It's literally why we have government. You let people rip each other off, pretty soon the guns come out. That was America from the immediate post-colonial era right through the late 1800s. That is also Baltimore City today, as regarding its third or fourth-largest industry.
Since then, it's been a race to deregulate and defang would-be regulators of broad swaths of commerce while simultaneously over-regulating small and medium-sized business about matters that often don't matter much. By now you can have a successful lawsuit based on a paper, or technical, violation of the law without any underlying ill intent, while failing utterly to hold account those for whom mean fraud is the whole business model. We're so broken it's hard to know where to even start.
I believe in the idea of government, insofar as it creates a level playing field, and protects the weakest members of society from the machinations of the strongest.
However... that's never how a fully-formed government works. I have a sense that this is why America was a laissez faire republic for the 120+ years Ed referenced. Sadly, government has always done a pretty crappy job of delivering on the promise of a level playing field, and has always ended up tilting the table toward wealth and power (in whatever form it takes).
I'm not advocating for a return to this post-revolutionary timocracy (as Plato put it in Republic), because it didn't really work, either. But I am saying that Ed's highlighted sentence pretty much sums up my opinion of the current state of affairs. Enormous and heavily regulated industries pay enormous bribes to politicians of all stripes, so that legislation and regulation will be written to favor them in perpetuity. The preceding sentence sums up the Illinois political system very neatly. The 33rd, 36th, 39th, and 40th governors of this great state all were convicted of crimes stemming from corruption while in office.
In 1837 a guy named John O’Sullivan wrote that "A strong and active democratic government, in the common sense of the term, is an evil, differing only in degree and mode of operation, and not in nature, from a strong despotism." He meant that government (regardless of the form) is a collection of power, and that as John Dalberg-Acton said, "Power tends to corrupt, and absolute power corrupts absolutely". The more power we concentrate in any single place, the greater the tendency for corruption will be.
As to the question regarding where we could start reforming this-- I'd like to see the decentralization of power in this country. We should absolutely reinstitute the kind of contribution limits we had until Citizen's United, but extend limits to include labor unions, and especially public labor unions.
We could drive the stake into the underbelly of the current (but not future) corrupt wealth/power cabal by instituting term limits. As long as we have an entire government consisting of people with even the barest chance of becoming rich and/or powerful in "public service", we're going to continue to have more of the same.
It's said that we get the government we deserve. But more accurately, we presently have the government that's been paid for.