When a new industry develops, usually with totally new technology, we let entrepreneurs run wild. They don’t need permits, making new companies is easy, they file patents, and it’s a land rush.
Once the industry matures and ossifies, and the winners go public and the pension funds and sovereign wealth and retail and everyone gets their retirement in, the American system begins to protect the incumbents.
The government passes laws that are ostensibly neutral but are written hand-in-hand with lobbyists to ensure the incumbents remain. The incumbents get subsidies, they donate to politicians of both parties, they become embedded into the fabric of corporate America.
America is crony capitalist once the players are established. However for small firms and new technologies, it’s wildcats and free markets. VCs not only provide capital but act as the nexus between the crony capitalists and the anointed new firms for acquisition, muscle in legal disputes, credibility, sustaining enterprise deals, etc.
I would heavily reform the system to be less crony capitalist in numerous ways. Despite this, the American system is beating all other large countries by a lot.