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This issue is a big part of the debate between the liberal strains that emphasize liberty and those that emphasize equality of rights, as dramatized by Erik von Kuehnelt-Leddihn in his book. In the 19th century US up until the overturning of Lochner (the doctrine that prevented governmental interference with contract) and the old interpretation of the Commerce Clause, the US government was firmly on the "liberty" side of the intra-liberal divide.

Most modern day educated people would say that, to reify the principle of equality of rights under the law, the state must intervene in private affairs to guarantee some level of material equality as well ("a chicken in every pot," the right to counsel in criminal cases established by the Gideon case, Social Security, the Great Society, etc.). Unless there is some minimal level of material equality, that equality of rights is just a guarantee on paper.

So right, this kratos by the state you're describing is usually justified as something done for the people by the state, which holds itself out to be by the people and of the people in Lincoln's terms.

As an aside, our education system is very good at creating a false sense among people that the system guarantees true material equality under the law when they become subject to their first civil case. It's typical for college-educated people to be shocked that they must spend a lot of money to actualize their rights to assert certain defenses in court or even to wriggle out of false claims that have been asserted against them. The system creates an impression among people that rights are free floating assertions that you can just shout out like a sovereign citizen and then the judge will say "by god, it's your right" and then you'll be acquitted and all the children will clap.

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