Yes, regulatory capture is a problem, but it's somewhat ludicrous to make a blanket statement like "government is the tool used to suppress competition". It's one tool in the toolbox, perhaps a significant one, but hardly the only one.
Health care is another example. The government empowers the AMA to strictly control the number of seats in medical school, thereby restricting the supply of doctors and competition.
Licensing, permits, etc, are all ways to limit and prevent competition.
I could ask any surfer on the beach right now and even they'd be able to identify that you've now entered a kind of argumentation where, if government is at all involved, government is the problem, no matter how it's involved.
"The AMA strictly controls the number of seats, and the government has a medical licensing process, therefore the AMA's actions are the government's fault."
Again, I do not deny that governments have been used as a tool for monopolies to form, but it is dubious that they are the only tool used by bad actors, nor is regulatory capture the only method for anticompetitive behavior.
You didn't, but your phrasing certainly implied it. "The government is the tool used to suppress competition" is a very stark statement. Next time, say "a" or "one of the" tools.
A simple alternative ingredient could be that firing (read "punishing") employees on a small scale has a large chilling effect. Relaxing labor laws/job security may have a much larger long term effect. If I ask for a raise, will I get fired first either way?
