how is the free market responsible for social inequality?

[Eliot K]

In a free market, business can lower wages if there is a surplus of workers. This results in a group of people (low-paid workers) who may be unable to afford living a decent life.

Also, in a free market, businesses can save money by externalizing some costs. For example, with no regulation, I can sell you fruit juice, make it sweeter with anti-freeze, and toss the garbage into the river.

The result is that people who depend on the river suffer, and people drinking the juice suffer, but there is no recourse except suing me. But, in a free market (as envisioned by Republicans) they are not going to get justice, because businesses have the power to limit access to the court and put a limit on how much can be paid to injured parties.

A free market with controls, such as minimum wages, limits on hours worked per week, safety regulations, environmental regulations, full access to the courts for everybody, there is likely to be less social inequality.

Finally, If regulations - such as tax laws - are structured in favor of the wealthy, then there is a continuing, overall transfer of wealth from the many to the few, leading to social inequality.

Some people would call a system of strongly progressive taxation ("tax the rich") as being anti-free market. yet, it is the fairest, easiest way to return money to the consumer economy and increase social equality.