Right, a market is a small tool of larger systems. That’s fine, hard to get right but can make systems better. Type two just seems to be the cargo culted everywhere..
Markets failures do happen, and when they do it can be helpful to have an external force step in to nudge the market back onto the rails. But even without such interventions they work remarkably well on balance.
Markets, as they are understood today, are more like about 300 years old, even less in some places. The bulk of world economy has been sustenance farming for most of the human history, with some communal mutual help (based on favours and mutual indebtedness) thrown in.
> with no central oversight and almost no regulation
Lol what? E.g. Roman Republic (and later empire) tightly regulated its markets, especially food trade, during all of its existence.