This statement is completely impractical. I can't think of a single law that does not affect the markets in some way. By its nature, any regulation requires proof of compliance on the part of the regulated party. This will always create some costs, at least in time spent, to the regulated party. Since "established players", by virtue of being established, have more resources at their disposal, they can comply more easily than upstarts with much more limited time and money on their hands. Hence, any regulation will stifle innovation to some extent while benefiting the established players.
Creating and updating regulations for the benefit of the majority is exactly what democracy is supposed to do most efficiently. Taking that right away from the government would be tantamount to taking the government away entirely.
10 years ago taxi regulations were not stifling innovation enough to be detrimental to the majority. Over the past few months they have. Then they were updated democratically. The system worked.