Leftists -- specifically, socialists -- created the name "capitalism" as a name for a real system which existed in the developed world in the 19th Century, in which the economic order was actively managed to favor the interest of the capital-holding class. The idea that this was system had something to do with "free markets" was part of the propaganda of defenders of that real, very much crony, system in response to that critique.
Its kind of weird to call the real thing which actually existed that "capitalism" was coined to refer to as anything other than real capitalism, while referring to amorphous, ill-defined, fantasy as "real capitalism".
"State capitalism" is a different thing entirely -- it usually shows up in critiques by leftists, particularly non-Leninist socialists, of Leninist(incl. Stalinist/Maoist)-style "Communism".
The "free market" that does exist is based on subsidies, bailouts, state protection, monopolies, a huge army, bullying, and resource grabbing (and past 300+ years of colonialism).
Heck, the "free market" is even more mythical than the laughable "really existing socialism".
Businessmen are not interested in ideology, if they can use the government as a cudgel against their opponents, or a crutch to sustain them in hard times, they will.
Every time the government's power over the economy has been expanded, advocates of the free market have pointed this fact out and been ignored.
You can't break my spine and then blame me for being paralyzed.
So people should quit talking about it as it existed.
Not to mention that the same could (and WAS) said for communism ("it didn't exist because party bureucrats got in the way").
>You can't break my spine and then blame me for being paralyzed.
No, but I can point out that the unicorn pony you frequently talk about doesn't exist and never did in human history.
Tell that to Standard Oil or The American Tobacco Company.
If you look throughout just American history you can various examples of this. Big, strong companies that eventually fade away to disappear because of failure, lack of vision, or whatever other decisions that held the company back.
It's just that there is very few examples of a true free market, except for maybe on a local level, so that we'll likely never know for sure.
If you can, imagine a watershed. The river, along with its tributaries, covers the most efficient downhill route from every point in the watershed to sea level. The natural monopoly on precipitation drainage is everywhere you see flowing water. Installing a second river does not work. Wherever you try to put it, the natural tendency is for the second river to drop right down into the original watershed. You end up with just one river again.
If you turn that idea into a graph, replace the ocean with the Internet, the power plant, the potable water and sewage treatment facilities, the highway system, or some other common resource, and replace raindrop targets with homes and businesses. There is only one optimal routing for roads, pipes, wires, and fibers. The surface path following that route is the natural monopoly. You can cram an awful lot of stuff on top of it if you wanted.
Once poles are up and tunnels in place, the hard part is over. If a second cable company runs a second cable, that's not a waste. The customer can now buy either of two cable service packages, or both. If there's already a hamster tube up on the poles connecting the house to the municipal rat supply, and someone wants to run another for squirrels, that's not a waste. People might not want their rats and their squirrels from the same tube.
So when people say cable and phone service are natural monopolies, they are wrong. It's the space those wires run through.
The lowest energy state of the natural monopoly is a single firm. Excited states can also exist, and are necessary for transitions to occur, but these states are less economically efficient. Customers see higher prices, and firms see lower profits. But given that a monopoly is in itself inefficient, it can still be worthwhile for a challenger to attempt to displace the incumbent, especially if they can operate at lower costs.
In a truly free market, the switch could be accomplished by an initial investment of sufficient size. In the context of the analogy, huge machines dredge a new channel for the river. For a time, water flows in both channels, but in the end, one dries up and you are left with one river again.
