Within a country, the State has two main tools it uses to load the economic dices:
its monopoly on violence
its ability to counterfeit currency
While the former is the most blatant and spectacular one and is used (in times of peace) sparingly to sow fear and distrust among the people living under a State it is actually the least powerful of the two.
By mandating the use of a specific currency in mandatory transactions (such taxes), a State guarantees itself an easy way to steal from its victims through inflation. In order to redistribute the spoils it will embed itself in the economic functions through influence on companies.
This is accomplished in the following way:
print money (through actual printing, interest rate manipulation, ...)
use this money to:
purchase controlling shares in private companies
subsidize specific companies to help them outcompete their less favored opponents
use violence to keep competitors at bay (with State-mandated monopolies, or by favoring regulatory capture) For a company to work under a State it must:
comply with its rule or be the object of violence
use its allowed legal currency and none other
By controlling the currency and being able to counterfeit it at will, together with its monopoly on violence, the State is able to favor or destroy companies independently of the value they bring to society, very much like a local mom'n pop shop has to comply with the mob demands or face escalating violence.
La meilleure façon de châtier les hommes est de toujours donner ce qu'ils réclament.
