"The point is that they can or can not be related. There's no rule that says that the two must work in concert. Of course in America money buys politics (returning to the Mircosoft debate) so the two are virtually identical. Do they need to be? Not necessarily."
This is like saying that freedom and slavery can work together. It's an attempt to seperate cause and effect, the law of causality does not fail to apply however (causality is the rule that says they must work in concert). If you have a statist political system, you cannot have a free market because in order to be free, an individual must be free to keep the product of his/her effort; someone that is not allowed to keep such product, is a slave, and all forms of statism require some level of slavery.
The difference, is an issue of political power, vs. economic power. Political power is backed up by force, economic power is based on voluntary trade (not force). A socialistic system and the free market cannot exist together, because socialism requires economic sacrifice (high taxation in socialist Europe for instance, and all kinds of extreme welfare programs, etc.), in order for the government to pay for the socialism, it must exploit money from individuals by force. By reaching into the economic system, and exploiting money from individuals by force, a government is necessarily eradicating the possibility of an actual free market (which is a market free from force). Japan is currently paying the well overdue bill, on their socialism; which in Japan takes a very large form of 'public works.' Japan has run up somewhere around 8 or 10 trillion in debt, and has relatively little to show for it but a lot of unproductive public work ventures, and thousands upon thousands of companies that rely on public works to exist. Japan played an economic con-game for decades, and has been paying for it for a decade (and will continue paying for it).
What socialism comes down to, is always redistribution of wealth by force (from those according to ability to those according to need (ask yourself who determines and defines 'need')); this alone proves socialism and the free market cannot exist together (in order for the government to redistribute wealth, force is required). Force and the free market are contradictory, as are force and the mind - the mind does not function rationally under the use of or the threat of force (if one must use force to get another person to act, it means that the person is being forced to act against his/her better judgment, otherwise the force wouldn't be necessary). The correlation between economic, and innovation stagnation the greater the level of statism in a country, is no coincidence; Europe has been quite stagnant for over a hundred years, while America has produced countless products and inventions that are used by every industrialized nation. America in a short span of time has become the greatest economic power in history, not by force, but through the productive effort of some 22 million businesses, which produce 10 trillion in GDP.
China proceeds (as did the USSR) to steal technology from other industrialized nations, reverse engineer technology, etc. because their political system, based around the use of force, causes the minds being forced to fail to function rationally. China has 1.3 billion some odd people, yet they have an economy 1/9th the size of the U.S. economy; if it isn't obvious, the correlation between statism and the lack of prosperity, given that figure, then nothing will convince you.
And to cut short the argument: America's prosperity isn't due to exploitation. America has the world's first mass affluent middle class, and a standard of living that puts all but a few countries to shame (America's poor level is defined at around $15,000 per year or below, and by that standard over 95% of the world is poor; India's poor level is often defined in the $350 range by comparison).
Why would one desire to produce, if it is the lack of ability that gets rewarded, not ability? Whatever is a virtue, it is the lack of it that is rewarded under all forms of statism. 35% of the population ends of carrying the economic burden of the other 65% or so (including that 15% + that tends to remain constantly unemployed). Those 15% + that tend to remain unemployed under socialism, remain such because they can; because the government will force everyone else to pay for them to be unemployed.
"You are simply wrong. Please explain the seperation of government and the free market in Germany, or the entire EU for that matter. I'm quite interested to see how your imagination explains this."
You say I am "simply wrong" but you fail to provide any proof, this isn't unusual.
Germany doesn't have a free market economy; an *actual* free market economy means the seperation of state and economics. The "entire EU" does not have a free market either; France and others are borderline communistic (in France it is becoming near impossible just to fire an employee without approval of a government board, and may yet). Statists think the solution to the problems that statism cause, is... more statism; see: California energy problem.
The shabby little game that statists have tried to play, is to make capitalism into nothing more than an economic system so that they can claim to combine it with their statist system; i.e. to have their cake and eat it too.
So while the German government may proclaim to have a free market, it then proceeds to intervene in that market constantly, to enforce thousands of operational regulations, to collect massive percentages of tax on every profit, etc. all backed up by the threat of force. As I've said before, a market forced to be free (that is, a market controlled, and then proclaimed to be free), is not a free market.