Some functions of government, such as persecuting people for victimless
crimes, should not be done at all.
Other functions can be privatized, as others have noted. I see no limits on
this process. Every legitimate government function was at one time done
privately.
For those interested in further reading on this matter, I suggest the following:
_The Enterprise of Law: Justice Without the State_ by Bruce L. Benson
_For a New Liberty_ by Murray N. Rothbard
_The Machinery of Freedom_ by David Friedman
_Welfare Economics and Externalities in an Open Ended Universe_ by
Roy Cordato
I don't agree with all that is written in these works and they come from a
variety of viewpoints. Benson applies public choice economics to the
realm of law. Rothbard is a hardline Lockean rights advocate. Friedman
is staunchly anti-rights. Cordato argues from Austrian economics to why
there is no need, in principle, for a government.
However, despite their disagreements and differences in approach, they
all provide much food for thought. The historical examples present in
the first three also bolster their theoretical arguments.
Daniel Ust