If you can direct me to any state, historical or current, which started small and stayed that way, I would love to see it.
Whether you believe in the slave/master morality dichotomy of Friedrich Nietzsche or not, there seems to be evidence for it. The superior minority embraces an ethic if free will and individuality, the inferior majority adopts a collectivist, illiberal ethical framework. Through the nature of a democracy, the majority can enforce their will through the vote, whereas the Nietszche's "ubermensch" who's ethic genuinely benefits all is artificially usurped by the the counter-ethic.
Can you elaborate on the idea of ghetto ethic states?
Every polity starts small and tends to start by kith and kinship, then they evolve and create a militia to exert authority over the territory they want to control and then they expand.
I do believe the Nietzschean dichotomy for it is the basis on which western civilization is founded upon.
When I write about ghetto ethics I meanthe ethics of the medieval urban ghetto.
Ghettos are a "state within a state" and as such, their residents can conduct exchange and transactions as if they are state actors by relying upon high trust exchange in-group, while using low trust exchange out-group.
However we cannot act as a "state"by applying low trust with some traders and high trust with others because the net result is a near universally low trust society for the vast majority.
In such an environment, demand for the state and its interventions act as a proxy.
For the mere fact that trust just remains high, since low trust is by definition the use of cunning and deception to obtain discounts and premiums that the opposite party would not tolerate willingly.
In other words, low trust ethics are parasitic, and impose high transaction costs on the population.
What I am trying to point out is the absurdity of using the model of a state within a state to advocate for a stateless society.
In that scope the entire Rothbardian project is absurdly illogical.
Aristocratic egalitarianism (the protestant ethic) suppresses all cheating such that demand for the state is low because transaction costs and conflicts are minimized, while the velocity of production and exchange is high.