That's an odd indictment of government. If government is taken over by private companies, that's government not working, and it's certainly not a democratic government to blame, it's an infiltrated, corrupt political system.
I may tweak your statement a little that the government is run largely by special interests, i.e. small minority wielding substantial influence (is a union a 'private company'?). Why must my city government make the decision on what company may drive a truck in a circuit to collect my refuse? Why was my local YMCA denied a permit to build an indoor pool while the city built a luxurious, beautiful, money-sucking 'Community Recreation Center' (that has an indoor pool)?
Given the broad prevalence of this type of activity, it seems to at least suggest some fundamental breakdown within the system of representative democracy or, as you suggest, it is an indictment of governments, in general.
