An old joke describes a camper who awoke to see his friend frantically putting on his running shoes as an angry bear approached their campsite. “Why bother?” he asked. “Don’t you know there’s no way you’ll be able to outrun that bear?” “I don’t have to outrun him”, the friend responded, “I just need to outrun you.”
Economist Robert Frank offers a useful corrective to pure free market economics. The pure free market theory is based on the notion that, if everyone simply pursues their self-interest, the result, by Smith's “invisible hand,” will be good for everyone. Looking instead at Darwin's theory of evolution, Frank pointss out that this is usually, but not always, so. Sometimes what works for survival of the individual does not work out for survival of the species. The Irish elk grew antlers up to 3.65 metres wide. This was very useful when competing with other Irish elk in the annual mating competition. It was an advantage for the individual. It was a hindrance when passing therough forested areas, allowing the elk to be trapped by predators. It was against the best intererests of the Irish elk as a species. Granted, the obstructing powerr of the antlers was also a disadvantage to the individual; but the mating advantage of the large antlers more than couinterbalanced this, while doing nothing of advantage for the species.
The Irish elk became extinct 7,700 years ago. In truth, biologists are not sure why it became extinct, but bear with me and accept that it could have been this odd antlerian arms race, for the sake of argument.
For it illustrates something that can surely happen in economics as well, letting the individual good diverge from the common good. Hockey players, if left freee to choose, will almost alsways opt to play without a halmet. It improves their field of vision and gives them a competitive advantage. But they almost all prefer a rule requiring halmets. The problem is, they do not want to get their brains bashed out, but so long as anyone else is not wearing a halmet, they feel they must not to compete.
You can see, then, why regulation of the pure free market may well sometimes be in eveyone's best interests.