It also ignores the fact that a weak/minimal government will either be taken over or completely co-opted by the businesses whose property rights the government is supposedly there to protect/enforce, leading to a complete loss of democratic input.
We don't even have to imagine this scenario either, it's happening before our eyes now!
It's a bullshit economic theory that should have been tossed aside when the steam engine came on the scene and the rise of industrial capitalism and massive concentrated wealth.
Without equal economic power, there is no such thing as equal political power.