this post was submitted on 26 Nov 2023
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I don't really agree with this. It is the answer that I think classical economics would give but I just don't think it's useful. For one, it ignores politics. Large corporations also have bought our government, and a few large wealth management funds like vanguard own a de facto controlling share in many public companies, oftentimes including virtually an entire industry, such that competition between them isn't really incentived as much as financial shenanigans and other Jack Welch style shit.
Some scholars (i think I read this in Adrienne bullers value of a whale, which is basically basis for this entire comment) even argue that we've reached a point where it might be more useful to think of our economy as a planned economy, but planned by finance instead of a state central authority.
All that is to say: why would we expect competition to grow, as you suggest, when the current companies already won, and therefore have the power to crush competition? They've already dismantled so many of the antimonopoly and other regulations standing in their way. The classical economics argument treats these new better companies as just sorta rising out of the aether but in reality there's a whole political context that is probably worth considering.
Good point well made. I think it's usually naive wishful thinking (for a "just world" that makes sense and is going to be OK, actually) that allows a liberal capitalist apologist to point to classical economics and say "see the companies are hurting," but the companies don't have feelings, and the owners and shareholders are feeling just fine.
I woukd say it's even worse than that: Free Market only works if humans behaved in a certain way (the so called homo economicus) which has long be disproven by Behavioural Economics and in Markets with low barriers to entry (i.e. teddy bears or soap, not railways or internet service provision) and even then it can't deal will systemic problems (basically any Negative Externality such as Polution or Greenhouse Gas emissions, or over consumption of share resources - a.k.a. Tragedy of the Commons - such as with overfishing or in depletion of mineral resources).
People have been fed by politicians and think-tanks with shaddy funding an oversimplified theory that sounds amazing if you do not at all dig into the details, whilst not actually working in reality, not even close, but of course you're never be told that by the people who win the most from the system built on top of this theory.
(It's actually funny how this is the Capitalist mirror of Communism: beautiful high-level theory, never worked and can't work in practice - because people are as they are, the physical world is as it is and human systems work as they work - and the people whose priviledges come from the system created to implement said theories will never ever tell you they don't work and never will even after a half a century experiment: in fact they'll just tell you it's only not working as expected because it has not been done with enough "purity" and hence we need to double-down to make it work)