> You make an unregulated product that is much cheaper but has massive negative externalities or long-term risks that a regular person can't oversee > everyone buys your product > people start dying because of your product > people agree that the regulation is now mandatory and ban your product.

You can pretend that "in a free market" the citizens will refuse to buy bad products, stores will refuse to sell bad products and manufacturers will refuse to create bad products. But then why is it different when a democratic government refuses to allow bad products?