I can certainly understand where you're coming from when it comes to skepticism of big government, but what I can't wrap my head around is why you think unregulated free markets are the solution. Correct me if you think I'm mistaken, but many of our laws/regulations are in fact written by special interest groups who represent the most powerful free market participants. If these participants are the ones making the rules, how can you say that the free market system is the solution to government corruption, when they are the ones who rigged it in the first place?
Basically what I'm getting it is people with money make the rules. Why would this be any different if the government had less control over them?
I guess @dan's idea of "free market solutions" is more about recognizing the fundamental mechanisms and building solutions on them. One basic assumption is that people act selfishly. By recognizing that, you can build a system which lets people act selfishly, but which directs the energy to a positive outcome by using suitable incentives. People can act freely within the boundaries of the system, but the rules aren't forced on anyone, because they can leave whenever they want. It's a free market solution - until people are "born into steem" and cannot leave :-). The rich making new rules within a society where everyone else is born and cannot leave, is not a free market solution, as you pointed out. However in Steem, the rules are created first, then everyone who agrees to the rules is welcome to join, which brings more value to the system. Thus "the rulers become rich", and not "the rich create rules". The difference is vast. Bringing value to the whole - and thus to the rulers too - is completely voluntary. What is amazing is that it looks like it's easy to bring value, but difficult to take/reduce value. Beat that!
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The regulations are indeed written by special interest groups. That's because government is a central point of failure. The less central points of failure, the better the system.
Imagine you have a situation where McDonalds has a legal monopoly on restaurants in a state. Is their food going to be any good? They have very little incentive to produce good food, as there are no other restaurants which can compete with them. In fact, we could even see this situation for ourselves in Cuba. The government restaurants tend to have very bad service and very bad food.
Imagine if you have a situation where there is only one organisation which has the ultimate say in matters of law. They have a monopoly on law. Is their law going to be any good?
On the other hand, imagine if there are many organisations which you can go to which will provide arbitration. They're all competing, so they have the incentive to promote a reputation of fairness and impartiality. Now, you might say "But what's stopping someone rich and powerful from buying one of these courts?" There are several things, but first apply that to government courts. What is stopping someone rich and powerful from buying a government court? Well, very little. The judges have impunity, so if a judge is paid off and makes a ridiculous decision which punishes an innocent, the judge doesn't have liability. In a polycentric law system, the arbitration companies want to show that they are impartial, and if a judge makes a stupid decision, he may be investigated, fired, perhaps even sued because of his liability for punishing an innocent. Or, people may just decide to disobey the judge if they believe the decision is unfair, as the judge has no legal privilege.
Basically, if there is one organisation with a monopoly on law, you have very little recourse. If there are many organisations providing law, then you can have potentially unlimited sources of recourse.
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government restaurants?
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Yes, for a long time all or most of the restaurants in Cuba were owned and run by the government.
I've also heard there are state-run restaurants in Russia, a hangover from the USSR, in the tourist centres there.
In any case, I mentioned government restaurants as a thought experiment to get the reader to imagine a state-run sector with no competition.
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