[jyl]

The stock market is as close to a completely free market as you'll find today. Participants buy and sell as they wish, with virtually no constraints from govt rules, and the sole goal is to make money. Yet, the stock market exhibits plenty of volatility and bubble/bust behaviour. Both at the overall market level, and all the way down to individual stocks. While a fairly small amount of the volatility can be attributed to changes in govt regulation of the real economy, most of the market's volatility is not due to that. There are plenty of equilibrium theories for the market - and they don't work, at least not within practicably useful time periods.