> The strongly libertarian/anti-regulation folks really don’t seem to have an answer for this. And it’s where there whole philosophy falls down because it so fundamentally ignores human behavior so it’ll never work.

Sure they do. "The invisible hand of the market"! Which requires customers to have perfect knowledge of the market to work. Somehow they can't fathom that someone who is willing to harm others in order to make a profit might also be willing to act dishonestly and commit fraud in order to make even more profit.

The other argument is, "Well, it would happen anyways with regulation!" Which is true, but, just like the "bad regulation" and "regulatory capture" arguments, effectvely boils down to saying, "I don't need to go to the doctor because I'm going to die anyways."