There's a fundamental disconnect between what economic theory preaches and what actually drives market outcomes. Large, dominant firms capturing increasing returns isn't necessarily a market failure—it can translate into genuine social benefits through efficiency, innovation, and economies of scale.

Yet here's where things go sideways: policymakers have been led astray by theoretical frameworks that oversimplify how markets work. They often treat scale and dominance as inherent evils, missing the point entirely. The real question isn't whether big firms should exist—it's whether the regulatory approach matches market reality.

This matters beyond traditional economics. In crypto and digital markets, we see the same pattern playing out: network effects naturally create dominant platforms, and that's not always bad. Understanding when concentration creates value versus when it stifles competition is crucial for sensible policy, whether in traditional finance or blockchain ecosystems.