> Well, first I would like to point out that in your example there are three parties with the exchange being the intermediary and trading firms transacting.
The agreement to restrictions is still between two parties, but you can read it as "two classes of parties" if it makes you feel better.
> Now, your argument appears to revolve around knee jerk reaction to me saying that in real free market, the rules would not artificially prop the market. My argument is that in a true free market, the rules would not restrict it arbitrarily.
It seems like you're confused about a couple of concepts here and I think it may stem from overloading the words "free market" and the concept of "the free market" generally.
The stock exchange, like any real world marketplace, has many restrictions on trading. These make it a market that is not free in the sense that you cannot trade however or whenever you like. However, the free market is a distinct concept from any individual exchange. It means that parties involved in the open market (i.e. everyone) are able to freely exchange goods and services as they choose. This may involve entering into agreements (like contracts) that restrict future actions, but as long as those agreements are freely agreed to, this is still consistent with the concept of a free market generally. Thus, the fact the stock market has restrictions is still consistent with the concept of a free market so long as the participants freely agreed to those restrictions.
The agreement to restrictions is still between two parties, but you can read it as "two classes of parties" if it makes you feel better.
> Now, your argument appears to revolve around knee jerk reaction to me saying that in real free market, the rules would not artificially prop the market. My argument is that in a true free market, the rules would not restrict it arbitrarily.
It seems like you're confused about a couple of concepts here and I think it may stem from overloading the words "free market" and the concept of "the free market" generally.
The stock exchange, like any real world marketplace, has many restrictions on trading. These make it a market that is not free in the sense that you cannot trade however or whenever you like. However, the free market is a distinct concept from any individual exchange. It means that parties involved in the open market (i.e. everyone) are able to freely exchange goods and services as they choose. This may involve entering into agreements (like contracts) that restrict future actions, but as long as those agreements are freely agreed to, this is still consistent with the concept of a free market generally. Thus, the fact the stock market has restrictions is still consistent with the concept of a free market so long as the participants freely agreed to those restrictions.
Does that clear anything up?