Now it is easy to coerce the transactions in physical marketplace, or a physical large scale factory or office, because the state can easily find the market place and see what people are doing in it, far easier than it can find individual people and see what each person is doing overall, and if people do not play by the state's rules it can easily send in the bad boys to close down the marketplace. Thus the state obstructs the large scale specialization of labor, and charges us a high price to participate in that specialization. The state can extract this tax because it can send the bad boys into any such meeting place and close it down. It is this, rather than direct coercion of taxpayers that enables it to charge such savage and extraordinary taxes. Any attempt to directly coerce taxpayers on this scale would swiftly lead to rivers of blood.
Electronic marketplaces are less easy to coerce.
Note how states find themselves largely powerless before the international money market. This has caused a substantial retreat of the state in many countries throughout the world. The socialists complain because the World bank asks the Ukraine and Belarus to be slightly less socialist, but the international money market will not touch such governments with a ten foot pole, while it will roll over like a puppy for governments such as Estonia and Tunisia which really are dismantling socialism. The challenge then is to move the meetings that make specialization of labor possible to the net, thus making us less easy for the state to coerce. In order to smash the state, we must first transform capitalism.