Adam Smith is very selectively quoted by "free market" types...
Markets are built both on corporations openly trading value to customers for money and competition keeping that system alive and healthy as markets/products/technology/organizations naturally grow and die and economies fluctuate. Stasis and one-sided deals are unsustainable, which is what this type of arrangement buys you.
Corporations being allowed to use state power for their own benefit (at the expense of their customers and/or competition) has nothing to do with free markets. All you're left with then are companies who rake in money from customers without trading full value or excluding competition from existing. That's not a market or a useful system for any society.
Regulations to serve some higher public good that markets can't practically account for are very different from individual corporations writing laws to benefit only themselves in the marketplace. Boeing selling more dangerous airplanes (even if that happens through government coordinated processes) and losing Airline customer's trust would be terrible for any real business, assuming there is competition and customers who aren't forced to buy from them.
It applies in this particular case: I'm not very familiar with Smith's work, and I am a bit puzzled that this quote is from him.
E.g, radically, labor markets in the absence of a basic income system are not really free, since employees starve and lose their homes if they do not accept the best available offer. Hence companies' competition for paid labor is not really free, and most groups have an existential threat if they do not accept the terms of the employers that are willing to employ them.
There are a million aspects to this that I'm not an expert in, but many of the "free market" principles are considered in the context of contrasting a market economy vs. a planned economy.
Free market means people can voluntarily engage in transactions without the government interfering in those transactions, such as when the government sets the price of some good.
Unfortunately you are not allowed to pick only the good side of the people that supports the feasibility of your chosen ideological utopia.
Yes, the difference is one exists and is bad (like "really existing socialism" existed and was bad), and the other is an unrealistic utopia like communism.
A utopian market without sucker consumers, without business people willing to exploit it and without powerful companies taking advantage of it, and somehow, with less government as well...
The criticism I offer for all “free market” types is this: it is naïve to ask, let alone hope, for government to act as an impartial referee. Government is a player with its own agenda. It always has been and, for as long as it is made up of self-interested human beings, it always will be.
> Because of Guzman, she says, everything is under control — people don't steal, kidnap or extort here. And the partiers say he helped the poor, paved roads, gave people jobs — the list of good deeds goes on.
This is fudging the word "market" a bit. Free market advocates think that everyone should be able to, say, sell paperclips without the government getting involved. Saying that regulation is "part of the market" suggests some kind of misunderstanding of what a free market is.
> it is naïve to ask, let alone hope, for government to act as an impartial referee.
In practice, I agree. It's also naive to hope for the government to faithfully align with almost any political ideology, e.g. progressivism. I don't see that as a flaw of the ideology itself.
I have similar quibbles with other ideologies. Really, my strongest criticism is reserved for ideological purists who come in all shapes and sizes. To put it plainly, I believe all ideologies are reductive and lead to absurdities when broadly applied, particularly to other human beings.
Pragmatism is the approach I prefer. What separates it from an ideology is that it doesn't attempt to cram the world into a tiny box. It's a tool that would work even in an unreliable universe and it affords complex human beings the respect they deserve.