Governments rely on indirect coercion because direct coercion seems brutal, unfair, and wrong. If the typical American saw the police bust down a stranger‘s door to arrest an undocumented nanny and the parents who hired her, the typical American would morally side with the strangers. If the typical American saw regulators confiscate a stranger’s expired milk, he’d side with the strangers. If the typical American found out his neighbor narced on a stranger for failing to pay use tax on an out-of-state Internet purchase, he’d damn his neighbor, not the stranger. Why? Because each of these cases activates the common-sense moral intuition that people have a duty to leave nonviolent people alone.
Switching to indirect coercion is a shrewd way for government to sedate our moral intuition.
In a free market, a symphony of desires comes together, and they’re met by people who constantly rack their brains to provide better services and invent solutions to our desires.