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This sounds to me like voluntarism or anarcho-capitalism. Which is ethically and morally sound, but a pretty hard sell in todays world of liberal-democracies. The idea of the state or The Government as an entity is, in my opinion, entirely incompatible with the idea of, as you put it:

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If they choose not to behave as you want, then there is no punishment, and you accept their right to decline indulging you.

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I say this because outside the existence and interferences of the state in the free market, this is mostly how economics works. Great post.

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