Discussing this in detail in “Free to Choose” even Freedman said that pharmacy manufacturers will release drugs long before they are proven effictive and side effects are documented. As people waste money, or die, the market will eventually “learn” what is good from what is not leading long-term to the best products being available. What of those who die in the process? Just part of free market learning to the theorists.

The other popular economic term is “temporary economic dislocation.” Free marketeers forget to point out that as learning occurs the excesses and errors lead to overpricing assets and overusing leverage – such as when people mortgaged their homes to buy tulip bulbs, and Danish bankers loaned money on tulip bulbs only because they were expected to go up. When the price crashed, everyone lost. So what of those that lost fortunes, homes and jobs – they were “temporarily economically dislocated.”

Even the theorists pointed out that the only way to control the extremes is to provide a countervailing force to “free markets” before excess is reached. And that force comes from regulators. Only regulators can stop meat providers from cutting sanitation costs so low that many die before meat consumption declines. And regulators should have stepped in and stopped the incredibly lenient lending done in the name of finding short-term profitable loans – for short-term profits at new home builders.

Today’s free marketeers are politicians. That’s too bad, because everyone knows merchants have no incentive to regulate themselves. Until the politicians achieve balance, and recognize their social requirement, all of society will suffer from these rather avoidable problems.