CryptoAnarchy: What's wrong with this picture?

[mkj@october.segno.com]

Please forgive what may be a stupid question, but I've been wondering
about this for a long time, and today I'm tired of wondering.

A consistent theme here is "crypto-anarchy", which appears to be
essentially the idea that widespread cryptography will make tax
collection impossible, bringing down governments.  I don't see how
this will work.  The logical flaw in this argument seems so obvious
(and at least some of the people who buy into it seem so obviously
intelligent), that I can't help but think I must be missing something.

Certainly the widespread use of cryptography will frustrate modern
systems of taxation, such as income taxes, sales taxes, etc., which
are based on the monitoring of financial transactions.  But these
systems are a mere flash in the pan; taxes existed, and governments
sustained themselves perfectly well, long before these systems arose.

Why then shouldn't we expect that modern governments, in the face of
widespread cryptography, will simply revert to more traditional (and
brutal) systems such as head taxes, land taxes, travel tolls, etc.?

					---  mkj