IN order to have meaningful discussion, definitions of terms must be agreed upon. "Free Market" is used primarily in two different ways.
Definition#1: The free market is a mode of exchanging goods and services without the intervention of government.
Example #1: Johnny trades his peanut butter and jelly sandwich for Sally's Coca-Cola.
Definition #2: The free market is a mode of exchanging goods and services in which all parties take part freely using all known market data, including any government intervention data.
Example #2: Their school bans Coca-Cola because it contains too much sugar. Because Sally is the only one reckless enough to defy the school rules, she has the only Coca-Cola. Therefore the price of her Coke is bid up and Johnny must offer two peanut butter and jelly sandwiches for the Coke.
Thus, some would argue that in #2, since Johnny was free to keep his sandwiches if he wanted, the market was free. Economists use definition #1 only: A Free Market is exchange without government intervention. Under definition #1, it is clear that trading carbon credits under cap-and trade laws is not a "free market" transaction. In fact, the credits have no economic value without the government. Of course industry will play the game only because they have no choice, except prosecution, fines, and prison. To call that free is REALLY chicken shit.
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