It's not a standard economics answer, even economists (normal ones anyway) aren't going to fly on planes entirely unregulated in a purely free market.
Gradient descent and reinforcement learning work eventually, but they take a lot of iteration and spectacular failures. Different exploration/exploitation tradeoffs are needed in different environments, the market signal isn't really strong enough to differentiate and the incentives don't actually line up perfectly.
The standard economics answer is more like, the market (i.e. regs) evolved to address coordination problems and align the market incentives better with the true long-term welfare function.
The trouble with this answer, and the people who accept, it is that they assume the market is fair or at least pretend so they can ignore the inherent problems.
At this point it should be apparent to anyone that markets are rigged, and anyone sticking to the idea of self regulating markets should not be trusted.
The trouble with this answer is that it makes two incorrect assumptions:
Companies regularly attempt to interfere with or harm any means of regulation, governmental or otherwise. Companies stifle competition that might regulate their behavior both legally and illegally without fear of consequence.
* Even if your answer held true, which is absolutely does not, the inherit problem with it is that there's an acceptable rate of failure before correction takes hold and that the losses are acceptable.
There is irreparable harm that occurs in many industries and the morally acceptable limit of zero is well below the market's acceptable limit.
Theory =/= Practice. We've seen time and time again that simply isn't how things play out consistently. It's largely why we have regulations/oversight.
The reason the "well-trained humans" are in the loop is often due to legally required oversight and safety nets. Plenty of companies do not (or would not if they could get away with it) operate with safeties they should otherwise have in place because the money lost does not outweigh the money gained and no one is forcing their hand. They can putter along and kill or hurt people for an indeterminate amount of time, so long as the consequences stay below a certain threshold to not invite public or governmental scrutiny.
maybe in one of those simple textbook economics where everyone has perfect information and the economy only produces one good from two different companies.
"The market fixes everything" is absolutely not _standard_ economics; it's a particularly fringe maximalist libertarian view which even most libertarians would not entirely subscribe to.
Moreover, it’s generally accepted as a standard part of economics that the market only ever begins to fix things (be efficient) when property rights are enforced, barriers to entry are few, and transaction costs are low.
It’s not clear that “aviation” manages more than about one of those items.
My ECO101 lectures (I don't know if that's "standard economics") included government regulations to handle externalities (which can usually be summed up as "deaths")
Even libertarian economists don’t make this argument, pretty much everyone wants dangerous spaces where the public can’t be expected to technically understand the risks and trade offs involved, standard economics says regulate.
How much should you pay the well-trained human in the loop, that’s believed best to go unregulated.
