The main reason why regulation needs to exist: - Unregulated markets often become oligopolies or monopolies, see the 19th century US robber barons (the reason

The main reason why regulation needs to exist: - Unregulated markets often become oligopolies or monopolies, see the 19th century US robber barons (the reason for existence of FTC, antitrust laws, price dumping regulation etc) - Unregulated markets can pose massive health and safety hazards, because operators pursue cost cutting at the price of safety - see the accident rate Chinatown buses between Boston and NYC, or see the regular food scandals in any developing country of your choice (reason for existence of OSHA, FDA etc) - Unregulated markets can pose big fraud risks - particularly unregulated securities markets (reason for existence of SEC, NASD, etc) - Unregulated markets will ignore externalities like pollution, public health, damage to commons both environmental and infrastructural [roads, buildings, trash, spectrum interference]. Regulation is needed to avoid the externalities or to internalise the costs into the market which causes these costs (reason for existence of EPA, FCC)