A Brief Segue Into Contestable Markets
Since the Stoat has derided me for my purported ignorance of contestable markets, let me use his own petard* to hoist him above the castle walls:
A perfectly contestable market has three main features:
No entry or exit barriers
No sunk costs
Access to the same level of technology (to incumbent firms and new entrants)
A perfectly contestable market is not possible in real life.
Dr. Connolley thinks that Amazon, Microsoft and Facebook have contestable effective monopolies. Did he even read the three "essential features" in his link? None of them comes close to applying to these corporations. In particular, sunk costs are in the tens of billions, technology is protected by a vast patent web, and entry costs are enormous.
My free advice: Mr. Connolley should stop reading Tim Worstall and read some actual economists. On second thought, never mind. Economics is heavily populated with dolts and scoundrels with PhDs and professorships. But Tim is an idiot.
*I mean Wikipedia reference, though technically a petard is a small bomb, as in Shakespeare's Hamlet "For 'tis the sport to have the enginer / Hoist with his own petar." The word, like the English word "fart" and cognates in Russian, French, Sanskrit, Lithuanian and Greek (among others) is descended from the Proto-Indo-European root *perd-, one of two PIE words we have meaning 'fart," this one referring to the noisy kind.