It is difficult to answer this question without it devolving into a competition of monologues as opposed to a constructive dialogue. For each answer posed to one side of the equation, another competing notion is revealed. I think that the question comes down to a basic theoretical point of view. In analyzing the question in terms of what Adam Smith and Karl Marx believe, great clarity emerges. In the end, one sees which side is more compelling and uses that as a framework to answer the question.
Smith embraced the Classical Liberal position on business regulation. An Enlightenment thinker, Smith argued that human beings need to be allowed to pursue their own self- interest. Nothing should regulate or control the human sense of reason that guides human actions. Individuals do what they do for their own self- interest and no control should be placed upon this reality. When individuals are able to pursue what they wish, their happiness increases, their profitability increases, and the capacity for what can be done increasaes. This is the basic element of human nature in Adam Smith's thinking. Since the marketplace becomes a reflection of individual self- interest and talent, any problems that result will be resolved by the marketplace itself. When limitations or regulations are placed upon such a reality, bad things usually happen because one is going against the current of human nature, of consciousness itself. In this light, governmental regulation of business inflicts the greatest of danger to businesses.
Karl Marx can be seen as a Modernist. Marx believes the basic element to historical consciousness is dialectical materialism. This is a progression of history where people have been in the position of power over others. The position of power in these social settings has been determined by who owns what constitutes wealth. This ownership of the means of production has been constructed so that power exists in social orders where there are definite "insiders" and definite" outsiders." For Marx, this progression is a part of the human predicament, an essential component in the narrative of what it means to be human. Capitalism has emerged in this same vein. Self- interest has become the very few who possess obscene amounts of wealth pitted against the interests of the vast many who are disenfranchised and embody obscene poverty. In this condition, Marx believes that the trend of historical materialism will be reversed as the vast amount of people who are being oppressed under the heel of capitalism will revolt. This will cause a public or social ownership in the means of prodiction. For Marx, this is where government or public regulation can be seen. Public control or regulation of business helps to prevent the greater danger to the social good. Its effect on business is secondary because an entity that was once privately owned is now owned by the public, the social entity.
It is in these two philosophical tracts that the question of government regulation can be seen. Dependent on which vision one embraces, their answer becomes evident. It is in this battle of ideas where the debate rages on today and shall for quite some time.