I agree with you that Bylund does a great job in explaining that the market is always changing. I also enjoyed the "broken window fallacy" reference. Like you mentioned, the wants and needs of consumers change daily. Entrepreneurs must be prepared to hop on new trends and even anticipate what consumers will want next.
It's interesting that the government officials can put new policies and regulations in place, but they may not be followed. Sometimes big corporations and large populations can get away with more not abiding by them. If a large amount of people do not follow the rules the government lays out, it's harder for any consequences to be had. Unless each business is checked individually by an official, they are able to not report things that would be against regulation.
"If they do not have a good relationship then the population will be hesitant to abide by the law and the government can not trust them to."
This is very interesting to think about. It reminds me of being a rebellious teenager in a way. If you tell a teenager to do something, most of the time, they will do the exact opposite. When my parents tried to tell me to not go somewhere or do something, it made me want to do it more. Or if they told me to do the dishes when I was already going to do them, I no longer wanted to do them. The same goes for the general population. The more rules and regulations that are put in place, the more they won't follow them. Most people do not like to be told what to do.
"Regulations do not intend to stop exchange and growth, rather guiding it in a direction that can benefit both parties in a controlled manner."
I think that regulations could definitely be used a guide. However, sometimes people just get power hungry and they like to tell businesses how they should be run. This has happened for centuries and it a big factor in why the population does not trust or have a good relationship with the government. It is hard to find a healthy balance in guiding people and controlling them. But, if the government wants their policies to be followed they must strive to give direction in a better way than they are right now. If the population does not trust or respect the people running our country it will turn our world upside down.