There has to be basic regulations against fraud and theft and they have to be enforced. Look at all the huge fines the banks have been paying for criminal activities without admitting guilt. No one is going to jail for breaking the law. As long as we have a lawless elite society, you are right, free markets will not work because the thieves will steal stuff with impunity. If a bunch of those big traders that broke the law spent jail time, the others tempted to break the law would think twice. The way it is, the company they work for simply pays the "Liscense to Steal" fee in the way of a small portion of the profits made from the theft, and it is business a usual. The thief gets a raise and a corner office and a promotion. We do not have free markets. We have markets where laws are not enforced.

The other thing that HAS to be in a free market is the ability to fail. Would things be different if all the big banks making the risky bets with depositors money went belly up and smaller regional banks picked up the pieces and took over the deposits? I think so. How can we have a free market and capitalism when failure is rewarded with bonuses and record profits? How can banks in the future avoid the pitfalls earlier made when the pitfalls get the rewards?

We do not have free markets. Free markets require a lawful society and the ability to fail as a cornerstone for it to function as it should. Free markets have not failed because what we have is crony capitalism where an elite society is above the law and controls the money supply. That is not a free market.

John