The existence of a free market does not of course eliminate the need for government. On the contrary, government is essential both as a forum for determining the ‘rules of the game’ and as an umpire to interpret and enforce the rules decided on.
The debate over free market capitalism generally pits those in favor of economic regulation against those who believe markets are strongest when left to function without regulatory intervention.
One one side of the debate, regulatory advocates believe that free markets are inherently unstable, unequal, and prone to the traditional “business cycle” of booms and busts. Known as Keynesians in economic circles, these individuals believe that free markets need to be controlled by the government in the form of fiscal policy and monetary policy, in order to soften the impact of yhe business cycle and prevent painful recessions.
On the other end of the spectrum, free market economists argue that government interference in the economy is what causes the business cycle in the first place.
In practical terms this debate also pits those who believe the government is best suited to distribute economic resources through social programs and infrastructure projects against those who believe that unregulated private enterprises are best suited to stimulate progress and wealth growth. Central issues within this debate include the privatization of public resources or utilities, the legislative push and pull over regulatory oversight, and the outsize role that money plays in our political system.