Free, unregulated markets -- those absent government oversight of any kind -- are not the same as the ideal competitive markets found in textbooks, those that produce optimal outcomes. In a free market, producers are free to organize, for example, "in some contrivance to raise prices," and this takes us away from the optimal outcome free market enthusiasts are trying to defend. Government oversight and regulation are needed to stop producers from engaging in behavior that is harmful to consumers, excessive market power and the associated political power that come with it are both problematic, a point Smith's so-called disciples ought to take to heart.And no, Adam Smith never used the phrase "laissez-faire," even though it knew of it. Gavin Kennedy shows that the narrative of Adam Smith embracing laissez-faire is myth whose origin is traceable to Jean-Baptiste Say and Fredric Bastiat. Kennedy is the authority on Adam Smith so let's put that myth to bed.
Read it at Economist's View
"Adam Smith and the Myth of Laissez Faire"
by Mark Thoma, with a long quote from Gavin Kennedy