If you actually do then decide to have no government, then some other entity will take over and they will be your new government. At the end of the day you have to be part of some group, and that group needs rules. Democracy happens to be my preferred way of deciding rules for the group, but maybe you have some other preference? Maybe the richest should be able to do whatever they want as long as it benefits them and those that they transact with. Who am I to judge.
If we are only talking about the solution to some externalities, and that overall government is a net win, then the solution is to make sure that you are electing people that care about governing wisely. That means that they know when to regulate and when to remove regulations. Too much of either is disastrous.
On one hand, "yeah prohibiting bad things is good, duh", on the other hand bad policies prevents building affordable walkable high density neighborhoods, providing cheaper medical care, providing certain services like hair braiding, and so on.
There's an optimal path in this. No need to resort to absurd counterfactuals. The root of the problem is that society and the people themselves are inconsistent. Their stated preferences don't match their actual preferences revealed through their actions. (Of course a big part of that is simply the bounds on human rationality. We are easily misled by our own biases, naive, exploited through emotional pressure, gullible, etc. Plus on top of all this we have problems with consuming the relevant information sources, filtering and processing the firehose of the Internet.)
There's no consistent preference from society for tolerating this and this amount of risks and harms in exchange for cheaper gas.
Most people don't even think of these as a complex interconnected inseparable thing. They just want to "ban lead" or have a "small government" and so on.
The public-private separation makes sense in some contexts, but the line is not clear, and when it comes to politics there's almost no separation. It's about equity and oppression. History is full of examples of shifting preferences and increased equity and decreased oppression. (Monarchies, slavery, universal suffrage, gay marriage ... society as a whole changed its mind about these. [Yes, of course, there are reactionaries all the time, and there's no universal law that says that these changes can't be reversed or never will change back somehow.])
It's not about public or private, it's about who benefits and who gets exploited. Both the "everything is publicly owned and controlled" Stalinist USSR (and Maoist China) and the privately owned United Fruit (and both the Dutch and the British East India companies) committed crimes against humanity on an unimaginable scale (all while "democracy was booming" in both the Dutch and British societies.)
[0] Except the authoritarian police they require to put down protests or protect their property, or the military they use to secure resources in other countries, both on the taxpayer dime of course.
So then why isn't government in states where these people are all but absent a pillar of competency that we can use as a blueprint?
These are much larger cultural and societal problems. If you think letting "your team" run things unfettered would magically solve it you're wrong.
There are competent government agencies. The situations in which they arise tend to look a lot like the situations in which other competent groups of people arise (smaller organizations, a well defined and narrowly scoped cause/mandate, people who actually believe in the mandate, etc).