> to allow long term profitable companies to weather short term undercutting by larger companies who can take the losses to kill a competitor This doesn't work

> to allow long term profitable companies to weather short term undercutting by larger companies who can take the losses to kill a competitor This doesn't work in a free market. Look up David Friedman's discussion in, IIRC, Price Theory of competitors to Standard Oil. > the Exxon Valdeeze spill This was a product of ineffective government regulation, not a free market. In a free market Exxon would have been bankrupt after one such spill--and knowing that would be the outcome, they would have taken better steps to prevent it. Similar remarks apply to, for example, the Deepwater Horizon spill. > the cost of litigation is massively skewed And why? Because governments made it that way.