In a recent debate, a free market detractor described libertarians as the "free market is infallible crowd." Infallible means something is incapable of failing, but it also implies that failure and success are meaningful descriptions of the subject. Free markets cannot fail or succeed. Since there is no goal to a free market, there is no way to measure success or failure and those two results do not apply.



While free market participants are free to set personal or group goals, the free market itself has no goal. Both advocates and opponents of free markets unknowingly or mistakenly add expectations or goals to free markets. Free markets cannot succeed or fail because those terms are contextually meaningless.

The freedom to peacefully associate is one prerequisite of a free market. It is not a goal of the market. If peaceful association is not free in even the slightest degree then the free market ceases to exist, but it does not fail. If peaceful association is free and a free market is available, it is not successful. It simply describes the market.

If market makers in a particular sector lose interest and that sector fails to keep investors interested, the free market has not failed. If repeated transactions in an industry result in many losing and only a few gaining, then fair trading may have failed, but the free market has not. If an industry experiences great innovation and becomes popular, the free market does not succeed. The free market merely exists and any failure or success within the market is not the failure or success of the free market. It is the failure or success of the traders in the market.

Most trades are positive sum transactions. The sum of the benefits to each side of the trade is equal to more than zero. That does not mean that each side of the trade comes out better than before the trade. It only means the sum of all the benefits to everyone is greater than it was before the trade. A positive sum trade is a successful trade and wealth increases.

Should a positive sum transaction occur in a free market, that free market can not claim success. Success only has meaning for the transaction, not for the free market. Free markets do not promote positive sum transactions. Zero and negative sum transactions are also possible. People decide which transactions to transact. It is safe to assume that most trades in any market will be positive sum transactions. These are most likely to be beneficial to everyone and more likely to be repeated than zero or negative sum transactions.

Free markets do not promote fair trades or reduce fraud. The participants within the market need reliable information about who they are trading with and about the quality of products or services. This information allows markets to expand as people widen their circles of trading partners. If the demand for such information is large enough then products may be supplied which fill that demand. This is not a goal of free markets. It is a goal of the people participating in free markets.

Should a free market emerge and products develop which protect people from fraud and aid them in more balanced trade than existing markets, it would only be a chance circumstance, not a goal of the free market. If a free market emerges and a fraud protection product is not provided, that is not a failure of the free market. The free market does not promise fraud protection.

If a monopoly or a monopsony develops in a free market, the market has not failed because the free market does not guarantee that such business models will not exist. It is up to market participants to decide the success of failure of monopolies in the free market. Many libertarians believe monopolies will fall under their own weight should trade remain free, but that is a perception of a particular free market, not necessarily a characteristic of all free markets.

Competition is not a characteristic of the free market. I think Adam Smith would disagree, but the free market does not encourage or discourage competition. If a market consists of only two people living isolated on a remote island and if this is a free market, then competition for goods may not exist, but the market remains free. We assume that free markets would feature plentiful competition, but that is not a characteristic of free markets. The lack or abundance of competition is a result of decisions by people in the free market.