Yes, it's certainly a tricky one. But note that deregulated markets not only allow harmful race-to-the-bottom style behaviour, they all but require it, because "good apple" companies will be outcompeted by those cutting corners.
I think it's worth considering the effect that political and social narratives have on this. Reagan-style politics not only deregulates markets, it pushes a moral narrative that it is righteous to exploit the market as far as you possibly can, even when that means taking advantage of market flaws and externalities such that you are causing a net societal harm.
Their ideology is such that this is "capitalistic" and therefore good, and so we should not attempt to curb, regulate or otherwise discourage such behaviour. This has no basis in economic theory, and it's causing huge harms to our society (and economy).
I think it's worth considering the effect that political and social narratives have on this. Reagan-style politics not only deregulates markets, it pushes a moral narrative that it is righteous to exploit the market as far as you possibly can, even when that means taking advantage of market flaws and externalities such that you are causing a net societal harm.
Their ideology is such that this is "capitalistic" and therefore good, and so we should not attempt to curb, regulate or otherwise discourage such behaviour. This has no basis in economic theory, and it's causing huge harms to our society (and economy).