Consider first what you predict about the efficiency, effectiveness, innovativeness, driveness of he who trades by force. Needs are necessary. Supply is necessary. But, how supplied is not. Consider he who names himself only supplier and drives out all others by the infliction of pain or its threat. He becomes the only one who supplies what satisfies need. No other can be found. The need drives that individuals supplies him with a ready demand for his goods.
What are the costs to him for inefficiency, a lack of innovation? Indeed what is his incentive for justice, self-restraint, prudence in production, consumption and trade? Who else, under conditions of monopoly, will the needy turn to?
Now, imagine a group of individuals with varied needs, varied skills, and varied access to that which would satisfy needs. One among them though is given power over money and its value (that which makes possible indirect mutual exchange), power over what the rules are and their enforcement, power to extract from all the others and how much is extracted how often and for what reason. In addition he has monopoly over emergency response, unused property (“public land”), who may enter into any market like health care or energy and how much they must pay to even be allowed to play in the market not to mention how much they may trade for.
What is your bet as to how things go for the group of individuals who are set up in this way? What do you predict about who will inhabit this position of power? Indeed it would be strange, nay unique, if such a position only attracted the virtuous. Indeed you would be permitted, I think, to bet that the position might actually attract those who aim for power and are willing to use nefarious means for its accrual! Any position of power attracts in this way. But the position that lacks competitors is most advantageous.
He who monopolizes the rules, their enforcement, decisions about how disputes are settled, the value of currency, the regularity and amount of forced extraction from the productive, who chooses who may or may not produce and trade and at what prices must also admit that given the attraction of power his position might attract the power hungry more than any other.
Could this be a better situation than a situation in which there is a free market in emergency response, rule making and enforcement, dispute settlement, production and trade. The only thing that would be present here as opposed to the former monopolized situation is incentive to do it well. This is what the oft hated competition brings.
It is not that all risk is avoided. It is that one great risk has been eliminated-universal monopoly over rules, enforcement, conflict resolution and much else.