Leave it to the free market

Often people use the phrase 'leave it to the free market'. This applies whether or not they are in favour of free markets. For example:

For me, this indicates a misunderstanding of the idea of free markets. A free market is a way to maximize society's wealth, given the following constraints:

Examples of laws of the land are:

A free markets takes these constraints and gives a system that optimizes society's wealth. Implementing a free market involves extra laws. For example:

The point that I want to make in this post is that the free market solution that you end up with depends on the laws of the land. There is no single free market solution. For example, if it's against the law to pour mercury into rivers, then your free market solution won't result in rivers polluted with mercury. If it omits the mercury law, then you probably will get mercury pollution.

Going back to the quotes at the begining:

I'd answer that free markets are just a way of solving an optimization problem. If you want the solution to involve reduced CO2 emission, you have to pass a law that makes it more costly to emit CO2.

This implies that there's a single free market solution to health care. This is wrong. You have to work out a complex system of regulation. Each system of regulation would result in a different outcome. The free market is just a way of maximizing society's wealth given the laws of the land.