Government’s Monopoly on Money and Violence: A Double-Edged Sword

What Does the Government Do? Exploring the Powers and Role of the State

In any modern society, the government wields two profound powers: control over the monetary system and a monopoly on legitimate violence. While these powers are often justified as necessary for maintaining order and stability, their concentration in the hands of a central authority also poses significant risks to freedom, accountability, and democracy itself.

Monopoly on Money

Governments exercise unparalleled control over the monetary system, from printing currency to setting interest rates through central banks. While proponents argue that this control is essential for managing inflation, unemployment, and economic crises, it also grants governments the ability to manipulate the economy for political gain.

Take inflation, for instance. Central banks can devalue a nation’s currency through excessive money printing, eroding the purchasing power of ordinary citizens. This phenomenon, often described as a "hidden tax," disproportionately affects the most vulnerable members of society who lack assets to hedge against inflation. Meanwhile, governments can redirect freshly minted money toward politically advantageous projects, creating an illusion of prosperity while deepening economic inequality.

Moreover, digital currencies and cashless economies have further entrenched state control over money. As governments push for greater financial transparency, they simultaneously strip citizens of their financial privacy. In extreme cases, authoritarian regimes can freeze bank accounts or de-platform dissenters, weaponizing the monetary system against opposition voices.

In India, approximately 20% of income goes to the government as Goods and Services Tax (GST), and more than 20% of savings are eroded by inflation as the government prints money through debt. This means that over 40-50% of an average citizen’s income effectively goes to the government. What do we get from paying such a heavy amount of taxes? Citizens often have to pay for basic healthcare, good education, and other essential services. Our education system, largely controlled by the government, often emphasizes rote memorization and indoctrination over critical thinking. Alarmingly, approximately 64% of the total GST collected comes from the bottom 50% of the population, while only 4% comes from the top 10%, highlighting the regressive nature of the system. Is it not an extortion of our money by the government?

Monopoly on Violence

Equally concerning is the government’s exclusive authority to use legitimate force. This monopoly on violence is justified as necessary for upholding the rule of law, protecting citizens, and ensuring national security. However, it often becomes a tool for oppression when left unchecked.

From police brutality to military overreach, history is rife with examples of governments abusing this power. Authoritarian regimes use their control over armed forces to silence dissent, while even democratic governments are not immune to excessive force. The militarization of police in many countries has blurred the line between law enforcement and military action, leading to escalating violence in situations that could be resolved peacefully.

Furthermore, the selective application of this monopoly reveals its inherent bias. Protests, for example, are policed differently depending on the political affiliation or demographics of the participants. This selective enforcement not only undermines trust in the government but also exacerbates societal divisions.

Interconnection of Money and Violence

These two monopolies are often intertwined. Economic sanctions, for instance, are a non-violent yet coercive tool that governments use to exert control over other nations or even their citizens. Similarly, taxation—backed by the implicit threat of force—highlights how the state’s control over money and violence reinforces its power.

When combined, these monopolies can create a system where dissent is stifled not only through physical force but also through economic manipulation. Critics of the status quo may find themselves marginalized, both socially and financially, as the state wields these tools to maintain control.

The Path Forward

Can we take back control of our money and put power into the hands of the people rather than a few hundred representatives? Technically, we can break the government’s monopoly, and progress is being made through innovations like blockchain and cryptocurrency. These technologies offer a pathway to decentralize monetary control and empower individuals.

However, we need more robust algorithms for governance mechanisms and decentralization. A decentralized framework for public decision-making and fund allocation could ensure greater accountability and fairness. Such systems would rely on collective participation, where decisions are made transparently and inclusively.

Citizens must also become more aware of how governments operate, how money works, and the powers they wield. Education and awareness are key to understanding and dismantling regressive systems. By collectively demanding change, we can transition to systems that prioritize freedom, equity, and decentralization.