internal structures of these institutions, but only with the effects of their policy (enacted through the various individuals that compose the government) on markets. In praxeology, of course, we do not distinguish between "good" and "bad" governments, and the definition given is sufficiently broad to include both the most benign and the most oppressive of such institutions.