Have any noted "free market, deregulation" advocates changed their tune?

[sailor]

erislover is right. People like to confuse freedom of the market with unregulation and then knock them both. It is a straw man. Freedom in a market means that all parties should be allowed to compete on equal terms so that the positive effects of competition can be produced. It does not mean that there is no regulation but that regulations affect all parties equally and, as F. Hayek says in “The Road to Serfdom”, that

“the parties in the market should be free to sell and buy at any price at which they can find a partner to the transaction and that anybody should be free to produce, sell and buy anything that that may be produced at all”.
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Any attempt to control prices or quantities deprives competition of its power of bringing about an effective coordination of individual efforts, because price changes then cease to register all the relevant changes in circumstances and no longer provide a reliable guide for the individual’s actions.
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To prohibit the use of certain poisonous substances<…> to limit working hours or to require certain sanitary arrangements is fully compatible with the preservation of competition.
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It is based on the conviction that, where effective competition can be created, it is a better way of guiding individual efforts than any other. It does not deny but even emphasizes that, in order for competition should work beneficially, a carefully thought out legal framework is required.

I recommend this book and also The Use of Knowledge in Society also by Hayek.

In other words, as long as regulation affects all parties equally and the state is not pushing for certain ends, then we consider there is a free market. When the state passes laws which favor dertain people over certain others or push certain ends then prices stop reflecting all information and competition cannot produce the best results.

For example, when the government passes laws granting privileges in pricing to certain groups, (old people, farmers, students, etc) then the market is distorted and is no longer said to be “free”. Also when the government passes laws which favor certain ends (like cement or oil be cheaper for certain uses) then, again, the free exercise of competition cannot happen nor produce the desired results.

Regulation does not in any way contradict freedom of the market in that sense. Making all food list the ingredients and things like that are in no way contrary to a free market but some people love to create that misunderstanding so they can then attack the “free market”. In some cases it is ignorant stupidity and in many cases it is plain malice.

Also, no one, not even Hayek, has ever said that this is absolute:

Where, for example, it is impracticable to make the enjoyment of certain services dependent on the payment of a price, competition will not produce the services; and the price system becomes equally ineffective when the damage caused to others by certain uses of property cannot be effectively charged to the owner of the property.
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In no system that could be rationally defended would the state just do nothing. An effective competitive system needs an intelligently designed and continuously adjusted legal framework as much as any other. Even the most essential prerequisite of its proper functioning, the prevention of fraud and deception, including the explotation of ignorance, provides a great object of legislation.

Read The Road to Serfdom.