I get that, and I agree that the reason most people don't kill has nothing to do with the law but you're overlooking a few very important points. First, that we have a mechanism in place to prevent people from killing again if we catch them. Second, that that mechanism is overseen by everyone who lives under that system, and each of those people has a voice in changing that system. I don't mean to be pollyannaish about government, but we truly do have safeguards in place in many parts of the world. The legal disincentive regarding killing prevents many forms of organized murder, for the simple reason that someone might fink you out. Murder is something you pretty much have to do alone or with very close and trusted conspirators. Even that is a huge gamble.
Finally, here's another correlation that I won't pretend is the whole story. Where (and when) the likelihood of being caught and imprisoned is higher, the murder rate is lower. People do, at least sometimes, consider consequences before engaging in violence.
I can surely see this happening; however, I believe this is more an effect of society frowning upon violence and murder, than there being a law; to take this a step further, I would say that people do not frown upon violence because there is a law, but that there is a law because people frown upon violence; it is because the to-be killer is connected with his fellow people that he is less likely to kill, for the same reason why he is less likely to go out in public naked--he feels connected with other people and we generally agree that we can settle our conflicts without violence. Ergo, society first had to make the decision that they didn't like this, or at least their totalitarian leader decided it was bad (but of course, he's not typically going to stop himself.) What may be interesting to see is, if a society agreed that killing was always legal, would murders go through the roof? And would this be because there was no law against it, or because the citizens loved to kill? If it's the former, it seems, death rates would go no higher; if it's the latter, they would've already been doing it to begin with.
Anyway, we're drifting; my initial point was, if government is the centralization of man's power, could he not make a conscious decision to how he would like himself to devote that power? Must that power be taken from him for us to get anything done? My only complain would be that we would be much too disconnected from one another to ever pull such a reality off--this is where centralization is the only way we could coordinate ourselves. However, we are now so connected, we can freely talk to anyone in the world if we wanted, not to mentioned people in our very countries, states, neighborhoods; we're not at all disconnected anymore. We can plan and plot by ourselves, now, from our very own homes. I think we have the ability to reason and agree on the best way of running the general area in which we live, or at least find places we would enjoy better; I don't believe we must be forced, especially when the forcers are a minority of us (like PETA, or the hooded order, or corporations in the case of America), to better ourselves as another sees fit. I believe, if a method of living is truly exceptional, it will stand out. I argue that it is only through reason and peace that we will see an improvement in our conditions, as opposed to propaganda and violence; we did not achieve the idea of evolution by allowing the creationists to forever propagandize, ignoring calls of reason to state otherwise, and I do not believe we'll find peace and security through inherently violent governance, with a blind eye to attrocities. I argue that government does not allow man to function, but man who allows government.