In any multi-player game, feedback is critical to a good gaming experience. You can either have positive feedback, in which players who start winning get an advantage which quickly becomes insurmountable; or you can have negative feedback, in which players who start losing get a little boost to keep the game interesting.
Monopoly is a game with strong positive feedback, and it's no coincidence that it's a horrible game. Once you have a certain amount of property, the game is effectively over, even though it usually takes hours to play out to conclusion. The more property you own, the more money you swipe from other players; therefore the more property and hotels you can buy; therefore the more money you get. It's an amplifying cycle, and it doesn't end until all but one player is bankrupted. Once you start losing, you can't really recover.
The question at hand is, do we want our society to work like that or don't we? Good game designers are often forced to compensate for this issue by adding negative feedback, some way to artificially keep the losing player from getting crushed right at the beginning of the game.
Another example is online roleplaying games. One of the biggest problems that MMORPG designers have to face is what to do about players who want to kill other players. Sometimes a simple advantage starting out, like beginning the game a month before everyone else, or having one powerful friend, is enough to turn into a snowballing advantage. If the game allows it, it's possible for a powerful bully to beat the crap out of newbie players, and there's not a thing they can do about it. And if newbies get regularly beaten down, they may be forced out of the game from sheer frustration.
So as I said, designing a successful government is a lot like designing a good game. The goals are similar. The ultimate goal of a game is to be filled with players who are having fun. The ultimate goal of a society is to be filled with citizens who are happy.
Without any rules or infrastructure, a game is a state of nature. It can easily degenerate into a handful of uber-powerful players terrorizing the much larger number of weaker players. It may be possible for the weaker players to band together and fight back, but only if the game rules are designed to make that plausible. Again, the game seriously needs an element of negative feedback to make it work.
Society is the same. Absent some restrictions on super powerful players, it's possible for one person who begins with an advantage (i.e., born to wealthy parents) to become a warlord who can only be toppled by an extreme force of military power. Warlords aren't necessarily much better players overall; it's just that in a system with no negative feedback to adjust inequality, small advantages can quickly balloon up into huge power concentrations.
This isn't speculation; read some medieval history. This is, in practice, the way it has happened historically.
When armchair political analysts utter emotionally charged phrases like "Those liberals just want to take all your money and spend it as they see fit!" I can't help feeling that they are being naive. Something more complicated is going on. In a game, there would be no point in having no spending decisions, because having choices is part of what makes a game fun; in a similar way, any society that made all your spending decisions for you would be an oppressive tyranny. But what "those liberals" do support is a form of negative feedback. A way to prevent small inequalities from exploding into a new situation where we repeat the days of monarchs and serfs.
You have to respect the founding fathers for being top notch game designers. They very clearly outlined what the people in power may and may not do. They designed a system under which individual branches of government are prevented from getting absolute power. They even designed a means by which patches may, on rare occasions, be installed to the game -- a way to change the structure of the government if parts of it becomes obsolete.
Fact is, it's impossible to prevent a small number of people from gaining a huge amount of power unless good rules are written into the game. If you abolish those rules, it may feel like having "more freedom" for a little while, but that would only last until a new warlord took advantage of the lack of rules and bought and/or conquered all other players.