Prosperity in a Free Market?

Last month I speculated:

Perhaps a genuinely free market would have seen the development of organic economies driven by local production and less on mass production and trade. People might have less of what they didn't need anyway, and lead quiet, simple, but happy and stress-free lives. Or perhaps the free market would have taken us to unimagined technological heights and a prosperous and peaceful planetary economy.

In an unrelated topic at Yahoo's Libertarian Alliance forum, mutualist Kevin Carson writes [I've added links for elaboration of concepts]:

Regardless of the specific form consumption takes, state intervention destroys wealth by skewing things away from pareto-optimality, forcing some to accept lesser preferences than they would otherwise. Even if consumption were lower-tech, for example, in a free market society, we'd get to see what people would freely choose to spend their money on if it weren't for the cost of fixing all those broken windows.

But even measuring the quality of consumption in conventional terms, my guess is that there would not be any loss of real wealth; just a loss of the unnecessary Rube Goldberg apparatus currently involved in its production with subsidized waste and inefficiency, and the portion of the average workweek that goes down those ratholes.

I certainly agree that this is the most likely outcome of a genuinely free market.