[v-erne]

>>they aren't the manufacturer's customer in the market for new cars

Wow somehow this simple observation seems to be the greatest critic of capitalism I have heard in long time. It succintly shows why this system if left alone and scaled will destroy everything with its externalities.

[AnthonyMouse]

The trouble is it isn't limited to "capitalism". A similar set of incentives are implicated in public choice theory, which is why democratic institutions are frequently willing to sell out future generations or compromise the public good to benefit the governing coalition's cronies.

And the latter is more susceptible to it. Things work when you're the customer and you have competing suppliers. They don't work when you're not the customer. But you could still be the customer in another market as long as there is one, e.g. because third parties can reverse engineer the OEM parts and go into competition with them. So a major risk here is that the incumbent captures the government to prevent that from happening.

The closest you generally get to competing alternatives with government is "laboratories of democracy" from having different states each with their own laws and the ability for people to vote with their feet, and even that suffers from the same failure mode. The system is intended to sustain that by having a strictly limited central government, but the central government gets captured by those who want to impose uniformity on what was meant to be diversity.