Free-market systems mimic nature. In that, the big fish will, naturally, eat the small fish. Because they can. If left to itself, the system will result in a power struggle of the economic kind, which also spills into the social domain. Those who gain power are, again naturally, inclined towards retaining it and growing it through unending acquisitions. Why would they reduce it voluntarily and risk extinction?
In the power struggle, which can be constant, each contender or participant tries to gain a competitive advantage via perseverance or information or technology or timing or networks or deception or other such means that are civil equivalents of arms, ammunition, and armies.
In a system of transactions and exchange of values, the least informed (or educated) is, often, at the most disadvantage, and hence, the most exploited. System governors try to impose fair play and equity by protecting the disadvantaged using rules and norms. The more powerful participants are, in a way, forced to temper their need to acquire more and more.
If left to itself, without neutral referees, the system will ensure the most disadvantaged continue at their subsistence level, and not beyond that. Because that is in the interest of the most advantaged. Without constant production of value and its unequal transfer, those who want to grow cannot grow, unless technology or systems multiply value to a factor that every class of participant benefits.
(The most powerful will coexist with a class of contenders only as long as they need them to produce value. Once they don’t need them, they will find no incentive to engage with them, and, in worst cases, find them to be a “cost point”.)
But no smart contender will depend solely on technology and systems to deliver growth at geometric progression. So they will use whatever means available to gain competitive advantages, thereby necessarily leading to the disadvantage of the disadvantaged.
Democracy is an antidote to such “natural” impulses. It is not perfect, because it, too, can be gamed. But it is better than any system we have invented yet.
It may not be a good idea, especially in a democracy, to send a contender who is disadvantaged, to do business directly with a contender who is massively advantaged, without first preparing a fair playing field.
Middlemen can be inefficient to the transfer of value, but in the list of things that should be avoided by a nation, inefficiency comes way below exploitation.
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