In short selling, investors borrow shares and sell them, hoping that the price will fall and they can buy the shares later at a lower price, replace them and thereby turn a profit.
Hedge funds are not seeking to dictate economic affairs. Rather we are preoccupied by price. A market-based economy like ours requires a pricing mechanism to allocate resources and ensure that we all prosper. Get it wrong and we endure the calamity of the technology bubble and the sleazy debacle of the American mortgage crisis.
My issue here is that shorting was available as an option during both bubbles, but failed to dent them, so I dunno if it really has the market-wide benefits that are claimed (or implied in this case).
But anyway, it's a decent defence.