perhaps true of "big L" libertarianism, but this is not entirely a fair representation of the broader political philosophy. most libertarians i have talked to will certainly acknowledge that market failures happen even in unregulated markets.
as i understand it, the core motivation for libertarianism is that power is real and impossible to "distribute" evenly. relatively more powerful people will always be able to divert state resources to serve their own ends. the only way to limit this effect is to limit the power of the state itself.
so the argument is not so much that free markets are beautiful, perfect things; rather, the free market is usually preferable to the regulated markets that powerful actors will allow to occur.
That is true for the right-libertarianism dominant in the US (also true for some flavors of left-libertarianism). I guess that's probably what most refer to with "big-L Libertarianism".
as i understand it, the core motivation for libertarianism is that power is real and impossible to "distribute" evenly. relatively more powerful people will always be able to divert state resources to serve their own ends. the only way to limit this effect is to limit the power of the state itself.
so the argument is not so much that free markets are beautiful, perfect things; rather, the free market is usually preferable to the regulated markets that powerful actors will allow to occur.