>Are we really better off having competition for competitions sake rather than looking at what delivers the best outcome?
No but competition is the bedrock of the resource distribution philosophy at hand. If thats not the case then we should just let all companies consolidate in to a large monopoly because their products are superior to non existing companies.
Unsupported assertion. There are both positive and negative aspects to more companies. Consolidation isn't just profitable because it turns an industry into a cartel, but because there are real economies of scales in some industries, especially logistics. This could go either way.
> with overcapacity, who would like to join?
No one needs to join until the overcapacity goes away, do they?
> I think those firms will likely lose their competitiveness overtime. Unless they are defacto monopoly.
I suspect that's wishful thinking that assumes a greater alignment than actually exists between what we want for society and what the market will lead us to.
> Only way to compete should be to make either a better, or a cheaper product.
I think this is a core part of the anti-competitive problem, though. Economies of scale mean that a company with a 50% market share is going to make the cheaper good, all else equal.
We would effectively need to increase competition at the cost of increasing efficiency to make that work (e.g. by banning mergers of larger players).
> Inevitably, if any industry is profitable, competition will arise.
An industry can be profitable for the existing market participants and still have a high enough cost of entry as to have a negative expected profit over any meaningful timeframe for a prospective new entrant.
In practice, this is likely to change due to changing external conditions (e.g., technological progress that lowers the cost of entry or creates previously-impossible substitutes) but there is no theoretical reason why this must be the case.
> Industries where direct competition is allowable do not suffer from these problems.
No, they suffer much worse. Haven't you noticed how all goods and services go to shit over the years? This is not an accident, this is competition optimizing out any quality it can get away with removing.
Well, consolidated industries currently exist, and they don't take too kindly to competition.
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