>I thought Prisoner's Dilemma was more about the inability to have good information: the prisoners can't communicate with each other, and therefore have imperfect information about their decision.

Even if the prisoners are allowed to communicate, if there is no underlying coordination mechanism, some binding agreement, a punishment for breaking the agreement, etc. then the default state is still defection.

>What it sounds like you're saying is that the government should tell the prisoners what to do. I prefer the former, because I think it keeps the responsibility still on the prisoner ("consumer" in our case).

I think this is the part that most people (and maybe you) get stuck on because the basic idea is that you give up one freedom to gain another. The prisoners are stuck. Until each one tells the other "if you squeal on me, my brother will kill you on the outside." Now, where they were once trapped by the rules of the game a new rule has been added. Do the prisoners gain or lose freedom when they threaten each other? The answer is neither because they never had any to begin with. In both scenarios they are trapped into picking a specific choice by their own rationality. The difference is that pre-threat they were trapped into a suboptimal decision and now they are trapped into an optimal decision. Coordination is the only thing that mattered here and it allowed everyone to benefit.

Now if we move this analogy over to government intervention in markets, which component of the analogy is 'government'? Easy, it's the mutual threat. The government isn't some outside entity and it isn't telling the prisoners what to do, it's the agreement between the prisoners and it's the enforcement mechanism of that agreement. The government here isn't reducing freedom (or increasing it) on an individual level but on a societal level it's granting us the freedom to move to more optimal outcomes.

>You've said that boycotts don't work, but I'd say that if the market doesn't want a product, it will fail

That's just not true. The prisoners want shorter jail terms, yet they'll fail to get them. Where you and I are clashing is the difference between individuals and society.

>why does a government have to enforce that?

Because otherwise it won't happen. There has to be an enforcement mechanism to for coordination to work. Otherwise defecting will dominate.

>You may find the references to some communist revolutions distasteful, but I think it's an appropriate comparison in that folks see government as the solution to a problem that markets solve really well.

Like I said, see Mao's Law. It's absolutely distasteful and not an appropriate comparison at all.

Besides we're specifically talking about problems that markets don't solve.

>Maybe you disagree (which I respect), but in many ways, static laws look good on the surface but have real downsides in the long run.

I do, but if you look at what I said you can see that my 'static' scenario and my 'fluid' scenario are both equally static. In one we're static because we're stuck by government regulation, in the other we're static because we're stuck by market rules (we can't coordinate.)

>I don't think that these things should be done secretly. I think companies should have to make this information available to consumers, and I think the government should enforce this to some degree (e.g. if a company is recording my phone calls to send back to their headquarters, absolutely it should be known).

You know who else liked government enforcement? Hitler. This is an appropriate comparison btw.