Imagine, just for a moment, a world without a government to protect us, to compensate us when Shit Happens (we will come back to this in a moment, I'm sure).
In such a world, there would be no statutory regulation, no minimum wage, no closed shop unions, no vested interests that exist precisely because government enables it.
In this appalling world, markets would be truly free. And a free market is an interesting thing. People speak about the "free market" (which absolutely does not and cannot exist in a world which contains statutory regulations) as though it's some sort of evil monster that can "fail".
Such thoughts fundamentally and profoundly misunderstand what a free market is. A free market is merely the recording of prices for the exchange of goods and services when there are no legislated barriers to entry from either the supplier's side or the consumer's side.
It has no power, it is merely the recording of the price agreed when two parties freely agree to trade.
Let's assume (in the world without government) that you are walking along a beach on a hot, sunny day and you come across a lemonade stand. You have no idea how the lemonade is made, but you're hot and thirsty and the vendor wants a pound for a glass of cool lemonade. You buy it and drink it. He has a pound in his pocket, you are refreshed, both parties have gained from the transaction, both parties are happier than they were before.
That, ladies and gentlemen, is the absolute horror of the free market in action. The thing that socialists blame for the collapse of the world's economy.
Of course, it gets more complicated. I think I can make a better lemonade for the same money or even less. So the next sunny day, I make up a batch of lemonade and I go set up a stall next to him. I want to get customers to buy my lemonade (which I think is better) and so I sell it for 99p, or 95p or whatever. I still make a decent profit at this price, and because my lemonade is nicer, I sell out quickly and the other vendor is forced to either bugger off, or lower his price to 90p. He's still making a profit, and although my lemonade is better, he grabs back more market share. If I don't sell out my batch of lemonade, I am forced to cut my price so that my price is the same as or better than his, or so that the price difference is so small in my favour that people don't mind paying the difference for my lemonade and I sell out.
At the end of this round of horse trading, we stabilise at about 80p per glass for him and 81p per glass for me, because it costs us 50p to make it and neither of us is prepared to do it for less than 30p per glass profit. Someone else comes along and decides, he's prepared to do it for 25p per glass profit, or he has a source for cheaper ingredients and so the battle starts all over again.
At no point in this bloodthirsty, violent struggle has any of us lost out -- we are all still trading voluntarily, and more importantly, the people who walk on the beach are having their wants met for a lower and lower price. Everybody is still happy. At some point, one or more of the vendors may fold, or may go off somewhere else and the whole dynamic will change again. But everybody is still buying what they want for a price they're prepared to pay and the vendors are all still making enough money for it to be worth it for them.
After a while, a devious vendor appears. He starts casting aspersions on existing vendors, claiming that their lemonade made him ill. Or maybe it's true, who knows? We certainly don't! Anyway, he creates "The Guild of Lemonade Vendors", which mandates basic requirements for GLV-approved lemonade, which also means they can charge a higher price.
Customers can now choose from existing lemonades or lemonades that are pricier, may not taste as nice, but are "certified" as good. Vendors can choose to join the Guild (which will probably mean paying something which increases their costs and reduces their margin), create their own "Society of Lemonade Vendors" or remain unaligned and trade on their existing customer base and reputation.
Eventually, this horrific, brutal struggle to deprive the consumer of their hard-earned money will reach moments of stasis, where no-one sees any benefit in entering the market, but then everything will change again. The price of lemons (in itself a free market) could collapse, leading to cheaper lemonade for all or it could rise sharply, making lemonade more expensive.
But at no point does anyone stick a gun at the customer's head saying they have to buy lemonade. The customer may not have enough money on them, and the vendor may or may not be susceptible to haggling or a freebie to win over a repeat customer. It may not be warm enough that people will buy. So other "sweeteners" may be offered to get customers to buy, which may or may not work.
All the free market does is measure the prices at which people make mutually beneficial trades, completely removed from the burdens of externally-imposed constraints.
Terrifying, isn't it? And aren't people who believe in the free market heartless, unfeeling bastards?