Governments are not free markets. That is the problem. What you describe is exactly what governments do. They try to do better than free markets (human hubris, I guess), and therefore they produce waste. Few, if any, political parties try to reduce government.
This problem is equally present in the private sector. If it wasn’t, we’d never — for example — have had the financial crisis. I would go so far as to say that the waste in the private sector is the main signal for improvement in your own argument, so eliminating it becomes asymptotically difficult in the same was as error reduction while training an AI.
To put it another way, how many businesses use free markets internally? It’s not none worldwide, but it is none of the places I worked.
