Your help is needed.
I recently got into a discussion about free markets (am a BIG fan) and free enterprise (also a big fan).
My discussion partner, an ever skeptical schizo ‘love-free-markets-but-they-don’t-exist’ kind of guy, challenged me to come up with some examples of “self-regulating markets” where private enterprise acted in the public’s best interest without prior prodding from government.
As an MPA I should know the answer to this. I was sure that I could come up with an easy example.
Alas, I cannot come up with a single example of where private industry, aka private enterprise, acted at the industry level to self-regulate itself. I’m sure that there must be an example somewhere.
Would you help? (This is a bit embarrassing to not be able to show even one example).
Have trouble thinking of an example that can be confirmed? Please try these two Google links that I used in my search. Good luck!
Note: “self-regulating” is not the same as “self-correcting”, which is another dogmatic challenge.
Bill Golden is a conservative independent observer of American economics, business, politics and trends of all kinds. You can always reach Bill at Bill@Bill4DogCatcher.com
Bill Golden's Bill4DogCatcher.com 
Actually, Adam Smith, the recognized father of Free Market theory, recognized Government’s role in them as a “coach”. I don’t think he ever envisioned the idea of totally self-regulating free markets. Libertarians such as myself, of course, support free markets while also supporting as little Government regulation as necessary to ensure orderly markets (while recognizing Government’s “coach” role). What constitutes appropriate “Government regulation” is, of course, the stuff of long conversations over a single malt.
Personnally, I recommend Milton & Rose Friedman’s book, “Free to Choose” as probably the best discussion of Adam Smith, Free Markets, and the practical application of Free Market economics.
I believe that folks would settle for some self-regulation.
Self-regulation:
— The regulation by an organization or industry group of one’s own behavior without external control or monitoring.
— Instead of being controlled by the government, an industry undertakes to police its own activities.
— When an institution (the Press, Advertising, Manufacturing, etc.) appoints a group of individuals whose job is to independently provide oversight of self-imposed standards or conduct or quality or performance.
I agree; however, as long as people are involved some people will “optimize” any system to their own economic benefit. To do so is usually at the expense of other people; ergo, some form of Government “coaching” (my preferred term for regulation, taken from Milton Friedman) is necessary.
That being said, I believe that self-regulation exists in a number of industries and is a natural result of competition. For example, companies that make things naturally have to strive to build products that are defect free and perhaps better than their competitors. We have also seen companies collaborate in their own self-interests to regulate standards and conduct within their domain. We see the financial industry attempting to self-regulate to prevent Congress from imposing regulations… another example of self-interest in play.
While I can think of a number groups appointed to provide oversight to specific industries, I can’t think of even one that supports an industry free from some form of Government regulation.
The challenge is to find evidence of industry self-regulating itself. I’m sure/was sure that it happens … but can find no evidence of it.
The primary challenge was to find where industry self-regulated itself prior to government intervening and playing a role.
So either ‘self-regulation’ is either an extremely rare event or it exists only in the mythos of capitalist supporters than have no problem decrying government intervention but do nothing to prevent the need for it.
Libertarians are often incorrectly considered anarchists. Nothing could be further from the truth. We value and believe in Government… Just not too much of it.