A truly free market is characterized by a separation of government and economics. Individuals are free to engage in the economic activities of their choice, so long as they do not use force or fraud in dealing with others. Many believe that this is impracticable. Without government regulations, they argue, consumers will have no "protection" and will be left to the mercy of businesses.
It is important to realize that government regulations do not protect consumers from fraud or dangerous products. Despite an abundance of regulations, Bernie Madoff, Enron, and numerous other businesses have engaged in wholesale fraud. Rather than protect consumers, regulations create a false sense of security. Believing that regulators are preventing fraud, consumers often fail to engage in due diligence.
What is the alternative? Certainly, nobody wants to discover that his doctor is an incompetent hack. Nobody wants to buy tainted food or medicines. Nobody wants to be defrauded.
Even in our heavily regulated society today, there are many alternatives to government regulations. Organizations such as the Better Business Bureau and Angie's List allow consumers to voice complaints about businesses and make recommendations. Organizations such as Good Housekeeping and Consumers Union test products and provide consumers with information to make intelligent buying decisions. Product manufacturers and trade organizations provide certification programs. And in a truly free market it is likely that other alternatives will be developed.
Advocates of regulation posit an irrational, and impossible, standard--preventing fraud and deceit. This is a Platonic ideal that does not and cannot exist. So long as men possess volition, they are capable of engaging in fraud. Rather than regulate and control all businesses, government's proper role is to prosecute those who actually do engage in fraud or knowingly market dangerous products.
The alternative to government regulation is freedom--the absence of coercion in the relationships between men.