Is this behavior guaranteed, and would the public necessarily choose to stay informed? Free markets are dependent on rational, informed actors; humans are neither rational nor informed 100% of the time. Some other thing would have to step in (an organization, a government, whatever) at some point.
> Your argument implies a lack of faith in a single person or a small group of people to effect change
If I owned the polluting company, I would likely have much more power than the poor sap I'm poisoning. Money seems to speak louder than actual words. Compared to some tycoon, a normal person is basically insignificant and is much less likely to cause any change.
> Do you believe that only government has the ability to keep our water clean?
I don't know what the right answer is, but to put it bluntly, your approach seems like a deeply flawed one to me.