I think you shouldn't be immune to the observation that in calling the parent's argument "based on emotion" and "deliberate propaganda" you occuse your opponent of "promoting ... dictatorship and slavery".
Let's take a step back here. We are all geeks and we can approach governance from an engineering point of view. If I read you correctly, you're advocating a somewhat extreme social contract viewpoint in which the only legitimate function of government is to take us out of the state of nature by granting the government as minimal a monopoly on violence and power as possible. This view isn't unreasonable on its face, but there is more to it.
In any society, including humans, there is a distribution of power and resources that comes from natural survival of the fittest. The basic idea of government is to voluntarily abdicate much of this power to a central authority (where central can mean tribal, state, federal, world, etc). This creates the natural problem of a single point of attack: any group that can infiltrate the government will be able to use that centralized power for personal gain. This creates the need to impose laws on things like (1) who can serve in government (probably not felons, e.g.), (2) what limits members of government can have in their personal influence (e.g. can anybody unilaterally declare war?), (3) limitations on the influence other powerful social members have on the government (e.g. campaign funds, revolving doors) and many others. The point here is that it's a question of engineering. How do we organize the central authority so that the people have maximal freedom to do anything they want and they don't have to fear being pushed around by anyone.
Where you and your opponent disagree most is in determing the strongest threat to government infiltration. The social contract tradition, of which you seem to subscribe, was concerned primarily about landed aristocracies using the power of government to do anything they like. This was historically opposed by a class of business owners and farmers who favored a representative democracy. But in the course of history many things have changed. America has no landed aristocrats, so we no longer worry about that. Instead, it has a class of people who believe that selfishness is a positive virtue that is much more important than telling the truth or helping others. This belief flourishes in America's political structure because it is easy for such people to lie in order to gain votes but then to ignore the voters once in office. The parent believes that these people are using government to their advantage to the detriment of the vast majority of the public.
From this point of view, the "free market" rhetoric is a device to convince the population that there is a moral imperative to turn every part of society into a money-making enterprise. Naturally, if you do this you end up with something very much like what you see in, say, Boardwalk Empire or any other popular depiction of organized crime. In fact, it should be rather obvious that organized crime is only crime because there are laws that prevent business men from engaging in certain profitable businesses, such as human trafficking, drug exportation, war profiteering, and so forth. It raises the question of why any of these things is illegal in the first place.
And, quite obviously, the reason they are illegal is that in a truly free market, labor has the right to organize and the poor have the right to protest and vote. So in a free market, a government will voluntarily implement policies that limit the ways that businesses can exploit others for profit. The only way to get an "ideal" free market of the sort Milton Friedman advocates is to sneak pro-corporate laws onto the books or into the courts since naturally those laws will be opposed by anybody not directly benefited by them.
The mistake you make is that you don't see a free market as a process, you see it as a set of laws. But historically you never get that set of laws unless through corruption and autocracy. For example, jobs moved offshore because other countries didn't have the labor protections we had in the US. When labor started organizing in these other countries (as they can in a free economy), the US used military and lethal force to impose autocratic rules that forbade it.
I would suggest educating yourself further on history, political science/philosophy, economics and the like. If you believe that "social" means "anti-individual" then you have an extremely narrow perspective that I believe you will find wholly unsatisfying after you learn more. I don't mean this to be insulting, but your post reads a little bit like an iPad gamer claiming to know everything there is about gaming. You just kind of want to take the person aside and open his eyes to the wide and fascinating world of things beyond his ken.