Government is a system of rules that people create to govern themselves and their communities. It has many different functions, but it is most well known as the body that makes laws and enforces those laws. It also provides services that help people, such as education and healthcare. Governments are responsible for raising money from citizens to fund these things, which they usually do through taxes and fees. Governments are also responsible for establishing rules about economic and social issues, such as property ownership and business contracts.

In the past, governments evolved as people discovered that it was easier to protect themselves if they stayed together as groups or nations. To do so, they needed to assert their authority over large territories and gather taxes from their citizens to pay for armies and other defenses. These efforts created what we now call civilization and gave rise to the concept of sovereignty, the idea that a group (later, a nation) has the right to its territory free from foreign interference.

Smith argued that human nature combines self-interest and division of labor to create prosperity, a process that requires people to leave some of their property to others in order to take care of those who cannot look after themselves. He also argued that there is no justification for force, so government should only have those powers necessary for protecting life and property from outside attack and from domestic thieves and oppressors.

To fulfill its protective role, a government must make and enforce laws that are fair and understandable to the simplest citizen. It must be impartial in its decisions and cannot arbitrarily take private property from one person to give to another. It must also provide basic public services, such as police and fire protection and education, and keep the currency stable and circulating.

A key to a functional government is separation of powers and checks and balances. For example, Congress can only pass laws with a majority vote from both chambers of the legislature and must obtain the president’s approval before a bill becomes law. If a citizen disagrees with the law, they can work to persuade the president to veto it.

Many problems can be dealt with by a functional government, but most are addressed too late. Most of the time, governments only intervene in a problem once it has already occurred, such as an economic crisis or natural disaster. This reactive stance often leads to unnecessary suffering and crony capitalism.

Peabody quotes scholars Steven Levitsky and Daniel Ziblatt, who have identified “basic norms” that must be in place to ensure a functional government. These include mutual toleration—the idea that you must accept your political opponents as legitimate, even if you disagree with them—and forbearance—the idea that you must refrain from interfering in other people’s affairs. Without these two principles, the democratic process can be corrupted by partisanship and personal attacks. It is these negative influences that threaten our democracy and, ultimately, our freedom.