Is it? Can the government possibly be expected to be able to keep up with a dynamic society? No, and it never will. Government is a bureaucracy, it is both cynically and realistically slow. In order for government to function efficiently, it has to slow down the economy that it governs. The more rules and red tape, the worse off we are (and this has become increasingly evident, historically).
By the time a government got around to legislating and regulating something, new issues, technologies, and economic factors have probably arisen (that is how fast our society changes). All of a sudden, those rules aren't entirely compatible with these new things, and they slow progress down.
What if, on the other hand, we could develop a system that can cope with the changing landscape; do it better and faster (also, harder and stronger). The awesome thing is, this system already exists: the free market. Government is trying to regulate a market that is always changing. If we left the market alone, it could change at any speed, any time, and in any direction within reasonable bounds (not forced bounds). If a market goes down a bad path, it gets selected for extinction (my one biology reference) and disappears. The government can't do that; instead, it attempts to jury-rig every snag the market comes upon. The problem with a jury-rig? It's bound to break and become worse than what you attempted to fix in the first place.
It's a cycle, really. The more you jury-rig, the more stuff breaks. You then have to jury-rig it again, only to have it break further down, and so on and so forth. It will eventually reach an asymptote; a point where the government no long has the capacity or speed to solve the problem. A point where things will break down.
On the other hand, true free market capitalism doesn't jury-rig problems: it fixes them.