2 Describe the alternative methods of allocating scarce resources. But force plays a crucial positive role in allocating resources. It provides the state with an effective method of transferring wealth from the rich to the poor. It also provides the legal framework in which voluntary exchange in markets can take place.

A legal system is the foundation on which our market economy functions. Without courts to enforce contracts, it would not be possible to do business. But the courts could not enforce contracts without the ability to apply force if necessary. The state provides the ultimate force that enables the courts to do their work.

More broadly, the force of the state is essential to uphold the principle of the rule of law. This principle is the bedrock of civilised economic (and social and political)

life. With the rule of law upheld, people can go about their daily economic lives with the assurance that their property will be protected – that they can sue for violations against their property (and be sued if they violate the property of others).

Free from the burden of protecting their property, and confident in the knowledge that those with whom they trade will honour their agreements, people can get on with focusing on the activity at which they have a comparative advantage and trading for mutual gain.