David - thanks so much for your work. You're a great writer. That said, though I agree with most of your premises, I strongly disagree with your conclusions.
You say that "there has never been any way to disentangle politics from economics and there never will be. There are no neutral, pre-existing economic facts, as such propositions are always underlied by normative philosophical questions of yours or mine, of how we define the rules." That's true. Our laws form a kind of basic substratum in society - a set of rules or agreements that are more or less fair (often less). Of course business does not live outside this domain, but it doesn't need to - that's not what a healthy disentangling of the two would look like.
Before the separation of church and state, religion and law were always entirely entangled as well. There was a time in Europe where, if you lived within a principality where your prince was Catholic and then became Protestant, you would have to convert as well. The church and the state were entirely tied together. It was the same in early colonial America, and only a few radical thinkers thought the two should be separate. Today they are separate and that's a mark of significant progress (though of course we are always in danger of reverting to a theocracy, we've nonetheless evolved towards greater individual freedom). As Thoreau says in Civil Disobedience: "The progress from an absolute to a limited monarchy, from a limited monarchy to a democracy, is a progress toward a true respect for the individual. Is a democracy, such as we know it, the last improvement possible in government?" We are making progress towards freedom, though it's slow and halting. The fact that churches still have to obey laws doesn't mean that they can't be separated in a healthy way. They have been in what is, at least, a rudimentary way.
And of course we could separate business and government - there is nothing stopping us except for our own lack of will and vision. Yes, they have evolved together over centuries and millennia, but that doesn't mean they need to continue.
You tie business and government so tightly together, but why? Is it really true? Yes, at the "senior level" some people do move between the two. And of course, more often they don't personally move between the two but instead have an army of lobbyists do it for them and enact their wishes. But nonetheless, the functions of business and government ARE fundamentally different. Businesses produce goods and politicians produce laws that should protect people. Unfortunately, the separation between the two is messy and mostly nonexistent, but they still have two entirely different functions and SHOULD be kept separate. We just have to develop the will and vision to separate them.
One other important point. We don't just need to separate the church from the state, but all of culture from both the state and the economy. Is it not terrible that the state runs our schools and fights over "the truth" that shall be taught? Why aren't the teachers free to teach according to their own conscience? And perhaps there is a degree of separation between medicine and the state, but it seems to shrink more and more daily (and of course medicine is entirely tied in with business). Journalism is probably the easiest example. We would be horrified if the government ran the newspapers, and we are rightfully horrified at how much the media goes along with the government to start wars and the like - they are tied together, though not "officially" - and of course they are often beholden to corporate interests, or will see their advertising revenue disappear. But of course we should be fighting to separate them further and shouldn't throw up our hands in despair. There was no edenic period when these things were naturally separated. We are only coming to see that they should be separated over the course of time.
We need anarachism - but only in the realm of culture. It's in our thinking, believing, and expression (in religion, education, science, medicine, art, journalism, etc) that we should be entirely free. In our government, we should be truly democratic. Economic and cultural institutions should have no say. It should just be a society of equals, of peers, making the agreements that they believe are right for them. And our economy should be a kind of socialist/capitalist mix. It should encourage freedom to take initiative, but not indefinitely, not once the initiative-taker is no longer serving the public good but their initiative has grown antisocial (There is a difference between small business owners that are there to meet the needs of the community, and the CEOs of huge corporations just trying to reap as much profit as possible before the planet burns). The economy is meant to meet needs and should be fundamentally social, and really Smith and every other economist would agree with this: that the point of the economy is to meet people's needs, and as many needs as possible (this is why Reagan and others justify their economic policy by saying "all boats will rise" - I've never seen an economist argue that the economy should serve a few people and everyone else should starve. They're just disagreeing on the way to make all boats will rise. And of course many, if not most, are disingenuous and don't care if people starve.)
Does that make sense? That picture of a healthy separation of societal functions was most extensively described by Rudolf Steiner at the turn of the last century. It's called "social threefolding." It's not a picture of utopia, but of what is today and how we need to work in order to bring society towards health. We just need the will and the vision. (But the fact that these functions exist and have always existed, Thomas Piketty, Levi Strauss, Mircea Eliade, and many others have described. I wrote an article about it here: https://thewholesocial.substack.com/p/societys-open-secret
Thanks so much for your work. All the best!