A market in which supply and demand are not subject to regulation other than normal competition policy, but in which property and other economic (e.g. consumer) rights are observed so as to allow trade to occur. This is based on the view by such economists as FriedrichHayek that decentralised systems tend to be markedly more efficient than the use of centralised planning.
Mainstream economists hold that free markets have a natural tendency towards consolidation, and therefore require the existence of monopoly regulation. However, free market economists such as Murray Rothbard and Ludwig von Mises have contended that free market economies are, in their very nature, antagonistic to industry cartels and monopolies.
See Austrian Economics and other InterestingMemes.