[microtonal]

Allowing companies to buy any companies has issues. Not allowing companies to buy other companies also has issues.

You seem to reason in really absolutist terms. You can have an open economy, where a government can still intervene if the current market situation has an extremely negative effect on society.

E.g. breaking cartels, monopolies or oligopolies where they seriously hurt a population does not throw away all the benefits of capitalism.

The disadvantage of one extreme is that you cannot have free enterprise, the other extreme is that you might end up with a few megacorps who control the market and ultimately society. In the middle you have a situation where there is free enterprise, but as a cooperation you also have to play by the rules that were set up to maintain fair competition and avoid centralisation of power.

[logicchains]

>In the middle you have a situation where there is free enterprise, but as a cooperation you also have to play by the rules that were set up to maintain fair competition and avoid centralisation of power.

The middle situation faces the potential of http://en.wikipedia.org/wiki/Regulatory_capture. This state-enforced monopoly is a small-scale manifestation of the complete state monopoly associated with 100% state ownership. The only way to completely avoid regulatory capture is to have no regulatory agencies, but this of course brings troubles of its own. There's no perfect middle.

[microtonal]

Sure. First of all, in all systems averse effects can happen. Secondly, regulatory capture is countered by democracy and transparency. If politicians become corrupted, you vote them away. In capitalism without regulation, there is no good way for citizens to intervene (except through violence).

[logicchains]

How's voting the corrupt politicians away working in practice in the US? From what I hear, not very well.