Yet given the number of consumption decisions a person has to make, they cannot very well read the consumer reports on every product they buy, much less, investigate the negative externalities of the product.
Technology solves many of those problems, with ever-cheaper devices for analyzing nutritional / chemical contents, and ever-greater use of the Internet, including from portable devices. You don't need to "investigate" anything, just hold a product next to your smartphone and look at the summary screen: this many stars for quality, safety, expert advice, consumer satisfaction, ethical "karma" of companies involved, any warning flags, etc - it only takes 5 seconds!
And many other "negative externalities" like pollution are issues that are dealt with through property rights, like between the owner of a factory and any adjacent property owners that can detect their air / water / soil quality being affected, in which case the factory owes them restitution (unless they have a prior agreement, like a factory might agree to a specific cap and sponsor a local park to compensate for it).
Even with the Consumer Product Safety Commission, consumers still end up buying toxic toys and poisoned pet food. With less regulation businesses were able to smuggle all sorts of toxins into products that were consumed by the masses. Even though the Consumer Product Safety Commission is even less accountable to voters than a politician, it has managed to make consumption decisions safer, while still allowing for the most diverse market of products in history.
What do you mean by "even"? CPSC is a government monopoly, and is thus naturally inferior to a competing mesh of consumer safety organizations that actually have to compete for public donations, subscriptions, or service fees (most likely paid by manufacturers looking for a reputable way to prove their product's quality) on the basis of their reputation.
When the CPSC monopoly screws up (i.e. corruption, incompetence, forcefully delaying / keeping a useful product out of the marketplace, raising product prices too much, etc) - what're you gonna do, move to a different country? Even if you do, they'll still be getting your tax dollars for many years to come!
So you would not like to abolish the Consumer Product Safety Commission or the FDA?
On the issue of medical regulation, I specifically recommend a book by
Mary Ruwart called
Healing Our World (older edition free online). FDA kills!
