u-Bob

Why does the baker bake bread? Is it because the government told him to?
Why does the butcher prepare and sell meat? Is it because the government told him to?
Why does the farmer grow crops? Is it because the government told him to?
...
And..
Why don't we grow our own crops? why don't we bake our own bread? why don't we raise and slaughter animals ourselves? why don't we raise sheep and make our own clothes out of the wool? Why don't we make toys for our children? Why don't we make our own shoes? Why don't we do everything ourselves? Why don't we spent 15 minutes a day on the field, 45 minutes making furniture, 2 hrs building websites, 1 hr making clothes, 30 minutes feeding the animals, 1 hr building a walls,...? because it's not efficient.

Every human being is unique. Every human being has its own strengths and weaknesses. Every human being has its own set of skills, preferences, goals etc. And human beings prefer to work together. By working together and by specializing in what we do best or prefer doing (devision of labor) and by trading services and products (the fruits of our labor) we create more wealth for everyone.

Of course, this can only work if all transactions (trades) are voluntary. And sadly, there will always be people who try to benefit from other people's hard work without contributing themselves (without offering something in return / by stealing etc). So, people have to (and have the right to) defend themselves against these forms of aggression.

If people have the right to defend themselves, they also have right to form alliances and defend each other and each other's property. This is how 'government' came to be. Remember the words of Thomas Jefferson:

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness (in the original document he used the word 'property'). That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,"

That's the whole classical-liberal or minarchist-libertarian idea of limited government: People are free to do what they want as long as they don't cause damage to other people or other people's property. And people chose a government to defend the people against acts of aggression.

However, history teaches us that the classical-liberal or minarchist-libertarian idea that a limited government is necessary and possible is false. Lord Acton had it right when he said that "Power tends to corrupt, and absolute power corrupts absolutely". Once a position of power (any form of government) is established, that position of power will eventually be abused. People with bad intentions will try to gain access to or control over that position of power. And the people in power will always try to expand their power.

Do I have an example of the perfect libertarian community with no government intervention whatsoever, where everybody's happy? No, I don't. There was the "Icelandic Free State" (900s to 1200s) that came close. At one time Albemarle and Rhode Island (Rogue's Land) came close.... But the fact that history shows no example of the 'perfect' libertarian/anarcho-capitalistic community in no way proves anything about the validity of the underlying ideas.

On the other hand, history is filled with examples of how government intervention (even with 'good' intentions) in our daily lives had (both intended and unintended) negative consequences. General George Washington's troops almost starved when the Colonial Government tried to make sure there was enough food available to the troops by setting maximum prices for everyday meals and drinks. Recently there was shortage of milk in Venezuela when Hugo Chavez set maximum prices for milk. Of course Chavez blamed evil foreign capitalists and ignored the fact Venezuelan farmers lowered their production and started selling yogurt and ice cream instead of milk because selling milk at unrealistic prices wouldn't allow them to survive or support their families. Or remember what happened in the gulf of Mexico? Laws like the Deep Water Royalty Relief Act and the concept of limited liability made it acceptable for drilling companies to take what otherwise would have been unacceptable risks.