It is hard to discuss where this is going...
It is like the tired old line, "what about muh roads?".
When, in the future, roads will not be needed, and will be turned into walking paths and basketball courts.
The entire, "muh roads" point will just be stupid. From both sides of the argument.
So, govern-cement puts itself out of a job...
The only people that would push the police to start the next civil war are psychopaths. Every normal person sees it as a bad move. So, we start seeing that psychopaths mean the next civil war, and will start electing people that are not psychopaths.
Then, it pretty much untangles itself.
Most of the stuff govern-cement does is collect paper work, to file paper work, to make sure people are doing what they are supposed to do. And soon, someone will realise, this doesn't do anything. And, along with AI, this paperwork goes poof.
The monopolistic structures break down if there is no free money causing inflation. Amazonium and Wallymart live only because of inflation.
And think about it. We could all go back to being farmers, and with the modern advent of tiny tractors and plumbing, we would have to work 10-20 hours per week to maintain our lives. When enough people realize this, then the cities will be abandoned. (this comes with another powerful invention that will allow new communities anywhere)