Anal Magician
This was again a very long question, but it seems I managed to compress it into a single sentence without any significant loss of meaning.
In general, the idea of transitioning to financing the state budget through payment for government services is good because the government thereby declares its intention to be useful—taking money only for what is in demand, and in the volume for which there is demand for its activity. Such a line of thinking among government officials, of course, should be encouraged. Let’s figure out what this might look like.
Purely theoretically, the sale of any services by the state can be either a monopoly or carried out within the framework of free competition with private companies.
Let’s start with services that are a natural monopoly of the state. Yes, such things really exist, and they are linked to the exploitation of the state as a unique brand. For example, a quite significant source of income for young Pacific states in the 20th century was the issuance and sale of postage stamps. Here, private entities cannot compete with the state in any way, because it is precisely the fact that the stamps are issued by the state that gives them collectible rarity. Any fool can color a piece of adhesive paper, but obtaining UN recognition as a state and then coloring a piece of adhesive paper is a completely different matter. I don’t know how much this business flourishes now with the advent of the internet, but stamps aren’t the only thing. The state can sell noble titles, tickets to military parades, and other market-demanded perks. Any such activity of a minarchist government can only be welcomed, even if the money earned is squandered on some harmless nonsense, like maintaining a royal court, rather than on what, according to minarchist myths, should be the exclusive prerogative of the state. What was it—courts, the army, and the police?
Besides government services that are natural monopolies, there is a much broader class of monopolies achieved by the forced exclusion of competitors. For example, a government service such as the sale of entry (or, even more so, exit) visas. While in the case of natural monopolies the buyer themselves wishes to purchase the service specifically from the state, in this case, they would gladly buy this service from a competitor if it were cheaper, and even more gladly prefer not to pay for this service at all—but simply enter the country without any visa. I presume you have already realized that we, the ancaps, cannot approve of dubious services of this sort, unlike corruption, which allows one to avoid their imposition.
Finally, there are services that the state could provide while competing with private entities. State clinics, schools, insurance companies, pension funds, television, and many, many other services. How, properly speaking, do they differ from private ones? In that their nominal owner turns out to be society as a whole, and in theory, all their profits should be spent exclusively on improving the services themselves, rather than being siphoned into the pockets of private owners. Theoretically, this could provide a new quality of service that would be difficult to achieve in the case of a private enterprise. For example, public television could sell only the absolute minimum of advertising, just to cover the channel’s costs. In practice, state companies of this sort will fall victim to the principal-agent problem and will act more in the interests of management than in the interests of society.
To summarize. The only type of government service that remains unconditionally legitimate in the eyes of ancaps is the market exploitation of the state as a brand. Other organizations with rich cultural traditions, such as churches, knightly orders, football clubs, or festivals, can operate on the same principles.
