Do you really not see a difference between a company making the highest bid at an auction, and that same company owning the auction house and getting an infinite bid for free?
Say Boeing and a bunch of smaller companies are bidding on various defense contracts. But then Boeing gets fully nationalized and they start bidding zero dollars for everything, because it all goes back in the same federal budget. When the competitors complain, Boeing responds "well, we all know we would have won anyway even if we had stayed a private company, so the end result to the Pentagon is the same - they get Boeing aircraft. Where's the problem?". Is that a fair market?
