The Real Purpose of Government At its heart, it’s about saving capitalism from itself. September 22, 2015 • (AP/Ron Edmonds) Government in a democracy is essentially a conservative institution. It is responsible for creating and sustaining markets, enforcing contracts, protecting private property, and producing systems of education and infrastructure that allow commerce to function efficiently. The current conventional wisdom that liberals are pro-government and conservatives are anti- is frequently traced to President Ronald Reagan’s often-invoked notion that government is the problem, not the solution. But when you read Reagan’s first inaugural address, delivered in 1981 in the middle of a crushing recession, what he actually said was this: “In this present crisis, government is not the solution to our problem; government is the problem.” This was not a blanket condemnation of government, but a reaction to a specific situation in which the federal government seemed particularly ineffective. Reagan went on to say that “it’s not my intention to do away with government. It is rather to make it work.”