why do people think 100% free markets manage themselves?

Question

I've heard allot of people, mostly conservatives and libertarians, who seem to think that 100% free markets will somehow manage themselves to the benefit of society. I don't see how this is possible. 100% free markets are made up of businesses and corporations not checked or controlled at all by any of the three branches of governments decisions and since corporations and businesses exist only to make profits, what would a corporation’s incentive be to act socially responsible? What would the motivation be for a corporation to be socially responsible? Wouldn't competition make being socially responsible impossible? I'm seriously trying to figure out what the reasoning is of the people who believe this.

In response to Eric and Chris and to clarify my position: the problem with the philosophy of "voting with dollars" is that almost all consumers vote on the product, not on the social issues, when buying a product. They vote for social issues when they are voting for their elected representitives. I am talking about social irresponsibility, not product irresponsibility. Consumers generally just want cheaper higher quality goods. It's rational self interest at the market, not rational social interest. And the idea that a monopoly would ALLOW options is rediculous! Do you really think these multi-billion dollar companies would just sit back and allow some other companies to rise up and challenge them? They would eat them up and crap them out for breakfast!

Answer 1

it's more naive than pure communism if you ask me...

if you've ever worked in a business for about 5 mins... you can CLEARLY see the flaws... money over quality... money over workers... money over all...

ERIC H: people wouldn't shop at wal-mart if they cared about the deeds a company did... people don't care... that's the flaw..

Answer 2

You are right, free markets are made up of corporations unchecked by government. However, every corporation bows to the mighty dollar. The free market will correct itself through the selective use of the dollar. Even in a monopoly, the necessity for options will lead to the invention of alternatives.
Look at what a good job our government has done in regulating the oil industry. The prices kept rising because of "trouble in the middle east" - yet the oil companies continued to make record profits. If government wasn't mixed up in the process, we would feel empowered to act for ourselves.
The government is one of the least efficient machines in the business world. As a wise person once said - if a bureaucrat fell out a window, it would take him a week to hit the ground.

Answer 3

If the market is allowed to work, we vote with our wallets. If a company is doing something you don't like, you can boycott them. If it is making a big enough negative impact on society, society will let the business know when they've had enough. Everyone operates on rational self-interest (even when it seems like you are doing a selfless act - you have decided its in your interest to do so, even if its just an emotional positive you feel). When this is allowed to function freely, it works great. The problem is when a few people decide they know what's best for everyone else and start making regulations.