When contemplating the endearing qualities and maddening weakness of the modern Football Association as it treated itself to a 150th anniversary back-slapping banquet, it is crucial to understand how genuinely distinguished its history is. That original gathering in 1863, at a London pub, the Freemasons Arms, where 12 clubs of upper-class gentlemen met to unify a set of laws so they could play football against each other, did – really – establish the great and beautiful game.

Football's growth from its English public school origins, travelling first to the industrial north, then overseas with sailors and expat administrators, now as prime media content in the age of globalisation, is a true wonder of the modern world.

Yet through the game's phenomenal history lies the FA's faultline too. Those men 150 years ago were conceiving a sport to play, for enjoyment and character building, not a spectacle to watch, and the FA grandees have always struggled to govern once its game was unleashed from wealthy amateurs' leisure pursuit to hungry professionalism.

An illustration of where football's founding governing body is now, in 2013, came with last week's outcry about the price today for watching what became known through the 20th century as "the people's game". Just about everybody who loves football, not only supporters whose lifelong loyalty was minted by watching clubs for pennies in their youth, agrees that top clubs' ticket prices now, not just Arsenal's £62, are largely exorbitant, exploitative of that loyalty.

In Germany, the football association (DFB) in December issued a firm affirmation of standing areas in stadiums, saying "positive fan culture" enabled by "modest ticket prices [around £12 for 13,500 to stand at Bayern Munich, for example] must be preserved and protected".

Here, on this challenge at the heart of English football, who it operates for, who can have access to it, our Football Association was silent. The FA's absence from such issues of central importance is now more institutional than trembling nervousness or uncertainty. Last February, in response to the government's call for firmer governance and an enhanced role for supporters, the FA's chairman, David Bernstein, formally agreed that the FA would give up any influence at all over "club ticket prices, commercial and financial matters, club business and operating issues", and even the distribution of money through the game.

It was an extraordinary, historic surrender, the FA ceding all responsibility for these key areas to a Premier League whose top clubs are owned by individual billionaires from overseas. This lamentable vacation of the FA's duties could be chalked up as a victory in an administrators' turf war by the Premier League's chief executive, Richard Scudamore, but the Premier League would itself benefit from more solid governance.

Scudamore, speaking to the BBC on Sunday, made the startling statement that if there is an ideal form of club ownership, it is probably Swansea – 20% owned by its supporters trust, whose members elect a director to serve on the board, alongside local businessmen who are lifelong fans. Yet Swansea are a lone exception among clubs which, under Scudamore's tenure, have been sold to the opposite of democratic ownership: Chelsea, to soak up Roman Abramovich's loot; Manchester United, Arsenal and Liverpool to US investors attracted by TV and media money, Manchester City (Bernstein's former club) for Sheikh Mansour's pleasure and investment, and as a marketing vehicle for the monarchy state of Abu Dhabi.

In German football, when the league split from direct DFB control in 2001 to gain more commercial freedom, the clubs agreed to preserve their local, popular character by remaining under the control of their members. So Bayern Munich, Borussia Dortmund, Schalke and all Bundesliga clubs (with two historic exceptions, Wolfsburg and Bayer Leverkeusen), are controlled by their supporters.

The glaring lack of vision for the ownership of even the greatest clubs, in the country which gave football to the world, is a departure from how the FA saw its duty for a century. After 1885, when the governing body's amateur gentlemen reluctantly allowed players to be paid, and 1888 when 12 provincial clubs formed the Football League (the world's first), the FA did step in to preserve clubs as not-for-profit. It allowed the clubs' members to form limited companies, but introduced rules to prevent the shareholders – owners – making money for themselves from dividends or salaries.

That regulation, well-meant but imperfect, arguably maintained the club ethos, but entrenched an amateurish approach in professional football. So, even as it powered to four divisions, attracted huge crowds and created legends, the game too often took supporters for granted and served up periodic disasters. Yet from the 1980s, instead of modernising these rules for the coming commercial era, the FA allowed Tottenham Hotspur, then Manchester United and other clubs, to bypass the rules completely by forming holding companies to float on the stock exchange.

The 96 deaths at Hillsborough, a venue the FA selected as a venue for the 1989 FA Cup semi-final without asking Sheffield Wednesday basic questions about the ground's safety, were the appalling conclusion to years of shortcomings in governing the game.

After Hillsborough, on the threshold of unprecedented wealth from the advent of pay-TV, the FA flunked its opportunity to manage the transformation in the interests of the whole game. Seeing no further than a rivalry with the Football League, the FA backed the then First Division clubs to break away from the other three divisions, meaning they did not have to share the multi-millions from the resulting deals with Rupert Murdoch's BSkyB. Graham Kelly, the FA's chief executive in 1992, has since described what the FA did as "a tremendous, collective lack of vision".

The vision since has been driven not by the governing body and preservation of core values, but by what Scudamore described as the Premier League's central function: to "commercialise" top football. The 20-year waning of the FA's influence reached its logical destination when Bernstein formally surrendered to the Premier League.

The FA council, still constituted of venerable administrators from the amateur counties, showed it could still snap when, encouraged by an impassioned speech from Malcolm Clarke, chair of the Football Supporters' Federation, it rejected Bernstein's treaty. Yet the council is too unwieldy, unpredictable and habitually self-serving to consistently govern football in this modern era, mostly foreign-owned on the threshold of another TV bonanza.

As football has undergone successive government inquiries, the administrators' obsession has been to lobby against any laws being imposed on its running. Yet a well-judged law, to frame what sport means – not just allow its commercial exploitation – could do football and its 150-year old governing body a great service. The safety legislation passed after Hillsborough finally protected supporters in grounds and laid the foundations for the English game's revival since.

Amid the glitz, cheers and back-slapping to celebrate a truly remarkable history and the good work still done in many areas, the modern FA should make time for a courageous, sober stock-take. Those gentlemen defining the laws at the Freemasons Arms never imagined their sport would grow to captivate the world, but a surrender to commercial interests, viewing football as an entertainment product, was always the opposite of what they wanted.