Controlling self-interested behavior

Kevin Drum makes a point that few Republicans seem to be able to understand while they kneel piously before the altar of the Free Market:

... it's foolish to paint Wal-Mart or the broader business community as "evil." They aren't, any more than ordinary human beings are evil. It's just that, left to their own devices, both humans and corporations tend to act solely in their own self-interest. That's why we have laws to control human behavior, and it's why we need laws and regulations to control corporate behavior. I prefer a society in which people don't gun each other down in the streets, and I also prefer a society in which middle class workers prosper when the economy grows. I support laws that encourage both.

Precisely. Laws and regulations are particularly necessary in situations where the social costs of bad behavior are not "priced" in the market. In Wal-Mart's case, for instance, there is little or no cost to the company (which often has a sort of monopsony on the low-end labor market in the areas where it operates) to refuse health insurance to its employees. Hence, the state bears the cost.

At the height of the liberal "great society," of course, some regulations were just stupid and non-sensical. But, just because some regulations are bad doesn't mean all regulations are bad.