… is from page 75 of Felix Morley’s 1949 essay “State and Society,” which is reprinted as Essay Two in the 1979 Liberty Fund collection The Politicization of Society  (Kenneth S. Templeton, Jr., ed.):
Even a bargain with Mephistopheles is less surely a losing proposition than one in which the individual surrenders his soul to the state. For Satan has forbidden fruit of his own to distribute, while the state, in the last analysis, has absolutely nothing to offer that it has not already expropriated from its subjects. So, in worship of the state, men sacrifice their souls to a false god that can give them in return only what has already been placed by the worshippers themselves on the sacrilegious altar.