I get the sarcasm :) But in fact, markets are great for many things. However, they're clearly vulnerable to information asymmetry and outright dishonesty, at least in the short term.
I mean, demand for PCB-tainted oil for dust suppression did decrease dramatically after PCB content and toxicity were widely known. And demand for melamine-supplemented baby food also decreased dramatically after people discovered the issue.
The problem was that more-or-less irreversible damage had already been done. Damages could be recovered through litigation, perhaps. But that doesn't fix poisoned ecosystems and children.
So we need regulation to punish market manipulation through dishonesty.
> So we need regulation to punish market manipulation through dishonesty.
That's not the only source of problem. Another is managing the game theory of externalities. For example, if every transformer manufacturer is dumping its PCBs into rivers, no one manufacturer can afford to make "clean" transformers that dispose of PCB byproducts in a more ecological way as transformer buyers will presumably buy the cheapest one that meets the necessary performance characteristics. Regulation can add management of the ecological externality as a mandatory performance characteristic, disadvantaging no manufacturer relative to all others.
I mean, demand for PCB-tainted oil for dust suppression did decrease dramatically after PCB content and toxicity were widely known. And demand for melamine-supplemented baby food also decreased dramatically after people discovered the issue.
The problem was that more-or-less irreversible damage had already been done. Damages could be recovered through litigation, perhaps. But that doesn't fix poisoned ecosystems and children.
So we need regulation to punish market manipulation through dishonesty.