From Reddit:
Is there something more to it than an elaborate laundry scheme and illusion of legitimacy?
Wanted the community’s thoughts on the subject.
My reply, with the better part coming in at the end:
Funny you should ask. Today’s Mises Daily addresses a very similar question:
“As a buyer or seller the state has to conform to the conditions of the market.”:
http://mises.org/daily/5935/Money-and-the-State
I did not myself read the article, but i would say, for one, that it is much easier to steal the money. Much more easy to carry. Imagine the IRS carting off furniture and bags of sand.
That is a slightly shallow answer, of course, as you could say, instead, that the bureaucracy would take as much as it needs (lol) when it needs it.
I am guessing the problem with that is the fundamental problem that you run into when you do not have a price system - rational allocation of resources is impossible. We have no clue whether the bureaucracy is being efficient (again, lol) relative to the productive power of the private sector.
After all, if a parasite kills its host, the parasite dies too.
Am I on the right track? Or is there something deeper?