It has been truly said: ignore Adam’s invisible hand(s) and his invisible foot will kick you in the back side when you least expect it.

Sienna said
"government depends on a claim of a legal monopoly of the use of violence or threats of violence."

This is true but it is also true of private property rights. Private property is protected by the same legal monopoly on violence and threats of violence.

Without the current system of government protecting landowners, landlords, business owners, inventors etc with their trespass, patent, copyright and other property laws then no one would respect "property" and it would be a free for all.

What is to stop me squatting in any unused building or starting my own farm on a disused bit of land but for the(violent)sanction the owner could call down on me via the law and the government.

It is hypocrisy to be critisising the states "legal monopoly of the use of violence or threats of violence" while receiving and relying on the states(violent)protection for your property rights. You cant have it both ways.

"The benefit to both parties is precisely because of their inequality."

The benefit to the cup inventor is only possible because the "evil grasping state" makes it illegal for the customers to make their own cup by the(once again violent)enforcement of copyright and patent laws. Without this protection the cup maker would have made virtually nothing as people saw a good idea and with nothing to stop them copied it themselves.

Not to mention that according to your "win/win" standards that would be even better as now the people would have all the benefits of cups AND they still have their money and the cup maker will have to go on producing instead of being a parasite and living off the wealth he made exploiting his fellows just because he was the first to discover the concept of a cup.

Without a state "private property" is impossible.

Monopoly means there is only one firm supplying that good or service in the market. Thus a property-owner does not have a legal monopoly of the use of violence or threats.

The idea that society is something extruded out the back end of governmental processes is completely mistaken. Government gets all its revenue by confiscating property from its private owners. But just because government claims a monopoly of certain services does not mean that only government could supply them, nor that a government monopoly is better for the consumers.

"Property does not exist because there are laws, but laws exist because there is property."
~ Frédéric Bastiat

The two contrasting economic examples in this article could not make things clearer.

In the first by exploitation and exclusion one man becomes wealthy at everyone elses expense.

To equate this as some sort of "benefit" of competition is stretching the notion of "benefit" somewhat. Im sure the cup maker "benefited" but how did the customers "benefit" by buying such an overpriced product. They would have "benefited" more if the cup maker didnt/wasnt able to exploit them and charged them $3 from the start. Society can hardly be said to "benefit" when large shares of wealth become locked up in the hands of one/few and the rest of us are excluded from and denied valuable progress.

In the real world(today)it would have been much worse as the cup maker "rented" his cups and patent laws etc prevented the nearby village from competing and driving down the price.
Or even worse he would have "hired" his fellows and made them walk to the river 100 times a day to use the cups to fill up his water tanks and then sell the water back to them for a large chunk of what he payed them in "wages". Backed by a state that said he owned all the cups and gave him rights over the river he could bleed his fellows dry and live the life of a king. Just like they do all around us everyday. How this can be "beneficial" to society or efficient and productive escapes me.

It is inherent in competition that there are always losers. To run a world that depends on a proportion of its citizens being losers is not my idea of a civilised world.

In the second example no one is exploited, resources are conserved and used efficiently, there is dignity in the real voluntary nature of the transaction(unlike the coercion,desperation and inequality of power that exemplifies many of todays contracts, particularly employment) and the participants are above all free from anyone standing over them and taking from them the fruits of their labours.

Cooperation always trumps competition for fairness, value, efficiency and benefits.

"Property does not exist because there are laws, but laws exist because there is property."
Without government(and their monopoly of force)laws could not exist.
Without laws there would be no property.
Therefore without government there could be no property.

"To make a thief, make an owner, to create crime, create laws"
U.K.LeGuinn.

I don't think there is or ever was a patent for a cup was there?

In any event you haven't established that there was any exploitation or over-pricing. If one person makes cups while another makes bread, and they swap because each, working in isolation, could not end up as well off, how is that exploitative?

And over-priced relative to what price? How did you arrive at the difference between the market price and the supposed fair price?

*If* the sharing transactions you are talking about are voluntary, there is no issue. But it is simple dishonesty to say that this describes taxation or anything based on it.

In fact there is nothing stopping producers from forming co-operatives. But they have never been able to withstand competition from businesses, because the co-operatives go broke. Why? Because they are *worse* for the consumers as judged by the consumers, in other words, the mass of the people including the workers.