The argument that “we are the government, after all,” reflects not only an ignorance of the ruling class and its methods, but also a more conceptual confusion between society and State. Indeed, the belief that there can be no society without the State is a common objection to Anarchy. In order to understand the Anarchist political analysis, it is vital to decouple the two.
First, we must realize that there is no reason whatsoever why one cannot have a society without a State. Certainly this is easy to realize at a small scale (say, a hundred people), and most people do realize that, but then claim that Anarchy cannot work on a larger scale. But a society of a hundred people has the exact same organizational needs than a society of a million people. They both need water, energy, transport, communications, homes, protection, justice, social organization, charity, etc. And large-scale societies have existed in the past, at least large-scale enough for most purposes (not for reproducing the artificial State boundaries, but these are invalid concepts anyway, so we should not bother trying to reproduce them).
That being said, one could still argue for the integration of society and State. But what do these concepts represent?
Society can be defined simply as the network of voluntary exchanges (most of which are not monetary or work-related, but rather relational) with which we are connected every day. When we talk about “social issues,” we’re talking about issues which concern the nature of our relationship as members of society. The notion of a society is relative: at its greatest extent, our society covers most of the planet (if only due to all the markets necessary to produce the goods we buy), but in our daily lives our personal concept of society is no bigger than a few thousand people, and we know perhaps one or two hundred of those. As society progresses, globalizes and structures itself, we call it civilization.
The State, on the other hand, is not based on voluntary exchange. The State is a monopoloid entity which acts on the basis of coercion and threats. Laws that make entire markets illegal, or take them over, destroy a whole area of society. Prisons and jails disrupt social relations. Taxation lowers the strength of voluntary trade in a society. And war, of course, outright kills people.
But it would be simplistic to say that the State is merely the exact opposite of society. In order to flourish, the State needs to browbeat its subjects into accepting its rule. In order to do so, the State enmeshes itself with society to a certain extent (by taking over education, justice, public works, by appointing popular people, by giving favours, by giving money or leisure, and so on). The State also depends on society in order to subsist, since its revenues come from extortion on the work of productive people (taxes, theft of land, fines and penalties). All evil is parasitic in nature, so the State, being an evil system, is parasitic as well.
The knee-jerk statist answer is to invoke the holy name of democracy. But democracy is not holy or magical, which is exactly what it should be in order to turn an act of violence into an act of voluntary trade. The moral status of an action cannot be changed by using different terms to describe it or by having different people giving the orders. Murder is murder regardless of what uniform you’re wearing. Extortion is extortion, even if you work for the IRS.
The fact that “the people” get to choose the identity of a few of the people who rule over them every four years does not change the base facts of the situation. For one thing, almost everyone who works for the government and control your life are not elected. The only role that democracy plays in the society-State relationship is by legitimizing State power in the eyes of the masses by giving the illusion of choice. In reality, the subjects of the State cannot decide on the law at anything but the most local level, and even when they do so it is at an aggregate level, where individual values are irrelevant.