Molyneux's transition from anarchism to an open endorsement of the ethno-state, perhaps, should not be surprising. He wouldn't be the first anti-statist to come to terms with the current political system on the pretense that, while the ultimate goal is a stateless society, certain issues must be dealt with which necessarily require one's collusion with the state apparatus. He simply takes it a step further and, utilizing the authority of statistics, concludes that an ethno-state of white men is the best means of ensuring small government.
It is rather strange to witness this comparison and deceptive scale between a stateless society and 'small government.' What in the world is having 'small government' going to solve in a world made up completely of empires? It would seem that people who are party to this conflation operate under the assumption that if less government is better, small is better than big. I fail to see how the strengthening of the nation state, or the founding of a new white ethno-state, is ever going to lead someday to a stateless society.
Molyneux's long war with political correctness and ideological zombies is quite understandable. What is rather hard to swallow, however, is his rather partisan assessment of the problem. He seems to see the problem of western collapse and mass immigration almost entirely as a welfare-state/socialist/Leftist created problem, without ever taking into consideration the forces at play which transcend both Left and Right.
An unrelenting moralist, one will often hear him defend capitalism on principle, precisely in opposition to cultural, classical and neo-Marxists, without taking into consideration that he is, perhaps, not talking about the same thing... He sees immigration, simply, as a result of immigrants wanting to take advantage of the welfare state. As he denies Marx's critique of capitalism ipso facto on moral and personal grounds (Marx was a bad man, therefore, how could a bad man have useful theories), he is unable to give an inch to the part which capitalism plays in the role of mass immigration too. Western powers, vying for resources in order to maintain surplus, will inevitably move into new territory in order to keep the rate of growth increasing, and will therefore interfere in foreign forms of economy, and therefore, in foreign interests and sovereignties. Now, this isn't the only reason for all this, but it certainly couldn't be said that this is not happening. In my mind, it doesn't then follow that socialism or communism is a good alternative (in fact, I would argue it's the worst alternative) nor is it inevitable. However, it is the case now that many things are happening at once which don't immediately lend credit to partisan narratives.
Stefan Molyneux picked a bad time to endorse the nation state in any form, ethnic or otherwise. The nation state, an ultimately democratic construct, is on its way out. You don't get 'working democracy' just because you have a population with a high IQ. The nation state and democracy always, over time, select for their own implosion. Settling for the conservative position of a 'smaller government' is not going to ensure the survival of western culture. While it is likely that things very well could fracture quite drastically in the west in the future, even along ethnic lines, it seems quite paradoxical to assume that true democracy will be restored on a smaller scale in the form of a more hegemonic state apparatus. Rather, I see this fracturing as a result of democracy; not a temporary interruption to what would be an otherwise smooth process.
Stefan Molyneux may not be wrong in his sentiments, but what he is proposing are merely bandaids to a much bigger, more nefarious wound.