at some point, the whole thing goes upside down and the monster ceases to be fed in the traditional methods of taxation...
then, the jackbooted-tax-collector-read-looters...will go around seizing anything/everything that they can get their hands on to feed themselves and their families and their fellow bureaucrats...
most of the mobocracy will loot til everything is gone and then they will kill and eat each other and then eventually starve to death...
this will happen no matter how few or how many "go Galt"....
Are you at all aware that you are speaking as though this is a common sequence that has happened many times in history? And that in real life it has never happened?
Has it occurred to you that almost everything "works", to some degree or another? Even Communism works, among consenting adults. What Liberty has going for it is that it is Moral, and is somewhat more efficient than most (though by no means all) systems that hold Society above The Individual (i.e. Socialism).
Rome (Protection Racket) "worked". Even Egypt (Insurance/Priest Racket) "worked". The Third Reich "worked" fabulously well until the Communitarians ganged up on them.
The popular notion that Rome failed after "only" a few centuries is false. It moved to another city (Constantinople), that's all, and "worked" for several more centuries. Even Egypt did not "fail" internally, it was conquered by Greek types... Cleopatra's native language was Greek (she was the first Ptolemy in 300 years to actually bother to learn Egyptian), the Greek conquerors just called themselves Pharaohs.
What past society do you have in mind when you think of this devolution into chaotic looting and cannibalism? All I see is a lot of creeps getting away with it with impunity and dying peacefully in their beds. It is almost impossible to steal and waste steal ALL of a society's resources, barring some natural drought or meteor strike or other disaster. Even Zimbabwe's Government is still in power, and near-universal poverty has NOT persuaded it to become more humane. On the contrary, I can make a case that it is often the well-fed beasts like Norway and Sweden and the U.S. that afford their subjects the most Personal Liberty.