As Doug noted, there's an element of truth in this, but there are (at least) two fatal conceits here. The first is that "markets" and "politics" are a matter of either-or. Beyond a certain primitive level, market interactions are always accompanied by "government intervention" of some sort, at some stage--including the stage that enforces prior, opportunistic private appropriations of what used to be common resources. The second conceit is the astonishing suggestion that the operation of markets doesn't "exacerbate and magnify differences." Heck, even Adam Smith realized that market interactions specifically and emphatically do this.
Gil
"The great virtue of a free market is that it enables people who hate each other, or who are from vastly different religious or ethnic backgrounds, to cooperate economically. Government intervention can't do that. Politics exacerbates and magnifies differences." <http://economics.about.com/gi/dynamic/offsite.htm?site=http://www.digitalnpq.org/archive/2006%5Fwinter/friedman.html>
