but the merchants make the money.

History is not a record of the conflict of commerce and the state. Throughout modern history, until the 20th century and the Communists, what we see is governments formulating policy to support their commercial intersts, and commercial interests doing everything they can to influence government. This conflict of business versus government you constantly decry does not exist, it never did. What we really have is a partnership, its called Mercantilism and it's been around in one form or another since the 1500s. We have it to thank for imperialism, colonialism, slavery and war. It's how the businessmen of one nation really compete with the businesses in another, not with markets, but with navies. The trouble today is that these businesses are going international, they don't really need governments any more.

Your libertarian principles are fine for the corner laundry and the diner on Main Street, but these people do not matter politically UNLESS they achieve class consciousness and act together politically to preserve their common interests. This used to be the province of the traditional Republican party in the USA. Of course, these people don't believe in classes any more. They actually believe their own propaganda and think they are free agents.

The partnership between business and government comes from large business collectives. Yes, I use the term deliberately since it seems to push the right buttons for you. Large corporations are publicly owned, professionally managed collectives that operate on an agenda all their own, independent of the will of the people that work there, even the senior executives that run them. These organisms have only one metabolic function, to grow bigger. They have nothing to do with the Heinlein entrepreneur or Galt's Gulch gang that make up the icons of libertarianism. Those are as much a fantasy as those socialist worker's paradises everyone talks about but no one has ever actually seen.

Big business is not at war with political collectivism, it thrives on it. Look how quickly State Capitalism transformed itself into classic Fascism in Russia and China. In the USA and Europe, the small businessman can't afford the lobbyists and lawyers required to influence government, he can't afford the accountants and specialists needed to navigate the tax laws and regulatory tangles. But big businesses have the advantage of size, this gives them inertia, stability, power. They can afford to screw up big time in the marketplace because they can outlast their more efficient little rivals; they can diversify and borrow and absorb or misplace losses, or write them off on their taxes. And when they do collapse, as they must eventually, they tend to cave in en masse, dragging large sectors of the economy and millions of innocent people, and efficient little businesses, with them.