In reply to Bruce Caldwell, I think that Adam Smith believed some 
regulation was necessary not because of market imperfections, but 
because of human imperfection.  Markets are not endowed with human 
nature, but are instead mirror images of human nature.  Man did 
domesticate some animals, but man does not control even those he 
domesticated.  It is possible to say that those animals did in fact 
domesticate humans.

Scot Stradley