According to the usual justification for government regulation of externalities,almost everything we do is ripe for regulation. Even worse, regulators never admit their prohibitions prevent an incalculable number of positive externalities.
Business owners have always made errors, and external factors can lead to economic crises of various sorts. But the cyclical pattern of booms and busts we now see are a result of government interventions not seen in a free marketplace.
There is a myth that Progressive humanitarians agitated for meat-packing regulations which now protect us from disease. The reality is that the big meat packers themselves wanted regulation to help crush the competition.
The free-market doctrine does not rest on an assumption that consumers make wise choices. Like the mythical “economic man,” the Perfectly Wise Individual is a straw man created by the critics of the theory.