Free Market: Definition

What do you mean when you say "I believe in the free market"?

Television pundits often say "I believe in the free market" but it isn't at all clear what is believed when this is said.

Thanks again to William for raising this query.

I think I can say that the core definition of free market should be “a market economy based on supply and demand only; where buyers and sellers, the only two entities, transact freely based on a mutual agreement on price”. Rest everything added to the definition is superfluous. The word “Government” is almost inevitably used in the definition of FM. The emphasis on this word isn’t required in the definition. Rather we should understand that government is just an example of external control which takes the market away from being governed by pure supply-demand law. This control can come from even inside the market, through buyers and sellers, for example from coercion between buyers, sellers or buyers and sellers. What the word government symbolizes is a control which interferes with the free functioning of market.

To recapitulate, none of the buyers, sellers or any external agency should have the power/ability to influence a FM economy which in turn should be ruled only by supply and demand.

Here I would like to add that more often than not the reference of "Free Market" is made only when it is being suggested that the market should not be influenced by any force which undermines the supply and demand principle.

When the pundits use FM they usually try to emphasize that they want any external interference or influence to be removed from the market.

Visit the below link for a very informative discussion on the above topic.

 http://www.linkedin.com/answers/finance-accounting/economics/FIN_ECO/365554-2378437?browseIdx=12&sik=1238529999126&goback=.ama