A general response to CoccoBill:
1) Bad Governance vs Good Governance
It isn't that the governments are bad, it's that they are ill-equipped to act accordingly. You could fire the entire Congress and replace them with the top 535 IQ people in the country, hypothetical paragons of morality with no self interest to speak of, and they still would not be able to determine the correct amount of money to invest in ethanol production, or what the proper wage for a bussboy should be. That information can only exist because of the voluntary participation of millions of individuals in the market.
2) "Those are people working both for the public and private sectors, there's nothing inherently different in their analytic capabilities. Their incentives and goals, however, differ."
You go on to describe the ways in which the private accountant could act in a corrupt manner and the public one in a virtuous manner. The facility for corruption is universal to all people, private sector or public. However, the big difference is that the public sector guy is insulated from the consequences of his corruption or in some cases completely divorced from them. This causes him to be even more corruptible.
On the other hand, actors in the private sector have their own money on the line, and stand to lose it a lot more readily if they fail. And the company they work for stands to lose even more. Yes, private companies have the capacity to defraud customers, but doing so is an enormous risk, one which resilient firms will not be willing to take.
3) Value:
This isn't in response to CoccoBill specifically, but I just want to say a short piece about value. Value is the most basic concept that is lost on laypeople who discuss economics. Most people think that all items have inherent value, and become frustrated when they realize that the value of something can change in the blink of an eye.
Value is a completely subjective attribute. It is what a given individual is willing to pay for a given item at a given moment, and nothing more. True value can only be determined by voluntary exchange. Every single thing that a government does is to arbitrarily set its own values onto things. Republics do so based on a plurality of elected representatives' opinions.
The whole point of a government is to impose such values because of an implicit given that people in voluntary exchange will misallocate. They will undervalue things like safety and security and overvalue things like jelly donuts and pussy and beer. You have to start from this point, IMO, to justify the belief in a government.
So when you're building the optimal government, it all has to begin with "Well people aren't going to value X like they *should*, so the government will seize Y amount of their assets to provide X to everyone." This is inherent waste on a colossal scale because the natural system for determining value has been undermined from the start. You have to reconcile this waste somehow with a collective benefit or gain in stability.
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