The original contention, that regulation can make markets better, is entirely true. It’s just that we’ve got to be careful about how and why. Only when we’ve gained our justification for regulation will we get those two right.
Essentially, regulation from outside the market is only needed when we are dealing with things that have one of the two features: Effects that spill over to those not part of the transaction, and things that we don’t do very often. Things that are just the direct voluntary interaction of buyer and seller, and in commonplace transactions, we can leave to self-regulation.
A market that regulates itself, or one that is regulated by the participants in it, is not an unregulated market; it’s just one not regulated by those outside it.