Say we're on a bus trip with 100 people and stop to have dinner at a mall. 90 people have money to buy dinner, but 10 people forgot their wallets.
First, we decide everyone needs food, so we're going to pool our resources, since we can spread the cost. Then someone mentions that we could negotiate a deal with one of the vendors if we all buy the same meal. Lots of people grumble but a chorus of "ok" sounds like a majority so the "group" decides to do it.
Everyone breaks up into cliques and elects a representative. Then the representatives decide what we'll have for dinner, and how much everyone should pay ($8 each to cover the 10 who can't pay). Then the vendors hear what we're doing and start lobbying. The Chinese food stall offers $50 to a representative if he changes his vote. The pizza place offers to throw in free cookies if they are chosen. Finally, we find out that we're all having Filet o Fish value meals, with Diet Coke and fries.
When the reps go to pay, they realize they don't have enough money. More than 10 people didn't pay, or someone pocketed some money. It changed hands about 3 or 4 times. They have to order some cheaper food to get enough.
Everyone lines up to get their food, but at the end, there are 7 people in line and the food has run out. The 7 have to buy their own meal, but one of them is a person who forgot their wallet. A friend pays for his meal.
The guy who paid for three meals is really pissed off, and he uses the f-word about 10 times a minute for the entire bus ride home when talking to his friend. He also makes loud comments about the manhood of one representative and threatens to beat up another. The seven people who didn't get food are angry. Several people hated the fish and just ate fries. Some gave their sandwich to others, but a few just threw them out. That pissed off two fat people who were still hungry later on the bus and a couple other people on general principle, who lectured the others. When we got back home, most people asked, who is the moron who came up with that idea?
A truer description of the state...
From the comments on http://econlog.econlib.org/archives/2009/04/some_libertaria.html
Almost perfect, but he fails to mention how the reps give a quarter the money to their friends, then the McDonalds manager comes after the whole group with a shotgun because they stiffed him.