OP: your argument begs a political discussion about pro/anti big government. The downside of Gaius is that, like Aristotle, he believes that government belongs in the hands of an elite minority (the aristocracy).

Whereas the Grand Companies (more so in the case of Gridania and especially Limsa Lominsa than the Sultanate of Uldah) espouse a more power to the people, small government-style of leadership.