A moat is what enables you to avoid being in a race-to-the-bottom commodity business. In a commodity business you get just enough returns to cover cost of capital plus a little bit. With a moat you can get 20% - 30% profit margins: Coca-Cola, Apple, Google. A moat is also what builds an enduring business. The moat is what prevents other people from just doing that same thing you are doing but at a lower price. A moat isn't rent seeking, it is (or at least can be) out-competing. The iPhone was a huge moat for Apple for many years; they were 2 years ahead of everyone when it came out, so much so that engineers at Microsoft and RIM both thought that the announced product was impossible. The M1 is similar, everyone is probably two years behind, if they can even catch up. (Eventually they will, because Apple probably can't ride the process improvements that long)

A commodity business is the essence of free market capitalism.

Every time you say you don't want to be in a commodity business, you're saying you don't believe in free market capitalism. You don't want competition.

I think the unstated context is that “moats” might justify a higher stock valuation than otherwise, which is relevant because of the behavior of the stock on IPO