cross-posted from: https://exploding-heads.com/post/86888

Young students of capitalism learn that markets operate according to the laws of supply and demand, through which Adam Smith’s “invisible hand” guides both the production and prices of finished goods. When demand for a particular product is high, its price will rise. When prices rise, new entrepreneurs will enter the market and produce new supplies. When those entrepreneurs compete against each other, their desire to attract customers creates a natural incentive for them to construct the best possible products in the most efficient ways at the lowest cost. Competition, in theory, forces markets to naturally discard bad and expensive products, while keeping the prices of the best products low.

In practice, however, mature students of capitalism understand that entrepreneurs are never in search of markets for competition but rather conditions for maintaining monopoly. Wherever and whenever producers may make and sell goods free from competing sellers, they alone determine the quality and price of their product. When their product is something that consumers must have, monopolists control the market. That is how real fortunes are made. The end result is that capitalists are always in pursuit of ways in which they may take advantage of laws and regulations, specialized knowledge, government contracts, or other exclusionary mechanisms to restrict potential competitors from ever entering the market. There is nothing “invisible” about the ways in which large corporations and financial conglomerates use their leverage to prevent smaller firms from ever challenging their dominion. In this way, most markets could hardly be described as entirely “free.”