Re: The Purpose of Government.
I was taught at college that the Crown has a couple of prerogative duties (to go with its Royal Prerogative rights):
1. Defense of the Realm
2. Maintaining the Queen's Peace
Which align with your longboats and police bit and explains why those are the hardest bits to privatise because they are the core responsibility of the state. If a state can provide a peaceful and secure environment then the rest of society may be able to pick up the rest itself.
The state may feel that it has to do something to ensure that utilities, public transport and so on actually happen - if the water, sewage and food distribution system fail the Queen's Peace will fail shortly afterwards - but it doesn't have to do them itself, it can just regulate to enable them.
Biting the hand that feeds IT
