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Now, here we have basis for a long discussion. Even if people acted in their rational self-interest, there is still a need for Government.
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Yeah your right, there may be innocent property disputes where neither side is at fault. So, yes a Government needs to exist.
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That is one of the methods that the U.S. Government uses today. It is not looting someone's property. It is certainly 'nicer' than government regulations, laws, and penalities.
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So threatening someone with jail time if you don't pay them isn't looting? Oh your right, it's extortion.