The only one who can guarantee a free market (e.g. big players not monopolizing, abusing their position, underbidding and then killing small more efficient players, etc) is the government/law.
But the government is also often in the hands of big players, and passes laws to their favor.
And even when it isn't, they have the upper edge in other ways (purchasing and negotiating power, better lawyers, more money to burn, etc).
Heck, even the simple fact that "bigger player = more advertising money" can make free competition from a newcomer a non-starter. Even if the new company can make something for cheaper (despite the better economies of scale of the big players) people don't buy cheaper, they mostly buy what they know.
Hence, free market is a myth, perhaps even more so than communism.
Bingo.
Additionally, in many cases the person/team carrying out a procurement process may require (often by law or company policy) a ridiculous set of documents that some sleazy company is an expert in navigating, and exploiting any loopholes or poorly-written selection criteria. They deliver crap service that barely qualifies, but the procurement person/team can say, "well technically they fit the criteria" so their ass is covered. The procurement team is not rewarded for selecting the best candidate, so they minimise their own exposure.
Another reason to support small businesses, it helps keep markets honest.
https://en.wikipedia.org/wiki/Free_market
It says that there is a less assuming version, but I'd always heard the information thing.
As an employee in software I've been working through intermediaries for a good part of my career, so obviously interested.
I suspect that, at least in my country, it's more a matter of bad regulation than of information assymetry. But the mere fact that we're not sure which are the causes is in itself information assymetry.
I think you might of hit on a possible explanation there, maybe it's wealth inequality? When there was more equality that CEO (or company owner, or just someone near the top) might have been going to the same bars or been part of the same local sports clubs as the cleaner, their kids might have gone to the same school. Now they probably live in other parts of the city.
Politics lately has been an example of this divide.
I don't think this ever the case, in any era. Rich people in many countries definitely send their kids to posh schools through their connections (e.g. slots available for those with a parent who attended), go to different bars and follow different sports (e.g. rugby union vs football/soccer, depending on the country obviously).
Yes, but company owners in many countries weren't that rich that the other people they provided services to. Consider a company with 10-20-100 people, serving a city.
Now, those jobs go to huge conglomerates and companies with 1000s upon 1000s of employees, and CEOs that are 100x as rich as the people buying their services.
Businesses don't compete for customers. They compete for investor and shareholder cash. For most businesses, the point of optimum return for investors is in a completely different part of the graph to the points that keep customers happy and employees secure and well-paid.
- property rights exist, and are enforced
- there are few barriers to entry
- transaction costs are low
My money's on transaction cost issues. BigCorp has teams of people dedicated to making customer acquisition more effective and efficient.
Don't forget that the state humanity started from was a totally free deregulated market, the consequences of which was the formation of tribes ruled by the strongest, most vicious guy and his spear-happy friends. When you don't have regulations, the person with the most power can impose their regulations.