Via Economists View, I found this article compelling. It kind of ties into my previous post on the amorality of the free market, but I think this point may be even more important. Because aside from morality or right and wrong, it points out that the free market, left entirely alone, is an inherently self-destructive thing.
The purpose of the free market is to make businesses use competition to entice customers by increasing efficiency or quality or by innovating. But those are all difficult things to do in a competitive market, and they’re all things that reduce profit. Creating barriers to entry, extending copyright or patent, gaining monopoly powers, and even, to some extent, marketing can be ways to avoid competition and the hard work and social benefit it is supposed to create.
This is why government regulation is such a crucial part of our economy: the government must act as a referee. As long as the competition commences, and plays out fairly, we receive the benefit of free market competition. But if the government is lax in its duty that benefit erodes. When the government fails in that role, the only check left is the voters.