I try to keep things as simple as possible, and because of this, I am going to quote the first line of Aristotle's Nicomachean Ethics: "Every art and every inquiry, and similarly every action and pursuit, is thought to aim at some good; and for this reason the good has rightly been declared to be that at which all things aim."
People aim at achieve what they define as good. It may not truly be good for them, as in the case of criminals, but they are still aiming at what they define as good.
In the same book Aristotle also wrote, "Life is an activity, and each man actively exercises his favorite facilities upon the objects he loves most."
"The objects he loves most." People can only pursue what they love most, what gives them the most pleasure, when they are free.
The highest political good for people is liberty; the highest good economically is the free market. That is what experience and history has always shown, and it's what theory has shown, too, if it's done correctly.
I'll quote Aristotle again, from his Politics: "Of the above-mentioned forms, the perversions are as follows: of royalty, tyranny; of aristocracy, oligarchy; of constitutional government, democracy. For tyranny is a kind of monarchy which has in view the interest of the monarch only; oligarchy has in view the interest of the wealthy; democracy, of the needy: none of them the common good of all."
"The common good of all."
Democracy, tyranny and oligarchy do not work, because they are not for the common good of all. Royalty, aristocracy and constitutional government do, because they can work for the common good. If there are going to be rulers, they have to be the best ones.
The smallest government possible is the best, since it allows the largest amount of liberty and the free market. The smallest government can be based on royalty, aristocracy and constitutional government. It cannot be based on tyranny, oligarchy and democracy.
Personally, I don't think it can be based on anarchy, even though the pull of that philosophy can be very seductive. On that point, I would agree with G.K. Chesterton's observation that under every 'conservative' there is an anarchist.
The United States has now turned into a combination of a democracy and an oligarchy. This, of course, cannot stand. Our house is now built on sand.
It does not take a Ph.D. in Psychology or Philosophy or Economics or Political Science to understand Aristotle's simple observations. One of my instructors in college, who had a Ph.D. in English, told the class, "We know what BS means. MS means 'more of the same,' and Ph.D. means 'piles high and deep.'" When he said that, I thought of Sturgeon's Law: 90% of everything is crap.
The basics of Aristotle aren't hard. He is so simple he could be taught in middle school, and should be taught to 12-year-olds. They can understand him. Yet it's possible to graduate college without reading one word by him.
Our State-run school system has quite a lot to do with this lack of education.
With political and economic liberty, when people aim to achieve what they define as good—what gives them the most happiness and pleasure—it works for the common good of all.