Business owners have always made errors, and external factors can lead to economic crises of various sorts. But the cyclical pattern of booms and busts we now see are a result of government interventions not seen in a free marketplace.
There is a myth that Progressive humanitarians agitated for meat-packing regulations which now protect us from disease. The reality is that the big meat packers themselves wanted regulation to help crush the competition.
The free-market doctrine does not rest on an assumption that consumers make wise choices. Like the mythical “economic man,” the Perfectly Wise Individual is a straw man created by the critics of the theory.