I see the problem a bit differently. Perhaps a society could function in a model like that. But we decided it's too burdensome and we ceded this responsibility to the government. In such a world, it is paradoxically more dangerous to come across some under-regulated niche, because our default assumption is that the government took care of the risk. It doesn't even cross your mind that you should be asking about lead in your turmeric.
This is sort of what happened with welfare too. For a long time, we depended on private charities to take care of the less fortunate. We decided the system sucked, so we established a government-operated safety net. But in this reality, it can be worse if you slip through the cracks of government programs. People around you by and large no longer think it's their duty to help.
Anyway, I wouldn't write it off as extremism. It's just we need to pick an option and stick to it. In a "nanny-state" world, you can't decide that you're not going to regulate food safety anymore and hope that the market will sort it out.
The idea that South Asians consumed poisoned lead because of high average levels of trust in the efficiency of their governments and their regulation of the food supply as opposed to low information on lead poisoning isn't one that survives contact with reality. So the "but the market would have solved this if only lead poisoning was legal" position is definitely an extreme one.
The world has had millennia of not regulating very much, and the market very rarely sorted it out.
The world has had millennia of not regulating very much
The one exception is weights and measures. There is a long tradition of regulating these strictly, because experience has shown that the market is incapable of driving the cheats out of business and that there must be trust in the markets because else trade will slow down.
Most economists and left-leaning research institutes disagree with this. Transaction costs, both monetary and temporal, are always higher with more regulation and governmental institutional involvement.
You're not describing a position taken by sane libertarians, though. Their argument is different: that if the government didn't regulate so much, customers would depend on the merchant's reputation, possibly backed by independent testing done by private sector institutions. A modern-day parallel would be electrical safety. In the US, this is largely handled by private organizations such as the UL. You can buy a non-UL extension cord or a toaster if you want.
And look, I'm not arguing that this is a better solution. But I think it makes sense to attack the strongest version of that argument, not the weakest one.
I don't necessarily want to add or take away from your point, but I do want to note that I believe this is false:
> People around you by and large no longer think it's their duty to help.
GoFundMe raises about $650 million for medical costs each year[0]. That's just one little thing, I suppose, but there are many, many NGOs, charities, religious institutions and unaffiliated individuals providing personal care inside their communities and outside. There's plenty of care that /cannot be provided/ by these organisations, and was not provided in the past by private charities either. Neither could provide cancer treatment or cure a patient with major injuries from a car accident. That's a job for institutionalized healthcare.
"Protection of the public from fraud in the marketing of food products represents
one of the earliest forms of government regulation of commercial enterprise" -- https://www.jstor.org/stable/26658854 "FOOD DRUG COSMETIC LAW JOURNAL 39, 2-73 (1984)
A History of Government Regulation of Adulteration and
Misbranding of Food"
The introduction covers food regulation from Biblical and Roman times to the present. If you think about how many of the Biblical rules are devoted to food handling in some sense, it starts to become clear how food regulation is civilization and the state, as much as any other kind of ancient law. I will never understand the Libertarian dream of a "prelapsarian" world where everyone is free to sell poison to everyone else with no consequences.
In particular, adding lead to tumeric was illegal before they made a show of enforcing it in 2019. So their previous policy was the worst of both worlds; telling people they were safe while allowing them to be poisoned.
This is sort of what happened with welfare too. For a long time, we depended on private charities to take care of the less fortunate. We decided the system sucked, so we established a government-operated safety net. But in this reality, it can be worse if you slip through the cracks of government programs. People around you by and large no longer think it's their duty to help.
Anyway, I wouldn't write it off as extremism. It's just we need to pick an option and stick to it. In a "nanny-state" world, you can't decide that you're not going to regulate food safety anymore and hope that the market will sort it out.