New Delhi, Dec. 8 -- Last week was yet another education in how fragile markets truly are. When one private airline faltered, schedules collapsed, weddings were disrupted, families struggled, students fought to reach exam venues and businesses scrambled. A logistical nightmare became a dark reminder of something even more profound: markets, especially concentrated ones, can turn predatory in a crisis unless they're regulated well.

Let us look at the symptoms. Airfares shot up overnight. A ticket that cost Rs.6,000 a few days earlier was suddenly Rs.40,000 or more. Hotels around airports quietly doubled rates as stranded passengers looked for overnight rooms. It is all demand and supply, say market purists-as supply responds, markets will...