It seems to me that free market theories depend to a considerable
degree on the thesis that the state will enforce laws and contracts.
The unfortunate fact is that no state is completely efficient at this
task, and some states are abysmal. As the size and economic power of
a corporation increases it’s opportunities to “cheat” the system with
bribery, fraud, corruption and theft increase. It is easier for
CitiBank to bribe a state legislator than it is for Joe’s Deli to do
so. Where the corporation has more economic resources than the state
the situation is exacerbated as is the case in Africa in some
countries.

Does any of this have any theoretical impact on free market theory?
If corruption is rampant and the state is unable or unwilling to
combat it, is it still the case that competition in a free market is
the optimum solution?

Even in a country like the US, where some consider that the rule of
law is extant, the state is inefficient at detecting and prosecuting
fraud. Perhaps like Roman markets fraud should be ignored by the
state, “caveat emptor”, but as of now it’s an important part of
contract enforcement law. Can there be a free market if there is no
enforcement of contracts?

Should the inablity of the state to enforce some laws change how it
writes those laws dealing with the market that it *can* enforce?