Democracy does not scale
Just look at history. Look at foreign politics of US, Russia, CCCP, ...
Also look at the inherent violence behind tax extraction.
One must admit that trade is more p2p/distibuted and that scales very well...
It's an interesting discussion to have but it may not be a good fit for Hacker News in general and especially not with the short prompt you've posted. Consider writing a more in-depth blog post and submitting to, e.g., MetaFilter or Reddit if you want to have this discussion.
Somebody (I don't recall who, but I suspect a Gilded Age robber baron) said, "I love paying taxes. With them I buy civilization." Civilization has problems, don't get me wrong. Democracy has problems. But alternatives have at least as big problems.
And if you are classifying Russia and especially the CCCP as "democracy", your definition is probably flawed.
I'd be very interested to see you point out a form of governance which does scale. Even totalitarian regimes start to buckle under large population sizes.