can there be a free market and government?

Bingo. Plus it’s not like there’s a way for a legitimate price mechanism to work when you’re dealing with an entity that has bottomless pockets and endless levels of bureaucracy. You get things like this.

But I talked about the contracting aspect a bit with respect to this very topic of defense here.

Thomas Sowell talks about this here.

…Or how the citizens might legally defend themselves, should their government overstep the bounds they placed around it. This was the purpose of the 2nd Amendment to the US Constitution.

Which is basically what we have now.

For more on free society, see here.