I posted this here: http://slashdot.org/comments.pl?sid=1318879&cid=28869075 and decided I liked it so much, I wanted to save it, and point to it every time someone starts saying that we shouldn't have regulation of blah blah blah.
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In a TRULY free market, the government wouldn't have power to establish currency, protect ownership, extend licensure... all sorts of things that the economy depends on.
The "hypothetical free market" requires perfect information, perfect competition, and perfect mobility. As none of these are feasible to attain, government regulation is required to simulate them or compensate for their lack. For example, legal definitions of what "organic" produce is, and establishment of certifying bodies (which are private enterprises, but have some sort of charter or something from the government that establishes their certification as adequate for usage of the term "organic") help compensate for the lack of perfect information about farming practices. Without them, someone could say "Yeah, my produce is organic!" after spraying it with tons of pesticides, and you wouldn't really have any way of verifying that unless you traveled out to their farm yourself and watched them for a while... or brought your own lab kit to the market.
So, markets that work on the scale we expect them to will always require SOME amount of regulation, and insofar as there is such regulation, there will be disagreements about how that regulation should be put in place. Some methods would favor the producer or the consumer. Hence, there's a business interest in attempting to shape the regulatory process.
I'm all for making lobbying illegal... but that, some say, is over-regulating the market.
