I believe that the "cycle" of government is exactly that. A cycle.
Starts out small, grows, people get pissed and demand revolution.
They have their revolution.
Things are cool, for a while, possibly.
Then it grows again, mostly, I believe, because there is this annoying thing that humans always do, which is always wanting to make things bigger and better, never leaving well enough alone, even if its perfect the way it is.
If you are fortunate enough to be living in a time of virtually no government, enjoy it while it lasts, because eventually, some genius will come along and say "hey, you know what? We can make it even better if we just give the government authority to protect this great freedom that we all enjoy so much. Its a small price to pay.......... what can go wrong?" and you will get an increasing number of people willing to go along with the idea as time passes. If it doesn't fly first time around, it surely will somewhere down the road as people lose direct connection to the root cause of their freedom and liberty, which they always do. They forget.
Its inevitable.
I like Molyneux, but I think he leaves human nature and the deeply engrained herd mentality out of the equation too often.
Maybe he's just more optimistic than I am concerning the masses.