Capitalisms fatal flaw, loss leaders can be used to harbor monopolies
If a company becomes too big in a market, they can use their virtually endless cash reserves to have loss leaders until the competition caves being unable to compete. We’ve seen this with Amazon and the diaper company. We’ve seen this with Walmart versus small shops.
Basically imagine there’s 2 lemonade stands on the block. Lemonade stand 1 only has $10 and has just 1 pitcher of lemonade. Lemonade stand 2 has rich parents who have $1,000 for his stand, along with unlimited pitchers of lemonade. Both initially price at 50 cents for lemonade, with a 25 cent cost to make. If lemonade stand 2 wants to charge $0 for lemonade, he could sell 4,000 cups of lemonade before caving. If lemonade stand 1 wants to have a loss leader, they cave at the 40th cup. Despite the same practices, the business tycoon has a clear advantage.
Monopolies are created and maintained in a true free market when people cannot compete with the monopolies ability to sell stuff for literally nothing.
How do we address this fatal flaw in capitalism?
Article from r/Libertarian: For a Free Society