Every time I read Moldbug's stuff I am startled by the extent to which he tries to give an economic analysis and solution to a political problem. The reason we have government isn't that we sat down once upon a time in the state of nature to design a political system. We have government because we live in a world where violence is a potentially effective tactic for achieving goals. Government exists to curb and control this tendency, to govern it. Uncontrolled violence turns out to be destructive to both the subject of the violence and also the wielder -- it turns out that it's potentially more fun to be in a citizen-soldier in a democracy than a menial soldier in an tyranny, or a member of a warlord's entourage. Politically, we don't do welfare spending and criminal justice purely for the fuzzies, or solely because they're ends in themselves. Every so often, we have organized and vigorous protests against the status quo. When this happens, those in power can either appease the protesters, use force to crush the protesters, or try to make them go away quietly without violence. If the protesters are determined enough, this last approach doesn't work. And the government can either use clubs, or buy off the protesters. It turns out that power structures that become habitually brutal don't do too well. People who get in the habit of using force aren't good neighbors, aren't good police, and aren't trusty subordinates. Bystanders don't want to live in a society that uses tanks and poison gas on retired veterans or that kills protesting students; leaders who try to use those tactics tend to get voted out of power -- or else overthrown. Moldbug talking about cryptographically controlled weapons is missing the point: we don't want to live in a society that uses too much overt violence on its members. And we tolerate a lot of inefficiencies to avoid this need.