In recent years, the great debate has focused on the role of regulation, how much of it there should be, and whether it does what it should in the economic realm. As pointed out in Juggernaut Part IV, the discussion is misleading. To be sure, there will always be regulation to some extent in every politico-economic system. The question is who is in charge of that regulation, government or the individual.

As Steven Horowitz explains, the assumption is that regulation can only come in the form of government intervention, which is unfortunate because that leads us down a path of unintended consequences.

(FEE) The usual dichotomy is between the “unregulated” or “deregulated” market and the “regulated” market, which includes significant government intervention.  Advocates of free markets have long made the case for the advantages of unregulated markets and exposed the problems associated with regulation, often using spontaneous-order arguments.  The fundamental insight of economics from Adam Smith forward has been that free markets are capable of producing order without design.  We do not need “regulation” in the sense of State intervention for markets to generate socially beneficial outcomes.  And when we do attempt to “regulate” them through the State, the result is a variety of undesirable unintended consequences.

So, does regulation have to come from state government? Is self-regulation feasible in a complex society such as modern America?

Read the entire article here:

http://www.thefreemanonline.org/headline/free-markets-are-regulated/