One can imagine a distributed system of organization, akin to what is used in the internet, but that's still organization. I'm personally a fan of pushing more authority down to the courts, which are both distributed and local. However, at the end of the day it becomes a question of where particular authority exists rather than a question of a need for the existence of authority.

We live in a highly interdependent society of 300m people. Highly specialized division of labor has given us a society where any person depends on probably 10,000 others for their basic needs, and modern technology has given us a society where nearly every human activity has the potential to harm large numbers of people. However you want to structure it, you need government to ensure the harmonious operation of such a society. Government is indeed an emergent phenomenon in human societies. As Google grew from a startup to a multi-national, it didn't have the conscious intention of growing a management layer for the sake of having more management. Yet, Google has a lot of management. Indeed, even in computers we see operating systems exploding in size and complexity as computers themselves become more functional and complex.

Techies take it for granted that startups grow management as they mature, that operating systems get more complex, that schedulers and out-of-order execution structures eat up increasingly large amounts of die-space in CPU's, yet there is a large contingent that thinks that a government running the affairs of 300 million people could be dramatically (meaning 10x, not 25%). Techies don't bat an eye at an OS that takes up 20% of your memory right off the bat, but in the face of a federal civil service payroll that amounts to 1.5% of GDP, many complain loudly of "too much government." Now, there are good arguments to be made that we could trim here and there and maybe get an effective government half the size (though it should be noted our federal system by design doesn't lend itself to particular efficiency), but do you think a federal government with a million employees and $1.5 trillion in expenditures would be so qualitatively different from the one we have now? Of course not.

Re: lobbyists, I didn't say anything about the majority of the public having useful things to say about policy. I said that 1) there are lots of policies that need to be made; and 2) there is no practical way for elected officials to make such policies without input from the affected parties (i.e. lobbyists).

Let me give you a very specific example. Here in Chicago we have two very dirty coal power plants. They're the product of an elementary market failure (the power company that profits from their operation doesn't bear the staggering health costs of that operation). They're also the product of a basic democratic failure (the health costs are highly localized to poor communities, so in effect voters choose to get cheaper electricity at the expense of a poor minority). Shutting down those coal plants is almost certainly the right thing to do, even on a purely economic calculus. Now, a legislator could read up on economic externalities, demography, and public health, and come to that conclusion. Do you think a group of state legislators, who all work part time, are going to be able to do all that? Hell, all that theory would go completely over the heads of many HN-ers, much less most Illinois state legislators! Someone needs to collect the data, estimate the health consequences of the plants, estimate the economic consequences of shutting them down, put together a policy proposal, and tell a legislator in 5 minutes why it is a good idea. That someone is a lobbyist (whatever you choose to call them).