And you hit the nail on the head of why this system is so rotten and broken:
we have a central government to dole out this harm as it sees fit
In my description of anarchy, the laws are agreed upon. They are not handed down by a superior being. In your above quote, the central government does dole out harm as it sees fit. Not "in a just manner", but "as it sees fit".
I don't see how it's extreme to want to eliminate extra expenses. And it's not an endless cycle as you describe, because the participant who are harming others are hopefully learning that "harming others creates harm to myself."