I don't believe that no beneficial government regulations exist, but I believe the net effect of government regulations is negative. And I would point to game theory (and economics more generally) to support that view.
I think the primary idea is that the economic issues that plague markets also plague governments. Public choice is the discipline of applying economic principles to governments. You can't treat government as a black box to solve economic issues without recognizing that economic issues affect government as well. For example, to theorize a law, regulation, or form of government to solve some economic problem like the public good problem, one must consider that "good government" is also a public good. It's true that a society might fail to produce a public good like flood control systems. But it's necessary to argue why, if the society cannot produce the flood control systems, why it should be expected to produce a government that will produce the flood control systems.
You have a good point here. I agree that governments are not exempt from the game-theoretic rules that affect everything else. While they are an effective solution to coordination problems of society, they suffer from coordination problems of their own (I think that might be one of the reason governments tend to develop layered structures; it's like turtles all way down, but here we have governments all way up).
> But it's necessary to argue why, if the society cannot produce the flood control systems, why it should be expected to produce a government that will produce the flood control systems.
I think one of the arguments for this would be the fact that it actually happens - i.e. people left alone tend to form governments that then make flood control systems :).
From what you wrote in your previous comment I understand that you believe, that if one would sum up all the benefits and all the costs of government regulation, one would end up with a negative number. Have I undestood you correctly? If yes, could you elaborate on why you believe the effect is net negative and not net positive? I.e. what makes the costs bigger than benefits?
> I think one of the arguments for this would be the fact that it actually happens - i.e. people left alone tend to form governments that then make flood control systems :).
I should have said "efficiently produce flood control systems." In other words, produce them in cases where the benefits outweigh the costs, and not produce them in cases where the costs outweigh the benefits. Of course, that's implied in the concept of "public good problem."
> From what you wrote in your previous comment I understand that you believe, that if one would sum up all the benefits and all the costs of government regulation, one would end up with a negative number. Have I undestood you correctly?
Yes, although I fully recognize that there is probably no physical way to measure and agree on each cost/benefit.
> I.e. what makes the costs bigger than benefits?
I think the biggest effect is that concentrated interests tend to beat dispersed interests when they compete to influence a government, and less so when they compete in a market.
But a market for governments does exist. People "buy" or support their governments through elections and immigration.
Edit: On second thought, perhaps you were talking about not a particular government, but a system of government. In that case, immigration is the only choice.
> People "buy" or support their governments through elections and immigration.
True, but elections are plagued by the public good problem, and immigration is in most cases an extremely large transaction cost. There is also obviously some pressure on governments from the threat of violent revolution, but that's an even larger transaction cost and less certain endeavor.
