In this awesome mises.org daily (excerpted from Journal of Libertarian Studies), Hans Hoppe makes the case that the state's predation has increased inexorably under democracy vis-a-vis the levels of State predation which prevailed under monarchy. I think Hoppe's case is historically and logically sound.
However, there is another interpretation of the increasing invasion of the State into everyday life which I think deserves some consideration. If we go back to the origins of the State, it began with simple robbery ... plunder and tribute collected from tribes by war raiders. These war raiders, through one means or another, eventually transmuted into "steady-state" plunderers, extracting regular payments from a subject population rather than running one-off raids. In the beginning, the State existed without apology. Might did make right. There was no other reason to obey the State than that they could put a spear through you.
As time went on, however, alliances between the State formed with priests, merchants and judges. This alliance was originally very small, so that only a very tiny number of people enjoyed the privileges of belonging to the predatory class. Since the defining features of the modern State are its territorial monopolies of law and force (and coercive revenuing), we can start with the emergence of these features as the birth of the fully-developed State in human history.
Note, however, than since the State is naught but organized crime (aggression), its only distinction with other criminal organizations is its success in establishing a territorial monopoly on the means of legitimizing its aggressions. Because people were poorer and less well educated in the past, less sophisticated justifications for State aggression were needed. So, the Pharaoh wore a funny hat and employed the priest class to build astrological temples and that legitimized his coercion. However, over time, the State has had to employ ever more expensive and rigorous justifications for its parasitism. The ideal situation, from the point of view of the State, is to employ no one and to waste none of its revenues justifying its coercions, while collecting all the revenues solely for consumption on its own pleasures.
Looking at social welfare measures, such as the New Deal, it is clear that, while power elite analysis clearly demonstrates the ways in which these measures served the interests of those most urgently pressing for them, it also shows that the State has had to distribute its largesse to a wider and wider subgroup of the public. Initially, the proto-State raiders employed no one and spent none of their spoils justifying their raids. They simply consumed the proceeds of their raids on their own pleasures. As the State emerged, the plunderers began to employ judges, priests and merchants to put up a facade of legitimacy, to justify the plundering. As time has gone on, the costs of State apologetics have grown inexorably, to the present system that consumes 50% of GDP, most of which is spent on ends which are ancillary to the State's raison d'etre: plunderous aggression.
Hoppe points out the invasion of the Federal government into everyday life.
"... the 1994 edition of the Code of Federal Regulations (CFR), the annual compendium of all US Federal Government regulations currently in effect, consists of a total of 201 books, occupying about 26 feet of library shelf space. The Code's index alone is 754 pages. The Code contains regulations concerning the production and distribution of almost everything imaginable: from celery, mushrooms, watermelons, watchbands, the labeling of incandescent light bulbs, hosiery, iron and steel manufacturing, and onion rings made out of diced onions, revealing the almost-totalitarian power of a democratic government."
This brings me to my alternative interpretation, namely, that the growth in the numbers of the parasitic class, and the dilution of the revenues commanded by the parasitic class, can be seen as a loss of power by the State, analogous to the loss of power by monarchs with the rise of democracy in the late-19th and early-20th century. Suffrage was extended to ever-wider groups because the counter-arguments to extending suffrage are too de-legitimizing. The State has had to share its parasitic revenues with an ever-growing subgroup of the public. It might seem that communism is an extremum of this process but I do not think that it is... communism is a concentration, not a dilution of state power and state revenues. While everyone is technically on the payroll of the State, the reality is that the State is consuming the vast majority of production and the people are being paid slave's wages by the State while the capital stock of the economy is burnt up and the communized economy eventually grinds to a halt on the precipice of tribal economics. I do not think this is analogous to the ever-expanding network of bribes and payoffs that constitute the parasitic class of the modern society. Now, the State has to pave the roads, run the phones and innumerable other ancillary tasks that it never had to bother with before, in order to continue legitimizing its core purpose of enabling the parasitic class to live at the expense of others.
This dilution of power not only applies to revenues but also to regulations. One interpretation of regulations is that they reflect an "omnipotence" on the part of the government... but anyone who has driven over the speed limit or smoked a joint knows that the government's regulations are not an expression of its actual omnipotence but its pretensions thereof. But why does the government pass so many regulations that it does not really intend to enforce? One reason is so that it has plenty of infractions to slap onto the innocent citizen with the temerity to stand up to the powers that be. But I think we have to ask why these regulations? Why does the government regulate this but not that? The reason is that regulations are a reflection of the expectations of the statist public from "good government". Good government won't let our kids drink and smoke cigarettes and will do everything in its power to ensure this doesn't happen. Every "immoral" behavior which can be construed in any way to have some effect on another person, however remote and indirect, is to be regulated by good government... government of conscience. This is part and parcel of the legitimization of government, the use of coercion to implement the will of the moral majority. This placates the majority with the feeling that the government is on God's side, something that their Pastors and priests - usually inadvertently - reinforce with every sermon on the duty of the individual to do everything in his or her power to stop others from behaving immoral (due to the damage they are doing to their immortal soul). The government is only following the sound advice of our spiritual leaders by doing everything in its power to stop people from behaving immorally. Spending the night in jail might suck, but if it teaches you not to drink the devil's liquor, why, you've been saved a great deal more suffering in the fires of Hell.
So, the increase in the size of the public sector and the increase in the number of regulations are symptomatic, I believe, of the weakness of the State's case for its own powers. While it is true that State expenditures have never been higher and State regulations have never been greater, this cannot in itself be interpreted as the result of a real increase in the State's power. The State ultimately derives its power from the legitimacy it commands in the public's eye. The more money the State has to spend on the pursuit of this ancillary goal, the less money it has for its own consumption. The more regulations the State has to implement to legitimize itself are a reflection of the greater demands of the public for the State to meet the criterion of legitimacy.