> I would suggest reading some history rather than economic fantasy.
So, history is a description of things that have actually happened, i.e. a chronicle of the actual state of the world as it progresses through time. Economics is a discipline that attempts to ascertain the condition of reality. So history and economics will tend to be fairly intertwined and mutually reinforcing.
Rather, it's the attempt to inject normative dogmas built on conflict-oriented adversarial models of human interaction -- which are amply contradicted by both historical and observable current evidence -- that tends toward "fantasy".
> You can start a railroad, but if the big existing railroads that already have lines running to the cities and factories refuse to let you connect to their service, your company has no hope of surviving.
In fact, historically, the incentive structures that motivated railroad construction back when that was the big industrial boom actually led competing railroads to build their own track networks and stations, often in close proximity to each other.
> You can start a factory making paperclips, but if the incumbent has billions of dollars in reserves and can afford to sell at a loss or barely above cost you will never be able to grow and thrive.
So you're describing a scenario in which low barriers to entry and a completely commoditized product make the dominant player's position defensible only by selling at cost, or below, to the point of having to invest additional capital (from its "reserves") just to maintain the status quo and you're trying to use this as an example of a non-competitive market? This is an example of almost perfect competition, where the even the largest players are completely beholden to market pressures.
> You can make a lot more money talking to your competitors and agreeing to fix prices or to each operate in regions that happen to not overlap, eliminating competition.
...which creates a situation in which your competitors now can make a lot more money by being the first to defect from the agreement. This is a classic prisoner's dilemma. And the same dynamics as in the paperclip scenario exist here too: even if collusive players try to fix prices, if they're fixing them too high, new entrants who are not party to their collusion will undercut them.
> You can tell customers that if they want to buy product X that they want, they have to buy a bundle that includes Y, meaning that any competitors to Y are bound to fail since customers are already buying that version anyway.
Except that now you've created a market opportunity for competitors to offer their own a-la-carte version of X, which is now more competitive than yours since customers don't have to buy Y to get X, along with incentivizing competitors to offer their own X-and-Y bundles with better features or price points than yours.
Literally every example you're citing here is theoretical, and the reality of the industries you're describing reflects the opposite of the point you're trying to make. Railroads were numerous and competitive prior to the rise of widespread air travel. Dozens, possibly hundreds, of companies actually make paperclips. Price-fixing cartels are rare and short-lived. Bundled products are commonplace, and competitive both in the bundles themselves and in their constituent parts -- you'll never buy a new car without tires already included, but both cars and tires have numerous manufacturers selling a wide range of products independently of each other.
