I think you are describing free markets, not capitalism. Capitalism means accumulation of capital through any means possible. Sometimes monopolies are examples of capitalism.
> This makes it extremely difficult for new competitors to enter the space. Which means the existing players can collude to raise prices.
> That's not capitalism. Capitalism requires heavy competition. Think restaurants for example. Extreme competition drives prices down and keeps prices fair for consumers.
No, that absolutely is capitalism. No True Scotsmanning capitalism when we see this as an end result of capitalism doesn't work as an argument.
For example, in the gig economy which is largely unregulated we see incumbents to the market get destroyed by economy of scale. Did you know Austin had its own non-profit ride-sharing app called RideAustin? Did you know that it blew up after Uber and Lyft completely pushed it out of the market?
I could go on with other examples of these issues. Like for example Bartells in Seattle being bought out by Rite Aid only to be decimated by Rite Aids shitty practices, with little to no ability for incumbents to fill the void due to the costs of rent and rising bootstrap costs. Or the way grocery companies merge and combine until we have five different brands all operating under the same owner.
Capitalism is controlled by the winners who have the most capital. Competition only vaguely exists as a way for capital to exert control.
Those are valid examples, but conflated with the problem that there is limited competition in all the industries you mentioned. Which makes monopolies much easier for the existing companies with power.
Counter examples of capitalist industries that have lasted centuries without corporate concentration: restaurants, spas, bars, tailors, car washes, barbers, almost anywhere small businesses exist.
Adam Smith's original capitalism required free markets, which fundamentally require high competition, low barriers to entry.
The low barriers to entry component is missing from the examples you described, which is theoretically where government should step in (and lower those barriers for new companies looking to enter the market).
In healthcare, however, government is essentially working with the companies to raise barriers to entry.
There's limited competition in the gig economy? I don't know what you think a free market is supposed to look like then because the gig economy is fully unregulated outside of a couple states and the barrier to entry was being able to write an app on your phone.
You literally cannot get more unregulated than that. What is your vision here?
Well let's look at ridesharing as an example. It's basically dominated by Uber and Lyft, i.e., minimal competition.
The nature of the market is that you need a large network of drivers to succeed. That network is a powerful barrier to entry. And it likely requires a lot of funding to achieve.
A government could foster more competition within the industry by funding new start-ups, in an effort to bring the market closer to free market status.
This is what China does with many of their industries, and they do it really well. Despite their "communist party" brand, they are actually doing capitalism much better than the US in many areas.
That's not a 'free market' though, especially not by the majority standards in the US. That's the US government attempting to pick a winner by funneling money into startups.
Mind you, it's not something I particularly disagree with, but the only way this works is by imposing regulations on the dominating market forces to prevent them from buying out the competition or using their network advantage to crush them. And regulation is considered the antithesis to a free market.
Gov wouldn't need to pick a winner - it just needs the market to reach a critical point of competitiveness, at which the sheer amount of competition would be self sustaining, as it is in the restaurant industry, for example.
