I think this is a judgment call (it depends on what you believe is "good" for the electorate, particularly in the long term vs. the short term), but let's assume it's true for the sake of argument. That still doesn't mean that what's good for the power structure is good for the electorate. For a democracy to do what's good for the electorate, elected representatives have to act in the electorate's interest, and the only benefit to their own interest that they can consistently expect from that is getting re-elected. They can't make backroom deals with lobbyists, they can't promise favorable legislation to corporations in exchange for cushy jobs after retirement, etc., etc. In short, they can't do all the things that politicians in democracies routinely do to further their own interests, because those things are not good for the electorate.

So if the definition of a "functioning" democracy is that what's good for the power structure is good for the electorate, then I don't think such a thing exists, has ever existed, or can exist. The interests of the power structure will always be in conflict with the interests of the electorate. Some democracies may manage that conflict better than others, but it's always going to be there.