“Leaving all decisions to markets results in grave inequalities.” Has the free market model failed?

The world today witnesses grave inequalities where majority of world’s wealth is concentrated in the hands of a few. These handful of people are able to enjoy all luxuries of life when a significant number of people find it difficult to meet even their basic requirements. This acute disparity in distribution of wealth and income calls for certain remedial steps to be taken.

Leaving all decisions to demand and supply mechanism has its advantages and disadvantages:

Advantages:

1. Free economic model encourages healthy competition in the market by reducing monopolistic tendencies which helps the end consumer
2.  Lack of monopoly in the market ensures that the prices of products remain competitive and fair.
3.  Competition encourages better and faster growth.
4.  Minimum state intervention reduces chances of corruption. 
5.  Certain aspects associated with free markets like outsourcing and globalisation brings cost advantage and faster penetration of modern technology in less developed countries of the world.

Disadvantages:

1. Lack of government intervention can sometimes result in formation of strong corporate nexus which can eliminate competitive price advantage.
2. With no welfare measures by the government to ensure fair income distribution, it can widen the income gap between rich and poor.
3. In the absence of state intervention, development will take place and opportunities will be created only in the areas of wealth concentration and a person born in a poor family with have very little chance to alleviate his state of poverty.

Hence it is notable that free market has led to inequalities. The extent of failure may vary from country to country such as in India the inequality is grave and in developed countries it can be managed with minimum state interventions as in USA.

Hence the idea is to adopt and economic model that maintains a balance between the extreme right and the extreme left and follow a mixed economy where there is sufficient market factor and government intervention so that masses can live in "Shared Prosperity".