[hansel_der]

point beeing that self regulating markets are a lie

[gumby]

Lie? No. They just seek to a set point that is socially undesirable but may be preferred to a powerful subset of participants. There are other systems have the same control system issues.

I don't mean this a sarcasm. The point of good regulation is to try to change the incentive structure so that the system seeks to a different peak in the possibility space, avoiding various hill-climbing errors along the way. That's hard, but the approach of mandating how can be easier to write but much harder to implement (less stable, expensive, and requiring a lot of government effort).

A good example is exchange trading schemes. Instead of requiring a huge bureaucracy, the European trading system issues a number of emissions permits and then lets the market decide whether to upgrade or buy permits. As the number of certs sinks predictably over time, people can plan ahead to commit to building better plants (or retrofit) vs eking a couple of extra years out and then shutting the plant down. Less paperwork, fewer regulators, and letting the market seek to the point you want.

[largepeepee]

Another way to put it is, the endgame of unregulated markets are monopolies.

[CPLX]

Sort of. The end game is more what I would call a mafia state. Localized monopolies in constant conflict but also loose cooperation with each other. Your ability to survive and thrive depends on being in the favor of the most relevant oligarch.

[hannasanarion]

the endgame of for-profit companies in unregulated markets are monopolies.

Cutting corners and monopolizing makes sense for a business when absentee profit-seeking owners are the ones calling the shots and taking the spoils.

An alternative corporate structure where decision-makers have different incentives coughsoughworkerco-ops might choose different and less destructive behavior in the same free market.

[IG_Semmelweiss]

The endgame for any living being is maximize return for as minimal effort.

This is not true for just "unregulated markets".

Regulated markets operate the same way, see: Banks. Credit Cards. Healthcare insurance by state.

But that's why we have laws specifically to break up anticompetitive behavior. The problem is they are not properly written and leave a lot up to discretion.

[jdbertron]

It's so easy for people to always 'assume' the cost of regulation is zero. But it never is. If you factor it in, and play with the amount, then all this nonsense goes away. There are no perfect markets free of problems. The real question should be how they get resolved. Regulation is the one way people choose, because it only seems cheap.

[akomtu]

It's not a lie. It just says that under any set of constraints you define, a free market will arrange itself in the optimal way. The market, by itself, is blind, and its optimal state is as good as your constraints. Under no constraints, the most efficient "eigenfunction" of the market is one uber monopoly.

[cfraenkel]

You're conveniently moving the goalposts when the original premise no longer passes the smell test. I'm old enough to remember the original talking points selling 'self-regulating markets. "A rising sea raises all boats" and plenty more of that ilk.

Just a poorly disguised fig leaf covering 'take from those with less, and give to those with more'.

[Jon_Lowtek]

The ideal of self regulation the grandparent calls a lie is not about markets adjusting to optimally fulfill regulatory constraints, but the believe that such regulation is unnecessary, because market participants will factor in ethical concerns, removing unethical practices by not doing business with those using them.

[jazzyjackson]

unless, of course, you consider the government a player in the market as opposed to an outside force