Manufacturers fought seatbelts, padded dashboards and airbags. Sometimes government interference works.Its funny that you think both are mutually exclusive, I can explain why they are not.
1) We wouldn't have all these fuel efficient vehicles because manufacturers focus on what sells and investment is thus dictated by consumer demand. Without government regulations, its likely there wouldn't be consumer demand because gasoline would be much less expensive, so fuel economy would take a back seat to other considerations. I mean, would you still pick the hybrid over the ecoboost if gasoline was $1 a gallon at the pump (which is possible, remember current prices are based on international cooperation to artificially restrict production far lower than what is possible)? I wouldn't, but that also wouldn't be a problem.
2) We would have all these fuel efficient vehicles quicker and cheaper without government interference on the condition that consumer demand existed as a strong driving force. So for example, if the public just became very eco conscious rather than self-serving on an individual basis (not likely) or fuel prices were very high not due to government interference but some other reason (say some epic war with China or something and a ban on domestic fracking for some reason).
In short, the government slows things down but is able to force manufacturers to build something even if consumers aren't even asking for it or can artificially create demand by altering normal market prices, and in that way can act as an artificial demand disrupting what would be normal in a natural laissez faire market.
tl;dr: Imagine I'm the government and, naturally, brain damaged. I see manure on the ground and throw it at you while making donkey noises, and then offer you a napkin which you can now certainly use to wipe off your face. Its true you wouldn't have the napkin if it wasn't for me, but you also wouldn't need it if it wasn't for me, and if you did need napkins for some other reason you could get them without having to go through all the bullcrap if I weren't around.
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