Right, which is why touting oversimplified economic models is likely to be contentious ;) Speaking of which:
> The more free market a country is, the more prosperous it is.
When do you think the US was at its most prosperous? Most would say somewhere in the mid 20th century, which was hardly the least regulated time in its history…
GDP growth in the 1800s is a rather dodgy time of statistics, as economic statistics were not collected then.
From 1800 to the Civil War, the US economy began to be industrialized. The Northern states industrialized, while the Southern economy stagnated.
The 1870s and 1880s are considered a very prosperous time. It was a time when industry really got in gear and was applied broadly.
I don't have hard facts, but prosperity in my life seems to have been driven by the computer industry, a pretty much completely unregulated sector of the economy.